Streamlining Work Permits and Residence for Foreigners in Serbia: Recent Legislative Changes

Discover how recent legislative changes in Serbia are simplifying the process of obtaining work permits and residence for foreigners. In this article, we’ll delve into the key amendments aimed at enhancing cooperation between authorities, improving data exchange, and creating a more efficient system for employers seeking to hire foreign talent.

Current Legislative Solutions

Under the current legislative solutions, the jurisdiction in the field of employing foreigners is divided, so that two permits are issued for the purpose of employing foreigners. Namely, a foreigner must first regulate their stay with the Ministry of Internal Affairs (hereinafter: MIA), while the National Employment Service (hereinafter: NES) issues the work permit. The goal of amendments and additions to the law is to facilitate access to services for the economy, thereby improving cooperation between the competent authorities, as well as the exchange of data necessary for decision-making, creating a connected, efficient, quality, and improved system that allows an employer to employ a foreigner.

Since the Law on Foreigners (“Official Gazette of RS”, No. 24/2018, 31/2019, and 62/2023) and the Law on Employment of Foreigners (“Official Gazette of RS”, No. 128/2014, 113/2017, 50/2018, 31/2019, and 62/2023) are horizontally connected, and to introduce a single residence-work permit and further simplify the process of employing foreigners, this implies a parallel amendment of these two laws.

The basic principles in the process of employing foreigners are the principle of direct decision-making in all procedures and the principle of equal treatment. A foreigner who is employed, temporarily employed, cannot have fewer rights than those prescribed by the law governing labor.

One of the main reasons for the amendments and additions to these laws is the introduction of a single permit for residence and work, through the parallel alignment of the provisions of the Law on Employment of Foreigners and the Law on Foreigners (which is under the jurisdiction of the Ministry of Internal Affairs), with Directive 2011/98/EU on a single procedure for processing applications for issuing a single permit for residence and work for nationals of third countries in the territory of a member state and a common set of rights for workers from third countries legally residing in a member state. The phased harmonization of legislation in the field of legal and irregular migrations, i.e., alignment with the mentioned directive, is one of the activities foreseen in the Revised Action Plan for Chapter 24, Sub-chapter Migrations. By aligning the Law on Employment of Foreigners with the mentioned directive, a higher level of conformity of regulations with the regulations of the European Union has been achieved.

117,270 Work Permits Issued: A Comprehensive Analysis from 2014 to 2023

The Law on Employment of Foreigners from 2014

The Law on Employment of Foreigners was adopted at the end of 2014 and comprehensively regulated the field of employing foreigners in the Republic of Serbia. In the first years after the Law on Employment of Foreigners came into effect, the positive effects of its application were noticed. Namely, until the adoption of the Law on Employment of Foreigners, a law from 1978 was in effect, when an average of about 1,500 work permits were issued annually to foreigners. Since the beginning of the application of the Law, i.e., from December 4, 2014, the NES has issued a total of 117,270 work permits.

The application of the law in practice opened certain questions, so in December 2017, June 2018, and April 2019, certain provisions of this law were specified to simplify the procedures for issuing work permits and facilitate the application of regulations in practice.

Amendments and Additions to the Law in 2017

With the amendments and additions to the Law on Employment of Foreigners in December 2017, certain provisions were specified and regulated to more efficiently implement regulations in practice. Namely, it was necessary to specify the provisions relating to the work permit for posted persons and the work permit for movement within a company, then it was necessary to introduce a new type of work permit for professional training and improvement. It was also necessary to exempt from the application of the law the family members of diplomatic-consular representations, considering their specific position and the provisions of the Vienna Convention on Diplomatic Relations from 1961.

Amendments and Additions to the Law in 2018

Also, with the adopted amendments and additions to the Law on Employment of Foreigners in June 2018, further simplification of the work permit issuance process was executed. By specifying certain provisions of the Law and significantly shortening the period for issuing employment permits (reducing the market test period from a month to 10 days), the more efficient implementation of regulations and the actions of the competent authorities were contributed, which ultimately positively affects the further development of a more favorable business environment and the attraction of foreign investments.

