Privileges for foreign investors
National level
In accordance with the Law on the Policy of Direct Foreign Investments in BiH ("Official Gazette of BiH", no. 17/98, 13/03, 48/10 and 22/15), foreign investors are guaranteed the following:
- National treatment for foreign investors, i.e. foreign investors have the same rights and obligations as residents of Bosnia and Herzegovina.
Foreign investors have the right, for the purposes of their investments, to open accounts in the territory of Bosnia and Herzegovina with any commercial bank in domestic or freely convertible currency.
Foreign investors will have the right to freely employ foreign nationals from abroad, unless otherwise specified by the laws of Bosnia and Herzegovina on labour and immigration.
- Foreign investors are protected from nationalisation, expropriation, requisition and measures of equivalent effect; such measures may only be taken in the public interest, in accordance with applicable laws and regulations, and upon payment of appropriate compensation.
Foreign investors have the same ownership rights over property as Bosnian legal entities.
Foreign investors have the right to transfer abroad, freely and without delay, in freely convertible currency, the profits arising from their investment in Bosnia and Herzegovina.
The rights and privileges granted to foreign investors and the obligations arising from the Law on the Policy of Direct Foreign Investments cannot be revoked or annulled by the entry into force of subsequently enacted laws and subordinate acts. If such subsequently enacted laws and regulations are more favourable to foreign investors, they have the right to choose the regime that will apply to their investment.
Customs privileges
Foreign investments will be exempt from the payment of customs duties and customs charges, except for passenger vehicles, amusement machines and gambling machines.
Production equipment not manufactured in Bosnia and Herzegovina, imported for new or expanded existing production, the modernisation of production, the introduction of new or the upgrading of existing production technology, and which is used for direct production activities, is exempt from the payment of import duties.
Production assets and other equipment belonging to an enterprise that is definitively ceasing its operations in another country and relocating to the customs territory of Bosnia and Herzegovina to carry out a similar activity are exempt from the payment of import duties.
If the enterprise being relocated is an agricultural holding, the animals on it are also exempt from the payment of import duties on importation.
In order to use the customs concession for foreign investments, together with a written request for exemption from the payment of import duties, the concession beneficiary submits to the customs authority competent by virtue of the beneficiary's place of establishment:
- a contract or other appropriate investment instrument under which equipment for which exemption from the payment of import duties is sought is imported
proof of registration of foreign capital with the competent authority of the state
-specification of equipment by tariff codes and designations from the Customs Tariff of BiH, with indication of quantity and individual and total value, certified by the beneficiary of the concession
- a declaration from the investor that the equipment is no older than 10 years
- a certificate that the imported equipment meets environmental protection standards and other standards for occupational safety, issued by the institution or other body competent for that field of activity.
The customs service issues a decision within 15 days of the date the request was submitted.
Free zones
Free zones in BiH are part of the customs territory of Bosnia and Herzegovina and have the status of a legal person. In accordance with the Law on Free Zones of BiH, the founder of a free zone may be one or more domestic or foreign legal or natural persons registered in BiH. - Users of the free zone do not pay VAT and import duties on equipment that will be used for production. Investments in free zones, profit transfer and the transfer of investments are free. The establishment of a free zone is economically justified if, on the basis of the submitted feasibility study for the establishment of the free zone and other submitted evidence, it can be assessed that the value of the goods exported from the free zone, exceed at least 50% of the total value of the manufactured goods leaving the free zone within a 12-month period.
Entity level
Tax exemptions
In the Federation of BiH:
Under the provisions of the Law on Corporate Tax of the Federation of Bosnia and Herzegovina, foreign investors enjoy the following benefits:
A taxpayer who invests their own funds in production equipment, amounting to more than 50% of the profit generated in the current tax period, has their corporation tax liability reduced by 30% of the investment amount in the year of investment.
A taxpayer who invests a total of 20 million KM from their own funds over a period of five consecutive years, with an investment of 4 million KM in the first year, will have their calculated corporate income tax liability reduced by 50% of the amount invested in those years.
A taxpayer is entitled to a tax-deductible expense equal to twice the amount of the gross salary paid to newly-hired employees, provided that the following conditions are met:
- the employment contract must be for a minimum period of 12 months on a full-time basis and
- The newly hired employee has not been employed by the taxpayer or an associated person in the previous five years.
