Bosnia and Herzegovina
– An Emerging Outsourcing Destination
Bosnia-Herzegovina is a developing country in the Western Balkans, the heart of South-East Europe. Located between the Danube river and the Adriatic Sea, the Western Balkans and Bosnia- Herzegovina represents a bridge between East and West, a crossroad of civilizations and cultures – its capital Sarajevo is sometimes called the “European Jerusalem”. This geopolitical position has through the years made Bosnia-Herzegovina a true multicultural, multilingual, and diverse jewel, but with an authentic European cultural identity. Over the past couple of decades, following the dissolution of former Yugoslavia, Bosnia-Herzegovina has made impressive economic progress and reforms, in the process emerging as an attractive location to do business and invest, particularly in the Business Process Outsourcing (BPO) sector.
Bosnia and Herzegovina
KEY FACTS AND NUMBERS
Population:
– 3.3 million
Time Zone:
– CET (GMT+1)
Capital:
– Sarajevo
Other Major Cities:
– Banja Luka, Tuzla, Mostar, Zenica
Official Languages:
– Bosnian, Serbian, Croatian
Secondary Languages:
– English, German (most common)
Airports:
– Sarajevo
Other Airports:
– Banja Luka, Tuzla, Mostar
GDP Per Capita:
– 5,500 EUR (2019)
Average Monthly Wage:
– 428 EUR
VAT: 17%
Corporate Tax: 10%
Currency:
– BAM = 0.51 EUR
Outsourcing in Bosnia-Herzegovina
Bosnia-Herzegovina has emerged as a new “outsourcing hotspot” over the past decade. The country’s growing talent pool of young highly skilled multi-lingual professionals, together with low labor costs has attracted a growing number of foreign investors and global BPO providers, who have established business centers in Bosnia-Herzegovina or entered into partnerships with the country’s growing number of locally owned and operated BPO service providers.
Bosnia-Herzegovina’s fast-growing local technology sector is also attracting investment in more sophisticated ITO and KPO services, from software design and programming to electrical engineering and architecture.
Major international players currently with a presence in Bosnia-Herzegovina include CCC, DDC, Teleperformance and Trizma.
Number of specialized BPO/KPO providers ▼
65+
Number employed in the BPO sector ▼
3000
Number of ABSL members ▼
30+
Why outsource to Bosnia-Herzegovina?
Low Costs
Aside from the tax advantages, Bosnia-Herzegovina is one of the most competitive European locations when it comes to doing business. The country represents real value for money when it comes to typical business costs such as utilities, communication, office rent and professional services such as accountancy, legal advice, and recruitment. Also importantly, local talent comes at a lower cost than in neighboring Central and Eastern Europe countries, without compromising in quality.
Skilled Local Talent Pool and Language Proficiency
Bosnia-Herzegovina has a large, well-educated workforce – its people are its most valuable resource. Tertiary education enrollment rates have been extremely high over the past decade. Local universities produce about 16,000 graduates each year, most of which are very proficient in English and German. The expertise, skills and experience of the workforce in B&H is additionally demonstrated by the fact that there is a great number of very successful companies providing outsourcing services with excellent references, as well as a big number of successful individuals employed in big international corporations. This is a guarantee for the quality of service provided.
Within Easy Travelling Distance and Same Time Zone
Bosnia-Herzegovina is a one-to-two-hour flight from most major European capitals and business centers, with a number of cheap flights available. Outsourcing operations to a nearby country offers significant advantages for firms based in Western Europe. It is much more convenient for a company to set up a development center in a European country such as Bosnia-Herzegovina than in more distant locations such as India for the simple reason that it’s closer to home both geographically and culturally.
Low Tax Rates
Tax rates in Bosnia-Herzegovina are low compared to other locations in Europe. The local corporation tax is 10 percent, compared to a European average of 30 percent. VAT is currently 17 percent, the withholding tax rate is 10 percent and there is a single flat income tax rate of 10 percent, with additional incentives for employees.
Confidentiality Matters
In today’s digital connected world data confidentiality, privacy, and security are key priorities for businesses and society in general. As a potential candidate for EU membership Bosnia-Herzegovina local businesses that manage the data of EU citizens are required to comply with GDPR regulations. Compliance with all regulations and business standards is necessary for building trust and providing a great service.
HUMAN CAPITAL
Some of the key features of the labour force in Bosnia-Herzegovina
Talent Pool – A Closer Look
Currently, Bosnia-Herzegovina has about 90,000 students within tertiary education of which a quarter are estimated to be very proficient in German (B2 level and above), this amounts to almost 18,000 potential BPO industry employees.
At the national level including Sarajevo, Tuzla and Banja Luka there are over 200,000 enrolled students at all levels of educational institutions across the country.
An estimated 300,000 people below the age of thirty in Bosnia-Herzegovina are currently learning German. Most of these young people take advanced language courses to get access to work opportunities abroad.
Bosnia-Herzegovina loses a lot of its young people to emigration each year, but our market knowledge indicates though that a lot of young people are willing to stay if competitive job opportunities arise.
Real Estate Insights
Sarajevo is the most developed office market in Bosnia-Herzegovina due to the high density of businesses, governmental and non-governmental organizations, as well as international companies, basing their offices in the capital. The remaining office stock is located in major cities like Banja Luka (the capital of Republika Srpska entity), Zenica, Tuzla, Bijeljina and Mostar, all of which have more than 100,000 residents. Current office class ‘A’ and class ‘B’ stock in Sarajevo amounts to around 125,000 square meters GLA (gross leasable office area). Of this, class ‘A’ office space accounts for approx. 70% and class ‘B’ and ‘B+’ account for the remaining 30%.
DEMAND
Rents and vacancy rates are below 10% in the Sarajevo office market class ‘A’ buildings. The monthly rents are around €14 –€18/m2/month for class ‘A’ and around €9 – €13/m2/ month for class ‘B’ office premises. The monthly rent in Sarajevo suburban areas ranges between €5 – €9/m2/month.
Recent years have seen an upturn in the quality of available business premises, with both new construction and refurbishments in prime city locations. The municipalities of Centar, Novo Sarajevo, and Novi Grad have the best combination of real estate quality and connectivity, though less expensive real estate and pleasant surroundings can also be found on the university and airport side of town in Ilidža.
The size and layout of the city is such that, with moderate traffic, few places within city limits are more than 10-15 minutes commuting time to the central business district. It is equally possible to travel across the whole city from east to west and arrive at the airport within 20 minutes.
Country Profile may help you decide
We have created a country profile where you can learn much more about outsourcing in Bosnia and Herzegovina.
The information we offer in our country profile can be useful for you in making a decision on positioning your shared service center in BiH.
An Online Business Navigator
We created an online portal to navigate you through the investment process in Bosnia and Herzegovina.
Restart can help you to invest in Bosnia and Herzegovina
If you are a corporate client visiting our country, we are your local guide to Bosnia-Herzegovina, your business concierge. We provide services covering all aspects of your business needs, from administrative support to visit planning and travel and itinerary coordination.
We take care of the details, so you can focus on your business.
