Non-resident founding members of a limited liability company can invest in their business (registered in Serbia) in the form of an additional payment that does not increase capital.

The payment is made into the company’s foreign currency account. Therefore, it will be made in foreign currency.

Once the payment is deposited, the bank will send a notice of foreign currency inflow to the company, which will then need to be filled out, stamped, and returned to the bank to complete the correct distribution of funds.

This transaction corresponds to code 560. On the form, this code must appear next to the exact amount received, along with the account where the company wishes to deposit these funds (whether they choose to keep it in the foreign currency account for future outgoing payments or transfer the funds to their Serbian dinar account) and other required details.

Along with a signed and stamped authorization, the bank will ask for the following document, which forms the basis for the transaction — Resolution for additional investments of founding members that do not increase the capital of the company.

At the time the payment is made, the transaction is not reported to the Serbian Business Registers Agency (SBRA). At the time of return, there is a mandatory reporting requirement on the Serbian Business Registers Agency website. It is only after a certain period following the report’s submission, and after the conditions for founder payouts have been fulfilled, that the return of the previously made additional payment can be carried out.

The accounting method used for additional incoming payments that don’t increase capital depends on the transaction specifics. By its very nature, this type of transaction doesn’t increase the capital of the company. It also doesn’t come with short-term obligations since it isn’t a loan. However, a possibility of return can be included in the resolution made by the founding members.

If there is no return obligation at the time of the recording, the transaction can be recorded in the accounts of group 33(intangible investments/reserves).