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Unveiling challenges in Serbia’s virtual office industry: Regulatory gaps and compliance issues

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In recent years, virtual offices have emerged as a burgeoning business trend. A quick Google search reveals an increasing number of individuals offering company registration services at their addresses for a nominal monthly fee. Correspondingly, the utilization of virtual office services by companies and entrepreneurs, particularly those from overseas, has witnessed a notable uptick.

Current regulations do not explicitly prohibit such practices. On the contrary, a single address, whether it be a law firm or an accounting agency, can serve as the registered location for numerous companies.

However, beyond merely having a notable presence at the registered address, companies are also required to have a signed contract with their “landlord.” Nevertheless, it has been observed that compliance with this requirement is often lacking.

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Although the Tax Administration of Serbia did not respond to inquiries from Forbes Serbia, recent months have seen an increase in inspections of virtual office premises. These inspections aim to verify the residency of companies registered at these addresses. In many cases, companies, particularly those with foreign ownership, were found to lack proper contracts with accounting agencies and failed to prominently display their company name at the registered address, resulting in temporary revocation of their tax identification numbers (PIBs).

“According to our information, the Tax Administration conducted inspections at various addresses where multiple companies were registered. It was discovered that many of these companies did not have contracts for office space or agreements for virtual office services,” stated Miomir Stojković, a lawyer at Stojković Advokati.

Tax advisor Milan Trbojević, who offers virtual office services for a monthly fee of 40 euros, reported that his clients were generally unaffected by these inspections as he primarily works with domestic clients.

In both Serbia and the European Union, virtual office services are typically provided by companies specializing in accounting, legal, or administrative support. However, there is a segment of providers that offer virtual office services without the necessary infrastructure or contractual agreements.

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Alan Abazović, also from Stojković Advokati, proposed clearer regulation of virtual office services, suggesting that the Law on Business Companies and the Law on Registration Procedure should require submission of contracts for office space or virtual office services during company registration. Additionally, he recommended that the Law on Tax Procedure and Tax Administration oblige service providers to represent clients in tax proceedings and official communication.

Addressing these legal deficiencies would ensure greater transparency and accountability in the virtual office industry, safeguarding the interests of businesses and regulatory authorities alike.

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