to investments in the area of Posavina Canton

2014
to investments in the area
of Posavina Canton
GOVERNMENT
OF POSAVINA CANTON
FOREWORD
By analyzing the economic potential of Posavina
Canton and following global trends, it becomes
obvious that the future of entrepreneurship in this
area lies in the improvement of business and
investment environment. Improvement of business
competitiveness encourages investment activities
and increases economic attractiveness. One of the
initiatives to promote economic and commercial
activities, as well as inform potential domestic and
foreign investors, is the draftingof this Guide.
The Guide is aimed at those who intend or want to
invest,
entrepreneurs,
entrepreneurial
support
institutions, but also at all those who in any way come
in contact with potential investors.
Our primary goal is to support the creation and
maintenance of a prosperous local economy for all
citizens by attracting domestic and foreign
investment. Attracting investment is a highly
competitivebusiness in the whole world. Investors
always have a choice. Therefore, the ability to
successfully attract international investment depends
not only on the general microeconomic conditions in
B&H, but also on the ability of the region to offer
potential investors attractive and competitive
conditions which suit their business needs.
Furthermore, the guide introduces the legal framework
of investments, tax, customs and financial system,
which is of great importance because of the large
number of laws and regulations governing the
entrepreneurial and investment activity.
On the pages of the Guide we have tried to summarize
all the basic information about the Posavina Canton, its
geographical location, resources, population structure,
employment, the most important sectors of the
economy, as well as other relevant information.
We believe that we will provide useful information to
facilitate the first steps of potential investors and
actions preceding the start of business operations.
Sincerely,
The Prime Minister of Posavina Canton
M.Sc. Marijan Orsolic
THE FUTURE BELONGS TO THOSE
WHO SEE POSSIBILITIES BEFORE
THEY BECOME OBVIOUS!
J.Scully
CONTENTS
I
Administrative-territorial organization
of Bosnia and Herzegovina .................. 2
II
Posavina Canton ................................... 3
1. Geo-traffic position
2. The economy of Posavina Canton
3. The structure of government in
Posavina Canton
III Legal framework of business
in B&H ..................................................... 7
1. Who can invest?
2. How to invest?
3. Procedure of enterprise registration
in Posavina Canton
4. Specifics when a founder or one of the
founders is a foreign person
5. How to establish Representative office
of foreign persons in B&H?
6. How to invest without establishing
a company?
VII Valid agreementsin B&H ...................... 25
1. Agreements on the Avoidance of
Double Taxation
2. Free Trade Agreements
3. EFTA
4. Stabilization and Association Agreement
5. Agreement on the Promotion and
Reciprocal Protection of Investments
6. Preferential Export Regimes
VIII Investment incentivesin B&H .............. 28
IV Accounting framework of business
in B&H .................................................... 11
1. Large and middle legal entities
2. Financial reporting
3. An audit of financial statements
IX Business opportunities
in Posavina Canton .............................. 32
1. The procedure for allocation of land
and construction permits
2. First connection to the electricity network
2.1. Legal framework and procedure
2.2. The costs of first connection
3. Industrial zones in Posavina Canton
3.1. Municipality Orasje – „Industrial zone
Dusine“
3.2. Municipality Odzak – „Industrial zone
Sjever“
3.3. Municipality Domaljevac-Samac –
„Business zones „Veliko blato“ and
„Malo blato“
V
Importantcontacts ....................................... 41
Fiscal framework of business
in B&H ..................................................... 13
1. Customs duties
1.1. Free trade zones
1.2. Customs warehousing
1.3. Inward processing
2. Taxes
2.1. Value added tax – VAT
2.2. Profit tax
2.3. Income tax
2.4. Witholding tax
2.5. Foreigners and taxes in B&H
3. Special fees and membership dues
4. Utility fees
VI Labour market and stuff costs ............. 22
1. Labour market in Posavina Canton
2. Salary costs in Posavina Canton
Impressum
I
ADMINISTRATIVE–
TERRITORIAL
ORGANIZATION
OF BOSNIA
AND HERZEGOVINA
Bosnia and Herzegovina is a compound state,
which in line with the General Framework
Agreement for Peace in Bosnia and Herzegovina
consists of the Federation of Bosnia and
Herzegovina (51% of territory) and the Republika
Srpska (49% of territory).
REPUBLIKA SRPSKA
Brcko area, which was a subject of disputes and
international arbitrage, has been proclaimed a
district, thus Bosnia and Herzegovina consists of
two entities and Brcko District.
