SerbianTech News How to give equity to employees in Serbia – ESOP guide

How to give equity to employees in Serbia – ESOP guide

How to give equity to employees in Serbia – ESOP guide June 9, 2023
Vodič za udele u kompaniji za zaposlene

Belgrade, June 7, 2023 – The Guide to ESOP (Employee Stock Ownership Plan), which represents a mechanism for rewarding key employees through the allocation of stocks or ownership stakes in the company, was released today in collaboration between the Digital Serbia Initiative and the “Serbia Innovates” project, implemented with the support of the United States Agency for International Development (USAID) through ICT Hub. The guide is intended for Serbian startups and companies to facilitate their utilization of the domestic ESOP solution.

“ESOP has been developed and extensively used in American practice and law – companies, especially startups, have been employing it for many years, and it serves as a fundamental tool for employee motivation. Through this guide, we aim to encourage as many domestic companies as possible to implement ESOP and facilitate their understanding and application of this rewarding model,” stated Ivan Kostić, Manager for Legal and Regulatory Affairs at the Digital Serbia Initiative.

ESOP, as a mechanism for rewarding key employees in a company through the allocation of stocks or ownership stakes, was introduced in Serbia in 2020 through amendments to the Law on Business Organizations, enabling limited liability companies to issue a new instrument – the right to acquire ownership stakes, thereby allowing employees to become co-owners of the company.

“The guide provides a detailed explanation for the implementation of the domestic solution in three steps – registration of one’s own stake, issuance of the financial instrument to employees, and ultimately, the acquisition of ownership stakes in the company. The procedure before the Business Registers Agency and the Central Securities Depository and Clearing House of Serbia is explained, and illustrative examples of all the documents prepared in the process are provided,” said Milan Marinković, the author of the guide.

“It is important to emphasize that in addition to a highly detailed description of the process itself, the guide also includes specific examples and templates of the documents used in the procedure. Therefore, companies can independently carry out the issuance and allocation of the financial instrument to employees with careful approach, without the need for legal and financial consultants and associated costs,” Marinković added.

Guide is available on the Startup portal which you can visit on the link here.

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