INVESTING (7)

Regarding his investment the foreign investor enjoys equal status, rights and duties, as domestic legal and physical persons. A foreign investor enjoys full legal security and legal protection in respect of rights acquired by virtue of the investment. Rights of foreign investor acquired in the moment of registration of the legal documents cannot be deteriorated by subsequent alteration of laws and other regulations.

Company with foreign investment enjoys equal legal status and carries on its business under equal conditions and in an equal manner ad do domestic companies.

Foreign citizens in BiH shall exercise the same rights and freedoms as citizens of BiH, provided for by the legislation of the country ( in competence of Ministry of Justice BiH)

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There are many reasons for investing in BiH, such as:

  • Stable financial sector
  • Favorable Trade and other Agreements
  • Favorable Tax and Customs System
  • Availability of skilled, educated and competitively priced labor force
  • An abundance of premises and sites, industrial zones, free trade zones
  • Foreign Investor Support Fund etc.

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Foreign investors concerned about risks of transfer restrictions, expropriation, war and civil disturbance and denial of justice, can be insured against these risks with the European Union Investment Guarantee Trust Fund for Bosnia and Herzegovina, administered by the Multilateral Investment Guarantee Agency (MIGA, member of the World Bank Group).

BiH is eligible for assistance from the US Overseas Private Investment Corporation (OPIC), which also provides political risk insurance for investors.

 

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Corporate income tax rate is 10 % on the whole territory of Bosnia and Herzegovina.

Personal Income Tax- from 5,5 % to 30%

Property tax. – From 3-8 %

Value Added Tax – 17 %

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Work permits for foreign investors are issued on the basis of residence permit.

Work permits are issued by the authorized Employment Offices for the maximum period of up to one year and can be extended.

The employer should apply for work permits for their foreign employees. Work permits are issued for the person for specified position and with specified employer for specified period of time. The employment of foreign national will be permitted if he is qualified for the position and if no unemployment citizen of BiH can be found to fill the vacancy. With the termination of employment, the corresponding work permit is invalidated.

The permit evaluation process needs to be completed 7 days upon the submission of required documents.

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Money transfer to Bosnia and Herzegovina goes through banks directly or via intermediary banks, depending on the sender’s location.

Cash that exceeds 10.000 EUR must be reported at the border or airport.

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  • Foreign investors are protected against nationalization, expropriation, requisition or measures having similar effects; such measures may take place only in the public interest in accordance with the applicable laws and regulations and against the payment of an appropriate compensation, i.e. compensation that is adequate, effective and prompt.
  • National treatment of foreign investors, i.e, foreign investors have the same rights and obligations as residents of B&H.
  • Foreign investors are entitled to open accounts in any commercial bank in domestic and/or any freely convertible currency on the territory of B&H.
  • Foreign investors are entitled to freely employ foreign nationals, subject to the labour and immigration laws in B&H.
  • Foreign investors are entitled to transfer abroad, freely and without delay, in convertible currency, proceeds resulting from their investment in B&H
  • Foreign investors may own real estate in B&H. Foreign investors enjoy the same property rights in respect to real estate as B&H legal entities.
  • The rights and benefits of foreign investors granted and obligations imposed by the Law on the Policy of Foreign Direct Investment (mentioned above) cannot be terminated or overruled by subsequent laws and regulations. Should a subsequent law or regulation be more favorable to foreign investors, the investor will have the right to choose the regime by which the investment will be regulated.
  • Full corporate income tax exemption for companies whose exports exceed 30% of total income (turnover)
  • Companies investing not less than  20 million BAM over five consecutive years in production, provided the investment during the first year is at least  4 million BAM .
  • A company, whose workforce is comprised more than 50% of persons with disabilities or special needs hired for a period longer than one year, is exempt from corporate income tax for that year.
  • Foreign investors concerned about risks of transfer restrictions, expropriation, war and civil disturbances and denial of justice, can be insured against these risks with the European Union Investment Guarantee Trust Fund for Bosnia and Herzegovina, administered by the Multilateral Investment Guarantee Agency (MIGA, member of the World Bank Group).

