Upon the execution of a sale and purchase agreement, the seller has to pay the absolute rights transfer tax. The tax rate levied is 2.5% of the purchase price.

From the Serbian law perspective, a sale and purchase agreement needs to be notarised to be enforceable against the domestic party. However, a translation of the sale and purchase agreement is only necessary if it is to be used before the authorities in Serbia including, but not limited to, the courts. If a sale and purchase agreement is to be governed by a foreign law, its validity will be assessed from the perspective of the governing law.

A duly executed sale and purchase agreement under Serbian law will present the basis for the transfer of title to an aircraft from one party to another. The transfer will be perfected through its entry in the aircraft register. If the sale and purchase agreement were to concern the sale of the entire aircraft the agreement would automatically entail the sale of all of its integral parts including engines. The sale and purchase agreement may also have the sale and purchase of an individual part of an aircraft, eg, the engine, as its subject.

In addition, the sale of ownership interest in an entity that owns an aircraft or engine will not effectively be recognised as a sale of the aircraft or engine itself as long as the sold entity remains the owner.

Serbian law will in principle recognise the transfer of title to an aircraft that is registered in a foreign register if the transfer of title was governed by English or New York law.

A bill of sale, governed by the foreign law, does not need to be translated, certified, notarised or legalised in order for it to be enforceable against the domestic party. However, translation of the bill of sale is necessary if it were to be used before the authorities in Serbia including, but not limited to, the courts.

If a bill of sale were to be registered in the Serbian Aircraft Register the following steps will have to be taken.

Firstly, an aircraft can be registered in the Serbian Aircraft Register if it is not registered with a foreign aircraft register and one of the following conditions is met:

• the aircraft owner (in whole or in part) is Serbia, a legal entity or entrepreneur registered in Serbia;
• the aircraft owner (in whole or in part) is a citizen of Serbia, with a permanent residence in Serbia or abroad, if the home airport of the aircraft is in Serbia;
• the aircraft operator is a legal entity, entrepreneur or natural person whose corporate seat or permanent residence is in Serbia; or
• the aircraft owner or operator is a foreign natural or legal entity and consent has been obtained from the Ministry of Construction, Transport and Infrastructure. 

The process of registering an aircraft with the Aircraft Register consists of:

• applying to the Commercial Court in Belgrade for a resolution on the registration of aircraft. The following documentation is needed: a bill of sale; excerpts from the relevant registers; and any other document that could be requested by the judge based at their own discretion; and
• filling out an application form and submitting it to the Civil Aviation Directorate along with the court resolution.

There is no legally prescribed timeframe but the total process is expected to take approximately one month.

See 1.1.1 Taxes/Duties Payable Upon Execution of the Sales Agreement.

All types of operating/wet/finance leases or leases concerning only engines or parts are generally permissible and recognised.

Contractual obligations between the parties to the lease agreement may be governed by a foreign law. However, issues of ownership over the aircraft and other proprietary rights are governed by the law of the land in which the aircraft is registered. While the contractual obligations (such as the ones stemming from the lease agreement) can be governed by a foreign law, particular potential disputes that could stem from the lease agreement could be governed by Serbian law, if the aircraft is registered in Serbia (disputes concerning insolvency proceedings over the lessee, disputes over ownership over the aircraft and the like).

Rent payments may be made in US dollars.

There are no specific exchange control rules that will prevent rent payments under a lease or any repatriation of realisation proceeds.

The registration of the lease of an aircraft is optional. However, if it is registered, the registration of the lessee with the Aircraft Register will cost between RSD4,210 (approximately EUR36) and RSD16,750 (approximately EUR140), depending on the category the aircraft is in.

The lessor does not have to be licensed or otherwise qualified in Serbia to do business with a domestic lessee.

No mandatory terms have to be in a lease governed by English or New York law.

Tax and other withholding gross-up provisions are permissible and enforceable.

The concluded lease can cover parts that are installed or replaced on an aircraft or engine after its execution.

There is no specific risk of title annexation in respect of aircraft engines installed on an airframe.

