Bosnia and Herzegovina: Investing

FDI in Figures

In the 2000s, the government has taken a series of measures to attract more FDI, which resulted in a record amount of EUR 1.5 billion of FDI in 2007 (14% of the GDP). However, the economic crisis of 2008 led to a drop in FDI influx, which then accelerated, so that in 2010 FDI levelled off at only 174 milion EUR.

Overall, the countries that invest the most in Bosnia and Herzegovina are Serbia, Austria, Croatia, Slovenia and Russia. The sectors that attract the most foreign investment are the manufacturing, banking and telecommunications; although a significant portion of FDI is invested in trade, financial services and other services sectors.

Foreign investors still have to deal with problems like the non-transparency of procedures and weak judicial structures.

The economic situation of the countries that invest in Bosnia must  be restored first, and then FDI inflows can increase again.  Starting in 2011, thanks to the support from the IMF and the EBRD, this increasing trend should be confirmed, although still remaining modest.

Why You Should Choose to Invest in Bosnia and Herzegovina

Strong Points

The country's main strong points are:
- One of the fastest growth rates in the region (around 5% per year average);
- One of the lowest inflation rates in the region (below 5% per year average);
- The country's candidacy for EU and WTO accession;
- One of the most stable currencies in the region, directly linked to the euro;
- A well developed banking sector; and
- Low corporate income tax (10%).

Weak Points

Bosnia and Herzegovina still has a number of weak points:
- A complex legal and regulatory framework, with a country divided into two governmental entities;
- A lack of transparency in business procedures, especially in calls for public tenders, which are not always transparent;
- Weak judicial structure.

Government Measures to Motivate or Restrict FDI

Bosnia and Herzegovina has made significant efforts to open its economy to foreign investments. The main initiatives include a State Foreign Investment Policy Law, the establishment of a foreign investors' support fund and a uniform trade and customs policy.
The main provisions established by the government are:
- Equal treatment between foreign and national investors;
- The establishment of free trade zones;
- Investor protection through prohibiting nationalization or expropriation of property.

For more incentives see the Foreign Investment Promotion Agency website.

Procedures Relative to Foreign Investment

Acquisition of Holdings

A foreign investor can hold 100% interest in the shares of a company established in Bosnia and Herzegovina, except in some cases (armement, media).

Obligation to Declare

For the acquisition of Joint-Stock company.

Competent Organization For the Declaration

Republic of Srpska Securities Commission - for acquisitions in Srbian entity of the country
Securities Commission of Federation of Bosna and Herzegovina - for acquisitions in Muslim-Croat entity of the country

Requests For Specific Authorizations

Foreign equity ownership of an enterprise engaged in the production and sale of arms, ammunition, explosives for military use, military equipment and public information must not exceed 49% of the equity of the enterprise.  In case of investing in the above-mentioned sectors, foreign investor must obtain prior approval from the competent body of the respective Entity.

Restrictions applicable to domestic investment on account of public policy (l’ordre public), public health and protection of the environment are equally applied to foreign investment.

Investment Opportunities

Investment Aid Agency

Foreign Investment Promotion Agency of Bosnia-Herzegovina (FIPA)

Tenders, Projects and Public Procurement

Tenders Info, Tenders in Bosnia and Herzegovina
UNDP - United Nations Development Programme, Tenders & Projects from Bosnia and Herzegovina
DgMarket, Tenders Worldwide

Other Useful Resources

Foreign Investors Council (FIC) - a non-profit business association, representing the interests of foreign businesses in Bosnia and Herzegovina.

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