We would like to draw your attention to a novelty regarding the financial reporting obligations of Serbian companies. The Accounting Act (Zakon o računovodstvu, "Official Gazette of RS" no.62/2013) ("Accounting Act") provides that, starting from 1 January 2015, financial statements and statistical report must be submitted to the Agency for Business Registers of the Republic of Serbia ("Register") in electronic format and with qualified electronic signature of statutory representative (director) of the reporting company. Serbian companies whose financial year corresponds to the calendar year are obliged to submit to the Register Balance Sheet, Income Statement and Statistical Report until 28 February 2015, while the Annual Financial Statement for 2014 is not due before 30 June 2015. A failure of a company to submit to the Register its financial statements in the prescribed electronic form can result in a fine in the amount ranging from RSD 100,000.00 (approx. EUR 850) to RSD 3,000,000.00 (approx. EUR 25,000.00) for the company and up to RSD 150,000.00 (approx. EUR 1,250) for the director.
The problem with the requirement that the financial statements be signed electronically by a statutory representative exists when the director is a foreigner. Namely, a foreigner can obtain an electronic signature certificate in Serbia only if he/she has a Serbian personal identification number. A personal identification number can, in turn, be issued only to a foreigner who has a temporary residence permit in Serbia. However, because a temporary residence permit is required only if a foreigner stays in Serbia for more than 90 days within a six-month period, there are many foreigners acting as statutory representatives of Serbian companies who do not have temporary residence permit and thus do not qualify for electronic signature certificate.
Given this conundrum, a company having a foreigner as its only statutory representative has three options:
- to replace the existing statutory representative who is a foreigner with a new one who is a Serbian citizen and thus eligible to obtain electronic signature certificate (we note here that the statutory representative is responsible for the accuracy of the financial statements);
- to appoint an additional statutory representative who is a Serbian citizen and thus eligible to obtain electronic signature certificate;
- to obtain, until the end of February, a temporary residence permit, personal ID number and electronic signature certificate for the existing statutory representative who is a foreigner.
Please note that the above note is for general guidance only.