The concept of trust/trustee of an owner is not recognised under Serbian law.

An aircraft lease may be registered in the Aircraft Register. This is optional but advisable as the lease becomes a matter of public record once it is registered.

The Aircraft Register contains information regarding both the owner and the operator of the aircraft. Both the owner and the operator of the aircraft may therefore be registered.

Lease information is registered in the Aircraft Register. There is no separate engine-specific register in Serbia.

Registration of the lease with the Aircraft Register is optional but preferable. This is because if the lease is registered with the Aircraft Register third parties will be considered to be familiar with the existence of the lease.

The registration of the lease of an aircraft may be initiated by the lessor or the lessee by submitting the request for the registration of the lease to the Aircraft Register along with the:

• lease agreement;
• airworthiness certificate;
• corporate documentation; and
• court decision on registration of the aircraft.

If the lessee is a foreign person/entity, the consent of the competent ministry is required. Additional documentation may be requested by the Aircraft Register.

The estimated period for completion is one month.

A lease needs to be concluded in the form specified in its governing law. There are no additional requirements under Serbian law. If the lease agreement were to be presented to the Serbian authorities, a certified translation of the agreement would be needed.

See 2.1.5. Taxes/Duties Payable for Physical Execution of a Lease.

There are no popular alternative countries in which aircraft habitually based in Serbia are typically registered.

All documents submitted to the authorities, including, but not limited to, the bill of sale or the lease agreement have to be provided in the original or a certified copy and accompanied by the certified translation.

A foreign lessor has to pay income tax on the income it gains through its permanent business unit in the territory of Serbia, unless otherwise stipulated in a tax treaty.

In other words, unless a foreign lessor has a permanent establishment in Serbia, it is not required to pay income tax.

A foreign lessor may not be considered to be resident, domiciled, carrying on business or subject to any taxes as a result of its being a party to, or its enforcement of, the lease.

Generally speaking, liabilities in respect of aircraft or engine maintenance and operations may not be imposed on a foreign lessor under a lease as a result of it being a party to the lease.

A lessee is liable for the damage that is caused to the property or health of third persons by the aircraft.

Creditors of a lessee could not attach an aircraft leased to it but owned by a different entity.

In very limited circumstances, it is possible that some third-party rights will take priority over a lessor’s rights under an aircraft lease through the legal concept of “right of retention”. This is where the third party retains the aircraft as a guarantee of payment owed, eg, repair and maintenance costs, warehousing, depository costs, etc.

There are no mandatory Serbian regulations which dictate insurance must be placed with a domestic insurance company.

Current insurance limitations are aligned with the Montreal Convention, which amount up to:

• 100,000 SDR for injury and death;
• 4,150 SDR per passenger for delay;
• 1,000 SDR for baggage; and
• 17 SDR for cargo.

Reinsurance of an aircraft abroad is not regulated under Serbian law. However, from a general legal perspective, one might conclude that the practice will not be against the applicable regulation.

“Cut-through” clauses are not valid in Serbia because of the limitations imposed by the mandatory foreign exchange (FX) rules which are set out in Serbian legislation.

Assignments of insurance/reinsurance are allowed.

There are no specific restrictions on a lessor’s ability to terminate an aircraft lease, re-export the aircraft and/or sell the aircraft following termination of the lease under Serbian law.

In addition, it is not mandatory for an aircraft to be physically located in Serbia for either of these operations.

A lessor will have to have obtained a court order to take possession of the aircraft from the lessee.

There are no specific courts for aviation disputes. If an aviation-related dispute were to arise and the Serbian courts had the competence to decide the dispute, it would be adjudicated by the competent commercial court.

A lessor may request an interim injunction before the final resolution of the judicial proceedings. As a result of the interim injunction, the aircraft could be taken away from the lessee until the proceedings are completed.

In order for the court to grant an interim injunction, the lessor will have to prove both the existence of its claim and that it would incur damage if the interim injunction were not granted by the court. In practice, it usually takes approximately one month for a court to decide on the request.

