Q2 2026 legal update is here!
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What does the Draft Law on Credit Institutions bring?
The National Bank of Serbia published the Draft Law on Credit Institutions, which represents one of the most important steps in harmonizing domestic regulations with the legal framework of the European Union in the field of financial services.
Instead of the term “bank”, the draft introduces the broader term “credit institution” and uniquely regulates the conditions for the establishment, business, management, control and termination of these entities. A credit institution is defined as a business whose activity is receiving deposits or other funds from the public for which there is an obligation to repay and granting loans for its own account and/or providing investment services and activities and additional services, in accordance with the law governing the capital market. At the same time, it foresees different rules depending on their size and importance, so smaller institutions will have simpler regulatory obligations, while stricter requirements will apply to the largest ones.
One of the most important news refers to the procedure of restructuring of credit institutions. In order to preserve the stability of the financial system, the National Bank of Serbia receives wider powers to implement rehabilitation measures, while deposits of citizens and other protected users are still specially protected.
The draft also introduces stricter rules in the field of corporate governance. In addition to greater requirements for members of the management body, the obligation of more effective risk management, strengthening of internal controls and regular planning of actions in crisis situations is introduced.
Proposed solutions include supervision of risks associated with crypto-assets, improvement of control of financial groups and strengthening of cooperation between the National Bank of Serbia and European regulatory bodies.
Viewed as a whole, the proposed changes represent one of the most significant steps in the modernization of the regulatory framework for the banking sector in Serbia, with the aim of further harmonizing domestic legislation with European Union law, while strengthening the stability and resilience of the financial system.
The Most Significant Novelties in the Draft Law on Amendments to the Law on Business Companies
The Draft Law on Amendments to the Law on Business Companies complies company law to the legal acquis of the European Union. The most significant novelties refer to the transposition of provisions from three European Union directives.
The directives, the provisions of which are transferred to the Law on Business Companies, concern:
- Improvements in gender equality among directors;
- Use of digital tools and processes in corporate law;
- Cross-border transformations, mergers and divisions.
One of the novelties refers to the achievement of gender equality in the management bodies of public joint stock companies. The goal of such provisions is to encourage greater representation of the less represented sex, with the obligation of transparent selection of members of governing bodies. Also, there is an obligation to report on progress in achieving gender balance.
At the same time, solutions are being introduced that follow modern trends in business, such as the possibility of converting the shares of members of a limited liability company, as well as the company’s own share, into digital tokens. In this way, members of the company, and the company itself, were given the opportunity to transfer shares through the platform for trading digital tokens in compliance with the rules of the Law on Business Companies. Digitization of shares does not affect the application of the provisions of the Law on Business Companies, which regulate rights of pre-emption, transfer of shares with the consent of the company, as well as other restrictions related to the transfer of shares.
A significant part of the draft refers to the regulation of cross-border status changes of companies. With the proposed solutions, the company could change the legal form it acquired in the country of origin to the legal form of the host country. The idea is to establish a legal framework that will enable the smooth implementation of cross-border changes in legal form, mergers, acquisitions and divisions while at the same time ensuring the protection of company members, creditors and employees. The goal is to enable an easier change of the country of business or reorganization within the European Union, but with the simultaneous protection of interested parties.
In addition, numerous terminological and technical adjustments were made to the laws governing the capital market, accounting and auditing. In this way, existing obstacles and so-called “bottlenecks” are removed and more efficient application of the Law on Companies is achieved.
The proposed amendments to the Law on Business Companies represent another step towards compliance between domestic legislation and European Union law.
Why Legal and Technical Due Diligence must go Together in Commercial Real Estate Transactions?
Legal due diligence is one of the key elements of any real estate transaction. However, practice shows that the legal analysis, no matter how detailed, cannot provide a complete picture of the risks that a certain investment carries. This is precisely why, in modern transactions, more and more importance is given to the parallel implementation of technical due diligence.
