The National Assembly of the Republic of Srpska adopted the Law on Incentives in the Economy of the Republic of Srpska at its 12th regular session, on 28 November 2024.
After several years of implementing this Law and continuously monitoring developments and trends, as well as other significant developments in economic sectors and areas, and active communication with the business community, it proved necessary and urgent to amend the Law in question, i.e. to enact a new law. Namely, the new legal solution does not significantly change the commitment of the Government of the Republic of Srpska to stimulate the economy, but rather improves certain formulations, harmonises them with European trends and introduces more opportunities for the business community to become more involved and create incentive measures together with us.
The economic environment and business conditions are constantly changing and therefore require a more flexible approach and faster reaction, so this matter, economic in nature, requires more specific regulation through secondary legislation.
Namely, the existing three types of incentives are retained, but certain formulations are changed and simplified.
In the current incentive for increasing the employee’s salary, the concept for determining the initial amount of the salary is changed, i.e. It is prescribed that the starting salary amount should be the average amount of the employee’s salary in the previous business year, instead of the previous one where the starting salary amount was the month of December from the previous business year. This concept takes into account frequent changes in the labour market, as well as the continuity and permanence of employment. Considering the calculation period, from the aspect of deadlines, i.e. the fact that this incentive measure must be applied constantly in two calculation periods in the current year, an urgent procedure for adopting this legal solution has been initiated.
Furthermore, in order to simplify and European terminology, the remaining two types of incentives are being changed to a lesser extent, as follows:
– incentives for direct investments are being renamed to incentives for investments in improving the technological level and the transition of the economy to a green and circular economy,
– incentives for direct investments of special importance are being renamed to incentives for investments of special importance.
This legal solution is of crucial importance for the economy of the Republic of Srpska, it will provide more favorable conditions for stimulating the economy, with the aim of establishing sustainable growth and development, increasing investments and preserving, or increasing employment in the economy.
The Law on Incentives in the Economy of the Republic of Srpska was published in the Official Gazette of the Republic of Srpska No. 107/24, and enters into force on January 1, 2025.