MUNICIPALITIES
BOSNIA AND HERZEGOVINA
1. UNA-SANA CANTON
MUNICIPALITY
ORASJE
2. POSAVINA CANTON
3. TUZLA CANTON
MUNICIPALITY
ODZAK
MUNICIPALITY
DOMALJEVAC-SAMAC
4. ZENICA-DOBOJ CANTON
FEDERATION OF
BOSNIA AND
HERZEGOVINA
5. BOSNIA-PODRINJE CANTON
6. CENTRAL-BOSNIA CANTON
7. HERZEGOVINA-NERETVA CANTON
8. WEST-HERZEGOVINA CANTON
9. SARAJEVO CANTON
10. HERZEG-BOSNIA CANTON
Scheme 1. Administrative-territorial organization of Bosnia and Herzegovina
2
II
POSAVINA CANTON
3
Republic of Croatia
Bosnia
and
Herzegovina
Republic of Srpska
Posavina Canton, the second of 10 cantons of
the Federation of Bosnia and Herzegovina, is
located in the northeast of the Federation and
administrative-territorially divided into three
municipalities: Orasje, Odzak and DomaljevacSamac. The territory of the Canton is mainly
lowland and occupies about 325 km². It is located
at an average altitude of 90 meters. According to
preliminary
results
of
the
Census
of
Population, Households
and
Dwellings
in
Bosnia and Herzegovina, conducted in 2013,
more than 48,000 residents live in the area of
Posavina Canton.
Because of abundant natural resources, population
is traditionally predominantly engaged in agriculture.
Major agricultural crops are:
 corn and wheat (of grains),
 various vegetables and fruits (tomato,
peppers, cucumber, plum, apple), and
 soybean, sugar beet and tobacco (of
industrial plants).
Manufacture of willow and wicker articles is part of
cultural heritage of Posavina Canton population, and
the quality and beauty of these products are
recognized in international markets.
1. Geo-traffic position
SAMAC
BORDER CROSSING
ORASJE
CORRIDOR
Vc
4
Posavina Canton is, actually, along its entire length
leaning on the Sava River, and as a boarder area it is
called the ”Gate of B&H”. This favorable geographical
position
makes
it
unique,
and
favorable
communication links make it attractive for investment.
At a distance of only 40 km there are even two border
crossings (Orasje and Samac) which are at the top in
Bosnia and Herzegovina by multimillion annual traffic
of people and vehicles. Proximity to the highway
contributes to excellent communication links at the
distance of only 12 km to the Zagreb-Belgrade
highway and Orasje-Tuzla road, which makes the
Canton suitable for economic developments, and
movement of goods, people and capital.
'Let your hook be always cast; in the pool where you least expect it, there will be a fish.'
– Ovid
2. The
economy of Posavina Canton
Economic development in the area of Posavina
Canton is established primarily on new trends and
very successful realizations of business ideas of
modern era, and also on the inherited and existing
industries (especially manufacturing).
enterprises, which often started "from scratch" with
low funds and a small number of employees.
The largest number of enterprises registered in
Posavina Canton is in the field of wholesale and
retail trade, manufacturing, agriculture and
construction.
Transition created new small and medium-sized
jklmmn
BASIC INFORMATION ABOUT POSAVINA CANTON
Area
324,6 km
Municipalities
2
3
Settlements
33
1
48.089
Population
Population density
GDP (in millions, KM)
213
5.414
Employed persons
5.739
Unemployed persons
14,6%
5.602
Unemployed persons by professional
attainment
University degree
163
Non-university college degree
132
Secondary school education
Basic school education
Highly skilled
Skilled
Semi-skilled
Unskilled
Average net wages (KM)
Import (mil. KM)
Export (mil. KM)
 stable exchange rate of convertible mark
(1 EUR = 1,95583 KM)
 proximity to the border with the Republic
of Croatia (European Union)
121,1
GDP/pc (KM)
Employment rate (of total population)
WHY INVEST IN
POSAVINA CANTON?
 major roads: Zupanja-Orasje-Tuzla (future
high-speed road)-Sarajevo-Mostar-Ploce
and
Budapest-Osijek-Svilaj-SarajevoPloce (Corridor Vc)
 abundant
natural
resources:
mild
continental climate, arable land and water
flows, processing capacities and years of
experience in food production
 labor force availability
1.265
13
1.781
468
1.780
684,43
144
81
Data from 31.12.2012.
1
Data from the Census of Population (2013)
5
'Education and democracy have the same goal: the fullest possible development of human capabilities'
– P.Wellstone
3. The
structure of
government in Posavina
Canton
LEGISLATIVE AUTHORITIES
EXECUTIVE AUTHORITIES
By the Constitution of Posavina Canton (“Official
Gazette of Posavina Canton, No.: 1/96, 3/96, 7/99,
3/00, 5/00 and 7/04) the following organization of
legislative, executive and judicial authorities in
Posavina Canton was established.