While the legal analysis answers the questions of ownership, encumbrance, contractual relations and regulatory status of the real estate, the technical analysis evaluates whether the object can really be used in the way that the investor or tenant planned. Only the combination of these two aspects makes it possible to make an informed business decision.
In practice, situations are often encountered where the legal status of real estate is in order, but there are technical or administrative deficiencies that can significantly affect the realization of the project. These may be discrepancies between the designed and executed documentation, unresolved fire protection issues, lack of certain permits or consents, restrictions regarding connections to the communal infrastructure or technical deficiencies that require additional investments.
The special importance of these issues comes to the fore in the development of retail parks, logistics centers, office buildings and other commercial projects, where any delay in the handover or opening of the facility can produce significant financial consequences. Delays in obtaining the necessary approvals or subsequent discovery of technical defects often lead to delays in agreed deadlines, increased costs and disputes between investors, lessors, tenants and contractors.
Hence, the subject of due diligence today is not only the legal status of real estate, but also its functional readiness for the planned purpose. Timely identification of potential risks allows the parties to adequately regulate them through contractual mechanisms – either through conditions for concluding the transaction, appropriate declarations and guarantees, obligations to eliminate defects or correction of the purchase price.
As the commercial real estate market becomes more complex and investments more valuable, an integrated approach to legal and technical analysis is becoming the standard of good business practice. The goal of due diligence is not only to confirm the legal security of the transaction, but also to identify all the circumstances that may affect the successful realization of the investment and its smooth use in the future.
Amendments to the Labor Law in Montenegro
As part of the compliance process with the directives of the European Union in Montenegro, on 23rd April 2026, amendments to the Labor Law entered into force. Here, we highlight some of the changes that we consider particularly significant or interesting.
Transparency and Equality of Earnings
A large number of members are dedicated to the changes in this matter, and they are aimed at increasing the transparency of information about wages, which is certainly a prerequisite for achieving wage equality, and then the establishment of mechanisms (including employers’ obligations) for the realization of the principle of equal pay for work of equal value, as well as equal pay for men and women.
Flexibility in Working Relationships in the Interest of Reconciling Private and Business Obligations
In this segment, the EU Directive on the balance between work and private life of parents and care providers has been implemented. The novelties are:
- the right to one paid working day off due to a particularly important and urgent family issue caused by illness or an accident was introduced,
- unpaid leave was introduced to provide care or support to a member of the immediate family or household due to a serious illness,
- paternity leave was introduced,
- from the accession of Montenegro to the EU, a redefined parental leave will be applied,
- several articles of the law prescribe the right of parents, caregivers, adoptive parents, foster parents, and guardians to initiate more flexible working conditions.
Electronic Delivery of Acts
The possibility of electronic delivery of documents and notices between the employer and the employee is introduced, which is considered personal delivery, and the delivery is considered completed on the day the employer receives the confirmation of delivery in the employee’s electronic inbox.
Refinement of Existing Labor Law Institutes
The changes also specified the existing labor law institutes, which we believe will contribute to the ambiguities that existed in practice, among other things, in terms of:
- trial period and
- work outside the employer’s premises.
In addition to this, there was another significant novelty in the labor relations of Montenegro – the termination of the validity of the General Collective Agreement as of 30th April, 2026.
The changes are part of continuous reforms of Montenegrin legislation (especially in the field of labor relations), which should be welcomed in every sense. Since Serbia opted for the same path in foreign policy relations, and given that in practice it faced the same problems in the field of labor relations, it can be reasonably expected that these solutions will be implemented within Serbian legislation in the future.
The Draft Amendments to the Family Law Redefines Legal and Family Relations and Improves Protection of Children
According to the Draft Law on Amendments to the Family Law published in April of this year, certain changes will be introduced to the family legislation of the Republic of Serbia, the most significant of which is the abolition of the possibility of marriage at the age of 16, and before the age of majority, with the consent of the court.
