Serbia is taking steps to curb illegal construction and boost corporate transparency, aiming to simplify property legalization and tighten oversight of company ownership, according to Injac Attorneys Managing Partner Nemanja Injac.
“A lot is happening now in Serbia,” Injac says. “One of the most significant updates is in the real estate sector, specifically regarding the legalization of buildings and other real estate objects. The government is taking another major step to tackle illegal construction, something it has tried to address several times since the 1990s. Previous legislation even included criminal penalties, but it had little real impact. As a result, there are currently around 4.8 million illegally built structures in Serbia.”
Illegal buildings create multiple problems, according to Injac. “Owners of such properties face restrictions – they can’t sell, mortgage, or fully exercise ownership rights. At the same time, the state loses revenue due to incomplete and inaccurate records, the state cannot fully assess and collect property tax.” The new law, he says, “which is set to be processed in Parliament this week, aims to change that. Once in force, owners of eligible properties will have 60 days to apply for legalization. Most objects will be automatically legalized and registered in the cadaster, provided they meet a few basic conditions. It appears that certain categories – e.g., buildings on others’ land, protected areas – will be excluded.”
Injac adds that the idea behind the law is promising. “It introduces a simpler, more practical solution for a problem that has persisted for decades. Long, complex procedures haven’t worked in the past, and this approach could finally shift the status quo. For newly built projects, the law establishes stricter rules: any illegal construction will automatically become the property of the Serbian state. This is intended to discourage investors from building without the proper permits.”
However, Injac also highlights the challenges. “The newly established agency responsible for processing legalization applications may face a huge volume of requests – potentially millions within the 60-day window. It’s unclear whether the agency has the necessary manpower and resources to handle this efficiently. If it doesn’t, there is a risk of corruption or long delays, similar to what has been seen before.”
On the positive side, “once the law is in place, this could have a noticeable impact on the real estate market, particularly as many new types of buildings will now enter the system,” Injac adds. “Prices may be affected, though the exact outcome remains to be seen.”
“Another major development in Serbia is the new law on the registration of beneficial owners of companies,” Injac points out. “Serbia is strengthening its regulatory framework to ensure that no company operates without a known owner. The updated rules, in force since October 1, require companies to not only register their owners but also provide supporting documents and update this information annually. This ensures greater transparency and accountability for corporate ownership.”
The information contained in this document does not constitute legal advice on any specific issue and is provided solely for general informational purposes.
Source: CEELM Magazine
