Serbia’s beneficial ownership registry faces credibility test as exemptions blur ultimate control

Serbia has tightened its beneficial ownership rules in line with European anti-money laundering expectations, but the credibility of the system is now under scrutiny. A business publication, Biznis i finansije, argues that the Law on the Central Registry of Beneficial Owners includes major inconsistencies and has fallen short of the transparency goals regulators originally set.

Law introduced to curb hidden control

The registry framework was introduced in 2018 as part of Serbia’s broader reforms aimed at preventing concealment of real ownership structures. Regulators designed the system to address risks tied to privatization-related transactions, politically connected capital flows and opaque foreign ownership arrangements.

Implementation gaps after disclosure deadline

According to the analysis, practical implementation has revealed substantial loopholes. Five months after a deadline requiring registered entities to update their ownership disclosures under the revised legislation, many multinational corporations and foreign-owned banks operating in Serbia reportedly still list Serbian citizens in managerial or board-level roles as “beneficial owners,” despite having no actual ownership interest in those businesses.

The “OSV6” exemption at the center of criticism

The dispute focuses on a controversial exemption mechanism under a registration category referred to as “OSV6.” The provision allows companies to register a legal representative or a member of management as the beneficial owner if the actual ownership structure “cannot be determined.” Critics argue that this approach can weaken the law’s central purpose by enabling foreign parent companies to avoid disclosing ultimate ownership control.

Darko Majstorović, president of the Serbian business association “Zaštitnik privrednika i preduzetnika Srbije,” questioned how beneficial ownership could remain indeterminate when shareholder structures are already maintained through Serbia’s Central Securities Depository.

Tightening measures—and stronger enforcement—raise stakes

The criticism also highlights a tension between formal regulatory alignment with European standards and effectiveness on the ground. The law was intended to strengthen transparency, improve financial-sector integrity and support harmonization with EU regulatory frameworks—particularly for anti-money laundering, tax compliance and cross-border financial supervision.

Recent amendments and a new version of the law added compliance obligations, including annual verification of beneficial ownership data, expanded categories of reporting entities and stricter documentation requirements. The framework also imposes stronger duties on banks, accountants, tax advisers and other regulated entities to cross-check beneficial ownership information and report discrepancies.

Enforcement is backed by significant penalties. Legal entities that fail to register or update beneficial ownership information can face fines from RSD 500,000 up to RSD 2 million, with additional penalties for responsible individuals.

Why investors are watching beyond formal compliance

The debate comes at a sensitive time for Serbia’s financial and investment environment. Beneficial ownership transparency has become more important not only for anti-money laundering supervision but also for international financing needs, ESG compliance frameworks, CBAM-linked industrial supply chains and Serbia’s broader efforts to integrate into European financial systems—including eventual SEPA alignment.

For international investors, banks and compliance-sensitive industries, what matters increasingly is whether beneficial ownership structures are transparent enough to support due diligence expectations tied to ESG requirements and sanctions-related checks. European lenders, export-credit institutions and industrial counterparties are described as placing greater emphasis on traceable corporate governance and enhanced visibility into corporate control.

While Serbia’s framework may mirror many EU transparency principles on paper, the current criticism suggests that regulators’ next challenge may be proving that implementation delivers credible outcomes—an issue that could shape how financial institutions and foreign investors assess risk in Serbia’s market.