Among the significant changes, we would single out the introduction of the possibility of registering a child born abroad in the birth register with the note that “maternity has not been determined”, with the aim of overcoming the problem of registering children born abroad through surrogacy. Additionally, this institute will not be introduced into the legal system of the Republic of Serbia in this way, nor that the possibility of registration with the note “maternity not established” would be introduced for children born on the territory of the Republic of Serbia.
Furthermore, legal articles are added which explicitly regulate the prohibition of humiliating treatment and corporal punishment of children, i.e., other actions that offend the human dignity and integrity of children, and certain legal provisions related to adoption, guardianship and foster care have been amended in the spirit of achieving the best interests of children, i.e., wards. In this sense, one of the most significant changes is the deletion of the provision that gave the child’s parents the opportunity to designate adoptive parents, and the choice of adoptive parents will be made exclusively by the guardianship authority. In the future, full and partial deprivation of business capacity should replace the institution of “restriction of business capacity”.
It is also a novelty that the decision governing the manner of maintaining personal relations of a child with a parent with whom he does not live, i.e., relatives and other persons with whom he has a special closeness, must contain the time, place and manner of maintaining personal relations, frequency, agreement relating to religious and national holidays, birthdays, annual vacations, etc.
At the time of publication of this text, the competent Ministry is working on a version of the text of the Draft Law on Amendments to the Family Law, which also contains public comments that were adopted after a public hearing.
Regulation on Recycling: A New Model for Awarding Incentives through an Auction Procedure
In May 2026, a new Regulation was adopted regarding the type, criteria, amount, elements, conditions and method of awarding incentives to operators who reuse and recycle waste for the 2026-2028 period, the Regulation on Recycling, the main importance of which lies in the introduction of the auction model for awarding incentives.
Namely, the operators will compete by offering a lower price per unit of mass of waste in relation to the maximum prescribed incentive amount. Bidders with the lowest price are entitled to the incentive, while the available quotas are filled according to the ranking list. The model is largely based on EU state aid rules, which favor competitive procedures and market-based determination of aid levels.
It is particularly important that the Regulation prohibits the retroactive aid award, limits the maximum amount of incentives, introduces rules on cumulation of aid and provides for the reduction of incentives if the beneficiary has already received state aid for the same costs.
Operators of waste recycling facilities who have valid permits in accordance with regulations in the field of waste management and pollution prevention and control have the right to participate. Aside from small-value aid, incentives cannot be awarded to “troubled” business entities, nor to beneficiaries who have been ordered to return illegal state aid. Incentives are awarded for the reuse of: waste tires, waste electrical and electronic equipment, waste oil, used batteries and accumulators, and waste vehicles. Quotas and maximum amounts of incentives per type of waste are also prescribed, with the possibility of annual adjustment.
At the same time, the Regulation expressly excludes reuse operations for energy purposes, thus favoring recycling and material recovery of waste in accordance with the EU waste management hierarchy.
In case of non-intended use of the funds, the termination of the contract and the obligation to return the funds with statutory default interest are prescribed.
Adnan Sarajlić, Edna Basara
Key changes to the Law on Employment of Foreigners in FBiH
The Law on Amendments to the Law on Employment of Foreigners (hereinafter referred to as the “Law”) was published in the “Official Gazette of the Federation of Bosnia and Herzegovina” No. 36 on May 15th, 2026 and entered into force eight days after the date of publication.
The reasons for the adoption of the Law are compliance of the definition of tradesman with the Law on Trades and Related Activities, the specification of deadlines and procedures for issuing and extending work permits, the clearer regulation of the documentation that the employer submits with the application, the introduction of the institute of deficit occupations for better compliance with the state of the labor market, and the strengthening of employers’ obligations regarding the notification of the competent authorities about the employment status of foreigners.
