Our company employs a director who is a foreign national and holds a temporary residence permit in Serbia. Is there a possibility to pay his salary in euros to his foreign account?

3.8.2023.

According to Article 34, paragraph 2, point 9) of the Foreign Exchange Operations Act (hereinafter: the Act), exceptionally, payments, collections, and transfers in the Republic can be made in foreign currency based on, among other things, the payment of salaries to residents – individuals temporarily sent abroad for work under contracts for the execution of investment works abroad, as well as to employees in diplomatic-consular representations, organizations within the UN, and international financial organizations in the Republic.

An integral part of the Instructions for the Implementation of the Decision on the Conditions and Manner of Performing Payment Transactions with Foreign Countries is the Codebook of grounds for payment, payment, and transfer in payment transactions with foreign countries (hereinafter: the Codebook). The Codebook prescribes descriptions of grounds for payment, payment, and transfer in payment transactions with foreign countries, as well as codes for inflows and outflows. Code 600 is prescribed by the Codebook for transactions based on salaries and other allowances, and among other things, the following two grounds are listed in the description:

• permanently or temporarily employed non-residents by residents in the Republic within a period of up to one year;
• payment of salaries to employed cross-border and seasonal workers.

Regarding the mentioned grounds, taking into account the provision of Article 34, paragraph 2, point 9) of the Act, it follows that payments of salaries and other allowances to non-residents in the Republic, except in cases specified in Article 34, paragraph 2, point 9) of the Act, are made to a non-resident dinar account, in accordance with regulations on performing payment transactions with foreign countries, with the inclusion of code 600 on the foreign payment order.

Additionally, we would like to emphasize that Article 34, paragraph 8 of the Act allows contracting in foreign currency in the Republic, with payments and collections under such contracts being made in dinars.

In an employment contract, the monetary amount of the basic salary can be expressed in foreign currency, with the obligation to state the monetary amount of the basic salary in dinar equivalent, and payment and collection under that contract are made in dinars, in accordance with the provisions of the aforementioned article of the Act.