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The Law on the Policy of Foreign Direct Investments of Bosnia and Herzegovina (Official Gazette of B&H, 17/98, 13/03) ensures national treatment of foreign investors, i.e., foreign investors have the same rights and obligations as residents of Bosnia and Herzegovina.

Foreign investors are entitled to open accounts in any commercial bank in domestic and/or any freely convertible currency in the territory of Bosnia and Herzegovina.

Foreign investors are entitled to freely employ foreign nationals, subject to the labor and immigration laws in Bosnia and Herzegovina.

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.

Investment capital is exempt from paying import customs and customs duties (with the exception of passenger cars, slot and gambling machines). In order to enjoy this benefit, a foreign investor should submit a written request for exemption from paying import duties to the competent customs authority (according to the place of seat of the company) along with the following documents:

• Contract or other relevant document about the investment on the basis of which the equipment is being imported;
• Proof of registration of the investment at the competent authority;
• Equipment of specification with tariff number, tariff mark (with quantity indication), unit price and total value, certified by the investor;
• Statement of the investor that the equipment is not older than 10-year age limit;
• Certificate of the competent institution confirming that the imported equipment complies with the environmental and employment protection standards.

The Customs Office issues a decision within 15 days upon submission of the request.

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. Foreign investors may own real estate in Bosnia and Herzegovina.

Foreign investors enjoy the same property rights in respect to real estate as do the citizens and the legal entities of Bosnia and Herzegovina. Foreign investors are entitled to transfer abroad, freely and without delay, in a convertible currency to proceed resulting from their investment in Bosnia and Herzegovina. Free trade zones in Bosnia and Herzegovina are part of the customs territory of Bosnia and Herzegovina and have status of legal entity. According to the Law on Free Trade Zones, free trade zone founders may be one or more domestic and foreign legal entities registered in Bosnia and Herzegovina.

The users of the free zone do not pay VAT and import customs for manufacturing equipment. Investment in the free zone, transfer of profit and transfer of investment are free of charge. The free zone establishment is considered economically justified if the submitted feasibility study and other evidence can prove that the value of goods exported from a free zone will exceed at least 50% of the total value of manufactured goods leaving the free zone within the period of 12 months.

Operational Costs of Doing Business in Bosnia and Herzegovina

We would like to emphasize that operational costs are shown only for approximate estimates. Prices shown are in the range according the price lists of the provider, defined in accordance with various technical specifics.

Electricity prices in Bosnia and Herzegovina

The price of electricity is defined with tariff and price of kW/h. Tariff rates are determined by Entities Regulatory Commission for Electricity and information are available on the websites of:

Regulatory Commission for Electricity in Federation Bosnia and Herzegovina

The Regulatory Commission for Energy of Republic of Srpska.

The price of electricity is determinate with tariff groups, season and higher/lower daily tariffs.

Source: Agency for Statistics of Bosnia and Herzegovina, December 2011

The price of industrial gas in Bosnia and Herzegovina

Source: *Monthly review of Average Consumer Prices in B&H – December, Agency for Statistics of Bosnia and Herzegovina, ** Sarajevo gas d.o.o. – since November 2011

The price of landline and mobile phone:

A variety of custom packages are available on the market within more operators. The approximate price ranges are presented, from the lowest to the highest tariff for one minute and depending on the zone, time call or custom package.

The Communications Regulatory Agency Bosnia and Herzegovina granted approval to the telecom operators to amend their pricelists with the effective date as of January 1, 2011.

The prices of access fees, established by the telecom operators

The prices of access fees, established by the telecom operators range from 30.7 EUR to 35.8 EUR.

The price of local calls is equated with the prices of calls within the network group.

Prices of calls within the network group - from 0.014 EUR / min to 0.017 EUR / min

Prices of calls between the fixed network and its own mobile network - from 0.09 EUR / min to 0.10 EUR / min

International calls are divided into three zones: neighboring, European and non-European countries. International calls to neighboring countries - from 0.15 EUR/min to 0.23 EUR/min International calls to other European countries - from 0.25 EUR/min to 0.54 EUR/min International calls to non-European countries - from 0.51 EUR/min to 0.74 EUR/min

(Source: Annual report of the Communications Regulatory Agency for the year 2010, March 2011)

Average price of Monthly telephone subscription in December 2011 was 6.19 EUR

(Agency for Statistics of Bosnia and Herzegovina )

Average price of mobile phone usage within own fixed network in December 2011 was 0.12 EUR/min

(Agency for Statistics of Bosnia and Herzegovina)

The prices of water in Bosnia and Herzegovina 

Water charges are determined at local level and thus are different from one municipality to another. The water price consists of: water, sanitation, PVN (Special Water Compensation) for water consumption and PVN (Special Water Compensation) for water protection (depending of the level of pollution of wastewater).

