The world is politically unstable at the moment and political instability always brings about economic hardships. This is how the world works. The United States and the EU countries are going through some hard times indeed. The inflation rate in America has exceeded 40%. The inflation rate in Europe is not so high but it is record-breaking anyway.
Under such challenging economic conditions, you have to be highly inventive in finding the ways to keep a larger part of the income that you make. Living in a high-tax country that is ridden with inflation you may find it hard to make ends meet. If you don’t despair, however, and make use of some innovative business technologies, things can begin to look up for you.
One of such innovative business technologies is working via a rented company located in Serbia. Below we will briefly describe the concept of a rented company and point out the main advantages of doing business in this way and then we will show why Serbia is the best choice if you would like to use the rent-a-company service.
What is a rented company and what benefits can it bring?
In the modern overly regulated business world, most companies will not want to receive invoices from private individuals or sole proprietors. They want invoices from officially registered legal entities that have VAT numbers. In this case, they are going to have fewer problems with auditors and tax inspectors.
Now suppose that you would like to provide some services to international clients and get paid for them. This means that you would have to create a company of your own because no foreign client will hire you otherwise. Let us use the example of a software developer. He or she may be a talented programmer whose software does not have too many bugs but he/ she won’t be able to sell the software unless he/ she does so via an officially registered corporate entity.
If you find yourself in a similar situation, registering your own company could be a solution. However, some of your nervous cells are inevitably going to die in the process of company formation and opening a corporate bank account can take months in the modern overly regulated banking world. A healthy alternative would be renting a company instead of establishing a new one.
What does renting a company mean? It means that the company will sell your products or services on your behalf, bill your customers on your behalf while supplying its own bank account details and receiving payments to that bank account. When the payment goes through, the rented company can transfer the money to your electronic wallet or to your personal bank account.
The company is going to charge you a commission for this service but you will probably save money with the help of a rented company rather than lose money. Think of all the costs involved in registering and maintaining your own company: having a business entity registered in your name does not come for free. Also imagine the following situation: you have a nice business idea and you would like to test it but you cannot test it unless you can send invoices to your international customers. The choice remains the same: set up your own company or rent a suitable company. The second option looks much less risky.
The benefits of renting a company in Serbia can be especially great because a company located in that country would not have to charge you a high commission. It can afford charging you little because it works in a highly beneficial corporate, fiscal, and banking environment.
Why rent a company in Serbia?
Well, we have already answered this question in part: because the commission is going to be comparatively low. The second part of the answer is as follows: Serbia is a reputable European jurisdiction that is simultaneously outside the Eurozone. The euro has been depreciating recently as the prices have been growing. Energy prices in particular have nearly doubled over the last couple of years. Let us briefly discuss what factors enable a Serbian-based rented company to charge a low intermediary commission.
An advanced and well-developed banking system
You can find a great number of banks in Serbia that provide services both to individual and to corporate customers. In addition to Serbian banks, there are many branches of Western European banks in Serbia. Besides, there you will find American, Chinese, Turkish, and Arab banks in the country.
Making international payments from Serbia is perfectly easy and the same goes for payments coming to Serbia from foreign countries. The local currency is the Serbian dinar but payments can be made in American dollars, in euros, Turkish liras, yuan, yen, and so on.
A highly beneficial tax system
The Serbian company that you rent has to pay a much lower tax on corporate profit than companies located in most other European countries. This is probably the most important factor that allows the Serbian company to charge you a small commission. The corporate income tax rate is only 15% in Serbia. For the sake of comparison, the average tax rate in the EU exceeds 20%, and it is 25% in Austria, 26.5% in France, 30% in Germany, 24% in Greece, 24% in Italy, 16% in Romania, 18% in Croatia, 19% in Poland, and 19% in Slovenia.
Besides, there are 15 Free Trade Zones in Serbia where the tax conditions are even more beneficial. Resident companies are exempted from the VAT there as well as customs duties on raw materials and components of exported goods. Incomes made within a Free Zone can be transferred to mainland Serbia or to any other country without any taxes or duties.
Another great advantage for companies registered in Serbia is the existence of 65 bilateral agreements on double taxation avoidance. Most of the agreements are signed with European countries such as Germany, France, Austria, Slovenia, Denmark, Poland and others.
Low operational costs for Serbian companies
The average salary in Serbia is significantly lower than it is in the European Union countries. The low cost of labor allows economizing greatly. The rental prices are also much lower than in Western Europe. A pretty nice company office in Belgrade will cost your rented company only 800 euros per month. If it rents an office somewhere in the outskirts, it can do so for as little as 150 euros per month. Electricity costs four times less in Serbia than it does in Denmark or Germany, for example. Other utilities are quite inexpensive too.
If you have corporate customers, renting a company can bring some serious benefits especially if you are at the start of your business career or if you are a freelancer of a certain kind. Renting a company in Serbia can be especially beneficial. Its fiscal burden and its operational costs are low so it can afford charging you a smaller commission. Something to think about, isn’t it?