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Since the beginning of the war in Ukraine, 219,153 Russian citizens have immigrated to Serbia. In contrast, over the past year, more than four thousand Russian entrepreneurs and companies have been established in Serbia. In response to the newly emerging market circumstances, the Government of Serbia adopted the Decree on the criteria for awarding incentives to employers who employ foreign nationals in mid-June of last year. Under the conditions defined by the Regulation, for each employed foreigner, employers can obtain subsidies of 70% of the paid salary tax and 100% of the paid contributions for the Republic Fund for Pension and Disability Insurance.One of the primary criteria for awarding incentives is that the employer and the foreign citizen conclude an employment contract for an indefinite period, with a monthly salary of at least 300,000 dinars. However, this type of engagement is not following the Labor Law, which stipulates that an employer with a foreign citizen can only establish an employment relationship for a certain period for the validity of the work permit issued to the foreigner.Since the provisions of the Labor Law have a more vital legal force than the Regulation, the question of the practical scope of the Regulation itself is justified. The creator of the Regulation did not think to read the provisions of the Labor Law beforehand or at least consult with the relevant Ministry before the Regulation was adopted.In light of such circumstances, the Ministry of Labor issued an official opinion on this topic at the request of an employer who hired Russian citizens in February of this year. In its opinion, the Ministry notes that a foreigner can establish a working relationship for a fixed period but that a public discussion is underway on the amendments to the Law on the Employment of Foreigners, which will stipulate that the employer can conclude an employment contract with a foreigner for an indefinite period.Only after the entry into force of the changes mentioned above will employers be able to legally employ foreigners indefinitely and apply for the award of incentives provided for in the Regulation. In the meantime, may the creator of the Regulation think of passing a new regulation?This text is for informational purposes only and should not be considered legal advice. Should you require any additional information, feel free to contact us.Contact:Kristina Pavlović, Associate <a href="mailto:kristina.pavlovic@sog.rs">kristina.pavlovic@sog.rs</a>

Since the beginning of the war in Ukraine, 219,153 Russian citizens have immigrated to Serbia. In contrast, over the past year, more than four thousand Russian entrepreneurs and companies have been established in Serbia. In response to the newly emerging market circumstances, the Government of Serbia adopted the Decree on the criteria for awarding incentives to employers who employ foreign nationals in mid-June of last year.

Employment of Foreign Nationals – Current Conflict of Regulations

One of the long-debated domestic themes is non-existence of retail NPL market in Serbia. Following the 2008 World Economic Crisis in Serbia, the country managed to regulate corporate NPL market, and to decrease NPL level from 20% to 3,19 %.However, retail NPL market remained a taboo. There are several reasons for this and the main one is that the general public fears that regulating retail NPL (“RNPL”) market would legalize debt slavery.Stil, the true is quite different. Instead of establishing RNPL market, the NPL companies mostly offer side services to the banks on debt collection, whereas the real effects of such services is de facto purchase of RNPL.Having this in mind, and that Serbian law completely lacks regulation of personal insolvency (as well as entrepreneur’s insolvency), this creates close to a debt slavery situation for many citizens that defaulted, and brings into jeopardy many more. When we take in consideration the current crisis, inflation, which includes sharp increase of interest rates, Serbian society could enter the dark ages.On the other hand, the necessity to establish RNPL market could be beneficial for all parties: (i) the banks could release large amount of reserves with the National Bank of Serbia (“NBS”) and invest them further, (ii) the state could improve its legislation through introducing a personal insolvency, which could be further used to improve social service offices, and (iii) the citizens in distress could be offered with a fresh start and assistance from the social services to overcome the crisis. Even the NPL companies would benefit, as they would be doing their business in much better environment for investing into RNPLs.Social service is in its decades long neglection period, and should be re-established as an institution that should also assist debtors to overcome their personal debt crisis via well-educated and skilled insolvency administrators (counsels).At the end, establishing solid system of personal insolvency on the one side and RNPL market on the other, could boost economic growth.This text was published for the Winter-Spring 2023 issue of the <a href="https://www.executive-global.com/">Executive Global Magazine</a>. It is for informational purposes only and should not be considered legal advice. Should you require any additional information, feel free to contact us.Contact:Ivan Nikolić, Senior Associate ivan.nikolic@sog.rs

One of the long-debated domestic themes is non-existence of retail NPL market in Serbia. Following the 2008 World Economic Crisis in Serbia, the country managed to regulate corporate NPL market, and to decrease NPL level from 20% to 3,19 %. However, retail NPL market remained a taboo. There are several reasons for this and the main one is that the general public fears that regulating retail NPL (“RNPL”) market would legalize debt slavery.

Emil
Cetina

Employment of Foreign Nationals – Current Conflict of Regulations

Retail NPLs in Serbia – Slowly Suffocating the Banks and the Citizens

Let’s work together.

Glinska Mišković

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Address

EmilCetina

Employment of Foreign Nationals – Current Conflict of Regulations

Retail NPLs in Serbia – Slowly Suffocating the Banks and the Citizens

Let’s work together.

Glinska Mišković

Contact

Address

Emil
Cetina