US Company Formation from Serbia (2026): US LLC or C-Corp for Serbian Developers and Start-ups, Paušal vs US LLC, Dividends and No US Treaty

Serbia has become one of Europe's busiest places for software outsourcing and product development. Belgrade, Novi Sad and Niš are full of developers working for American and Western European clients, mostly as paušalci: entrepreneurs taxed at a flat amount. Serbian start-ups such as Nordeus, Frame and Seven Bridges showed that a Serbian team can build a global product. The usual structure behind them was a US or UK parent company with a Serbian subsidiary.

A US company can be formed from Serbia entirely online. Before forming one, a Serbian developer should ask whether it beats a paušal business, and a Serbian founder should know how the missing US–Serbia treaty affects dividends. This guide takes both questions, then covers US LLC formation and US C-Corp formation.

In short: Serbian citizens and residents can own 100% of a US LLC or C-Corporation, formed remotely. For most freelancers, a paušal entrepreneur (a flat monthly tax and contributions, with an annual turnover ceiling of around RSD 6 million) costs less than a US LLC, provided the business passes the independence test. Serbia taxes residents on worldwide income. Dividends are taxed at 15%, and there is an additional annual income tax for higher earners. There is no US–Serbia income tax treaty, so US corporate dividends to Serbia carry 30% withholding. A US company is most useful for US contracts, payment platforms and investors. With UCB, a Wyoming LLC with EIN is $249 and a Delaware corporation with EIN is $358, all-in.

Who can form a US company from Serbia

The USA does not limit company ownership by nationality or residence. A Serbian citizen in Belgrade, a foreign national living in Novi Sad, a Serbian d.o.o. or a preduzetnik can own a US company outright. A sole owner may also be its only manager or director. You need no US visa, Social Security number or US address, and nothing has to be done in person. The company appoints a registered agent in its state, included for the first year in every UCB formation (see registered agent explained), and receives an EIN from the IRS without an SSN or ITIN (see EIN for non-residents).

For identity, use your passport. The Serbian ID card (lična karta) is not accepted by US banks alone. Use the Latin spelling in your passport, with its diacritics or their plain equivalents (Đorđević or Djordjevic), consistently on every form. For proof of address, use a utility bill (EPS, Infostan) or a bank statement with an English translation.

Paušal or US LLC?

This is the first decision for most Serbian freelancers.

A paušal entrepreneur pays a fixed monthly amount of tax and social contributions, set by the tax administration according to the activity and the municipality, rather than tax on actual profit. The regime is limited by an annual turnover ceiling (around RSD 6 million), and most foreign-client developers and designers fall well within it.

Since 2023, a paušal entrepreneur must pass an independence test (test samostalnosti). Its criteria look at whether the "client" behaves like an employer:

• setting working hours;
• providing the equipment;
• paying most of the entrepreneur's income;
• controlling how the work is done.

If the business fails the test, the income is taxed like employment income at much higher rates. For many developers, working for a single foreign client through an agency is exactly where the test bites.

A US LLC does not escape Serbian tax. Serbia taxes its residents on worldwide income. Money a Serbian resident takes from a US company is generally taxed in Serbia as dividend or capital income at 15%, or as business or employment income if the facts point that way, and it can count towards the annual additional income tax for high earners. On top of that come the yearly US filings and the cost of keeping the company.

For tax alone, the paušal regime usually wins for a solo freelancer who passes the independence test. A US LLC earns its place for other reasons:

• US clients whose procurement will only contract with a US company.
• Payment platforms and marketplaces that work best with a US entity.
• A product business selling to customers worldwide.
• A future investment round, although for that you need a corporation (below).

Many Serbian founders keep a paušal business for their consulting income and form a US company only for a product or a group of US contracts.

How Serbia taxes a US company and its owner

Serbian tax residents are people with a residence or centre of business and vital interests in Serbia, or who spend more than 183 days there in a 12-month period. They are taxed on income from all sources:

• Capital income, including dividends from a foreign company, is taxed at 15%, with a credit for foreign tax up to the Serbian tax.
• Self-employment income taxed on actual profit pays 10% personal income tax plus social contributions.
• The annual additional income tax applies to high earners above a threshold linked to the average salary.

Serbian companies (d.o.o.) pay 15% corporate income tax, and dividends they pay to individuals carry 15% withholding.

A Serbian adviser should also look at how the Serbian authorities will view a US LLC that is ignored by the IRS but is a legal entity under US law, particularly for an owner who does all the work in Serbia.

US LLC formation from Serbia

How the IRS sees it

A US LLC owned by one non-resident is treated by the IRS as part of its owner rather than as a separate taxpayer. As long as the work happens outside the USA, and no one in the USA acts for the LLC, its income is generally outside US income tax (see effectively connected income explained). There is no corporate layer, so the 30% dividend withholding that comes with having no treaty does not apply. Each year the LLC files Form 5472 with a pro forma Form 1120, and missing it costs $25,000 (see Form 5472 explained).

