First time in Serbia: Employees get OWNERSHIP share in company as stimulation

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The amendments to the Law on Businesses in Serbia, adopted at the end of last year, introduce the right to acquire a stake as a new financial instrument. This, according to Belgrade media, will enable these businesses to stimulate their employees as well as consultants and investors. This method of stimulation has not existed in Serbia so far, and owing to it, employees will have the right to acquire a stake in the company at a preferential price, said the Ministry of Economy. This model exists in the developed market economies of the USA and the EU, where there is a practice of stimulating employees of a company to do their jobs as best they can by giving them an opportunity to become members of that company. “The model has proven to be particularly effective in the information technology industry, given that these companies have limited resources at the initial stage of their operations and they are thus unable to provide high-quality staff with high salaries,” the ministry said. On the other hand, these companies have great potential for rapid growth, and in this regard, the possibility for the members of the company to make a fairly high profit in the case of the sale of equity that was acquired for a relatively low amount of money in the initial stage of doing business, they emphasize. The company’s own reserved stake is considered to be a stake that the company acquires from a member of the company for the purpose of granting the right to acquiring a stake, the explanation of the law says. A company may have more than one reserved stake, and the percentage of the share of all reserved stakes in the share capital of a company cannot exceed 40 percent. The financial instrument – the right to acquire a stake is registered in the Central Securities Depository and Clearing House, whereby the Central Securities Depository and Clearing House will provide limited liability companies that issue this financial instrument with direct access to the registry without intermediaries, which frees them from the cost of paying brokers, says the Ministry of Economy. Amendments to the Law on Businesses, whose application starts on 1 April, are valid for all limited liability companies.

Source: BIZLife/beogradski mediji