Set up a Company in Bosnia
Updated on Friday 11th May 2018
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Setting up a company in Bosnia and Herzegovina implies a series of well-structured procedures. An entrepreneur must register for tax purposes, insurance, health and in order to obtain the certificate of function and registering the company with Municipal Court is mandatory. Foreign investors find a productive and welcoming economic environment and are not treated with discrimination, having the same rights as domestic entrepreneurs.
Preliminary activities before registering limited liability and joint stock companies in Bosnia
Prior to state registration, an entrepreneur must stipulate a founding act and notarize it at the municipality office. The Law on Notary requires all documentation for registration of the Bosnian company to be certified by a public notary. Also, it is important that the founders open a bank account and deposit the minimum required capital, obtaining a bank certificate. The minimum share capital that must be deposited to set up a company in Bosnia is BAM 2,000 for a limited liability company and for a joint stock company the formers must deposit as share capital at least BAM 50,000. The final step prior to registration implies obtaining a statement from the tax authorities that the founders have no tax debts. The whole preliminary procedure before setting up a company takes around seven working days.
Registering limited liability and joint stock companies in Bosnia
The founders of the Bosniak companies must purchase regulated forms at a stationery shop or at court and complete them. The articles of association, charters, bank account, information on the legal address and capital and data on members and managing board are required along with the application for registration with the Municipal Court. After the issuance of the registration certificate, the Municipal Court informs the Official Gazette and the companies are automatically registered for membership in the chambers of the economy at state, entity, canton and regional levels. The registration at the Municipal Court takes around 10 days.
Obtaining a company seal in Bosnia
After the issuance of the registration certificate, the next step in setting up a Bosnian company is depositing the necessary documents and paying a fee for receiving a company stamp.
Obtaining the approval for starting the business
After receiving the company stamp, the entity must apply for receiving the municipal approval on the future activities. The process takes around 10 days.
Notification of the Cantonal Inspection Authority
Once the approval is received, the process of setting up the company in Bosnia and Herzegovina continues with the notification sent to the Cantonal Inspection Authority regarding the beginning of activities.
Applying for company identification number with the tax office in Bosnia
The founders of the company must submit a photocopy of the court registration and the contract on the lease of the business premises and a copy of the director's identification card. The procedure may take up to 15 days to complete.
Registering the employees with Pension Insurance Institute and Health Insurance Institute
An important step in the finalization of the incorporation process includes enrolling the new employees with the pension and health insurance institutes. In order to do that, the founders must submit the application forms for pension and health insurance, a copy of the certificate of registration of the company and the employee's identification card and health booklet, a copy of the concluded employment contract and finally the employees' work booklet.
Hire employees in Bosnia and Herzegovina
When all the actions required for setting up a company in Bosnia are completed, the entrepreneur may employ the needed personnel. The working conditions, wages, working hours and other rulings are provided by the Labor Law. An entrepreneur may choose to hire an employee for an indefinite contract or for a definite contract, in case of seasonal jobs, replacement of temporary absent employee, limited projects or in other situations determined by collective agreements. The working hours shall not exceed 40 hours per week and when the position and job's duties require otherwise, the maximum working hours can be extended to 60 hours per week. The minimum salary in Bosnia and Herzegovina is BAM 357 and in Republika Srpska, the minimum wage cannot be under the amount of BAM 320.
Setting up a company in Bosnia and Herzegovina from abroad
The state of Bosnia Herzegovina has a complex tax system but represents a rather attractive environment for foreign investors, ensuring a non-discriminatory treatment for foreigners. A company can be set up in Bosnia and Herzegovina by assigning a representative who will carry the establishment procedures. However the company must have a local residence, and certain restrictions on the repatriation of the company's capital apply, depending on the characteristics of each company. If a branch is opened, it has to be represented by an authorized individual invested with a power of attorney. Many foreign companies prefer to open a limited liability company instead of a branch because of the fact that the foreign company carries all the liability for its branch’s actions and also must provide the capital.
The Bosnian Laws provide a certain restriction on foreign direct investments applicable in the field of arms, military equipment, explosives for military use and related activities. In this sense, the foreign investment must represent maxim 49 percent of the entire investment. For other investments, including public health and environmental protection are applicable the same restrictions as for a domestic investment.
How long does it take to establish a company in Bosnia and Herzegovina?
The process of setting up a company in Bosnia and Herzegovina can be rather complex and almost each procedure is completed in more than a week. Small steps, as opening a bank account, buying company stamp etc. are finished in no more than a day. Registering the company with the Bosnian Municipal Court can take up to 15 days, as other procedures. The entire procedure can take up to two months to be established.