A US company can hire someone in Serbia legally, and you don’t need a Serbian entity to do it. Serbian professionals work with foreign clients through four setups: as a preduzetnik (a registered sole trader), as a registered freelancer, through their own company (a DOO), or as an employee of an Employer of Record.
All four are legal for you to hire. In the first three, they invoice you and you pay by international wire. With an EOR, the provider employs your hire in Serbia and sends you one monthly invoice.
Which of the four you meet is mostly their decision, made with their accountant based on how much they earn and how they like to work. Your side is simpler than it looks: a contract, one tax form, and a wire.
This is a practical guide, not legal or tax advice. Confirm your setup with your accountant, and ask the person you’re hiring to confirm theirs with a Serbian accountant.
If you’d rather have this as a checklist, download the free US Founder’s Guide to Hiring From Serbia. Same ground, a few pages, plus hiring cost and vetting.
Written by Zorka Djurovic, Founder @ Kaymack Careers
Is it legal for a US company to hire someone in Serbia?
Yes. Serbian residents can sell services to foreign clients, get paid in foreign currency, and report that income under rules written for this exact situation. On your side, paying a foreign contractor for work performed outside the US is ordinary business.
What matters for you is that the person is properly registered in Serbia, whichever of the four setups they use, and that you have a written contract and an invoice for every payment. Registration status is public and takes a minute to check.
The four setups you’ll meet
1. Preduzetnik (sole trader)
A preduzetnik is a person registered as a sole trader with the Serbian Business Registers Agency (APR). It’s the most established route for Serbian developers, designers, and marketers working with foreign clients. They go by the business name, which is the person’s name plus “PR” and a trade name, for example “Marko Marković PR Agency M.” Every registered business has a PIB (tax ID) and an MB (registration number), both free to look up in the APR public register.
You sign a services contract with their business, they invoice you, and you wire the amount to their business account. They pay their own Serbian tax and contributions out of what you send. You withhold nothing and file nothing in Serbia.
2. Registered freelancer
Some Serbian professionals work with foreign clients without registering a business. Serbia has a legal path for exactly that: they declare the income themselves and pay tax on it quarterly through the Tax Administration’s portal.
For you it works the same way as any contractor, and it’s the lightest of the four. You agree a rate, sign a contract, and pay into their personal account. There’s nothing to withhold, nothing to file, and no Serbian obligation that transfers to you. It’s common for part-time work, one-off projects, and people earlier in their freelance career. If the engagement becomes steady, many register as a preduzetnik, which changes nothing for you except the name and account on the invoice.
3. Their own company (DOO)
A DOO is the Serbian equivalent of an LLC. Two versions show up: an agency or outstaffing firm that assigns people to your project, and a single professional who has incorporated. The second is more common than founders expect, because the accounting math improves as income grows, so senior people who have scaled their work often end up here.
You’re contracting company to company, which suits US founders fine and usually means the person already works with foreign clients and knows what a proper contract looks like. Three things are worth agreeing in writing: notice period and how either side cancels, what happens if the company wants to put someone else on your work (you can require it stays the person you hired), and IP assignment, including confirmation that the company holds those rights from its own people before it transfers them to you. Invoicing works like any B2B relationship, and their accountant handles VAT or the absence of it.
4. Employer of Record
An employer of record in Serbia has its own local entity, employs your hire under a Serbian employment contract, runs payroll, and handles compliance. You direct the work and pay one monthly invoice.
This one exists because some Serbian professionals prefer it. Being formally employed brings paid annual leave (at least 20 working days), paid sick leave, pension and health contributions handled for them, no accountant to pay, and no quarterly admin. An employment contract can also make things like a mortgage application simpler here. If a candidate asks for it, it’s a reasonable ask and easy to accommodate.