ASSEMBLY OF POSAVINA CANTON
GOVERNMENT OF POSAVINA CANTON
PRIME MINISTER
MINISTRIES
MINISTRY OF INTERNAL AFFAIRS
MINISTRY OF JUSTICE AND ADMINISTRATION
ASSEMBLY OF
POSAVINA
CANTON
MINISTRY OF ECONOMY AND SPATIAL PLANNING
MINISTRY OF FINANCE
MINISTRY OF HEALTH, LABOUR AND SOCIAL POLICY
GOVERNMENT
OF POSAVINA
CANTON
MINISTRY OF TRANSPORT, TOURISM AND ENVIRONMENTAL PROTECTION
MINISTRY OF AGRICULTURE, WATER MANAGEMENT AND FORESTRY
MINISTRY OF EDUCATION, SCIENCE, CULTURE AND SPORTS
MINISTRY OF VETERANS AFFAIRS
JUDICIAL AUTHORITIES
6
COURTS AND PROSECUTION
III
LEGAL FRAMEWORK
OF BUSINESS IN
BOSNIA AND
HERZEGOVINA
7
'What a cage is to the wild beast, law is to the selfish man.' – Herbert Spencer
TYPES OF COMPANIES
IN B&H
WHO can invest?
1.
The Company Law of the Federation of B&H regulates the
establishment, operation and termination of businesses in
B&H.
Investors may be:
o
domestic natural and legal entities and
o
foreign natural and legal entities.
Issues regarding foreign investments of
natural and legal entities are regulated by the
Type of company
Unlimited Joint
Liability
Company
(d.n.o./o.d.)
following laws:
o
Law on the Policy of Foreign
DirectInvestment in Bosnia and
Herzegovina("Official Gazette of B&H”,
No.: 17/98, 13/03 and 48/10)
o
Limited Liability
Company - Ltd
(d.o.o)
Law on Foreign Investments of the
Federation of B&H ("Official Gazette of
FB&H”, No.: 61/01 and 50/03)
o
B&H (“Official Gazette of FB&H”, No.:
Limited
Partnership LP
23/99,45/00, 2/02, 6/02, 29/03, 68/05,
(k.d.)
The Company Law of the Federation of
91/07, 84/08, 7/09, 63/10 and 75/13).
2. HOW to invest?
I.
By establishing private enterprise
II.
By investing in an existing enterprise
III.
By establishing joint enterprises and
connecting with other enterprise
IV.
Through public-private partnerships
V.
Through other special forms of
investments
8
Joint-Stock
Company -JSC
(d.d/a.d.)
Founded by the contract establishment
of two or more partners, domestic/foreign
natural persons, with their own unlimited
solidary
liability
for
company
commitments.
There
are
no
requirements for minimum or maximum
contributions.
Founded by the establishment act or
establishment contract by one or more
domestic/foreign natural and/or legal
entities with initial capital divided in parts.
A member in a limited company is liable
for the value of his investment in that
company. Minimum initial capital is 2,000
BAM (app 1,000 EUR).
Founded by the contract establishment
of two or more domestic/foreign natural
and/or legal entities. There must be at
least one partner with full liability
(including private property) and at least
one partner with limited liability, the
liability being limited by the value of his
share in that company. There are no
requirements for minimum or maximum
initial capital.
Legal
entity
founded
by
the
establishment contract of one or more
domestic/foreign
natural
or
legal
shareholders with initial capital divided
into shares. Open joint-stock company is
a legal entity (bank and insurance
company or enterprise) with minimum
initial capital of 4,000,000 BAM i.e.
2,000,000 EUR, and 40 shareholders at
least whose shares may be listed in
public. Closed joint-stock company is a
legal entity, whose shares are distributed
among a limited number of shareholders.
The minimum initial capital is 50,000
BAM (25,000 EUR).
3. Procedure of enterprise registration
in Posavina Canton
No.
Steps for registration
Competent institution
Duration period
On your own or with the assistance of a
lawyer or notary public
1-5 days
Payment of the founding deposit
The commercial bank
of one’s choice
1 day
3.
Entry into court register (business
organization registration)
Municipal court Orasje
5-10 days
4.
The creation of a company seal
Authorized seal shop
1 day
5.
Opening a giro account
The commercial bank of one’schoice
1 day
6.
Entry into Register of Business Entities
(statistic number)
The Federal Office of Statistics
1-2 days
7.
Identification number
Tax Administration
1-2 days
8.
Statement on meeting the minimal technical requirements of business
premises
On your own or with the assistance of
the Department of Economics and
infrastructure of competent Municipality
1 day
9.
Registration of employees
Tax administration
1 day
10.
Customs number
Indirect Taxation Authority
1-3 days
1.
Preparation and drafting of a founding act
2.