Other incentives
Federal Ministry of Development, Entrepreneurship and Trade
The public call is issued annually and supports micro and small enterprises (up to 49 employees). Some of the funding topics are:
- incentives for newly established small businesses
- youth entrepreneurship
- sub-entrepreneurship of women
- introduction of ISO; CE, HACCAP
- support for strengthening the competitiveness of exporters
Federal Ministry of Energy, Mining and Industry
An annual public call is issued, defining the lines of support, eligible applicants and projects. Funds are channelled through:
- Credit Guarantee Fund
Federal Ministry of Agriculture, Water Management and Forestry
An annual public call is issued, defining the lines of support, eligible applicants and projects. Funds are channelled through:
- Support for the development of agriculture
Federal Ministry of Environment and Tourism
An annual public call is issued, defining the lines of support, eligible applicants and projects. Funds are channelled through:
- Tourism development
- Support for the hospitality sector
Development Bank of the Federation of Bosnia and Herzegovina
The bank has established credit products for companies, and funds are channelled through:
- Long-term loans
- Short-term loans
- Guarantee Fund
- Projects with foreign donors for the competitiveness of domestic companies
Credit is earned throughout the year.
Environmental Protection Fund
An annual public call is issued, defining the lines of support, eligible applicants and projects. The Fund's resources that companies can use for:
- Environmental protection projects
- Waste management projects
- Energy efficiency improvement projects
Federal Employment Agency
It publishes employment support programmes annually and can offer funding opportunities to larger employers in retraining programmes.
The Agency's annual public calls include the following employment co-financing programmes:
- The "First Work Experience" program—employment of unemployed persons up to 30 years of age;
- The "Opportunity for All" program—employment for all categories of unemployed persons, regardless of age, ethnicity, or gender;
- Program "Periodic/seasonal employment" – seasonal employment of all categories of unemployed persons;
- The "Vaučer za posao" program – assistance with (self-)employment for the long-term unemployed.
Fund for the Professional Rehabilitation and Employment of Persons with Disabilities
Annually publishes a call for co-financing the employment and self-employment of people with disabilities
Support system for the improvement of entrepreneurial infrastructure
The support system for the enhancement of entrepreneurial infrastructure refers to the improvement of business activities in entrepreneurial zones, entrepreneurial support institutions and techno-entrepreneurial centres, according to the following priorities:
a) improving the entrepreneurial infrastructure to attract domestic and foreign investment;
b) creating a favourable business environment for smart industry (Industry 4.0);
c) promoting entrepreneurship in new technologies and green entrepreneurship;
d) strengthening the competitiveness of entrepreneurial infrastructure entities;
e) an increase in the number of employees and the number of business entities;
f) promoting the internationalization of business.
Based on the Development Strategy of the Federation, the policies of the Government of the Federation and in accordance with an analysis of the state of entrepreneurial infrastructure, the Programme of Incentives for the Development of Entrepreneurial Infrastructure in the Federation is proposed for each calendar year. The programme must include an overview of the state and trends in the field of entrepreneurial infrastructure, as well as the objectives and measures to be implemented through development projects.
Development projects must include the project title, the amount of funding required for its implementation, the project objectives, the criteria for allocating funds, the category of beneficiaries for the project, a projection of the desired state at the end of the period covered by the project, implementation deadlines and indicators for monitoring and evaluation.
Cantonal-level incentives
Depending on the purpose, i.e. the activity, some of the common incentives at the cantonal level in the Federation of Bosnia and Herzegovina, for which companies can apply, are:
- Incentives for the development of agriculture
- Incentives for newly established companies
- Incentives for the development of entrepreneurship and the launch of new start-up companies
- Funds for co-financing unemployed persons
- Incentives for retraining and further training of unemployed persons and education
- Support for co-financing interest on investment loans, loans for business assets, loans for closing/reprogramming investment loans, financial leasing
- Incentives for the development of sub-infrastructure
- Subsidies to private companies and entrepreneurs for participation in fairs and exhibitions:
- support for companies in the implementation of internationally recognized standards and quality
- Support for export development
- Incentives for tourism development
- Incentives for projects in the field of environmental protection
- Agricultural products
- Support for women's entrepreneurship
The incentive funds planned and allocated from the budget are most often awarded on the basis of a public call issued by the competent institution. Companies compete based on the conditions set out in the public call.
Republic of Srpska
The Law on Economic Incentives of the Republika Srpska (Official Gazette of the Republika Srpska, no. 107/24) provides for incentive funds for the development of the economy.
1. Investment incentives of a special nature
According to the currently valid Regulation on the Procedure for the Granting of Incentives for Investments of Special Significance (Official Gazette of the Republic of Srpska, no. 87/22, 56/23), these are understood to mean the realisation of projects that achieve the following:
1. Employment of at least 100 workers or an investment of at least 10,000,000 KM in tangible and intangible assets in the territory of a developed or moderately developed local self-government unit.
2. Employment of at least 50 workers or an investment of at least 5,000,000 KM in tangible and intangible assets in the territory of a less-developed or highly underdeveloped local self-government unit.
