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Incentives for foreign investors


  • FOREIGN INVESTORS SUPPORT FOUND. In order to encourage foreign investors and contribute to the predictable business environment the Council of Ministers established the Foreign Investors Supports Fund in 2007 as a financial incentive for investors.
  • The Law on the Policy of Foreign Direct Investments of Bosnia and Herzegovina (Official Gazette of BiH, 17/98, 13/03 and 48/10) ensures national treatment of foreign investors, i.e, foreign investors have the same rights and obligations as residents of B&H.
  • Foreign investors are entitled to open accounts in any commercial bank in domestic and/or any freely convertible currency on the territory of B&H.
  • Foreign investors are entitled to freely employ foreign nationals, subject to the labour and immigration laws in BiH.
  • Foreign investors are protected against nationalisation, 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, the 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,
- specification of equipment  with tariff number, tariff mark (with quantity indication), single and total value, certified by the investor,
- statement of the investor that the equipment is not older than 10 years 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 favourable 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 BiH. Foreign investors enjoy the same property rights in respect to real estate as BiH legal entities.
  • Foreign investors are entitled to transfer abroad, freely and without delay, in convertible currency, proceeds resulting from their investment in B&H.
  • Free zones in B&H are part of the customs territory of BiH and have status of legal entity. According to the Law on Free Zones of B&H, free zone founders may be one or more domestic and foreign legal/natural entities. The users of 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. 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.
  • Tax exemptions. The Federation Law on the 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.
    Taxpayer who in the period of five consequent years invests into production in the value of minimum 20 million KM, 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 KM must be invested.
    If taxpayer from the above paragraph, in the time period of five years, does not achieve the prescribed census for investment, they lose the right of tax exemption, and the unpaid corporate income tax is being determined in accordance with the provisions of the Law on the Corporate Income Tax augmented for penalty interest payable for untimely paid public revenues.

In the Federation of B&H, 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.