Serbian courts in general uphold:

• a foreign law as the governing law of an aircraft lease;
• submission to a foreign jurisdiction; and
• a waiver of immunity by the parties to the lease.

Serbian courts recognise and enforce a final judgment of a foreign court or an arbitral award without re-examining the matter if the procedural prerequisites for enforcement of the judgment/award are met.

A lessor under an aircraft lease may obtain a judgment in a foreign currency. However, the enforcement of this judgment will have to be made in local currency in Serbia.

There are no statutory limitations on a lessor’s ability to recover default interest. A lessor may charge additional rent following the termination of the lease for default if this course of action is in line with the governing law and the concluded agreement.

A lessor under an aircraft lease does not have to pay taxes or fees in a significant (ie, non-nominal) amount in connection with the recognition and enforcement of the lease in Serbia.

If Serbian courts were to deliberate in a case that involves the application of Serbian law, the judge might potentially declare the mandatory notice period null and void if it is too short or if it creates an imbalance between the parties.

Under Serbian law, the lessee does not have any legal instrument with which it will be entitled to claim sovereign or other immunity from suit in the sense that the legal instrument will prevent it from being a party to the judicial or arbitral proceedings.

Serbia has adopted the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) and Serbian courts recognise and enforce foreign arbitral decisions. Grounds for refusal of the recognition of foreign arbitral award correspond to those listed in Article V of the New York Convention and are not country specific.

There are no other relevant issues that a lessor should be aware of in relation to the enforcement of their rights.

Serbia recognises the concepts of contractual assignment and novation.

Under Serbian law (assuming that a lessor transferring its rights under an aircraft lease is assigning or novating its rights under the lease to a new lessor), the lessor will have to notify the lessee of the assignment. In this respect, the lessee does not have to give consent. If the lessee intends to assign its rights to the other entity, it will need to notify the lessor of its intention and obtain the lessor’s consent. There are no mandatory jurisdiction-specific clauses that have to be included in the assignment.

It is not necessary for an aircraft and/or engine lease assignment and assumption/novation to be translated, certified, notarised or legalised to be enforceable against a domestic party. However, the translation of the assignment agreement is necessary if it were to be used before the authorities in Serbia including, but not limited to, the courts.

Registration of the lease in the Aircraft Register is not mandatory. However, if the lease is registered in the Aircraft Register, any assignment of the rights and obligations under the lease should also be registered in the Aircraft Register. The procedure for registering the assignment of the lease is relatively simple and involves submitting the assignment agreement and notifying the relevant authorities of the conducted assignment. No government applications or consents are required as a prerequisite to the execution and delivery of an aircraft and/or engine lease assignment and assumption/novation.

The registration fee for the assignment in the Aircraft Registry is RSD4,210 (approximately EUR36).

The sole change of the ownership interest of the entity owning an aircraft will not warrant notification in the Aircraft Register.

An owner or an operator of an aircraft may submit a deregistration request of an aircraft.

If the deregistration request is submitted by an operator, a certified written statement of consent by an owner must be submitted along with the deletion request. If the deregistration request is submitted by an owner, a certified written statement of consent of an operator must be submitted along with the deletion request.

The Registrar removes the aircraft from the Aircraft Register ex officio if the aircraft is destroyed, permanently unusable, missing or completely unavailable or whose airworthiness certificate is not valid for more than ten years.

Once the Registrar decides on the deregistration request it issues the deletion resolution along with a confirmation of the deletion and, if the aircraft is airworthy, the Civil Aviation Directorate will issue an export airworthiness certificate. This is the basis on which the aircraft may be registered with another aircraft register.

An aircraft owner may only apply for the deregistration of the aircraft with the prior consent of the lessee.

In order for an aircraft to be deregistered from the Aircraft Register, an owner or an operator will have to provide a:

• deregistration request; and
• statement of consent from the other party (owner/operator).

There is no statutory deadline on the duration of the deregistration process. However, one can expect the process to take several business days to complete.

The aviation authority is not authorised to issue advance assurances to an aircraft owner, mortgagee or lessor as to the prompt deregistration of the aircraft.

The fee for deregistration of an aircraft is RSD5,020 (approximately EUR43).