2
3
2
The founding act must be certified by a notary public
If the company has registered a foreign trade activity
3
4. The specifics when a
founder or one of the
founders is a foreignperson
If a founder or one of the founders is a foreign natural
or legal person it is necessary to:
o
obtain
consent
for
the
founding
act
at
The Ministry of Foreign Trade and Economic
THE COSTS OF ENTERPRISE
REGISTRATION IN POSAVINA CANTON
Administrative costs enterprise establishment amount
toapp BAM 1,000 (app 500 EUR),
while the cost of lawyers and notaries amount to
Relations;
o
inscribe in the Unique business organizations
register at The Ministry of Foreign Trade and
Economic Relations.
app BAM 1,000 - 2,000 (app 500-1000 EUR).
9
5. HOW to establish
Representative office of
foreign persons in B&H?
Foreign persons can establish a Representative office
in B&H for performing market research, informative and
promotional activities and their own representation. The
Representative office does not have the status of a
legal entity, i.e. the Representative office can not
conclude agreements in the name of its founder except
representative offices of foreign air transportation
companies which can sell transportation documents in
accordance with bilateral agreements and international
conventions signed by Bosnia and Herzegovina. The
Representative office becomes operational after
entering into the Register of Foreign Representative
offices kept by the Ministry of Foreign Trade and
Economic Relations B&H.
The B&H Ministry of Foreign Trade and Economic
Relations must adjudicate on the application for entry
into the Registry within 10 days from submission.
6. HOW to invest without
establishing a company?
The investor with free capital concludes a commercial
agreement with the local partner for the realization of
certain projects in which the domestic partner is a
carrier of activities.
The contract shall be concluded in accordance with the
Law on Obligations ("Official Gazette of B&H", No.:
2/92 and 13/93), which is applied as federal law under
Article IX.5 of the Constitution of the Federation of
Bosnia and Herzegovina ("Official Gazette of B&H",
No. 1/94).
INSTRUMENTS OF
FOREIGN INVENSTMENTS PROTECTION
Foreign investors concerned about restrictions on profit
transfer, expropriation, war and civil disturbances and
denial of justice, can be insured against these risks with
the European Union Investment Guarantee Trust Fund
for Bosnia and Herzegovina, administered by the
Multilateral Investment Guarantee Agency - MIGA
(member of the World Bank Group).
10
INCENTIVES FOR FOREIGN INVESTORS
Law on the Policy of Foreign Direct Investments in
Bosnia and Herzegovina (“Official Gazette of B&H”,
No.: 17/98, 13/03 and 48/10) ensures:
 National treatment of foreign investors, i.e.,
foreign investors have the same rights and
obligations as residents of B&H.
 Foreign investors are entitled to open accounts in
any commercial bank in domestic and/or any
freely convertible currency on the territory of B&H.
 Foreign investors are entitled to freely employ
foreign nationals, unless the labor and
immigration laws in B&H provide otherwise.
 Foreign investors are protected against
nationalization, expropriation, requisition or
measures having similar effects; such measures
may take place only in the public interest in
accordance with the applicable laws and
regulations
with
payment
of
adequate
compensation.
 Foreign investors enjoy the same property rights
in respect to real estate as B&H legal entities.
 Foreign investors are entitled to transfer abroad,
freely and without delay, in convertible currency,
proceeds resulting from their investment in B&H.
The rights and benefits granted to foreign investors as
well as obligations imposed by the Law on the Policy
of Foreign Direct Investment, cannot be terminated or
overruled by subsequent laws and regulations. Should
a subsequent law or regulation be more favorable to
foreign investors, the investor will have the right to
choose the regime by which the investment will be
regulated.
IV
ACCOUNTING
FRAMEWORK OF
BUSINESS IN BOSNIA
AND HERZEGOVINA
11
In the Federation of B&H, the accounting
framework is based on the principles of
International Financial Reporting Standards
("IFRS").
1. Large and middle legal
entities
Large legal entities are defined by the Law on
Accounting and Auditing in FB&H („Official Gazette
of FB&H„, No.83/09 ), among others, as legal entities
who meet at least two of the following conditions:
 The average value of operating assets exceeds
4 million KM (app 2 million EUR) at the end of
the financial year;
 The total annual revenue exceeds 8 million KM
(app 4 million EUR); and
 The average number of employees during the
year exceeds 250.
Middle legal entities are defined by the Law on
Accounting and Auditing in FB&H, among other, as
legal entities that meet at least two of the following
conditions:
 The average value of operating assets
amounted to 1 million KM (about 500,000 EUR)
to 4 million (about 2 million EUR) at the end of
the financial year;
 The average annual income is 2 million KM
(about 1 million EUR) to 8 million KM (about 4
million EUR), and
 The average number of employees during the
year is 50 to 250.
2. Financial reporting
Legal subjects are liable for keeping financial
books, and preparing and submitting accounting
statements according to the provisions of the Law on
accounting, the International Accounting Code, and
International Accounting Standards.
Legal
subject
submits
its
accounting
statements semi-annually (semi-annual balance
statement) and annually (annual balance statement).
