Bosnia and Herzegovina company registration

DOING BUSINESS IN BOSNIA AND HERZEGOVINA IN 2019

Since 2003, Healy Consultants Group PLC has assisted our Clients with business registration in Bosnia and Herzegovina. Our services include i) Bosnia and Herzegovina company incorporation ii) government license registration iii) business bank account opening iv) employee recruitment v) visa strategies and vi) office rental solutions.

Summary table of Bosnia and Herzegovina company registration

Summary	LLC	Fast solution	Free Zone company	Public limited company	Branch office	Representative office
Best use of company?	All products and services	Sign contracts now	Global trading	To secure public funding	Specific projects	Marketing & research
How soon can you invoice Clients/sign sales contracts?	7 weeks	4 weeks	5 weeks	8 weeks	7 weeks	6 weeks
How soon can you hire staff?	8 weeks	5 weeks	6 weeks	9 weeks	8 weeks	7 weeks
How soon can you sign a lease agreement?	7 weeks	4 weeks	5 weeks	8 weeks	7 weeks	6 weeks
How long to supply corporate bank account numbers?	12 weeks	8 weeks	9 weeks	13 weeks	12 weeks	13 weeks
How long to supply company registration/tax numbers?	7 weeks	4 weeks	5 weeks	8 weeks	7 weeks	6 weeks
Corporate tax rate on annual net profits?	10%	10%	10%	10%	10%	0%
Limited liability entity?	Yes	Yes	Yes	Yes	No	No
Government grants available?	Yes	Yes	Yes	Yes	Yes	Yes
Resident director/partner/manager/legal representative required?	No	No	No	No	Yes	Yes
Minimum paid up share capital?	US$590	US$590	US$590	US$29,000	None	None
Can bid for Government contracts?	Yes	Yes	Yes	Yes	Yes	No
Corporate bank account location?	Raiffeisen Bank	Union Bank	Fima Bank	UniCredit Bank	Fima Bank	Union Bank
Can secure trade finance?	Yes	Yes	Yes	Yes	Yes	No
VAT payable on sales to local customers?	10%	10%	0%	10%	10%	0%
Average total business set up engagement costs?	€11,900	TBD	TBD	€13,900	€14,900	€14,550
Average total engagement period?	19 weeks	8 weeks	9 weeks	18 weeks	17 weeks	16 weeks

See full table

Accounting and tax considerations	LLC	Fast solution	Free Zone company	Public limited company	Branch office	Representative office
Statutory corporate tax payable?	10%	10%	10%	10%	10%	0%
Must file an annual tax return?	Yes	Yes	Yes	Yes	Yes	Yes
Must file annual financial statements?	Yes	Yes	Yes	Yes	Yes	Yes
Must appoint an auditor?	No	No	No	Yes	No	No
Access to double taxation treaties?	Yes	Yes	Yes	Yes	Yes	No
Withholding tax on payments to foreign shareholders?	5%	5%	5%	5%	5%	None
Company Registration	LLC	Fast solution	Free Zone company	Public limited company	Branch office	Representative office
Resident director/partner/manager/legal representative required?	No	No	No	No	Yes	Yes
Minimum number of shareholders/partners?	1	1	1	1	Parent company	Parent company
Minimum statutory paid up share capital?	US$590	US$590	US$590	US$29,000	None	None
Security deposit to be kept with Government?	No	No	No	No	No	No
Shelf companies available?	Yes	Yes	Yes	Yes	No	No
Time to incorporate a new entity?	19 weeks	8 weeks	9 weeks	18 weeks	17 weeks	16 weeks
Can easily convert to a PLC?	Yes	Yes	Yes	Yes	No	No
Public register of shareholders and directors?	Yes	Yes	Yes	Yes	No	No
Can have preference shareholders?	Yes	Yes	Yes	Yes	No	No
Business Considerations	LLC	Fast solution	Free Zone company	Public limited company	Branch office	Representative office
Good entity for trademark registration?	Yes	Yes	Yes	Yes	Yes	No
Can secure an import and export license?	Yes	Yes	Yes	Yes	Yes	No
The entity will likely be regulated by?	Municipal court	Municipal court	Municipal court	Municipal court	Municipal court	Registrar of Foreign RO

Sponsorship by a local citizen required?	No
Our Client needs to travel to Bosnia and Herzegovina for business set up?	No
Temporary physical office solutions available?	Yes
You need a local resident as bank signatory?	No
Government approval required for foreign owners?	No
Can be wholly foreign owned?	Yes
Minimum number of directors/managers?	1
Maximum shareholding for foreigners?	100%
Legally tax exempt if properly structured?	No
Group HQ tax incentives?	No
Monthly VAT reporting to the Government?	Yes
Must sign an office lease agreement during incorporation?	No
Shareholders & directors documents to be attested/translated?	Yes
Each foreign director needs a personal income tax number?	No
Foreign director needs a residence visa?	No
Maximum number of staff allowed?	No
Expatriate to local staff ratio?	No
Can secure residence visa for business owner?	Yes
Other useful information
What will be included in my customer sales invoice?	Click link
This country has signed free trade agreements?	Yes
This country is a member of TRIPS?	No
This country is a member of WIPO/ICSID?	Yes
Average custom duties suffered, %?	7.6
Government foreign investment approval required?	No
Average monthly office rental? (US$ per sq m)	25
Minimum statutory monthly salary (US$)?	US$212
Average monthly US$ salary for local skilled employees?	US$505
US$ deposit interest rate? (1 year average)	1.6
Overseas remittance currency controls?	Yes
Banking considerations
Multi-currency bank accounts available?	Yes
Corporate visa debit cards available?	Yes
Quality of e-banking platform?	Good
Crowd funding available in this country?	Yes

Bosnia and Herzegovina business setup summary

Press the link headings below to read detailed, relevant, up to date information.

