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Investing in the Real Estate Market in the Republic of Serbia

Investing in the Real Estate Market in the Republic of Serbia

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Continuing our series on opportunities for investment in Serbia, we discuss the real estate sector.  Historically, countries have been reluctant to allow foreigners to acquire real estate. In the past, real estate (primarily lands) symbolized its owners’ power, and today apartments, buildings, houses, properties, mines, and fields have significant worth. Nevertheless, globalization has increased the dynamics of “international” real estate trade. Real estate has thus become an important segment in international investment, both as a secondary part of the project (leasing or even buying space for the investors’ regular business operations) and as the very purpose of the investment (real estate construction, exploitation of mineral resources, construction of roads, etc.). As discussed in our previous articles, Bilateral Investment Treaties (“BITs”) play a crucial role in encouraging and securing foreign investors to invest in a foreign country, this time in real estate.

The purpose of BITs is to provide a variety of safeguards to international investors and to ensure that their investments are not “taken away” in a foreign jurisdiction. One of the mechanisms is the possibility of initiating arbitration proceedings against the investment host country.

Serbia has 53 signed BITs (45 of which are currently in force) with numerous countries across the region, most countries of the European Union (“EU”), as well as with significant trade partners – the United Kingdom, Canada, the United States, Russia, and China.

Regarding real estate, it is essential to point out that most BITs contain a provision by which the investing country guarantees the investments will not be nationalized, expropriated, or subjected to other measures that have the same effect as nationalization or expropriation. Nationalization occurs when the government decides to take over a company or real estate based on the rules (values) it establishes (for example, the case of the nationalization of the YPF company in Argentina). However, BITs themselves foresee an exception to the ban on nationalization/expropriation if: (i) it is in the public interest, (ii) the investor is not subjected to any discrimination, (iii) the expropriation is carried out under the law and (iv) the investor receives appropriate compensation.

International investment relations and real estate sector

A foreigner (foreign investor), whether a natural or a legal person, can buy and invest in real estate in Serbia, provided that Serbia has reciprocity with the foreigner’s country, which means that Serbian citizens can freely acquire (buy, rent, use) real estate in another country in the same way as citizens of that country can do in Serbia. According to the official information provided by the Ministry of Justice, Serbia has reciprocity with over 70 countries worldwide.

With certain countries, Serbia has contractual reciprocity (reciprocity confirmed in an international bilateral agreement). In contrast, in the case of countries with no reciprocity established in such a way, it is based on legal regulation (bylaws of other countries have provisions on the condition of reciprocity) by exchanging notes.

EU – The Stabilisation and Association Agreement (“SAA “) sets the framework for the relationship between Serbia and the EU in this area. It prescribes that Serbia will allow EU Member States’ citizens to acquire real estate in Serbia. The Agricultural Land Act defines an additional benefit for EU citizens, allowing them to acquire agricultural land under certain conditions.

Furthermore, the SAA envisages cooperation between the contracting parties in the field of promotion and protection of both domestic and foreign investments to create a favorable atmosphere for private investments, which is crucial for the economic and industrial revitalization of Serbia. Considering that the EU Member States such as Germany, Italy, Hungary, Romania, Poland, and the Czech Republic are the largest trading partners of Serbia, this agreement is an essential mechanism for the successful enforcement of investment projects in Serbia.

The USA – Bilateral relations between Serbia and the United States date back to 1881 with the signing of the Treaty of Commerce between the United States of America and Serbia. Motivated by a desire to facilitate and strengthen economic relations, the contracting parties to this treaty included, among other things, provisions for the Most favored nation’s treatment in the ownership of immovable property. Even though it entered into force nearly 140 years ago, the treaty has withstood the test of time, and economic relations between Serbia and the USA are continuously progressing.

UAE – Political and economic relations between Serbia and the United Arab Emirates (“UAE”) are at a very high level, confirmed by the agreement on cooperation between the Government of Serbia and the Government of UAE. An essential part of this agreement is cooperation in the field of investments, which implies joint work on various administrative, legal and financial capacities and all necessary procedures when establishing collaborative investment projects for both contracting parties. This agreement also provides cooperation in the real estate field, demonstrated in the acquisition of state-owned real estate. To carry out activities in this area of cooperation, Serbia is obliged to sell immovable property to subjects from the UAE or invest together with them when mutual interest is recognized.

Israel – Investors from Israel have had a significant role in the real estate market. Since 2000, the real estate sector has been the most prominent part of Israeli investments. In that regard, Serbia and Israel have signed numerous agreements, such as the Agreement on Trade and Economic Cooperation and the BIT Agreement.

The interesting fact is that there is no reciprocity between Serbia and North Macedonia in the ownership rights of real estate.

Registering the rights of ownership on immovable property in Serbia

When acquiring, changing, and losing rights to immovable property in Serbia, Serbian law is exclusively applied, regardless of the nationality of the contracting parties and other seemingly important factors. Therefore, it is essential to emphasize that registering ownership rights in Serbia’s Real Estate Cadastre (“Cadastre”) is significantly simplified and expedited. For real estate sales contracts, which the seller and the buyer must sign before a public notary, to register their ownership, the seller and the buyer do not have to go to the Cadastre physically. Instead, the public notary will electronically send the contract to the Cadastre within 24 hours beginning the day of entering into a contract. The Cadastre is then obliged to register the change within five days, starting with the day of delivering the documentation by the public notary. In addition, the seller and the buyer have no obligation to go before the National Tax Authority since public notaries will also fill out the tax declarations and submit them electronically to the National Tax Authority.


In the past several years, the real estate market, infrastructural projects, mining, and construction have seen significant growth in Serbia.

Foreign and domestic investors equally participate in this market, which shows, among other things, that foreign investors have already gained trust in the Serbian market and that they freely invest in real estate projects in Serbia. In addition, the city of Belgrade has named the city with the greatest economic potential in a selection involving 23 countries in the wider region, which only further indicates the dynamic development of the Serbian market, and that long-term projects, such as in real estate, truly make a lot of business sense.

By Nemanja Sladakovic, Senior Associate, Marko Djordjevic, Associate, and Milos Petakovic, Senior Associate, Gecic Law

Serbia Knowledge Partner

SOG in cooperation with Kinstellar is a full-service business law firm in Serbia that provides foreign and domestic clients with premium-quality legal advice and assistance across a wide range of key areas of corporate law. The firm was founded in 2015 by a group of seasoned, internationally-trained lawyers. SOG has developed a distinctively dynamic culture, bringing together top talent, fostering entrepreneurship, and maintaining exceptional relationships with its clients.

SOG has achieved consistent growth in the volume of its business, accompanied by an exponential increase in the number of hired associate lawyers and the firm’s network of business contacts. SOG has a robust client base of multinationals, investment and private equity firms, and financial institutions. Clients praise SOG for being commercially minded, very responsive and knowledgeable.

Establishing permanent cooperation with Kinstellar is part of realising SOG's long-term development strategy to be the leading provider of legal services in the Western Balkans market.

Firm's website: https://www.kinstellar.com/


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