Semi-annual balance statement has to be
submitted by the end of July of the current year, while
the annual balance statement has to be submitted by
the end of February of the following year - for the year
that had expired.
The Standards are adopted in accordance with
international accounting standards and relevant EU
instructions.
Business books are kept by applying double
entry principle.
Annual and semi-annual balance statements
shall contain the following accounting statements:
• Status balance, and
• Accomplishment balance.
3. An audit of financial
statements
Medium and large legal entities and legal entities
whose securities are traded on an organized market
are subject to mandatory annual statutory audit of the
financial statements.
12
V
FISCAL FRAMEWORK
OF BUSINESS IN
BOSNIA AND
HERZEGOVINA
13
1. Customs duties
Indirect Taxation Authority of B&H (ITA B&H) is
responsible for the collection of all customs duties.
Customs rates are harmonized with the Combined EU
nomenclatures.
According to the Interim Trade Agreement signed with
the European Union, customs rates will be reduced,
depending on the type of products, to 90%, 75% or
50% of the previous rate, while customs rates will be
completely eliminated for some products.
The reduction of import customs rates is valid only for
goods originating from the EU, not all the goods being
imported from EU.
Customs protection is still provided for agricultural
products for which customs rates will mostly be paid as
previously.
1.1. Free trade zones
Free trade zones in B&H are part of the customs
territory of Bosnia and Herzegovina and have status
of legal entity. According to the Law on Free Trade
Zones of B&H (“Official gazette of B&H”, No.: 99/09
and 13/03), free trade zone founders may be one or
more domestic or foreign legal entities and natural
persons registered in B&H.
Free zone users do not pay VAT and import duties on
equipment
that
will
be
used
for
production.
Investments in free zones, transfer of profits and
transmission investments are free.
The
free
zone
establishment
is
considered
economically justified if the submitted feasibility study
and other evidence can prove that the value of goods
exported from a free zone will exceed at least 50% of
the total value of manufactured goods leaving the free
zone within the period of 12 months.
14
1.2. Customs warehousing
Customs warehousing is regulated by the Article 95-110
of the Law on Customs Policy of B&H (“Official Gazette
of B&H”, No. 57/04):
 with this procedure goods which are not from
Bosnia and Herzegovina are placed in a customs
warehouse without paying import duties,
 customs warehouse may be public (available to
any person for the warehousing of goods) or
private (only for the storage of goods by the
holder),
 to
obtain
approval
to
conduct
a
customswarehouse it is necessary to make a
written request with the data on the economic
justification, necessary conditions for holding the
warehouse and other,
 only persons registered in Bosnia and
Herzegovina can obtain approval,
 when stored goods are released for free
circulation, customs duties are calculated on the
value of the goods at the time of placing the
same in the process of storage,
 if export of goods is performed after the storage,
the same is not subject to calculation of customs
and other duties.
1.3. Inward processing
The inward processing is regulated by Articles 111119 of the Law on Customs Policy of B&H (“Official
Gazette of B&H”, No. 57/04) by the Instruction on
customs procedure of inward processing (“Official
Gazette of B&H”, No. 90/06).
Within the inward processing imported can be:
 goods used in production and becomingfully
or partially integral part of the compensating
product, and
 certain goods which are necessary to allow
or facilitate the production, although not
becoming an integral part of the
compensating product, with the exception of:
o fuels and other energy sources, other
than those required for testing
of
compensating products or for the
detection of defects in imported goods
that require to be repaired,
o lubricants other than those needed for
the testing, adjustment or withdrawal of
compensating products,
o equipment and tools.
EXEMPTIONS
Equipment being imported as part of share capital
is exempt from paying import duties. This
exemption does not refer to passenger vehicles,
slot and gambling machines.
In order to enjoy the above stated benefit, the foreign
investor
should
submit
a
written
request
for
exemption from paying import duties to the competent
customs authority, according to the place of seat of
the company, along with the following documents:

contract or other relevant document about the
investment on the basis of which the
equipment is being imported,

proof of registration of the foreign share at
the competent authority,

specification of equipment with tariff number,
tariff mark with quantity indication, single and
total value, certified by the investor,

statement of the investor that the equipment
is not more than 10 years old,

certificate by the competent institution or
other competent authority which confirms that
the imported equipment meets standards in
terms of environmental protection and other
Authorization for inward processing shall be
issued only to persons registered in Bosnia and
Herzegovina, and for the above procedure the
following processing operations can be performed:
o modification of goods, including its lifting,
assembly,or installation to other goods,
o processing of goods,
o repair of goods, including itsrestoring and
fitting.
standards in the field of occupational safety
and health.
The Customs Office issues a decision within 15 days
upon submission of the request.
Request for authorization is required to enclose
an excerpt from court registry or evidence of
business activity registration, contract in case of
lohn business, normative of production, approval
issued by the competent Chamber of Commerce
and bank guaranty.
