Law on Foundations of Property Law Relations

The right of foreigners to acquire immovable properties in Serbia

Provisions of the Law on Foundations of Property Law Relations (“Official Gazette of the Socialistic Federal Republic of Yugoslavia”, No. 6/80, 36/90, “Official Gazette of the Federal Republic of Yugoslavia”, No. 29/96 and “Official Herald of the Republic of Serbia”, No.115/2005 – other Law) regulates the right of foreign persons (natural and legal) to acquire the right of ownership on real estate in the territory of the Republic of Serbia, legal transactions inter vivos (contract of sale, contract of gift, contract of lifetime support, etc.) and legal transactions mortis causa (by inheritance).

Acquisition of real estate by legal transactions among the living (inter vivos)

The conditions for acquiring real estate through legal transactions among the living (inter vivos) differ depending on whether foreigners in the Republic of Serbia perform their activity or not.

A contract on acquiring the right of ownership over immovables may be certified if requirements provided in provisions of Article 82a of the Law on Foundations of Property Law Relations (“Official Gazette of the Socialistic Federal Republic of Yugoslavia”, No. 6/80, 36/90, “Official Gazette of the Federal Republic of Yugoslavia”, No. 29/96 and “Official Herald of the Republic of Serbia”, No.115/2005 – other Law) for acquiring the right of ownership have been met, and that:

  • Foreign natural persons and legal entities conducting a business activity in the Republic of Serboa may, under the terms of reciprocity, acquire ownership rights on such immovables as are necessary for conducting of such activity (paragraph 1), and
  • A foreign natural person not conducting a business activity in the Republic of Serbia may, under the terms of reciprocity, acquire ownership rights over a flat and an apartment building, as may a citizen of the Republic of Serbia (paragraph 2).

Also, a natural person who does not perform activities in the Republic of Serbia may not acquire ownership of other types of land unless it is land on which there is an apartment or a residential building on which he acquires the right of ownership of land used for regular use of the apartment or apartment buildings.

Foreign natural persons and a legal entities may, by way of legal transaction, transfer the right of ownership onto a domestic person, as well as onto a foreign person eligible to acquire the right of ownership.

Agricultural land

By the provisions of Article 2 of the Law on Agricultural Land (“Official Gazette of RS”, No. 62/2006, 65/2008 – other law, 41/2009, 112/2015, 80/2017 and 95/2018 – other law) it is defined that agricultural land means land used for agricultural production (fields, gardens, orchards, vineyards, meadows, pastures, fishponds, reeds and swamps) and land that can be used for agricultural production.

Article 1 of the Law on Agricultural Land (“Official Gazette of RS”, No. 62/2006, 65/2008 – other law, 41/2009, 112/2015, 80/2017 and 95/2018 – other law) explicitly stipulates that a foreign natural or legal person may not own agricultural land unless otherwise provided by this Law following the Stabilization and Association Agreement between the European Communities and their Member States, of the one part, and the Republic of Serbia, of the other part ( “Official Gazette of RS – International Agreements”, No. 83/2008).

Determining the existence of reciprocity between the Republic of Serbia and other countries

A court or other competent agency proceeding in the matter of reciprocity, if it does not already know about it, may request relevant clarification from the federal agency in charge of matters of justice, in concrete case from the Ministry of Justice of Republic Serbia. Any other interested person may request an explanation of the reciprocity.

Ministry of Trade, Tourism and Telecommunications of the Republic of Serbia shall present an opinion on whether the type of immovables, acquired through contract is indispensable for performing the activities of the foreign natural person or the legal entity.

The issue of the type of reciprocity required for the acquisition of real estate is not regulated by The Law on Foundations of Property Law Relations (“Official Gazette of the Socialistic Federal Republic of Yugoslavia”, No. 6/80, 36/90, “Official Gazette of the Federal Republic of Yugoslavia”, No. 29/96 and “Official Herald of the Republic of Serbia”, No.115/2005 – other Law). It is assumed that this acquisition does not require the existence of contractual (diplomatic) reciprocity with the relevant foreign state. Still, it is sufficient that the legislation of that state allows the possibility of acquiring real estate for foreign persons under conditions that are not significantly more severe than the conditions prescribed by the said domestic Law, as well as in practice to allow citizens of the Republic of Serbia to acquire real estate on the territory of the respective state (factual reciprocity).

