Serbian Endowments (a.k.a. Serbian Trusts)

The Serbian Endowment is a statutory structure, typically used for Asset Protection and Family Succession Planning, that can be broadly compared to a common-law Trust. For this reason it is colloquially known as a Serbian Trust. It is governed by the Law on Endowments and Foundations adopted in 2010. 

In contrast to the Foundation, it is expressly permitted for a Serbian Endowment to be set up for Private Interest purposes; meaning, for example, for a family office or to manage succession planning, even in the case of a commercial business. In other words, a normal commercial company in Serbia or abroad may be owned by an Endowment.

In order to establish a Serbian Endowment, a minimum capital amount of Serbian dinars equivalent to 30,000 Euros is required. The law does allow certain exceptions to this Minimum Capital Requirement for a Serbian Endowment in special cases.

The assets of the Endowment cannot be distributed to the founders, members of the governing bodies, employees or persons affiliated with them:  however, family members of the Founders may be named as the beneficiaries.

Founders, Control and Beneficial Ownership of Non-Profit Organizations

There are no restrictions on foreign legal and natural persons as founders of associations. Neither does it matter, in the case of legal persons serving as founders, whether they are themselves non-profits or commercial businesses. Likewise, the Law on Foundations of Serbia allows foreign, legal, and natural persons as founders. 

Associations, Foundations and Endowments do not have owners according to Serbian law. Founders of Associations and Foundations are expressly prohibited from having any proprietary interest in the organization – they therefore may not legally claim any part of the organization’s property during its lifetime or in the case of its dissolution. This rule specifically is what turns the Serbian Endowment or “Trust” into a strong asset protection structure that is interesting for international planning purposes. The said rule not apply in the case of voluntary dissolution of a Serbian Endowment pursuing “Private Interest” goals.

Declaration of Beneficial Owners of Serbian Endowments

What about the Register of Beneficial Owners? And how do Serbian Banks comply with their anti-money-laundering obligations to identify Beneficial Owners in the case of opening accounts for non-profit entities?

The Law on the Central Register of Beneficial Owners, which entered into force in 2019, requires legal entities including associations, foundations, and endowments to register a “beneficial owner” in a new national registry. The “beneficial owner” must be a natural person who has primary influence over the organization’s operations and decision-making. The Ministry of Economy and the Serbian Business Registers Agency have both issued guidance for organizations seeking to register their “beneficial owner.” In the box below is a summary of this guidance:

This guidance, summarized generally, states that the Manager or Trustee of the non-profit would be registered as the Beneficial Owner. Neither the Founder nor the Beneficiaries need to be listed. That information is kept confidential.