Compared to previous solutions, the changes include the following:
- compliance definition of tradesman with the Law on Trades and Related Activities in FBiH, with the obligation to conclude employment contracts with persons whose work the tradesman uses;
- specified deadlines for submitting requests for a work permit extension (60 days at the earliest, 30 days at the latest before the expiration date);
- a deadline of 30 days was introduced for issuing a decision by the competent cantonal service after a complete request;
- amended evidence that the employer submits with the request (extract from the register or registration decision, proof of the bank’s main business account);
- introduced basis for rejecting the request if the employer does not submit all the necessary documentation even within the subsequently specified deadline;
- prescribed obligation of the Federal Ministry to regulate the procedure for issuing a work permit within 90 days from the entry into force of the Law by regulation;
- additional new reason for refusing to issue a work permit to a foreigner who renounced BiH citizenship;
- introduced an institute of “deficit occupations” – the Federal Employment Agency, with the consent of the Federal Ministry and consultation with the Economic and Social Council, annually determines occupations for which the check of the records of unemployed persons is not carried out;
- introduced the employer’s obligation to inform the cantonal service and the competent service of the BiH Ministry of Security within 15 days if the foreigner does not establish an employment relationship or stops working based on the issued permit;
- specified the obligation to keep records on issued work permits in accordance with the regulations on records in the field of employment; and
- added a new offense for failure to comply with the obligation to notify the cantonal service.
It is expected that the new legal provisions will contribute to a faster and more transparent procedure for issuing work permits, better matching the employment of foreigners with the real needs of the labor market, and strengthening the discipline of employers in fulfilling their obligations to the competent authorities.
Anastasija Lukovac
Amendments to the Law on Enforcement and Security: Compliance with European Legal Standards
Although the second quarter of 2026 brought numerous legislative novelties in Montenegro, the focus of the legal and business public is rightly focused on changes to the Law on Enforcement and Security (ZIO), which introduced the biggest changes in practice so far. The changes entered into force on May 28, 2026. The primary goal of the reform is to harmonize the domestic legislative framework with the legal acquis of the European Union, while at the same time improving the efficiency of the procedure and the protection of basic human rights.
The key novelty refers to the radical reduction of the maximum percentage of forced collection on citizens’ regular income. The previous legal solution allowed public bailiffs to confiscate up to two-thirds (2/3) of the salary or pension, i.e., up to half (1/2) of the minimum wage. The new provisions set a significantly higher threshold for social protection. Enforcement on regular wages, pensions and minimum wages is now strictly limited to a maximum of one-third (1/3) of earnings. The exception to this rule is compulsory collection on the basis of legal support (alimony), where the burden can be up to one half (1/2).
In addition, the changes that entered into force concern the rules of public bidding, due to the previous legal solution stipulating that real estate cannot be sold at the first public auction below the established value, at the second below 50%, while there was no limit for subsequent auctions. The new framework introduces stricter percentages and more restrictive price ranges, thus the minimum price now amounts to 80% of the value at the first sale, 50% at the second, while a fixed lower limit of 30% of the assessment has been set for all subsequent hearings.
Significant changes refer to the introduction of a European account blocking order, as a completely new procedure in domestic legislation. These novelties concern the establishment of a mechanism for rapid cross-border blocking of debtors’ funds on accounts throughout the member states of the European Union. This mechanism prevents the diversion or concealment of funds before the initiation of the enforcement procedure, which directly complies the Montenegrin system with European legal standards.
The new legal provisions significantly modify the course of the enforcement procedure itself through the introduction of new legal ranges and cross-border legal solutions. Thus, the Montenegrin forced collection system was formally integrated into the legal space of the European Union, following its valid standards.
The New Law on Games of Chance and Entertainment Games: A Modern Regulatory Framework for the Digital Age
On 29th June 2026, the Assembly of the Republic of North Macedonia adopted the new Law on Games of Chance and Entertainment Games, establishing a more precise legal framework governing this area. This marks a significant step towards modernizing the existing regulatory framework, considering the rapid developments in the organization and promotion of games of chance, particularly within the digital environment.