A deregistration power of attorney does not constitute a necessary legal document under Serbian law (and Serbia is not a signatory to the Cape Town Convention). However, in practice, it is usually issued along with the lease. A deregistration power of attorney does not need to be translated, certified, notarised or legalised to be enforceable against a domestic party. However, the translation of the subject document is necessary if it were to be used before the authorities in Serbia including, but not limited to, the courts.

As a deregistration power of attorney is not mandatory/necessary by itself no additional documents are required in order to determine its validity.

A deregistration power of attorney may be governed by a foreign law but is most commonly governed by Serbian law in practice.

As a deregistration power of attorney is not statutorily regulated, there is no regulation on the possibility of revoking the deregistration power of attorney. It may therefore be revoked at any time like any other power of attorney.

The lessee’s consent will be necessary for the aircraft to be exported. A mortgagee is not entitled to export the aircraft under Serbian law.

An asset does not need to be located in Serbia at the time of deregistration and/or export.

Upon request, the Aircraft Register will issue the deletion resolution, along with confirmation of the deregistration. In practice, it takes several business days to obtain the necessary documents. When it is issued, the confirmation of the deregistration (ie, export certificate) is valid for an unlimited period of time. It can therefore be obtained at any time before the termination of the lease. In practice, as the confirmation of deregistration contains the exact time of the deregistration from the Aircraft Register, it is usually obtained in advance so that it will be possible to commence with the procedure of registration of an aircraft in another foreign register.

If the aircraft is registered in the Aircraft Register, before the aircraft is exported, the deregistration of the aircraft must take place. In this scenario the following fees apply.

• The fee for the resolution on deletion amounts to RSD5,020 (approximately EUR43).
• The fee for the export airworthiness certificate (required for the foreign registry where the aircraft will be registered) amounts to RSD4,210 (approximately EUR36).

There are no significant practical difficulties involved in deregistration as such. However, it is worth highlighting that deregistration from the Aircraft Register and registration with another aircraft register must be punctually co-ordinated. In other words, the exact date and time of deregistration must coincide with the registration in a new register so that any potential time difference between two registrations is avoided.

Serbia recognises two types of reorganisation, restructuring, insolvency and liquidation proceedings.

• Corporate liquidation, which is regulated by the Company Law (Zakon o privrednim društvima, Official Gazette of RS Nos 36/2011, 99/2011, 83/2014, 5/2015, 44/2018, 95/2018, 91/2019, 109/2021 and 19/2025).
• Insolvency proceedings, which are regulated under the Law on Insolvency (Zakon o stečaju, Official Gazette of RS Nos 104/2009, 99/2011, 71/2012, 83/2014, 113/2017, 44/2018, 95/2018 and 44/2025).

Serbia recognises two types of voluntary and involuntary restructurings, reorganisations, insolvencies and receivership proceedings (see 2.9.1 Overview of Relevant Laws and Statutory Regimes Governing Restructurings, Organisations, Insolvencies and Liquidations).

• Corporate liquidation: proceedings that may be initiated if the company is solvent and wants to terminate itself. This procedure is initiated by the company before the Business Register and the creditors are called upon to register their claims. From an operational perspective, the company appoints the liquidation administrator who represents the company in the corporate liquidation proceedings. When the company provides evidence that it has settled all creditor claims, it may request the deletion of the company (liquidation) from the Business Register.
• Insolvency proceedings: these may be initiated if:
1. the company has extended monetary difficulties;
2. there is a danger that the company will become insolvent;
3. the company is over indebted; or
4. the company does not act in line with the reorganisation plan.

The insolvency proceedings are court proceedings in which the appointed insolvency administrator represents the insolvency debtor. Insolvency proceedings may lead to the reorganisation of the company or dissolution of its assets and subsequent liquidation.

In the case of parallel insolvency proceedings before the Serbian courts and the courts of foreign jurisdiction, Serbian courts are statutorily obliged to co-operate with the foreign courts. This co-operation may entail the:

• appointment of the person that will take actions in line with the court’s instructions;
• exchange of data;
• co-ordination of managing the assets of the debtor;
• conclusion of the agreement on co-ordination between the courts; and
• co-ordination of the proceedings.