Average monthly price in December 2011, of Water supply was 0.45 EUR/m3 and Sewerage services was 0.19 EUR/m3 . (Source: Agency for Statistics of Bosnia and Herzegovina)

In Sarajevo Canton, the price for water and sewerage for industry was 1,58 EUR/m3 to 1,66 EUR/m3, depending of the level of pollution of wastewater. (Source: Public Company Vodovod i kanalizacija d.o.o. Sarajevo )

Bosnia and Herzegovina has an exceptionally high quality of drinking water. Water from the tap is safe to drink as well as most places in the mountains or fountains in towns or along the side of the road.

Entity Level Incentives

Federation of Bosnia and Herzegovina

Tax Benefits

  •  The Federation Law on Corporate Income Tax enables the taxpayer, who in the year for which the corporate income tax is being determined, has achieved 30% of their total revenue by export to be exempted from the tax payment for that year.

  •  The taxpayer who in the period of five consequent years invests into production in the value of minimum 20 million BAM, on the territory of the Federation of Bosnia and Herzegovina, is being exempted from the payment of corporate income tax for the period of five years beginning from the first investment year, in which minimum four million BAM must be invested.

  •  If the taxpayer, in the time period of five years, does not achieve the prescribed census for investment, he loses the right of tax exemption, and the unpaid cor­porate income tax is determined in accordance with the provisions of the Law on Corporate Income Tax augmented for penalty interest payable for untimely paid public revenues.

  •  The taxpayer who employs more than 50% of disabled persons and persons with special needs longer than one year is being exempted from the payment of corporate income tax for the year in which more than 50% disabled persons and persons with special needs were employed.

Republica of Srpska

Tax benefits

  •  The Law Amending the Law on Profit Tax RS introduced tax base reduction in the value of investment for: Investment in equipment intended for the company production activity -Investments in plants and immovable property used for manufacturing and processing activities Tax base reduction in amount of paid personal income tax and mandatory constitution is provided also for employing 30 workers year (workers who were on the official evidence of Employment Office of RS) during a calendar year.

  •  Regulation on Requirements and Manner of Implementation of the Investment and Employment Support Program This Regulation sets forth requirements for and manner of encouraging and supporting direct investments and employment growth in the territory of the Republic of Srpska, criteria for award of funding, schedule of payment of awarded funding, and other issues relevant to competitiveness growth of the Republic of Srpska through inflow of direct investments aimed at employment in new jobs, transfer of new knowledge and technologies and balancing of regional development of the Republic of Srpska

Brcko District of Bosnia and Herzegovina

Law on incentives to economic development in Brcko District of Bosnia and Herzegovina (Official Gazette no. 13/06, 19/07, 17/10) which ensures:

  •  Exemption from utility fees for displaying the company;

  •  Compensation of court fees for registration of a business entity and the change entry in the register for newly established enterprises and entrepreneurs;

  •  Compensation of expenses of connection to power, water and sewage network;

  •  Compensation of paid fees necessary for obtaining the location conditions , building permits and approvals for the use of the facility;

  •  Compensation of expenses in amount of the difference in price of electricity and water paid by the company and the price paid by households;

  •  Compensation for paid employment contribution in the total amount for newly employed persons;

  •  Compensation for salary for maternity leave in amount of 100%;

  •  Stimulation of the employer in amount of 50% of total duties for health insurance of newly employed workers from the moment of obtaining the benefit;

  •  Compensation for amount of new investments invested in purchase of fixed assets and up to the amount of determined and paid profit tax or income tax in period for the year in which purchases of fixed assets was made, provided that the difference between the amount of profit tax or income tax, and made supply cannot be transferred to next year.

Other Incentives

Incentives that are planned and allocated from the budgets e.g. incentives for tourism development, agricultural subsidies, and support projects to small and medium-sized enterprises.