Through an EOR, budget for the agreed gross salary plus about 15% in employer contributions, plus the provider’s monthly fee. The largest international EORs list $599 to $699 per employee per month (Deel, Remote, Oyster, September 2026), and Serbian providers usually quote on request, often for less. The fee is billed to you and doesn’t come out of your hire’s pay.
How do you pay a contractor in Serbia?
- Check the registration. Look up the PIB or MB in the APR register and confirm it matches the name on the contract.
- Sign a written contract covering scope, rate, currency, payment terms, IP assignment, confidentiality, notice, and governing law. Serbian copyright law has its own rules on transferring rights, so make the IP clause explicit and have it checked.
- Collect the tax form before the first payment. A W-8BEN for individuals and preduzetnici, a W-8BEN-E for a company. It stays in your files rather than going to the IRS.
- Get a complete invoice: legal name and address, PIB and MB where they apply, amount and currency, IBAN (Serbian IBANs start with RS and run 22 characters), SWIFT/BIC, and any intermediary bank their bank specifies for USD.
- Send the wire in the invoice currency. If your bank offers the choice, pick “OUR” so fees don’t come out of their payment.
Agree the currency at contract stage. Serbian banks hold USD accounts routinely, though many professionals here still think in euros. Payoneer and contractor-payment platforms work too. One habit worth keeping: pay the account on the invoice, which for a registered business is the business account.
Drafting a contract this week? Download the free US Founder’s Guide to Hiring From Serbia and hand it to whoever handles your payments.
Can you hire from Serbia without an entity?
Yes, on both sides. You contract from the company you already have, and they invoice from their Serbian registration. Payments to a non-US person for services performed entirely outside the US are generally not US-source income, so there’s no US withholding and no 1099. Your CPA should confirm it for your situation, especially if the person ever works while physically in the US.
Which setup should you ask for?
Usually none. The person arrives with their setup already chosen, it’s legitimate, and hiring any of the four is fine. Treat it as a paperwork question: registered business means a business contract and a W-8BEN or W-8BEN-E, freelancer means the same contract paid to a personal account.
The one time you have something to offer is when a candidate would rather be employed than invoice you. That’s what an EOR is for, and saying yes to it can be the difference on an offer.
What does it cost to hire a developer in Serbia?
A Serbian contractor typically costs a US company $1,500 to $6,500 a month depending on seniority, and that invoice is your whole cost, because the contractor pays their own Serbian taxes out of it. Serbian professionals quote monthly, so a candidate who says $3,000 means $3,000 a month. Worth having in mind.
| Level | Experience | Monthly contractor rate (USD) | Annual cost (USD) |
| Junior | 0 to 3 years | $1,500 to $2,500 | $18,000 to $30,000 |
| Mid-level | 3 to 6 years | $2,500 to $4,000 | $30,000 to $48,000 |
| Senior | 6+ years | $4,000 to $6,500 | $48,000 to $78,000 |
Compare that with the US median for software developers, which the Bureau of Labor Statistics puts above $130,000 a year before benefits, and the gap is still the reason this conversation is happening.
FAQ
1. Do I withhold US tax or file a 1099 for a Serbian contractor?
Generally no, when a non-US person does the work outside the US. Collect a W-8BEN or W-8BEN-E and keep it on file.
2. Can I pay in US dollars?
Yes. Serbian banks offer USD accounts and USD invoices are routine. Include the intermediary bank details their bank gives you.
3. Can a Serbian contractor work full-time for me?
Yes, and plenty do. How they’re registered and taxed is their side of the arrangement. If a candidate would rather have an employment contract and benefits, an EOR gives them that
Next step
Download the free US Founder’s Guide to Hiring From Serbia for the setups, the paperwork, and what the same seniority costs versus a US hire.
Already have a role in mind? Book a 15-minute discovery call and I’ll tell you what a realistic shortlist looks like and what it will cost.
Practical guidance, not legal or tax advice. Confirm your setup with a US accountant, and have your hire confirm theirs with a Serbian accountant.
