BOSNIA & HERZEGOVINA Trends and Developments Contributed by: Nebojša Marić, Marić & Co
Introduction – Legislative Structure of Bosnia & Herzegovina Bosnia and Herzegovina (BiH) has a rather com - plicated political system and institutional struc - ture. The system’s four levels of government (one state, two entities, ten cantons and one district) have a significant impact on the legal system, requiring familiarity not only with multi - ple constitutions, laws, and regulations but also with the varying practices of courts and admin - istrative bodies across the country. Under the provisions of the Dayton Peace Agreement, the entities have competencies in areas such as taxation, except indirect taxation, business development, and general legislation. Foreign investment in Bosnia and Herzegovina and its entities is governed by the Law on the Policy of Foreign Direct Investment of Bosnia and Herzegovina, the Law on Foreign Invest - ment of RS and the Law on Foreign Investment of FBH and a set of entity laws and by-laws relat - ed to foreign investments, registration of busi - ness entities, labour and employment, taxes, customs, free zones and other areas related to the conditions of business. The Law on the Policy of Foreign Direct Invest - ment of Bosnia and Herzegovina regulates the basic policies and principles of participation of foreign investors in the economy of Bosnia and Herzegovina. The Law on the Policy of Foreign Direct Investment ensures national treatment of foreign investors – ie, foreign investors have the same rights and obligations as defined for domestic investors. Furthermore, the rights and benefits granted to foreign investors, as well as the obligations imposed by this law, cannot be revoked or overridden by subsequently enacted laws and regulations. If any subsequently passed laws and regulations are more favourable for the
foreign investors, the investors have the right to choose under which regime the respective for - eign investment is to be governed. In general, the purpose of legislation in this area is to establish simple, transparent, predictable, and stable foreign investment policy, and to pro - tect the rights and interests of the investors. Trends in Direct Investments Direct investment flows in 2023 were BAM378,000,000 higher than in the previ - ous year, 2022, when they amounted to BAM1,520,000,000. According to the latest offi - cial data, foreign direct investments (FDI) in Bos - nia and Herzegovina in the first nine months of last year, 2024, amounted to BAM1,477.400,000 (EUR755,400,000), which is 3.4% less com - pared to the same period in 2023. While noting that preliminary data is subject to subsequent revisions, foreign investments from January to September 2024 decreased by 3.4% compared to the same period the previous year (accord - ing to revised data, FDI from January to Sep - tember 2023 amounted to BAM1,528,000,000). With a slight decrease, it can be concluded that the amount in the first three quarters of 2024 is close to that of the previous year. In the first nine months of 2024, the countries with the highest registered capital amounts in Bosnia and Herzegovina were Croatia (BAM252,500,000), Germany (BAM240,200,000), and Slovenia (BAM193,400,000), according to the Foreign Investment Promotion Agency of Bosnia and Herzegovina (FIPA). Significant capital increases (over BAM100,000,000) were also recorded from Austria (BAM178,800,000), the United Kingdom (BAM135,600,000), Ser - bia (BAM110,800,000), and the Netherlands (BAM105,500,000). The sectors with the high - est registered FDI in Bosnia and Herzegovina
280 CHAMBERS.COM
Powered by FlippingBook