Incentives in economy of Republic of Srpska

Investment incentives are awarded at the national and local levels. In order to consolidate data and better information exchange, the Government of the Republic of Srpska has launched activities to create a Unified Register of Incentives, which is in the final stage of development and will be available soon on the portal www.regpodsticaja.vladars.net

Incentives at the Republic level

Institutions at the level of the Republic of Srpska award numerous incentives to the economy, we single out the key ones:

Employment support program in the economy through the payment of incentives in the amount of paid taxes and contributions, which is implemented through the Employment Service of the Republic of Srpska. All employers who hired workers in the past year will have the opportunity to have their taxes and contributions refunded. The public call for this program is announced individually for each year and is available on the portal of the Employment Service of Republic of Srpska www.zzzrs.org.

The Law on Incentives in the Economy of the Republic of Srpska (Official Gazette of the Republic of Srpska, No. 52/19) provides incentives for economic development, as follows:

  • free trade area
    Incentives to increase the salaries of workers employed in economic entities The amount of incentives to increase workers' wages is determined according to the following criteria:

The amount of incentives to increase workers' wages is determined according to the following criteria:

  • 1. if the initial amount of the employee's salary is higher than 550 KM, the economic entity is entitled to funds in the amount corresponding to 70% of the value of the paid contributions to the salary increase,
  • 2. if the initial amount of the employee's salary is equal to or higher than the lowest salary in the Republic of Srpska, but does not exceed the amount of 550 KM, the economic entity is entitled to funds in the amount corresponding to 30% of the value of paid contributions.

All companies and entrepreneurs operating in the Republic of Srpska in the field of production, trade and services, as well as business units of companies whose headquarters are outside the Republic of Srpska, have the right to incentives to increase workers' salaries.

  • free trade area
    Incentives for direct investment

Incentives for direct investments aim to provide conditions for achieving greater competitiveness of the economy, in order to ensure sustainable economic growth and employment in the Republic of Srpska. The subjects of direct investment projects, documents for proving the fulfillment of conditions for exercising the right to incentives, criteria for evaluation of applications and other issues of importance for the procedure of granting incentives for direct investments are defined by the Decree on the procedure of granting incentives for direct investments. (Official Gazette of the Republic of Srpska, no 86/19).

The Law on Profit Tax (Official Gazette of the Republic of Srpska, No. 94/15, 1/17, 58/19) stipulates that a taxpayer who invests in equipment and facilities on the territory of the Republic of Srpska to perform a registered production activity has the right to reduce the tax base by the value of the investment made.

The Law on Income Tax (Official Gazette of the Republic of Srpska, No. 60/15, 5/16, 66/18, 105/19) contains benefits for investors. This law abolished the dividend tax, and introduced significant innovations for the taxation of income from foreign sources in a positive sense. The conditions for obtaining the status of a qualified investor are defined, on the basis of which the investor acquires tax benefits for annual income (Articles 42-50).

RS Investment and Development Bank: Several credit lines, of which we single out the credit line for the introduction of new technologies

The new credit line for the procurement of new technologies and equipment is aimed at developing the economy of the Republic of Srpska and maintaining its competitiveness. The fixed interest rate of this credit line is three percent to the amount of 30 000 to five million KM, with a repayment period of 12 years and a grace period of 24 months. More information on all IRBRS credit lines is available on the website https://www.irbrs.org/

Incentives of the Ministry of Agriculture, Forestry and Water Management

Every year, the Ministry of Agriculture, Forestry and Water Management allocates financial incentives for the development of agriculture and villages. The Ministry adopts the Rulebook on the conditions and manner of realisation of financial incentives for the development of agriculture and villages. The Rulebook for 2020 was published in the Official Gazette of the Republic of Srpska, No. 7/20).

Guarantee credit lines of the Guarantee Fund of the Republic of Srpska

The Guarantee Fund of the Republic of Srpska issues guarantees in the name of securing a part of the loan that the bank approves to the users of funds under guarantee lines, in case the users of funds cannot offer adequate loan security required by the bank. There are several types of guarantee lines, such as for initial business activities, for companies, for entrepreneurs, for export support, for agriculture, etc., and the Guarantee program of economic support for mitigating the consequences of the COVID-19 pandemic caused by the SARS virus has been established. CoV-2. More information on the guarantee lines of the Republic of Srpska Guarantee Fund can be found on the website www.garantnifondrs.org

Incentives at the local level

Incentives at the local level differ, and information about them can be found at the portal www.regpodsticaja.vladars.net as well as at the official websites of the local government units.