A deregistration power of attorney is not regulated under Serbian law. However, from a general legal perspective, even if it is issued, the opening of insolvency proceedings will not have any effect on it.

When insolvency proceedings are opened, an insolvency administrator is appointed. It is the insolvency administrator who, from that point onwards, manages the debtor. At the moment when the insolvency is opened the insolvency administrator is entitled to choose which contracts will remain in force and which will be terminated (including the existing leases). If, for any reason, the lease is continued as of the moment of opening the insolvency proceedings, the insolvent estate will continue to be a party to the lease agreement and will have to settle the rent.

If the lease agreement is terminated, the lessor is entitled to issue a request for the removal of the aircraft from the estate of the lessee and hand the aircraft over to the lessor.

The main risk for a lender if a borrower, a guarantor or an entity providing security becomes insolvent is that it will not be able to collect its receivable.

A moratorium is imposed at the opening of the insolvency proceedings and lasts for the duration of the proceedings. It encompasses all the obligations of the insolvency debtor apart from the obligations undertaken by the insolvent estate.

A lessee may be liquidated or placed in administration or receivership either at its own request or at the request of a third party (liquidator or a creditor) in Serbia.

Ipso facto default clauses are valid under Serbian law and often appear in practice. If the clause is activated, the lessor is entitled to issue a request for the removal of the aircraft from the estate of the lessee and the handover of the aircraft to the lessor.

If a domestic lessee is liquidated by a Serbian court ruling, the following generally occurs.

• The aircraft may only be repossessed if the lessor fails to take action in order to remove the aircraft from the insolvent estate.
• The lessor must register its debt to the insolvency administrator for rentals and other costs (if any) that became owed before the insolvency proceedings were opened.
• The lease security deposit will remain with the lessee as long as the lease is in force.
• The maintenance reserves paid to the lessor (whether classified as reserves or supplemental rent) will remain with the lessor as long as the lease is in force.

The Cape Town Convention is not recognised in Serbia.

See 2.10.1 Conventions in Force.

See 2.10.1 Conventions in Force.

See 2.10.1 Conventions in Force.

Serbia has ratified the 1948 Geneva Convention on the International Recognition of Rights in Aircraft. However, it has not ratified the 1933 Rome Convention on the Unification of Certain Rules relating to the Precautionary Arrest of Aircraft.

In line with Serbian regulations, only banks are entitled to issue financial loans. Borrowers are entitled to use the loan in line with agreed loan terms.

In particular cases envisaged under the FX rules, the National Bank of Serbia should be notified of the financing or repatriation of realisation proceeds under a loan, guarantee or security document.

Borrowers are permitted to grant security to foreign lenders subject to certain FX restrictions.

Downstream, upstream and/or cross-stream guarantees are permitted in favour of lenders when they are made in line with the FX rules. In specific cases envisaged under these rules, the National Bank of Serbia should be notified of the guarantees being issued.

Whether a lender should take share security over a domestic special purpose vehicle that owns the financed aircraft is a business decision. However, generally speaking, the action will be advised. A pledge of shares is recognised under Serbian law.

Negative pledges are recognised under Serbian law.

Intercreditor arrangements may be made. However, these arrangements are only effective between the creditors who concluded the arrangements.

The concept of agency and the role of an agent (such as the facility agent) under a syndicated loan is recognised in Serbia.

All valid debt subordination methods are permissible and recognised.

It is possible to transfer or assign all or part of an outstanding debt under an English or New York law-governed loan.

There is no specific limit as to the amount of contractual interest that may be envisaged. However, the court is entitled to reduce the amount of interest upon a party’s request if it assesses it is exceedingly high. The assessment is performed on a case-by-case basis.

Typical forms of security and recourse granted in an aviation finance transaction in Serbia include promissory notes, pledges and bank guarantees.

All security types under the law may be taken over an aircraft or related collateral such as engines, warranties or insurances.