15
'The only thing that hurts more than paying an income tax is not having to pay an income tax.' –
T.R.Duwar
2. Taxes
2.1. Value added tax - VAT
Value added tax is a tax on consumption, estimated
on the basis of the value added to goods and services.
It is a direct tax imposed on all business activities
including production and distribution of goods and
providing services. VAT is a consumer tax, because
the total amount of VAT is not paid by the company
but the ultimate consumer.
It is assessed as a percentage of the price of a
product or service. The amount of tax is visible at all
stages, from production to distribution.
Upon payment of tax liability, the taxpayer will reduce
value-added tax from the amount of taxes already
paid to other taxpayers when purchasing. It ensures
tax neutrality regardless of the number of
transactions involved.
IMPORTANT NOTES
 The deadline for submitting monthly
VAT return is the tenth day of the
current month for the previous month.
VAT
The uniform tax rate amounts 17% and is regulated
by the Law on Value Added Tax (“Official Gazette of
B&H”, No.: 9/05, 35/05 and 100/08), and is imposed on
the supply of goods and services which the taxpayer
carries out in Bosnia and Herzegovina. Indirect
Taxation Authority is a competent institution for
collecting value added tax and coordination of fiscal
policy as a whole. Indirect Taxation Authority is also
responsible for the collection of customs and excise
duties on the entire territory of Bosnia and
Herzegovina.
4
 Compulsory VAT registration threshold
is 50,000.00 KM of taxable turnover in
the previous or current calendar year.
 The deadline for VAT refund is not later
than 60 days after expiring of VAT
4
submission deadline.
 Foreign entrepreneurs who in the
territory of Bosnia and Herzegovina do
not have headquarters or a permanent
business unit, and who carry out the
taxable supply of goods and services in
BiH whose value exceeds an annual
threshold of registration, are obliged to
register for VAT and appoint a tax
agent in B&H.
A taxpayer who does not receive the difference for VAT within 60 days shall be entitled to interest at the rate
prescribed by law which regulates the penalty interest rate
16
2.2. Profit tax
Profit taxes in the Federation of Bosnia and Herzegovina
are determined and paid according to the provisions of
the Law on Profit Tax ("Official Gazette of the Federation
of Bosnia and Herzegovina“, No.: 97/07, 14/08, and
39/09).
Accounting profit determined in accordance with the Law
on Accounting and Auditing of the Federation of BiH
("Official Gazette of the FB&H“, No.: 83/09) and aligned
in accordance with the provisions of the Law on Profit
Tax shall be taxed at a tax rate of 10%.
Certain expenses are partially tax deductible,
including:
 30% of representation costs;
 donations in amount of up to 3 percent of
total income, and
 sponsorship in amount of up to 3 percent of
total income.
If the expenses are higher, the difference between tax
depreciation expense and accounting depreciation
expense can be used for the purposes of profit
taxation, provided that for the pre-used depreciation
amounts the tax base in the tax balance is increased
in the coming years.
IMPORTANT NOTES
 The deadline for submitting tax return
of profit tax is by March 31 of the
current year for the previous year.
 Dividends are not included in the tax
base.
 The provisions relating to transfer
prices
require
of
business
organizations to present transactions
with related companies in its tax
balance.
 Profit transferredfrom abroad shall not
be taxed if the tax has been paid
abroad.
 Tax losses can be transmitted to the
next five years.
 Tax losses incurred in one tax year
can not be used in previous tax
periods.
Depreciation rates
Property/Asset
Annual depreciation
rate (%)
Building facilities
10
Equipment, motor vehicles,
machinery
20
Intangible assets
20
 Tax consolidation/group taxation is
provided in the Law on Profit Tax.
17
Exemption from payment
of income tax in the year in
which the taxpayer
achieves by exports over
30% of total income
Exemption from payment
of income tax for a period
of five years if the taxpayer
invests 20 million (app EUR
10 million) in production in
the Federation of BiH
(4 million KM have to be
invested in the first year)
Exemption from payment
of income tax for the year
in which the taxpayer
employs more than 50% of
disabled persons for more
than a year
PROFIT TAX INCENTIVES
18
2.3. Income tax
Income tax is a type of tax for income taxation of natural or legal
persons.
IMPORTANT NOTES
Items not considered as income include:
 dividends and distribution of profit,
 pensions,
 scholarships, and
 certain insurance payments.
Income tax rate in Federation of B&H
amounts 10% on net salary, in
accordance with the Law on Income
Tax („Official Gazette of the FB&H“,
No.: 10/08, 9/10, 44/11, 7/13 and
65/13).
The deadline for submitting annual tax
returns is 31 March of the current
year for the previous year.