The need for this new legislative solution stems from the increasing emergence of new forms of organizing games of chance, which had not previously been regulated with sufficient clarity. Through the new rules, the legislator aims to enhance legal certainty, increase transparency, and ensure more effective supervision over entities organizing such activities, while at the same time providing stronger protection of citizens and the public interest.
One of the most significant changes, which has attracted considerable public attention, is the statutory regulation of so-called “Giveaway” activities. These activities have become increasingly widespread in recent years, particularly through social media platforms by influencers and companies. The new Law introduces an obligation to obtain prior authorization for organizing such activities, as well as to pay the prescribed fee, thereby creating equal conditions for all organizers and establishing institutional oversight over these activities.
These legislative amendments have been adopted in line with the recommendations of MONEYVAL and international standards relating to the prevention of money laundering and terrorist financing. By introducing stricter rules for the identification of organizers, the integrity of the system is strengthened, and the risks of abuse are significantly reduced.
The Law also introduces substantial changes regarding the advertising of games of chance. It establishes stricter rules governing their public promotion, including restrictions on displaying advertisements on the exterior of business premises, as well as on the use of illuminated and visually aggressive advertising materials.
At the same time, advertising that creates the impression that games of chance represent a means of achieving financial success, a solution to personal or social problems, or that may encourage minors to participate in such activities, is expressly prohibited.
In an era of increasing digitalization, the new Law is expected to contribute to a more transparent and responsible regulatory framework for this sector, while ensuring a higher level of protection for citizens and more effective institutional oversight.
Penal Amnesty in Albania: A Legal Instrument for Rehabilitation and Social Reintegration
In February 2026, the Council of Ministers, upon the proposal of the Ministry of Justice, submitted the draft law on the granting of penal amnesty to Parliament. Following its review by the Parliamentary Committee on Legal Affairs and Public Administration and subsequent parliamentary debate, the draft was adopted on June 18th 2026 as Law No. 57/2026 “On the Granting of Penal Amnesty”, entering into force 15 days after its publication in the Official Gazette.
The primary objective of this law is to promote humane treatment and respect for human dignity by facilitating the rehabilitation and social reintegration of convicted persons. It is based on the principle that criminal sanctions should fulfil not only a punitive function but also an educational and rehabilitative one. Accordingly, where a substantial part of the sentence has already been served, the continued execution of the remaining sentence may no longer serve the interests of the convicted person, the penitentiary system, or society as a whole.
The law also aims to improve the functioning of the Albanian penitentiary system by reducing prison overcrowding. A lower prison population enables correctional institutions to provide more effective healthcare and psychosocial services, strengthen security and conflict management, and expand access to educational, vocational, and rehabilitation programs, thereby aligning prison conditions more closely with European standards.
The amnesty provides for the immediate release of men sentenced to imprisonment of up to three years, or those with less than three years of their sentence remaining to be served, and women sentenced to imprisonment of up to four years, or those with less than four years of their sentence remaining to be served. It also applies to men aged 60 years or older, women aged 50 years or older, and individuals who were under the age of 18 at the time the criminal offence was committed. However, the law expressly excludes offenders convicted of 19 categories of serious criminal offences, including aggravated homicide, sexual offences, corruption, organized crime, electoral offences, and money laundering.
Responsibility for the implementation of the law has been entrusted to the Ministry of Justice, the General Directorate of Prisons, the General Directorate of the Probation Service, as well as the competent courts and prosecution offices. According to the official data presented during the legislative process, the amnesty is expected to reduce the prison population by approximately 10%, contributing to a more efficient criminal justice system while reinforcing the rehabilitative purpose of criminal sanctions.
Disclaimer: This newsletter provides general information and should not be construed as legal advice. Please consult our legal experts for specific guidance tailored to your unique circumstances.