The concept of a security trustee exists under Serbian law. However, the trustee should be registered as a security trustee in the relevant register.

The assignment of rights and obligations under the lease of aircraft is possible. However, any change on the side of the lessor will have to be reflected in the lease agreement (ie, the lease agreement should be annexed to reflect the change). If the lease agreement is registered with the Aircraft Register, the data in the Aircraft Register will need to be changed.

It is possible to assign the rights and benefits only without also assigning the attendant obligations of the lessor under an aircraft lease under Serbian law.

A security assignment or a guarantee may be governed by English or New York law under Serbian law.

As securities present ancillary obligations in relation to the main contract, they can be assigned to the other party solely through the assignment of the entire agreement that they provide security for. If the security is registered with the Aircraft Register in Serbia, the Aircraft Register should be notified of the assignment. If the Aircraft Register is notified of the assignment, a translation of the assignment agreement will be mandatory.

If an English or New York law-governed security assignment is taken in respect of an aircraft registered domestically it will be advisable that the security is transferred to the domestic Aircraft Register.

There is no Serbian regulation that explicitly prohibits an aircraft, used in Serbia, from being encumbered by a security established in the foreign country in line with the foreign law. The security on an aircraft that is registered in a foreign country can be “transferred” to the domestic Aircraft Register by registering the aircraft itself.

The transfer of security interests is generally recognised under Serbian law.

If there are any changes in the identity of the secured parties the change should be reflected in the contractual documentation.

“Parallel debt” structures are not recognised under Serbian law.

A secured party under a security assignment will not be considered to be resident, domiciled, carrying on business or subject to any taxes as a result of its being a party to, or its enforcement of, the security assignment.

A domestic law mortgage over an aircraft is perfected by registering it with the Aircraft Register.

Security taken over the spare engines is perfected through registration in the Pledge Register held by the Business Registers Agency.

Security of the pledge over bank accounts is perfected through registration in the Pledge Register which is held by the Business Registers Agency.

A third-party lien in relation to unpaid airport fees, navigation charges, customs duties, etc is not registered.

In the case of repairers’ costs and similar liens, the creditor will be, under very limited conditions, entitled to the right of retention of the aircraft until the debt owed is settled.

A fleet lien is not envisaged under Serbian law.

The right of retention is a statutory right and no specific legal action is required in that regard.

The discharge of a lien or mortgage can be made within a day.

Serbia does not have a separate register of mortgages. Mortgages on aircraft will be inscribed in the Aircraft Register. The inscription of the mortgage in the relevant register is a necessary prerequisite for the perfection of the mortgage. Serbia does not have a register of charges.

There are no statutory rights or non-consensual preferential liens on a “fleet-wide” basis.

A potential purchaser of an aircraft should search the Aircraft Register to verify that an aircraft is free of mortgages.

There are no significant differences in enforcing a security assignment as opposed to a loan or a guarantee.

A security trustee who is registered in the relevant register may enforce its rights under an aircraft lease.

In principle, Serbian courts will uphold:

• a foreign law as the governing law of a finance or security document; and
• the submission to a foreign jurisdiction.

Serbian courts will, if other procedural criteria for enforcement of the foreign arbitral award are met, recognise and enforce a foreign arbitral award without re-examination of the merits of the dispute.

The secured party cannot take physical possession of the aircraft to enforce a security agreement/aircraft mortgage without the lessee’s or operator’s consent.

Serbian courts have competence to decide enforcement actions under a security agreement/aircraft mortgage.

It is possible for a secured party to obtain an interim injunction, which will present a form of security. In order for the court to render an interim injunction, the lessor will have to prove to the court it has a claim and this will be damaged if the interim injunction were not enacted. The issuance of bonds or similar guarantees in connection with the interim injunction will not be necessary.

A secured party under a security agreement/aircraft mortgage may obtain a judgment in a foreign currency.

A secured party will not have to pay taxes or fees in a non-nominal amount in connection with the enforcement of a security agreement/aircraft mortgage.

There are no other relevant issues a lender should be aware of in relation to the enforcement of its rights.