2.4. Witholding tax
Tax exempt compensations among other include:
 severance payments upon retirement in the amount
of six net salaries paid in the previous six months
or six average net salary in FB&H (if it is more
favorable to employee);
 travel expense allowances to and from work in the
amount of ticket prices of public transport;
 meal allowances in the amount of 2% of average
net salary in FB&H (currently about 16 KM per day
or less than 4 EUR);
 daily allowances for business trips in B&H in the
amount of up to 25 KM (about 12.5 EUR);
 daily allowances for business trips abroad up to the
prescribed amount (depending on the country);
 other allowances up to the prescribed amounts.
Withholding tax is imposed to non-resident legal entities on
certain payments (dividends, interest and intellectual property
rights, market research services, tax and business advisory
services and audit services, as well as generally all other services
provided by non-residents on the territory of the Federation of
B&H).
IMPORTANT NOTES
Witholding tax can be reduced/
eliminated
in
accordance
with
applicable
Agreement
on
the
Avoidance of Double Taxation.
Standard witholding tax rate is
10% while the rate of
witholding tax of 5% is applied
on dividend payments.
Namely, ratified contracts (agreements,
conventions) on the avoidance of
double taxation signed by Bosnia and
Herzegovina have priority over the
provisions of the Law on Profit Tax.
19
2.5. Foreigners and taxes in Bosnia and Herzegovina
All foreigners residing in the Federation of B&H pay tax on
income earned in the calendar year on the territory of Bosnia and
Herzegovina.
Likewise, all foreigners not residing in Bosnia and Herzegovina
but earning income in the Federation of B&H and the Republic of
Srpska are considered taxpayers.
20
3. Special fees and membership dues
No
TERM
RATE
1.
General Water
Charge
0,5% of
paid net salaries
2.
Special contribution
for protection against
natural and other
disasters
0,5% of
paid net salaries
3
Fee for rehabilitation,
training and
employment of
disabled persons
REGULATIONS
Law on Water (“Official Gazette of the Federation of
B&H”, No. 70/06), Ordinance on the method of
calculation, the procedure and deadlines for the
calculation and payment and control of liability settlement
based on general water charges and special water
charges (“Official gazette of the Federation of B&H”, No.:
92/07, 46/09, 79/11 and 88/12)
Law on protection and rescue of people and material
goods in case of natural or other disasters(“Official
gazette of the Federation of B&H”, No.:39/03, 22/06 and
43/10) and Guidelines on the method of calculation and
payment of special fees for protection against natural and
other disasters (“Official gazette of the Federation of
B&H”, No. 81/08)
0,5% of
paid gross salaries
If the legal entity does not employ people with disabilities
in accordance with the The Law on Vocational
Rehabilitation, Training and Employment of Persons with
Disabilities (“Official gazette of the Federation of B&H”,
No. 9/10)
Regulation on Tourist association fees (“Official gazette
of the Federation of B&H”, No.: 18/09 and 4/12)
Law on Forests (“Official gazette of the Federation of
B&H”, No. 9/13)
4.
Tourist association
fee
0,045% for Orasje,
0,04% for Odzak and
0,035% for
Domaljevac
of total income at the
end of the year
5.
Fee for
generally beneficial
functions of
the forests
0,015% of total income
at the end of the year
5
For example, business tax should be paid under this Law
4. Utility fees
Cantonal Law on Utility Fees (“Official Gazette
of Posavina Canton”, No.4/09) prescribes the
manner of payment of utility fees in the area of
Posavina Canton.
Fee rates by objects and services for the use of
which the tax is paid are determined by the
municipal decisions, provided that the rate of the
same can not be higher than the amount
determined by Communal Fees Tarrif which is an
integral part of the specified Act.
21
VI
LABOUR MARKET
AND STUFF COSTS
22
EMPLOYMENT OF FOREIGNERS
Employment of foreign nationals is performed by the
Employment Service of Posavina Canton in
accordance with the Law on Employment of
Foreigners (“Official Gazette of the Federation of
B&H“, No. 8/09). A foreign national seeking
employment in companies operating in B&H must
have a work permit.
1. Labour market in Posavina
Canton
In Posavina Canton, according to Employment
6
Service of Posavina Canton , there are 5,594
registered unemployed persons. The structure of
unemployed persons by professional attainment is
as follows: 163 persons with university degree, 150
with non-university college degree, 1,384 with
secondary school education, 11 highly skilled, 1.095
skilled, 210 semi-skilled and 1,042 unskilled.
Of unemployed persons with university degree or
non-university college degree, the majority are
graduate economists and lawyers, then electrical
engineers, civil construction engineers and
information scientists. Of unemployed persons with
secondary school degree, the majority are sales
associates,
then
economists,
administrators
accounting officers, nurses, agricultural technicians
and textile technicians. Of other unemployed
persons (skilled and highly skilled) the most
numerous are the sellers, locksmiths, automechanics, hairdressers, and textile sewists.
