Why us?

Why you should consider investing in Republic of Srpska

The Republic of Srpska is located in the heart of the Southeast Europe, in the central part of the Balkan Peninsula

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Favorable geo-strategic location

The Republic of Srpska, one of two entities of Bosnia and Herzegovina is located in the heart of the Southeast Europe, in the central part of the Balkan Peninsula, at the very border with the EU (Croatia). It is connected with Europe and Asia by Pan-European Corridor X – E70 motorway, which, in addition to the railway, Banja Luka International Airport, nearby international ports in the Adriatic Sea and free trade agreements, makes Republic of Srpska an ideal strategic location for export-oriented investors.

Regular flights from the Banja Luka Airport to Belgrade enable the good connection of Banja Luka with about 50 world’s destinations. Besides, the bigest low-budget Airline company Ryanair connects Banja Luka with Berlin, Brussels, Memmingen and Frankfurt. Flights to Vienna and Milan will be also established during this year.

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Population

1.147,902
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Profit Tax

10%
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GDP

€5,6 bilion
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Income Tax

10%
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GDP growth rate

3,9% (2018)
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VAT

17%
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Currency

BAM (1€ = 1,95BAM)
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Contributions

32,8%
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Political organisation

Parliamentary democracy
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Area

24.667 km2
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Administrative centre

Banja Luka ( about 184.257 )
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Location

Southeast Europe, BiH
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Climate

Mild continental, mountainous and Mediterranean
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Distances from

MUNICH
distance
736 km
VIENNA
distance
547 km
ZAGREB
distance
189 km
TRIESTE
distance
412 km
BUDAPEST
distance
505 km
LJUBLJANA
distance
327 km
BELGRADE
distance
332 km
SOFIA
distance
722 km
ISTANBUL
distance
1299 km
THESSALONIKI
distance
958 km
distances from
Free trade area

Investors in the Republic of Srpska gain access to the market for 600 millions of citizens based on the free trade principle.

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CEFTA countries and their market of about 30 million citizens
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Free Trade Agreement between BiH and Turkey –about 70 million citizens
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EFTA Agreement
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Stabilisation and Association Agreement between the EU and BiH (which enables free export in the EU of almost all goods meeting the standards)
Republic of Srpska main foreign trade partners, 2019.
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Competitive and highly skilled workforce

A republic with a well-educated and highly skilled workforce tailored to the needs of modern business market

Average net salary in RS by sectors, 2019. (€)

Financial and insurance activities

719

Information and communication

637

Electricity, gas, steam and air-conditioning supply

615

Mining and quarrying

597

Public administration and defence; compulsory social security

596

Human health and social work activities

548

Professional, scientific and technical activities

470

Other service activities

467

Education

459

Water supply; sewerage, waste management and remediation activities

403

Real estate activities

391

Agriculture, forestry and fishing

382

Manufacturing

374

Wholesale and retail trade, repair of motor vehicles and motorcycles

353

Transport and storage

349

Administrative and support service activities

346

Accommodation and food service activities

328

Arts, entertainment and recreation

324

Construction

321

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Low operating cost and stimulative cost policy

Business start-ups in Republic of Srpska bear significantly lower operating costs due to stimulative tax policy and competitive labor prices.

The average net salary in the Republic of Srpska for 2019 was BAM 906 (463 €).

The non-taxable part of personal income is BAM 500 (255 €).

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Profit Tax

10%

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Income Tax

10%

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VAT

17%

Total contributions rate on gross salary are 32.8% out of which:

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18,5% for pension-disability insurance
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12% for health insurance
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1,7% for child protection and
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0,6% for insurance from unemployment

Double taxation avoidance agreements have been signed with 40 countries of the world.

The price of electricity in Republic of Srpska is among lowest in the region – 0,051 €/kWh

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Business friendly administration

The Government of Republic of Srpska and local self-government units are investing significant efforts in reform of administration and the creation of a business-friendly environment.

A business start-up in Republic of Srpska now takes only three days and costs less than 100 €. The process of establishment of e-registration of business entities in the Republic of Srpska is underway.

In order to improve and harmonize the local conditions for doing business with those in the countries of South East Europe, Republic of Srpska is taking part in the regional program of Business Friendly Certification – BFC SEE. Currently, there are twelve (12) certified cities and municipalities in the Republic of Srpska, and several more are in the process of certification.

Businesses and citizens of Republic of Srpska have access to the Point of Single Contact for Business www.pscsrpska.vladars.net portal. The Contact Point provides information pertaining to methods, administrative procedures and formalities for starting and conducting business activities.

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Point of Single Contact for Businesswww.pscsrpska.vladars.net

Web portal of the Government of the Republic of Srpska Srpska– Republic of opportunity investsrpska.vadars.net, primarily intended for the present and potential foreign investors provides all necessary information to foreign investors concerning investment opportunities, legal regulations, institutions available to investors, as well as any other relevant information.

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Region of the future for the foreign investment

According to the fDI Intelligence / Financial Times rankings, the Republic of Srpska has been selected as one of 10 small regions of the future for 2018/2019, for the foreign investment strategy.

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Stimulative investment policy
Favorable treatment of foreign investors

Foreign investors enjoy national treatment in Republic of Srpska. Their rights are guaranteed by the Constitution. Among other things, this implies free profit transfer abroad, relief from payment of customs duties on import of fixed assets and new investment tax relief, incentives for new employment, new technologies and sallary increases free employment in accordance with the law and the right to acquire property. MIGA and 42 agreements on investment promotion and protection represent a reliable risk protection system for foreign investors. Also, Foreign Investments Council of the Republic of Srpska is established as institutional support in order to encourage foreign investment.

Incentives

Incentives for investments are provided at the republic and local level.

The Law on Incentives in Economy of the Republic of Srpska ("Official Gazette of the Republic of Srpska", No. 52/19) provides incentive funds for the development of economy: incentives for increasing the salaries of employees in business entities and incentives for direct investments.

The Programme for supporting employment in economy offers incentives for investors through paying the amount of payed taxes and contributions implemented through the Republic of Srpska Employment Bureau. All employers who have recruited workers in the past year will have the opportunity for the refund of taxes and contributions. The public call for this programme is announced for each year individually and is available on the portal of the Republic of Srpska Employment Bureau - www.zzzrs.net.

The Republic of Srpska Investment-Development Bank (IRBRS) at the end of 2019 introduced a new line of credit enabling the companies that plan to introduce new technologies into their production process to have favorable loans at an interest rate below 3%, with repayment period of 12 years and grace preiod of 24 month.

Law on Corporate Income Tax of the Republic of Srpska ("Official Gazette of the Republic of Srpska", No. 94/15, 01/17, 58/19) stipulates that companies that invest in equipment and facilities for conducting registered production activities in the territory of the Republic of Srpska are entitled to the tax base reduction for the value of the investment made.

The Law on Income Tax, (“Official Gazette of the Republic of Srpska”, No. 60/15, 66/18), foresees certain advantages, i.e. privileges for the annual income for a qualified investor (Article 42-50).

The Ministry of Agriculture, Forestry and Water Management grants cash incentives for agricultural and rural development. Each year the Ministry adopts a Rulebook on Requirements and Manner to Obtain Cash Incentives for Agricultural and Rural Development.

Local Incentives At the local level, there are various forms of incentives concering both local fees and services.