The Republic of Serbia has established contractual reciprocity concerning the acquisition of property rights on real estate through legal transactions inter vivos by natural persons based on contracts on trade and navigation, concluded in the first half of the twentieth century.

In some of them, reciprocity is explicitly agreed. In others, reciprocity exists through the application of the most-favoured-nation clause. These are the following countries: Great Britain, the United States, the Kingdom of the Netherlands and Japan.

With regard to other countries with which reciprocity has not been agreed, the Ministry of Justice, based on the legal regulations of the respective countries which regulate this matter, ie by exchanging notes, determined the existence of reciprocity with the following countries: Argentina, Australia, Austria, Bahrain, Belize, Belgium, Belarus , Bosnia and Herzegovina, Brazil, British Virgin Islands, Bulgaria, United Kingdom, Greece, Denmark, Dominican Republic, Egypt, Israel, Iran, Ireland, Italy, Japan, Armenia, South Africa, Jordan, Republic of Kazakhstan, Canada, China, Cyprus , Lebanon, Latvia, Lithuania, Liechtenstein, Luxembourg, Hungary, Malta, Morocco, Mexico, Moldova, Germany, New Zealand, Norway, Panama, Peru, Poland, Portugal, Russian Federation, Romania, United States, Singapore, Syria, Slovakia , Slovenia, Turkey, Uzbekistan, Ukraine, Finland, France, Netherlands, Croatia, Montenegro, Czech Republic, Switzerland, Confederation Sweden, Spain, United Arab Emirates, Azerbaijan , El Salvador, Qatar, Cuba, Senegal, Yemen, Georgia, Colombia, Republic of Korea, Sri Lanka, DNR Congo, Zambia and Algeria.

Concerning countries that are not listed, the process of determining reciprocity is ongoing. In that case, it is necessary to apply to the Ministry of Justice for an explanation.

Acquire the right of ownership over immovable mortis causa

By Article 82b of the Law on Foundations of Property Law Relations (“Official Gazette of the Socialistic Federal Republic of Yugoslavia”, No. 6/80, 36/90, “Official Gazette of the Federal Republic of Yugoslavia”, No. 29/96 and “Official Herald of the Republic of Serbia”, No.115/2005 – other Law) shall be prescribed that a foreign natural person may, under the terms of reciprocity, acquire the right of ownership over immovables on the territory of the Republic of Serbia inheritance, as may domestic citizens.

Acquisition of real estate with some countries is regulated by bilateral agreements on legal assistance, which contain a clause of national treatment, i.e. they provide that citizens of one contracting party can inherit property on the territory of the other contracting party under the same conditions and to the same extent as domestic citizens. In this way, contractual (diplomatic) reciprocity is ensured. Such a solution is contained in the agreements on legal assistance, agreements on trade and navigation, i.e. in fact with the following countries: Austria, Belarus, Bosnia and Herzegovina, Bulgaria, Great Britain, Japan, Hungary, Mongolia, Poland, Russia, Romania, Ukraine, USA, Slovakia, Montenegro, the Netherlands, Albania, Israel, Croatia, Canada, Czech Republic, Slovenia, Northern Macedonia.

However, to acquire property by inheritance, contractual reciprocity is not necessary, but actual reciprocity on this issue is sufficient.

Concerning countries with no contractual reciprocity regarding the acquisition of property rights by inheritance, we start from the position that reciprocity does not need to be determined concerning each state but from the assumption that each state recognizes the right to inherit the real estate from its citizens. On the contrary, foreign citizens can inherit real estate on the territory of the Republic of Serbia based on presumed factual reciprocity, provided that interested parties can prove the opposite.

Sale of real estate to foreign countries

Foreign states, with prior approval to be issued by the ministry in charge of matters of justice, may purchase buildings and apartments for the needs of their diplomatic and consular representation offices, as may organisations and specialised agencies of the United Nations Organisation, as well as building sites for the purpose of construction of such buildings.

A long-term lease on a tourist or other related facility to a foreign natural person or legal entity

An enterprise engaged in tourist or catering activities may grant a long-term lease on a tourist or other related facility to a foreign natural person or legal entity under conditions set out in a written agreement.

A long-term lease may be concluded for a minimum of five and a maximum of thirty years. Upon expiry of the lease period, a lease may be extended.

At the request by the lease-holder, the long-term lease shall be entered into a public register or filed in another adequate mode provided by law. A registered long-term lease shall have legal effect also on the subsequent acquirer.

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