Find out about the Incentives of Bosnia and Herzegovina
INCENTIVES FOR FOREIGN INVESTORS
There is a set of benefits ensured for foreign investors in BiH.
Foreign investors are granted the same rights as country residents and this provision is at state level. Potential investors are provided with various incentives, including:
- The ability to open accounts in any commercial bank in domestic and/or any freely convertible currency
- Employment of foreign nationals
- Free transfer of profits to abroad
- The same property rights as domestic legal entities regarding real estate
- Protection against nationalization, requisition or similar measures
- One of the lowest VAT rates in the region (17%)
Equipment that is imported as part of share capital is exempt from paying customs duties (except for passenger vehicles, and slot and gambling machines).
The investor is only obliged to submit a written request for exemption from import duties to the customs authority along with the appropriate documents.
Documents include: contract, proof of investment registration, specification of equipment, statement that the equipment is not over 10 years old and environmental and employment protection standards compliance certificate. Other goods that are exempt from customs duties are goods for military and police forces that are fully donor-financed and goods for reconstruction projects in BiH. At the entity level, there is a set of additional benefits, especially with regards totax breaks.
THE FEDERATON OF BOSNIA & HERZEGOVINA
- Taxpayers who purchase production equipment using their own funds, and totaling more than 50% of their total profit in the current tax period, shall receive a reduction of 30% of the calculated tax levied in the year of investment.
- Taxpayers who invest 10M EUR during a period of five (5) consecutive years, with at least 2M EUR invested during the first year, will have their income tax obligations reduced by 50%.
- Taxpayers are entitled to deduct double the amount of gross wages paid to new employees if the following conditions are fulfilled:
- the employment lasts a minimum of 12 months, with full-time working hours
- the new employee has not have been employed by the taxpayer or a related person during the previous five (5) years.
THE REPUBLIC OF SRPSKA
- Taxpayers who invest in equipment, facilities and real estate for carrying out production activities in an amount totaling more than 50% of realized profit for the current tax period, are eligible for a 30% reduction in income tax liability.
In this entity, foreign investors are entitled to:
- Exemption from utility fees for displayinga sign showing your company name at your registered company address and wherever your business operates
- Compensation of court fees for registration of a business entity and entry in the register for newly established enterprises and entrepreneurs
- Compensation of expenses incurred for connection to power, water and sewage networks
- Compensation of paid fees necessary for obtaining the location conditions, building permits and approvals for the use of facilities
- Compensation of expenses equal to the difference in the price of electricity and water paid by the company and the price paid by households
- Compensation for the total amount of paid employment contributions for new employees
- Compensation of 100% of maternity leave salaries
- A 50% reduction in payments toward the health insurance of newly employed workers from the moment they obtain the benefit
- Reimbursement for purchases of fixed assets up to the amount of determined and paid profit tax or income tax assessed for the same year the purchases of fixed assets was made, provided that the difference between the amount of profit tax or income tax and generated stocks cannot be transferred to next year.