What does the ranking of the most profitable SMEs show?
Almost one-fifth of small and medium-sized enterprises in Serbia that are among the top 150 by net profit achieved in 2024 operated without any employees. These businesses are mostly directly or indirectly linked to the real estate market.
This points to the continued inflow of capital into this sector, which has been growing significantly faster than domestic GDP since the pandemic.
Serbia’s Accounting Act classifies legal entities and entrepreneurs according to three criteria: the average number of employees, operating revenue, and the total value of assets. For a company to be classified into any category (micro, small, medium-sized or large enterprise), it must meet two out of the three prescribed criteria.
Large enterprises must have more than 250 employees, revenue exceeding 40 million euros, and assets worth more than 20 million euros. Companies with lower figures in these categories are classified as micro, small or medium-sized enterprises. According to the employment criterion, a micro enterprise has fewer than 10 employees, a small enterprise between 10 and 50, and a medium-sized enterprise between 50 and 250 employees. The revenue of medium-sized enterprises ranges from 8 to 40 million euros, while small enterprises generate revenue between 0.7 and 8 million euros. The assets of medium-sized enterprises range from 4 to 20 million euros, while small enterprises have assets worth between 0.4 and 4 million euros.
Net profit achieved is not listed as a criterion in the classification of enterprises by size, since this business indicator is variable and depends on numerous factors, especially when it comes to companies that do not fall into the category of large enterprises.
SMEs – dominant in number, weak in contribution
In 2024, there were around 113,000 enterprises in Serbia, of which 85 per cent were micro enterprises. The fewest were large enterprises, only 674, but taken together they dominate across all business indicators. Despite their numerical dominance, micro enterprises generated turnover of only 2.8 trillion dinars, while large enterprises accounted for more than 40 per cent of total turnover, with 7.8 trillion dinars.
Viewed by sector, enterprises engaged in wholesale and retail trade and the repair of motor vehicles lead by number, accounting for around 28 per cent of the total number of companies, followed by manufacturing with about 14 per cent. The most dynamic sector of the domestic economy, information and communication, had more than 8,500 enterprises in 2024 and reached a share of 7.5 per cent of the total number of active enterprises.
Across all enterprises, 1.34 million workers were employed last year, with around 44 per cent, or almost 600,000 workers, employed in large enterprises. By activity, the largest number of employees worked in manufacturing, around 31 per cent, followed by wholesale and retail trade and the repair of motor vehicles with about 19 per cent, and transport and storage with around eight per cent of total employment.
Large systems carry the economic result
The domestic economy ended 2024 with a positive net result of 866.3 billion dinars, which is around 10 per cent lower than the previous year. Despite a slight increase in the operating result of the domestic economy, net profit weakened significantly due to more difficult financing conditions. The financing result was 47 per cent lower than in 2023, primarily as a result of higher financial expenses due to higher interest rates.
The largest contribution to the overall economic result, viewed by company size, came from large enterprises, which generated a profit of 439.3 billion dinars, or about half of the total final result. Small and medium-sized enterprises recorded net profits of 209.2 billion and 206.9 billion dinars, respectively, while micro enterprises contributed 10.8 billion dinars to the overall final result.
Such a distribution of the final result is not surprising, given that around half of the financial capacity of the economy is concentrated in large enterprises, which hold about 49 per cent of business assets and more than 51 per cent of total capital. The net working capital of the economy was a quarter higher than in 2023, and the largest share of positive net working capital was recorded by small enterprises at 666.9 billion dinars, followed by medium-sized enterprises with 557.5 billion dinars, while micro enterprises had negative net working capital of 851.8 billion dinars.
The best SMEs with high margins
Micro, small and medium-sized enterprises on the Top 150 list, ranked by profit, generated net profit of 108.8 billion dinars, with a net profit margin of around 32 per cent. This very high profitability largely stems from the fact that some enterprises have low operating revenues and generate high profit from financial results, or due to one-off factors that contributed to a high result from other operating activities.
It is interesting that as many as 28 enterprises on the Top 150 list have no employees at all, meaning that only the company’s legal representative exists. According to data from the Business Registers Agency, more than 33,000 companies, or almost one third of the total number, operate without a single employee. The largest number of these are micro enterprises, while at the other end, there are only four large enterprises that have no one on the payroll.
Under domestic regulations, a company may operate without employees, but it must have a legal representative (director), who usually has an employment contract and sometimes a separate management contract.
What are the main reasons why a company operates without employees? These may be newly established companies in the initial phase of development, or holding companies and passive companies established to hold assets or investments. On the mentioned Top 150 list of micro, small and medium-sized enterprises, the largest number of such companies are engaged in some form of activity in the real estate market: renting out own or leased property, development of construction projects, property management, construction of residential and non-residential buildings, and so on. Almost two-thirds of the companies on the list that have no employees belong to this group.
Otherwise, companies without employees are not most numerous in these sectors, but primarily in wholesale and retail trade, professional, scientific, innovation and technical activities, as well as manufacturing and construction. These companies often use external associates instead of permanently employed staff, and examples of micro and small enterprises in the field of consultancy services are also very common, especially in the technology sector, where the company’s activity is carried out by a single individual.
Companies without a single employee on the Top 150 list of the most profitable micro, small and medium-sized enterprises generated a profit of 21 billion dinars, which is only slightly lower than their operating revenues of 28.3 billion dinars. With such performance, these companies rank among the very top of the domestic economy in terms of profitability, although it should be noted that these are nevertheless exceptions within the group of business entities that have no employees.
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