Amendments and Additions to the Law in 2019

Then, with the adopted amendments and additions to the Law on Employment of Foreigners in April 2019, the procedure was also simplified by stipulating a unified approach by the NES in extending the work permit for posted persons and the work permit for movement within a company. Namely, the burden of obtaining the necessary documentation (obtaining the previous opinion of the relevant ministry on the justification of extending these types of work permits and the consent of the ministry responsible for employment affairs) was transferred to the NES, further simplifying the procedure and significantly facilitating the employer’s process of extending the work permit. Thus, the mentioned solution enabled greater efficiency in providing services by the NES and affects the simplification of the administrative procedure itself. The same amendments introduced the possibility of issuing a work permit to a foreigner who has been granted a visa for a longer stay on the basis of employment, i.e., a work permit for employment, a work permit for posted persons, a work permit for movement within a company, an independent professional work permit, and a self-employment work permit. Namely, by simultaneously aligning the provisions of the Law on Employment of Foreigners and the Law on Foreigners from 2019, the employer was enabled to initiate the procedure for issuing a work permit with the NES during the process of approving a visa for a longer stay based on employment, which is conducted before the competent diplomatic-consular representation. Therefore, while the foreigner is still in the process of obtaining a visa for a longer stay based on employment, i.e., while still abroad, and in accordance with the mentioned legal solution, the employer can undertake the necessary activities with the NES to issue the appropriate work permit.

Amendments and Additions to the Law in 2023

These fourth Amendments and Additions to the Law on Employment of Foreigners can be viewed from two aspects: through the introduction of a single permit for residence and work and through a more flexible concept of employing foreigners, but with the application of the concept of conducting a labor market test.

These amendments and additions to the Law on Employment of Foreigners also further simplify the process of employing foreigners, as well as specify certain provisions of the Law, and contribute to the more efficient implementation of regulations and more efficient actions of the competent authorities, which ultimately positively affects the further development of the business environment.

This Law on Employment of Foreigners is accompanied by simultaneous amendments and additions to the Law on Foreigners, which introduce a single permit for residence and work. By aligning the provisions of the Law on Employment of Foreigners and the Law on Foreigners, a single administrative point is introduced, i.e., a single permit for temporary residence and work, as a single act that will be issued by the competent authority of the Ministry of Internal Affairs, and it is also specified that when issuing a visa for a longer stay based on employment, the NES submits an assessment to the competent authority about the fulfillment of the conditions for employing foreigners in the Republic of Serbia.

Therefore, the procedure is simplified by introducing a single permit that implies a permit for temporary residence and work, which will be issued by the competent authority in accordance with the regulations governing entry, movement, and residence.

The NES, instead of the previous system of issuing a work permit, will assess the fulfillment of conditions for employment, special cases of employment and self-employment of a foreigner, as a preliminary question in the procedure for issuing a single permit. The assessment will involve an evaluation of the fulfillment of conditions for employment, special cases of employment, and self-employment of a foreigner, which is carried out by the organization responsible for employment affairs, in accordance with the law. Then, the proposed legal solutions also precisely specify that the provisions of this law relating to the assessment of the fulfillment of conditions for employment, special cases of employment, and self-employment of a foreigner shall be correspondingly applied to the procedure for approving a visa for a longer stay based on employment. This means that in the process of approving a visa for a longer stay based on employment, the NES will perform a check of the fulfillment of conditions for employing foreigners, and this visa will be a visa for entry, movement, residence, and work of foreigners.

To recap, as of January 1, 2020, in addition to foreigners holding approved temporary residence and permanent residence permits, and foreigners with a long-term stay visa based on employment (visa D), are allowed to be employed in the Republic of Serbia. Article 9, paragraph 1, of the previous version of the Law on Employment of Foreigners (“Official Gazette of RS”, No. 128/2014, 113/2017, 50/2018, 31/2019) stipulated that the employment of a foreigner is subject to the condition that the foreigner holds a long-term stay visa based on employment, approval for temporary residence, or permanent residence, and a work permit unless otherwise provided by law. According to Article 22, paragraph 3, of the previous version of the Law on Foreigners (“Official Gazette of RS”, No. 24/2018 and 31/2019), which also came into effect on January 1, 2020, the employment of a foreigner in the Republic of Serbia is subject to the condition that the foreigner holds a long-term stay visa based on employment, approval for temporary residence, or permanent residence, and a work permit. A long-term stay visa (visa D) is permission for a foreigner to enter and stay in the territory of the Republic of Serbia, issued for a duration of 90 to 180 days. The visa is issued by the diplomatic-consular representation unless otherwise specified by the Law on Foreigners.