A dinar example

These are illustrative figures, not a client case, at RSD 105 to the dollar.

Marko and Jelena run a small studio in Novi Sad that builds a booking app for US fitness studios, sold by monthly subscription. They form a two-member Wyoming LLC that holds the Stripe account and customer contracts. Revenue in 2026 is US$240,000, and profit after hosting and contractors is US$160,000.

A two-member LLC is a partnership for US tax. It files Form 1065 and gives each partner a statement of their share. Because the business is run entirely from Serbia, with no US office or agents, there is no US tax on its income.

In Serbia, each partner reports their share as their adviser determines, based on how the business actually operates. They take US$50,000 each during the year, about RSD 5.25 million each. The LLC's US filings, accounts and bank statements support their Serbian returns. They keep their separate paušal businesses for consulting work.

US C-Corp formation from Serbia

How the IRS sees it

A US corporation pays federal tax of 21% on its profits, plus state tax where it does business, and files Form 1120 and Form 5472 each year (see the 21% corporate tax explained and the C-Corp guide for non-residents). With no US–Serbia treaty, dividends, royalties and interest paid to a shareholder in Serbia owning 10% or more are withheld at 30%. Serbia then taxes the dividend at 15%, with a credit for the US withholding, which already exceeds it. The combined cost of paying profits out to Serbia is about 44.7%.

Start-ups and the Serbian subsidiary model

Serbian start-ups that raise from US or international investors almost always use a Delaware C-Corporation as the parent:

• The investors hold shares in the Delaware company.
• The Serbian team is employed by a Serbian d.o.o. that the Delaware company owns.
• The Delaware company pays the d.o.o. for development at cost plus a margin, documented under Serbian transfer pricing rules.
• The d.o.o. pays 15% Serbian corporate tax on that margin.
• The parent keeps the product rights and the revenue, and reinvests rather than paying dividends to Serbia.

Founders benefit when they sell shares, not through dividends. See raising US investment as a foreign founder and US subsidiary for a foreign company.

A Serbian d.o.o. that wants a US sales arm with US staff should also use a US corporation, so that US tax on the US profits stays in the US company.

Which state

• Wyoming or New Mexico for an LLC run from Serbia.
• Delaware for any corporation that will raise investment. It is what investors and their lawyers expect.
• The state of a US office or team, if you have one.

See best state for non-residents and the state selector.

What it costs

UCB's formation prices include state fees and the first year of registered agent service:

• A Wyoming LLC with EIN is $249, or $348 with a US bank account application.
• A Delaware corporation with EIN is $358.

Keeping a Wyoming LLC active is $121 a year, or $421 including the annual federal return. A Delaware corporation costs $578 a year to keep active. A US business address with your own suite number is $60 a year. See what a US LLC costs every year.

Banking and payments

US banks and fintechs generally accept Serbian owners. What gets an application approved:

• A specific business description.
• An English website showing the product or services.
• Matching name spellings across passport, EIN letter and application.
• A US business address with your own suite number.

Once the US company has an account and an EIN, Stripe can be connected, subject to its own checks. Transfers to Serbian banks arrive as foreign currency payments, which Serbian banks process under the foreign exchange rules with documentation of the basis for the payment. Keep invoices, agreements and the LLC's records ready. See US business bank accounts for non-residents, why banks reject non-resident applications and Stripe for non-residents.

Common mistakes

• Swapping a paušal business for a US LLC to save tax. For a solo freelancer who passes the independence test, it rarely does.
• Ignoring the independence test while working full-time for one foreign client.
• Paying dividends from a US corporation to Serbia, at 30% with no treaty.
• Missing Form 5472, or Form 1065 for a multi-member LLC.
• Using different spellings of your name on different documents.

Frequently asked questions

Can a Serbian citizen own 100% of a US company? Yes, without visiting the USA or holding a US visa.

Is a US LLC cheaper than being a paušalac? Usually not, for a solo freelancer who passes the independence test. A US LLC is useful for US contracts, payment platforms and products, not mainly for tax.

Is there a US–Serbia tax treaty? There is no income tax treaty in force. US dividends, royalties and related-party interest paid to Serbia are withheld at 30%.

How are dividends from a US company taxed in Serbia? At 15% as capital income, with a credit for US tax withheld. Higher earners may also owe the annual additional income tax.

Does my US LLC pay US tax? Not if it has no office, staff or agents in the USA. It still files Form 5472 and a pro forma 1120 every year, or Form 1065 if it has two or more members.

How UCB can help

We handle US company formation from Serbia remotely: the state filing, EIN, registered agent, US business address and bank application. Each year we file the federal return through our US tax filing service, with Form 1065 for multi-member LLCs. Your Serbian accountant handles Serbian tax, and we supply the US records they need. See our formation, EIN and bank account package and the Central and Eastern Europe guide.

Setting up a US company from Serbia? WhatsApp us at +1 315 961 2956 or email enquiries@ucbsolutions.com.