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GENERAL (6)

Main Economic Indicators 2007 2008 2009 2010 2011 2012 2013 2014 2015
Nominal GDP (EUR billion) 11.5 13.0 12.7 13,0 13,4 13,4 13,7 14,0 14,6
GDP per capita (EUR) 3,000 3,394 3,297 3,372 3,490 3,491 3,568 3,648 3,821
Real GDP growth rate (%) 5.7 5.5 -2.9 0.8 0.9 -0.9 2.4 1.1 3.03
Industrial production growth rate (%) 10.0 9.2 -3.3 1.6 5.6 -5.2 6.7 0.1 2.6
Net average wages (EUR) 322 385 404 408 417 422 423 424 424
Annual inflation rate (%) 1.5 7.4 -0.4 2.1 3.7 2.1 -0.1 -0.9 -1.0
Annual unemployment rate (%) 29.0 23.4 24.1 27.2 27.6 28.0 27.5 27.5 27.7
Official FX reserves (EUR million) 3,425 3,219 3,176 3,301 3,284 3,328 3,614 4,001 4,400
Trade Balance (EUR billion) -4.14 -4.82 -3.48 -3.33 -3.73 -3.78 -3.47 -3.84 -3.51
FDI flows (EUR million) 1,329 684 180 307 357 307 228 378 244
FDI as a % of GDP 11.6 5.3 1.4 2.4 2.7 2.3 1.7 2.7 1.7
Deposits of citizens in commercial banks (EUR million) 2,622 2,633 2,793 3,251 3,605 3,914 4,276 4,623 5,044
EUR / LCY (avg.) 1.96 1.96 1.96 1,96 1,96 1,96 1,96 1,96 1,96
USD / LCY (avg.) 1.43 1.33 1.40 1,47 1,41 1,52 1,47 1,47 1,76
Source: Central bank of B&H and Agency for Statistics of B&H

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Official name: Bosnia and Herzegovina (BiH)
Area:  51.209,2 km2 (51.197 km2 land; 12, 2 km2 sea)
Population: 3,5 million

Capital city: Sarajevo
Other major cities: Banja Luka, Bihac, Mostar, Tuzla, Zenica
Religions: Muslim (50,7%), Orthodox Christian (30,74%), Roman Catholic (15,18 %), Others (3,35%)
Ethnic groups: Bosniaks, Serbs, Croats and others
Languages: Bosnian, Serbian, Croatian (all official)
Administrative organization: BiH comprises of two entities: the Federation of BiH and Republika Srpska. Formally part of both entities is the Brcko District, a multi-ethnic self-governing administrative unit.
Government structure: BiH is a parliamentary democracy with a bicameral parliament (House of Representatives and House of Peoples), a three-member rotating presidency, a Council of Ministers, and Constitutional Court.

Age structure:

0-14 years: 15,3%
15-64 years: 70,3%
65 years and over: 14,2%

Population growth rate: -0,0023% (2015 est.)

GDP:  14,6 bil EUR (2015)
GDP per capita: 3.821 EUR  (2015)
Currency: Convertible Mark (BAM – official; KM – common use)
Exchange rate: 1 EUR = KM 1,95 (fixed exchange rate)
Tax jurisdictions: There are two main tax jurisdictions in BiH: the Federation of BiH (FBiH), with 10 cantons, and the Republika Srpska (RS)
Latitude/longitude: 44 N, 18 E
Time zone: CET (GMT + 1 hour)
Internet domain:  .ba
Internacional telephone code:  +387

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Residence and movement of foreign nationals in BiH is regulated by the Law on Movement and Residence of Foreigners and Exile.

A temporary residence permit is issued by the authorized Ministry of Interior Affairs for a period of up to one year and can be extended. If the residence permit is issued on the basis of employment agreement, its validity is directly linked to the work permit. Since the first residence permit can be issued for one year only, foreign employee needs to extend both his work and residence permits, once that period expires.