The Law on Employment of Foreigners introduces a new legal institute, namely the National Employment Service (NSZ) will issue consent, which will allow a foreigner to change the basis of work, change the employer, or work for two or more employers during the validity period of a single permit.

The single administrative point and digitization of the process of issuing a single work permit

In this process, a single administrative point is the competent authority of the Ministry of Internal Affairs, which makes the final decision in the single process, while the assessment of the conditions for employing and other work engagement of a foreigner is within the competence of the NSZ, as a preliminary question in that process.

Furthermore, complete digitization of the work permit and residence permit issuance process is envisaged, which will contribute to speeding up the procedure for obtaining a permit.

The digitization process involves submitting an application for a work and residence permit electronically through the information portal. Single permits are issued as biometric documents. On one hand, the goal of complete digitization of this process is to facilitate access to services for employers. On the other hand, by digitizing the process, cooperation between competent authorities and the exchange of data necessary for decision-making will improve, resulting in a connected, efficient, high-quality, and improved system that allows employers to hire or engage foreign workers.

Employers will no longer need to carry documents from one counter to another, and the electronic service will be available 24/7, 365 days a year. Digitization will reduce administrative burdens and paperwork, thereby improving the business environment, and significant time savings for our economy by eliminating the need for employers to visit counters in person. Applications will also be possible to submit from abroad.

Until the amendments and additions to the Law on Employment of Foreigners in 2023, our legal system had seven types of work permits, namely: personal work permit, work permit for employment, work permit for movement within a business entity, secondment work permit, work permit for independent professionals, work permit for self-employment, and work permit for professional training and improvement.

Furthermore, the previous application of both laws showed that it is necessary to exempt certain categories of foreigners from the application of conditions for employing foreigners (mostly foreigners who met the requirements for a personal permit under valid regulations).

The Law on Employment of Foreigners establishes categories of foreigners who have the right to work, i.e., have free access to the labor market without the obligation to obtain a single permit, including the following categories of foreigners: foreigners with approved permanent residence, foreigners granted asylum or temporary protection. Additionally, foreigners granted temporary residence based on property ownership, scientific research, humanitarian stay, presumed victim of human trafficking status, performing tasks as an accredited foreign journalist, volunteering, and those providing services in accordance with the law governing the field of volunteering, performing religious service for religious activities, or organizing and conducting charitable actions within registered churches and religious communities in the Republic of Serbia in accordance with the law, and engagement as a member of an authorial or acting team.

The deadline for issuing a single permit is 15 days from the submission of a complete application. The application for a single permit can cover multiple foreign workers who are being employed or assigned during the validity period of the single permit.

A new feature is that a single permit can be issued or extended for up to three years instead of the current maximum of one year. The NSZ will assess the fulfillment of conditions, and the Ministry of Internal Affairs (MUP) will make the final decision in a single procedure based on this assessment.

The introduction of a more flexible concept of employing foreigners, but with the implementation of the labor market test concept. This means that only when it is determined that there are no domestic citizens meeting the employer’s requirements for a specific job in the NSZ registry, NSZ can grant approval for employing a foreigner.

More flexible employment of foreigners, along with protecting the domestic labor market (by conducting the labor market test), implies that a foreigner can work in the Republic of Serbia in jobs for which a single permit has been issued by the employer employing them. On the other hand, there is the possibility for a foreigner to change the basis of work, change the employer, or work for two or more employers during the validity of a single permit, provided that legal conditions are met. This change can be made only after obtaining approval as a separate act by the NSZ, and this approval does not imply a change in the single permit itself, significantly reducing administrative burden. NSZ can issue approval after conducting the labor market test, i.e., only when it is determined that there are no domestic citizens meeting the employer’s requirements for a specific job. Protective mechanisms for the domestic labor market include:

• conducting the labor market test;
• special conditions for issuing a single employment permit;
• quota mechanism.

It is important to emphasize that, despite facing a labor shortage, the proposed legal solutions protect the domestic labor market, primarily through the labor market test. The application of the labor market test concept means that a foreigner can only be employed in the Republic of Serbia when it is determined that there are no domestic citizens in the NSZ registry who meet the employer’s requirements for a specific job.

