On 26 November 2014, the New Act on Employment of Foreigners was published in the Republic of Serbia’s Official Gazette no. 128/14 and came into force on 4 December 2014 ("Act").

This act has replaced the outdated Act on Conditions for Concluding Employment with Foreign Citizens [Zakon o uslovima za zasnivanje radnog odnosa sa stranim državljanima], which was adopted in 1978 and amended several times, most recently in 2005.

In a nutshell, the Serbian legislators’ intent in the newly implemented Act was to: (i) completely regulate all aspects related to the employment of foreigners, (ii) fully comply with provisions of the Act on Foreigners and other related regulations, (iii) introduce the possibility of limiting the number of foreign employees in Serbia, depending on situation on the Serbian labour market, and (iv) completely exclude all problems related to the application of the previously applicable act etc.

The most important novelty introduced by the Act is that the labour permit is now required not only for the conclusion of an employment contract in Serbia, but also for the conclusion of any other agreement based on which the foreigners acquire rights stemming from employment.

Also, the Act contains special conditions for EU citizens working in the Republic of Serbia that shall become applicable as of the date the Republic becomes a member of the EU.

1. Types of Labour Permits

The Act recognizes two types of labour permits: (i) labour permit, and (ii) personal labour permit.

1.1 Personal Labour Permit

A personal labour permit shall be issued to: (i) employees who have acquired a residence permit, (ii) persons who have the refugee status, (iii) persons belonging to a special category (seeking asylum, etc.), (iv) immediate family members of persons covered in points (i) and (ii), (v) immediate family members of a Serbian citizen, and (vi) foreigners with Serbian origin up to the third degree of consanguinity in the direct line.

1.2 Labour Permit

Labour permits are issued for (i) employment, (ii) special cases of employment, and for (iii) self-employment. Based on a labour permit, employees can be employed only for the particular job for which the permit was issued for.

It is worth noting that the employer at whose request the labour permit was issued must comply with the following: the employer (i) cannot assign particular employee to another employer, (ii) must register employees in the social security system, and (iii) must bear the costs of issuing the labour permit; such costs cannot be transferred to the employee.

1.2.1 Labour Permit for Employment

This labour permit is issued at the employer's request if:

  1. the employer did not, before filing the request for permit, terminate as redundant the employee working in the employment position for which the permit is being requested;
  2. one month before submitting the request for labour permit, the employer could not find Serbian citizens, persons who have free access to the country’s labour market, or foreigners with a personal labour permits with the requested qualifications in the records of the employment bureau; and
  3. the employer files the employment agreement or other agreement providing rights stemming from employment.

A Labour Permit is issued for the duration of the planned employment, but at most up to the expiry of the employee’s residence permit.

1.2.2 Labour Permit for Special Cases

This type of labour permit is issued for (i) assigned persons, (ii) transfers within a undertaking, and for (iii) independent professionals.

A Labour Permit for assigned persons can be issued if a foreigner has a residence permit issued, an agreement has been concluded between two employers (a foreign employer and a Serbian employer) containing the place and term for providing services, evidence exists that the particular employee has been employed with foreign employer for at least a year, and there exists a letter of assignment or similar document regulating rights and duties from employment and manner of providing foreign employees with food and accommodation during their work in Serbia. The labour permit for special cases shall be issued through the term of agreement between foreign and local employer, but not longer than one year.

In addition, directors, managers, and specialists (i.e. key staff) being employed by a foreign employer for at least a year can be transferred to a Serbian branch or a subsidiary if they are to perform the same type of work in Serbia. This permit is issued for throughout the term of residence permit, but not longer than one year.

A Labour Permit for Independent Professionals is issued if such person has a residence permit, an agreement with an employer/service user, and has high education/technical qualifications and work experience in their profession.

2. Work without Labour Permit

The Act prescribes certain cases when foreigners can work in Serbia without labour permit.

For instance, the Act provides that a foreigner can work in Serbia without a labour permit if he/she resides in Serbia for less than 90 days within a period of six months as of the day of their first entry into the country and if, inter alia, such person (i) is a shareholder, founder, legal representative or a member of a corporate body of a Serbian legal entity and if he/she is not employed there, (ii) is assigned to perform work in Serbia based on agreement on purchasing goods, purchasing or leasing of equipment, delivery, instalment, repair or training for work on those machines or equipment and in other cases prescribed by the Act.