If a foreign national intends to reside in BiH with his/her spouse and/or children, this must be mentioned in the application for the first residence permit.

A permanent residence permit can be issued to a foreign national on the basis of temporary residence of at least 5 years of continuous residence in BiH.

 

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Work permits for foreign investors are issued on the basis of residence permit.

Work permits are issued by the authorized Employment Offices for the maximum period of up to one year and can be extended.

The employer should apply for work permits for their foreign employees. Work permits are issued for the person for specified position and with specified employer for specified period of time. The employment of foreign national will be permitted if he is qualified for the position and if no unemployment citizen of BiH can be found to fill the vacancy. With the termination of employment, the corresponding work permit is invalidated.

The permit evaluation process needs to be completed 7 days upon the submission of required documents.

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Ministry of Security is in charge of the implementation of immigration and asylum in Bosnia and Herzegovina, and is responsible for the regulation of procedures and methods of organizing services dealing with the issues of the movement and stay of aliens. The headquarters of the Ministry of Security is seated in the town of Sarajevo at the address Trg Bosnia and Herzegovina 1.

Asylum Sector performs administrative and other professional tasks related to the execution and implementation of policy and asylum procedure in Bosnia and Herzegovina. Immigration Sector is responsible for delivering second instance decisions on appeals of aliens on the decisions issued the Service for Foreigners’ Affairs and the Border Police.

Border Police of Bosnia and Herzegovina is one of the administrative organizations within the Ministry of Security, with its operational autonomy, established to perform police tasks related to monitoring and control of Bosnia and Herzegovina border crossing points and other duties as prescribed by law.

Service for Foreigners’ Affairs, as one of the administrative organizations within the Ministry of Security, with its operational autonomy, is tasked with performing administrative tasks related to the movement and stay of aliens in Bosnia and Herzegovina in accordance with the Rulebook of the Law on Movement and Stay of Aliens and Asylum. Organizational units of the Service for Foreigners’ Affairs are the following field offices: Sarajevo, East Sarajevo, Banja Luka, Mostar, Zenica, Travnik, Bijeljina, Trebinje, Gorazde, Tuzla, Livno, Ljubuski, Orasje, Bihac, Brcko, and Doboj.

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Non-visa stay is the right of stay for foreigners coming from countries with visa-free travel of up to 90 days within any period of 180 days, which means, taking into account the period of 180 days prior to each day of stay, unless otherwise determined by an international treaty to which BiH is a party.

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LAND / REAL ESTATE (8)

Foreign investors have the same property rights in respect to real estates as the citizens of Bosnia and Herzegovina.

Foreign citizen can buy property (land, house, apartment) in Bosnia and Herzegovina in accordance with the existence or absence of reciprocity in terms of acquiring the real estates.

 

The list of countries, reciprocity in acquiring title to real-estate and property in the Federation BiH:

lista_zemalja_reciprocitet_u_stanju_prava_vlasnistva_na_nekretninama

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After the signing of a sales contract and the certification of signatures of the contracting parties by the public notary, the land and new owner are registered in the Land Register.

Requests for land registry extracts, as well as requests for alterations in land register records, are submitted to the land register offices located in courts, specifically municipal courts in FBiH and basic courts in RS.

If some of the data necessary for submitting a request are unknown, e.g. plot number, land register folder, cadastre municipality name, these can easily be obtained in the land register office.

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Foreign investors can insure their properties at many insurance companies. For a list of leading insurance companies in Bi, please contact FIPA (Foreign Investment Promotion Agency BiH).

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A foreign investor/citizen can rent their BiH property without any requirement to obtain a rental license from the authorities.

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Real estate agents exist in major cities and towns, operating in a transparent, competitive environment. For a list of reputable agents please contact FIPA directly.

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Leasing office space:

5 – 50 EUR/m2

Buying office space:

Central position 1500 – 3500 EUR/m2

Peripheral position 700 – 2000 EUR/m2

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Buying land: 10 – 100 EUR/m2

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Leasing: 2 – 10 EUR/m2

Buying: 50 – 1000 EUR/m2

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