An application for the incentive can be submitted to the Ministry of Economy and Entrepreneurship throughout the year. In addition to the amount of the investment and/or the number of employees, the applicant must also meet additional criteria: that the average salary at the enterprise level throughout the project's duration is equal to or greater than the average for Republika Srpska for the previous year, that the equipment being procured is largely new or no older than 3 years, that the investor has an adequate creditworthiness, that the project positively impacts the development of the local community and the economy of the Republika Srpska (e.g. by collaborating with the education system, employing as many local suppliers as possible, etc.). The incentives available under this basis include a refund of taxes and contributions for each new employee (for up to 24 months) and a grant of up to 30% of the amount of justified investments in tangible assets.
2. Incentives for increasing the wages of workers employed in business entities
In accordance with the Regulation on the Granting of Incentives for Increasing Employees' Wages ('Official Gazette of the Republika Srpska' no. 4/25), the incentive for increasing the wages of employees in business entities includes the allocation of part of the funds based on the higher contributions paid on the wage increase in the calculation period. (Certain classes of activities are excluded from the right to the incentive). An enterprise that meets the general and specific conditions set out in the aforementioned Ordinance is entitled to a subsidy of 70% of the additional contributions paid on the salary increase during the calculation period, relative to the contributions paid on the initial salary amount. The amount of the incentive per employee cannot exceed 1,000 KM in the calculation period.
3. Investment incentives (to improve the technological level and transition the economy to a green and circular economy)
This type of incentive is regulated by the Regulation on the Granting of Incentives for Investments ("Official Gazette of the Republika Srpska, 16/25), the minimum investment value for an enterprise is 50,000 KM excluding VAT, and the total amount that an enterprise can receive over three years is limited to the permitted 'de minimis' aid.
Tax incentives
Law on Corporate Tax of Republika Srpska ("Official Gazette of Republika Srpska", no. 94/15, 1/17, 58/19, 48/24) it is provided that a taxpayer who makes an investment in equipment and plant for the purpose of a registered manufacturing activity in the territory of the Republika Srpska is entitled to a reduction of the tax base by the value of the investment made.
Law on Income Tax ("Official Gazette of the Republic of Srpska", no. 60/15, 5/16, 66/18, 105/19, 49/21, 56/22, 112/23 and 110/24) contains benefits for investors and abolished the dividend tax.
Exemption from payment of import duties
Provisions of Article 207. of the Law on Customs Policy in Bosnia and Herzegovina ("Official Gazette of BiH", no. 58/15), provides for cases of exemption from the payment of import and export duties.
Exemption from the payment of import duties is granted for:
· Equipment placed in free circulation which constitutes a stake of a third party, other than passenger vehicles, amusement and gambling machines;
· Production equipment, imported for new or expanded existing production, the modernisation of production, the introduction of new or the modernisation of existing production technology, and which is used for direct production activities;
Production assets and other equipment belonging to an enterprise that is definitively ceasing its activities in another country and relocating to the customs territory of Bosnia and Herzegovina to carry out similar activities.
Employment Office incentives
There are several different categories of employment programmes that the Employment Service of Republika Srpska implements, The process of subsidised employment in Republika Srpska takes place in accordance with the provisions of the Employment Strategy of Republika Srpska 2021-2027, on the basis of which the Government of Republika Srpska adopts annual employment action plans. The Employment Action Plan for 2025. The Action Plan for Employment for 2025 has not yet been adopted, but it is expected, according to data from the Employment Service, that the employment programmes defined by it will be aimed at employing unemployed individuals exclusively in the private economy and private sector, as well as for the employment of hard-to-employ and vulnerable categories of the unemployed.
The draft Budget of Republika Srpska for 2025 The draft Budget of Republika Srpska for 2025 provides for a transfer to the Employment Service of 10 million KM to implement the Employment in Industry Programme (five million KM) and the Employment and Self-Employment of Vulnerable Categories and Market Development Programme (five million KM).
More information at: https://zzzrs.net/
Incentives from the Ministry of Economy and Entrepreneurship
More information at:
https://vladars.rs/sr-SP-Cyrl/Vlada/Ministarstva/mpp/Pages/default.aspx
Incentives from the Ministry of Agriculture, Forestry and Water Management
Each year, the Ministry issues a Regulation on the conditions and procedure for obtaining financial incentives for capital investments in agricultural production. This Regulation prescribes the conditions for entitlement to cash incentives for capital investments in agricultural production, the procedure for their application, the type, amount and method of payment of the cash incentives, the obligations of the beneficiaries upon receipt, deadlines, as well as the required documentation and forms. These funds are awarded to beneficiaries on the basis of a public call, which is issued by the Agency for Agrarian Payments of the Republic of Srpska. The Agency for Agricultural Payments of Republika Srpska also awards financial incentives each year for the development of agriculture and rural areas, in accordance with the Regulation on the Conditions and Procedure for Obtaining Financial Incentives for the Development of Agriculture and Rural Areas ("Official Gazette of RS", no. 11/2025 and 23/2025) awards incentives, which are obtained by submitting a request with the necessary documentation to the Agency.