The proposed legal solution further improves the implementation of the labor market test, making it an integral part of the application for a single employment permit (thus, this procedure will also be fully digitized), simplifying the process, and contributing to greater efficiency in the issuance of a single employment permit.

Furthermore, the law specifies that an employer who has engaged a foreigner employed by an affiliated company to perform certain tasks or activities cannot terminate the employment contract of the employee within three months of concluding such a contract due to technological, economic, or organizational changes. This means that an employer cannot hire a foreigner and then, after some time, dismiss domestic employees.

It is also established that an employer who has terminated the employment contract of an employee due to technological, economic, or organizational changes cannot engage a foreigner employed by an affiliated company to perform the same or similar tasks within three months of declaring the employee redundant for the same or similar tasks, based on a contract for business-technical cooperation, provision of services, or another similar named or unnamed contract concluded with the affiliated company.

An affiliated company is considered to be a legal entity with the status of an affiliated company under the law governing business companies – Article 62 of the Law on Business Companies (“Official Gazette of RS”, No. 36/2011, 99/2011, 83/2014 – dr. law, 5/2015, 44/2018, 95/2018, 91/2019, and 109/2021) and which has its registered office within the same branch of the NSZ where the employer’s registered office is located.

Article 182 of the Labor Law (“Official Gazette of RS”, No. 24/2005, 61/2005, 54/2009, 32/2013, 75/2014, 13/2017 – decision of US, 113/2017, and 95/2018 – authentic interpretation) stipulates that if the employer terminates the employment contract of an employee due to technological, economic, or organizational changes from Article 179, paragraph 5, item 1) of this Law, the employer cannot hire another person for the same job within three months of terminating the employment relationship, except in the case from Article 102, paragraph 2, of this Law. This prohibition also applies to foreigners.

Additionally, the Law on Temporary Employment (“Official Gazette of RS”, No. 86/2019), Article 13, paragraph 1, item 2) stipulates that a contract for the assignment of employees cannot be concluded, among other things, for performing tasks for which the employer has determined surplus employees in accordance with general labor regulations within the time frame prescribed by the law regulating labor.

In this way, the possibility of circumventing these prohibitions, which occurs in practice by concluding contracts with affiliated companies (so-called “subsidiaries” established at the employer’s registered office or within the territory covered by the same NSZ branch), contracts for business-technical cooperation, provision of services, or other similar named or unnamed contracts under which tasks from the employer’s activities that were previously performed by its employees, who have since been declared surplus, continue to be performed by foreign workers formally employed by another employer – an affiliated company, is eliminated.

Moreover, the provisions related to permits for posted workers and permits for movement within a business entity are more precisely defined. By specifying these provisions, new terms are introduced, administrative procedures for extending permits for posted workers or for movement within a business entity are simplified, and conditions for issuing permits for posted workers and permits for movement within a business entity are specified.

The Law on Employment of Foreigners will also enable the posting of a foreigner to work for another employer, under the conditions prescribed for domestic citizens.

The Law on Employment of Foreigners is expected to enter into force eight days from the date of publication in the “Official Gazette,” with enforcement starting on February 1, 2024, except for provisions that:

• more precisely define the terms employer, posted worker, and posting for temporary work in the Republic of Serbia;
• specify the content of the posting act for posted workers and for movement within a business entity, specifying that a foreigner cannot have fewer rights than those prescribed by law regarding the mandatory content of that act and the employer’s obligation to ensure the realization of those rights;
• prescribe penalties for employers who do not ensure the realization of rights and obligations from the posting act; and
• these provisions will apply from the date of entry into force of this law.

The delayed implementation of other provisions of the Law on Employment of Foreigners is due to the need to establish material and technical conditions for their application, i.e., the establishment of a Single Web Portal for submitting applications for the issuance or extension of a single residence and work permit, applications for conducting a labor market test, as well as applications for obtaining consent from the NSZ for a change in the basis of work, changing the employer, or working for two or more employers.

The alignment of the Law on Employment of Foreigners and the Law on Foreigners, along with the introduction of a single permit for residence and work, marks a significant step towards simplifying the process for both foreign workers and employers in Serbia. These legislative changes reflect the country’s commitment to ensuring equal treatment and a smoother immigration process while adhering to EU directives.