In recent years, many international companies set up its operations in Serbia, in the form of subsidiaries or branch offices, not least due to the generous incentives that have been provided through a number of government schemes. Such companies very often have the need to engage foreign employees, mainly due to wanting to provide trained staff for their Serbian subsidiaries, persons who have demonstrated experience in the field and are already familiar with the company policies. In Serbia, employment of foreigners is regulated in a fairly thorough manner through the Act on Employment of Foreigners. Besides the fact that it enshrines the right of employment of foreigners, it also prescribes certain limitations and special procedures which the employers are bound to comply with when employing foreign nationals.

The first necessary condition in order to conclude an employment agreement with a foreigner, is that the prospective employee should obtain a temporary residence approval or a permanent residence, and a work permit. The following step entails submitting a request for employment of the organization competent for employment affairs, after which the authority checks if the employer dismissed any employees due to technological, economic or organizational changes on the position for which the request was made. Finally, after all of these conditions are met, the competent authority will allow the request and issue the work permit. However, an additional limitation to the regime of hiring foreigners in Serbia is provided in a recent opinion of the Ministry of Labour, according to which an employer hiring a foreigner can do so only by signing a fixed-term contract that will be valid only during the validity of the work permit. If the employer decides to prolong the duration of the employment agreement, it can do so only by signing a new fixed-term contract, or by annexing the existing contract.

An intention to protect the domestic job market is more than evident, however viewed against the fact that foreign-trained employees can often contribute immensely to the process of work of modern companies, especially in the case of Serbia which has not stepped too far from its beginnings as a young transitional economy – there is certainly room for re-evaluation of this legal regime.