Exporters and investors that are prepared and persistent can find chances in BiH. The US sold items worth $322 million to BiH in 2021. Businesses that have been able to successfully establish a presence in BiH have frequently seen a long-term return on their investment. A significant U.S. investment firm was successful in entering the market in 2014 with a regional investment and successfully selling its majority stake in 2019. The nation offers a flexible commercial environment and is welcoming to foreign investment. It has a wealth of natural resources. The following industries which are covered in more detail later in the report offer the best opportunities:
- Fisheries, fruits, vegetables, milk, dairy products, and medicinal and fragrant herbs from the agricultural sector.
- Industrial processing materials to provide BiH’s metal-based industry.
- Equipment for thermal power plants, hydroelectric plants, and electrical distribution projects.
- Telecommunications tools and services for extending current mobile, fixed-line, and broadband networks.
- Building machinery to help with infrastructure project needs for commercial construction.
- Medical gear, particularly advanced diagnostic gear, is for use in both private practices and public health care systems.
- Hardware and services for information technology, such as computer software and IT hardware and services.
Environment for investment
The country is a forward-thinking nation that has made incredible strides in enhancing the economic environment. Bosnia and Herzegovina has greatly improved its business environment and enhanced the environment for international investors through its robust reforms, and the adoption and approval of strategy documents, laws, and regulations. The nation is welcoming to foreign investors, particularly when it comes to balancing their obligations and rights with those of local businesses.
The Central European Free Trade Agreement (CEFTA), which was signed by the country, established a free trade area with access to a sizable consumer market. Additionally, talks to join the World Trade Organization are now under.
Stable financial sector
The most stable currency in South East Europe, connected directly to the Euro, is used in Bosnia and Herzegovina. By issuing domestic currency following the Currency Board agreement and full coverage in freely convertible foreign exchange funds at a fixed exchange rate of 1 KM: 0, 51129 EUR, the Central Bank of Bosnia and Herzegovina preserves monetary stability.
Favorable tax system
Favorable tax laws are another important factor for investing in B&H. Bosnia and Herzegovina has one of the lowest VAT rates (17%) in the area and all of Europe, as well as one of the lowest corporation tax rates in both of those regions (10%).
Incentives for foreign investors
Here are some of the incentives for foreign investors.
The following is guaranteed by Bosnia and Herzegovina’s Law on the Policy of Foreign Direct Investments (Official Gazette of BiH, 17/98, 13/03, and 48/10).
Foreign investors are accorded the same national treatment as BiH residents in terms of rights and obligations. On the territory of BiH, foreign investors are allowed to open accounts at any commercial bank in local currency or any freely convertible currency.
The BiH government supports foreign investments with several measures, including:
Customs duties are waived for equipment imported by the foreign investor as part of the share capital (except for passenger vehicles, slots, and gambling machines).
Free trade zones in BIH
These have legal entity status and are a part of BiH’s customs territory. The founders of free trade zones may be one or more local and international legal enterprises or real people, according to the Law on Free Trade Zones of BiHThe feasibility study and any supporting documentation must indicate that a free zone’s exports would exceed 50% of its manufactured items within a year to justify its existence. The same owner’s space outside the zone could be used for warehousing.