If you have assets and you need a reliable tool for their protection, the first thing that probably comes to your mind is a trust. However, this instrument has its drawbacks: you will need to hire a trustee and pay an annual fee for the management of your assets. In the case of a Serbian endowment, you (as an owner) are separated from your assets in the same way as is done in a trust (that is, you are no longer the owner of these assets in the eyes of legal authorities) – and you can still dispose of them by yourself. Sounds interesting? This post is fully focused on the Serbian Endowment. If you want to explore other opportunities available in Serbia or ask questions, go to SerbiaWealth.Info, a portal that is fully devoted to Serbia. Use the live chat during business hours to talk to a specialist.
Serbian Endowment (Private Foundation)
A trust is formed under the Anglo-Saxon legal system (also known as the common law), while the Endowment (Private Foundation) is its European analog. This is a popular instrument for Serbian residents and non-residents used for public and private asset management. The Foundation has a public (state) form that many investors are familiar with, but it does not ensure ultimate personal property protection. However, you can set up a Private Endowment, a non-profit structure that gives you the following benefits:
- Your capital can be accessed without an intermediary (a trustee in the case of trusts)
- The assets will be separated from the owner, which will make them unreachable from the outside (that is, no law enforcement agencies, creditors, heirs, or relatives will be able to lay their hands on them).
- The investor’s assets in any in-kind/financial form will be subject to reliable protection.
- You will enjoy a high level of privacy.
Wealthy people successfully protect their financial/non-financial interests using a Serbian Endowment, the best instrument for private storage of money/property. And if we look at the security, reliability, and confidentiality level that the beneficiary can take advantage of, the Serbian Foundation is much better than a classical trust.
You are probably aware of the fact that the legal efforts of global regulators are aimed at disclosing the data on all owners of money and property, including the information on bank accounts that such owners possess and trust management. It makes it harder and harder for wealthy people to protect their financial interests and remain as anonymous as possible. Fortunately, the Serbian Private Foundation is a stable structure that works well under current conditions and –who knows? – can gradually replace trusts.
Trust and Endowment: What to Choose?
The Private Foundation you can set up in Serbia is similar to the trust as regards its structure, but what are the differences between them? Well, the main characteristic feature of the Foundation is the separation of the owner’s capital from the owner as an individual and the management of the assets that are owned by such an individual. The owner is no longer considered to possess the capital in the eyes of legal organizations.
Let’s look at the main advantages of the Serbian Endowment:
- The Endowment makes it possible for the owner to directly manage the assets, while a trust requires a trustee to do that. As a result, you will not have to look for a reliable trustee and pay the remuneration, and you will be in no way limited when you decide to use your assets for some purpose.
- If you set up a classic trust, you (as a settlor) will not enjoy privacy when you manage the trust structure or set up a bank account. However, the laws in Serbia are more benevolent with regard to this point as the bank account owner’s personal details are protected in a more reliable way (even if we are talking about an individual who is not a Serbian resident) and he or she can freely dispose of the capital transferred to the structure.
- The right to set up a Private Foundation in Serbia is available to both residents and non-residents of Serbia, including private investors, commercial structures, and non-profit organizations. Serbian Endowment formation requires transferring a minimum amount of 30,000 euros to the structure (these can be assets in any form worth this amount).
- The tax on donations and income is not paid by the Serbian Endowments, or it may be charged in separate cases according to the rules below:
- Property tax is not levied on non-financial assets (gifts in kind) if you pay VAT on their transfer (as for foreign donations and grants to foundations, they are VAT-exempt in Serbia).
- If the Private Foundation receives non-economic income, membership fees, donations, or grants, no corporate taxes are payable.
- You will not have to pay any taxes if you receive no more than RSD 400,000 from related economic activities.
- As regards other incoming transactions, a 2.5% gift tax is to be paid by the Foundation.
- The structure of the Serbian Endowment does not require the presence of beneficiaries, which is stipulated in the local laws. The data about the trustee and the manager (these positions can be taken by the nominee person or the investor himself) is required to be submitted to the register.
- The person who sets up a foundation or an association in Serbia cannot possess property interests in the organization, and they are not allowed to claim any donations in a non-profit organization. This rule enables owners to store their assets in a secure way and enjoy bulletproof protection from external encroachment on the part of credit organizations, business partners, judicial authorities, and relatives (successors).
If the Private Foundation in Serbia is dissolved on a voluntary basis, all the assets will be distributed among investors in an agreed procedure.
How to Set Up a Non-Resident Endowment in Serbia?
A foreign founder who wishes to establish a Serbian Endowment has to study the local laws, collect and transfer a package of documents, get a legal/mailing address, and set up a local bank account. If you want to delegate all these tasks to a professional, save time, and avoid mistakes – you can follow the link to contact an expert. The first session is free.