Advantages of Bosnia and Herzegovina company registration
1. Our Clients may derive certain benefits when investing in Bosnia including:
  - A Bosnia limited liability company can be incorporated within 7 weeks with 1 director and shareholder, who can be of any nationality. The minimum paid-up share capital required is US$1,150 and our Clients do not need to travel to complete engagement;
  - Bosnia and Herzegovina has one of the most favorable tax systems in Europe with low corporate tax rates of 10% and VAT at 17%, one of the lowest rates in Europe;
  - Bosnian companies will be eligible for corporate tax exemption if i) the value of their annual exports exceed 30% of the total revenue and ii) investment of US$11 million is made in the project for a total 5 years, with the 1st year investment being at least US$2.2 million;
  - Bosnian resident companies in which people with special needs and disabilities form 50% of the total work force for a period of more than 1 year will be corporate income tax exempt for that year;
  - Companies which setup in Bosnia’s free zones will benefit from i) 100% corporate tax exemption ii) 100% VAT exemption and iii) 100% custom duty exemption on imports into the zones. Furthermore, these companies will be allowed to transfer capital and profits freely into and out of the zone;
  - Resident companies will benefit from 30% reduction in annual tax obligations if they invest more than 50% of their total annual profit purchasing production equipment. Furthermore, companies which hire new employees will be entitled to tax deductible expenses of twice the amount if the new employee has worked with the company for at least 1 year;
  - Bosnia and Herzegovina is signatory to 40 double tax treaties with different jurisdictions, ensuring reduction or complete exemption of withholding taxes on dividends, royalties or interests;
  - The Bosnia government has signed agreements on Promotion and Protection of Investments with several countries including the USA, United Kingdom, Canada, China, and Germany. Furthermore, through the European Union Investment Guarantee Trust Fund enacted by the Multilateral Investment Guarantee Agency (MIGA) the country has managed to insure foreign investors against risks of expropriation, transfer restrictions, war and civil interference and denial of justice;
2. Bosnia is rich in natural resources including large expanses of arable lands with fertile soil, forests, huge deposits of valuable minerals including manganese, silver, lead, copper, iron ore, chromium, and coal. Therefore, it is an attractive destination for agricultural, manufacturing and other related industries.

Disadvantages of Bosnia and Herzegovina company registration
1. To incorporate a Bosnia public limited company, the law requires the shareholder to have a minimum share capital of at least US$32,000;
2. Getting a new electric connection for a new establishment in Bosnia can be quite expensive and time consuming. Entrepreneurs should expect to pay at least US$22,000 and wait almost 5 months for an electric line;
3. The country’s legal system can be inefficient and entrepreneurs should expect to wait for up to or more than 2 years for courts to enforce legal contracts;
4. Entrepreneurs looking to invest in the construction industry should expect to pay at least US$50,000 and wait for up to or more than 6 months for construction permits;
5. Bosnia has a complex multi-tiered legal framework that is generally repetitive and contradictory. The country is divided into 2 entities, Federation of Bosnia and Herzegovina and Republic of Srpska, the federation of which is further divided into 10 cantons each with different governments and regulations;
6. Entrepreneurs will find it difficult interacting with potential Clients or suppliers in the country since the official and business languages are Bosnian, Croatian and Serbian;
7. Bosnia has been ranked poorly in the 103^rd position (out of 137 countries) for its global competitiveness in the Global Competitiveness Index 2017-2018 edition. This is largely due to the i) inefficient government bureaucracy along with widespread corruption, ii) nation’s insufficient capacity to innovate and iii) poor supply of infrastructural facilities.

Company registration

Time to incorporate: Seven weeks
Cost to set up: €11,900
Minimum capital: US$1,150
Physical office required: No

Required appointments

Shareholders: 1
Directors: 1
Company secretary: No
Resident director: No

Key facts

Corporate tax rate: 10%
Corporate tax base: Worldwide
Shelf companies: No
Main company type: d.o.o.

Tell us what you need - we’ll send you a customised proposal in 5 hours!

To help us engineer the optimum Bosnia and Herzegovina corporate structure, please complete the 3-minute questionnaire below; then press the submit button below.

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Within 5 hours, one of our senior staff will ring or email you:

Company purpose?
Will the LLC be a trading company or a holding company?
Will the entity be a subsidiary of a foreign company?
The LLC will be tax resident? Having local customers and local staff and local suppliers?
The entity will receive investment income or professional services fees or sales from trading with multi-national customers?
Is double taxation treaty access important?
Do you need our help to legally minimize your international tax obligations?
Do you need our help to increase e-commerce sales (click link)?
Company structure?
Will the shareholders be individuals or corporate?

In what country do you require a corporate bank account? Refer to this web page (click link) for ideas

Do you need multi-currency corporate visa debit cards?

Do you need a resident director?

Nationality of shareholders and directors?
Expected annual sales and net profits?
Does the entity need a special regulatory license or import or export license?
Additional comments?
Tell us about your existing business?
Name of your existing company?
Your business web site address?
What products and services does your company supply?
How many years are you operating this business?
Is your Firm regulated by a Government agency?
In what country are the majority of your customers?

In what country are the majority of your suppliers?
Tell us about you?
Your name?
Your email address?
What country are you based in?

Specifically, what deliverables (click link) do you need?
What is your US$ budget for the services you need?
What does quality customer service mean to you?
How do we contact you?
For now, do you prefer Healy Consultants PLC staff to phone you, or just email reply you with some corporate solutions?
If a phone call, on what number can our senior Consultant call you?
If an email, what email address can our Consultant email you at?
What is your preferred date and time for a phone call?
In what language do you prefer we communicate with you?
What matters would you like to discuss during the call; the agenda?

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