More information at:
https://vladars.rs/ sr-SP-Cyrl/Vlada/Ministarstva/mps/Pages/default.aspx
https://vladars.rs/sr-SP-Cyrl/Vlada/agencije/aap/Pages/default.aspx
Incentives from the Ministry of Energy and Mining
More information at:
https://vladars.rs/sr-SP-Cyrl/Vlada/Ministarstva/mper/Pages/default.aspx
Guarantee Fund of the Republika Srpska
The Fund was established with the aim of facilitating access to financial resources for companies by issuing guarantees when implementing various projects. The Fund can be approached directly by submitting an application or through a commercial bank.
More information at: https://garantnifondrs.org/
Fund for Environmental Protection and Energy Efficiency of the Republika Srpska
The Fund publishes open calls for environmental conservation every year, and funding is allocated for:
· co-financing of programs and projects in the field of environmental protection,
· energy efficiency,
· renewable energy sources.
More information at: https://ekofondrs.org/
Investment and Development Bank of the Republika Srpska
The bank has established the following credit lines:
· loans for start-up business activities,
· loans for microbusinesses in agriculture,
· loans for entrepreneurs and businesses,
· loans for agriculture,
· loans for the support and recovery of micro, small, and medium-sized enterprises.
More information at: https://irbrs.org/
Register of Incentives of the Republika Srpska
The Register of Incentives in the Republika Srpska is an electronic database of funds for economic incentives in the Republika Srpska, which are awarded at both the republican and local levels. The aim of establishing the Register is to improve coordination and the exchange of information between institutions that award incentives, to provide public access to available incentives, and to create a robust statistical basis for the needs of institutions of the Republika Srpska. Institutions that award incentives, at both the republican and local level, enter data within their remit, while the Ministry of Economy and Entrepreneurship administers the Register of Incentives in accordance with the Law on Economic Incentives of the Republic of Srpska ("Official Gazette of the Republic of Srpska", no: 52/19, 78/20, 37/22 and 56/22) and the Regulation on the Register of Incentives in the Republic of Srpska ("Official Gazette of the Republic of Srpska" no: 109/19)
More information at: https://regpodsticaja.vladars.rs/home/o-registru
In addition to incentives at the national level, there are numerous incentives at the local level which vary depending on each individual municipality/ city (such as, for example, favourable land prices in the zone, exemption from payment of costs for the development of building land in the zone, reduction of development costs, advisory services, etc.).
Brčko District
The Law on Incentives for Economic Development in the Brčko District provides the following:
Exemption from the municipal fee for displaying a company name
- Connection charges for the water and sewerage supply network
Reimbursement of fees paid for the acquisition of the site, the building permit and the certificate of occupancy.
Reimbursement of the difference between the prices paid by businesses and households for electricity and water.
The employer bears the cost of the connection to the electricity network, and the Brčko District of Bosnia and Herzegovina reimburses the paid specific fees and connection services for rights of connection to the electricity network under the Law, up to a maximum of 10,000 KM in any one calendar year.
- 100% maternity pay
The legislative measure for the incentive of new employment provides for funding for employers in the amount of 5,000.00 KM for the new employment of individuals with a secondary school education and a lower level of professional qualification, and in the amount of 7,000.00 KM for the employment of individuals with a university education.
Tax exemptions
For taxpayers who employ new permanent workers during the tax year, the tax base is reduced by the amount of the gross wages paid to the newly-hired workers.
- Reimbursement of the monetary amount for new investments for the acquisition of fixed assets, after realising the maximum exemption entitlement in the tax return for the previous year, by reducing the taxable base by the amount of the investment, in accordance with the Law on Corporate Tax of the Brčko District of Bosnia and Herzegovina. Any positive difference between the amount of profit tax or income tax and the acquisition made cannot be carried forward to the following year.
When a taxpayer realises a certain percentage of its total profit from exports in the year for which corporation tax is calculated, it is then exempt from paying a certain amount of corporation tax.
- For machines subject to depreciation, the taxpayer is allowed to use accelerated depreciation.
Guarantee Fund BD
Guarantees are provided to small and medium-sized enterprises (SMEs) and individual farmers. Loans have a maximum guarantee of KM 50,000 (50%), a repayment term of 60 months, and interest rate subsidies. Through the DGFBD BiH, a programme is implemented to subsidise part of the interest rate on loans for companies and entrepreneurs in the Brčko District of Bosnia and Herzegovina. In the Budget of the Brčko District of BiH, 1,800,000 KM is allocated annually for these purposes. The tax credit, which cannot be carried forward to the next year, is calculated based on the amount of profit tax or income tax paid and the purchases made.