Work permits are issued by the competent
Employment Service offices responsible for the
region of employer's head office.
The employer shall submit, on behalf of foreign
workers, the application for a work permit. A work
permit is issued for a specific person for the specific
job, for specific employer and for a specific time. A
work permit shall expire when employment ceases.
A work permit is valid for a period of one year and
may be extended.
Founders of a company or enterprise with a seat in
B&H performing certain tasks in that company or
enterprise, if such tasks do not have characteristics
of employment and do not exceed a total of three
months a year, do not have to obtain a work permit
in B&H.
If a company founder also is to be the manager of
that company and receive a salary for his work, then
he/she must have a work permit in accordance with
the provisions of the Law on Movement and Stay of
Aliens and Immigrants of B&H (“Official Gazette of
Bosnia and Herzegovina“, No. 36/08) and residence
registered in Bosnia and Herzegovina.
In case that the application for issuing work permit is
submitted by foreign investors or founders of
companies and/or persons authorized to represent
the employer (directors, executive directors,
procurator, etc.) or persons registered to carry out
independent activity - craft, the procedure of issuing
work permit shall be finished within no longer than
15 days from the date of submitting the application.
6
Data from December 2013
23
2. Salary costs in Posavina Canton
Salary simulation
The average net salary
in Posavina Canton
for the year of 2012
amounted
684.43 KM.
No
Gross
salary
The
amount of
salary to
be paid
out
Contributions
from the
base salary
Contributions
to the base
salary
Fees
Total
(3+4+5+6)
1
2
3
4
5
6
7
1
2
3
4
560.00
1,053.80
1,240.00
1,562.00
377.76
684.41
800.04
1,000.00
173.60
326.68
384.40
484.22
58.80
110.65
130.20
164.01
6.58
12.11
14.20
17.81
616.74
1,133.85
1,328.84
1,666.04
The table above in column 7 shows the cost of salary for an employer, in
case that the net salary amounts as shown in column 3.
Meal allowance of up to 2% of the average net wage in the Federation
according to the latest published statistics is not subject to taxation in
accordance with Article 14 of the Regulation on the application of the Law on
Income Tax (“Official Gazette of the Federation of B&H”, No.: 67/08, 4/10,
86/10, 10/11, 53/11, 20/12, 27/13 and 90/13).
Social security contributions paid by the employer and employee
In the Federation of B&Hcontributions
calculated on the basis of gross salary.
are
a) Share in contributions paid by employee:
17% for pension and disability insurance, 12.5% for
health insurance and 1.5% for unemployment
insurance (total of 31% on the gross salary).
b) Share in contributions paid by employer:
6% for pension and disability insurance, 4% for
health insurance and 0.50% for unemployment
insurance (total of 10.50% on the gross salary).
Gross income comprises net income of an
employee, multiplied by a coefficient determined,
plus contributions.
7
cca. 830,00 KM*2%=16,60 KM
24
The regulations governing the payment of
contributions are:
Law on Contributions (“Official Gazette of the
Federation of B&H”, No.: 35/98, 54/00, 16/01,
37/01, 1/02, 17/06 and 14/08);
Regulation on Calculation and Payment of
Contributions (“Official Gazette of the
Federation of B&H”, No.: 64/08 and 81/08);
Law on Pension and Disability Insurance of the
Federation of B&H (“Official Gazette of the
Federation of B&H”, No.:19/98, 049/00, 32/01,
73/05, 59/06, 4/09 and 55/12);
Law on Health Insurance (“Official Gazette of
the Federation of B&H”, No.: 30/97, 7/02, 70/08
and 48/11);
Law on Employment
Mediation and
Social
Security of the Unemployed Persons (“Official
Gazette of the Federation of B&H”, No.: 55/00,
41/01, 22/05 and 9/08).).
7
app. 830.00 KM*2%=16.60 KM
VII
VALID AGREEMENTS
IN BOSNIA AND
HERZEGOVINA
25
1. Agreements on the
Avoidance of Double
Taxation
Following Agreements on the Avoidance of Double
Taxation, which Bosnia and Herzegovina has signed
with other countries, are being applied:
Albania, Algeria, Austria, Belgium, Montenegro, Czech
Republic, Denmark, Egypt, Finland, France, Croatia,
Iran, Ireland, Italy, Jordan, Kuwait, Qatar, China,
Cyprus, Hungary, Malaysia, Moldova, Netherlands,
Norway, Pakistan, Poland, Romania, Slovakia,
Slovenia, Serbia, Spain, Sweden, Sri Lanka, Turkey,
United Arab Emirates, United Kingdom and Northern
Ireland.
2. Free Trade Agreements
Bosnia and Herzegovina has signed The Central
European Free Trade Agreement (CEFTA) with
following countries: Albania, Serbia, Moldova,
Montenegro, Macedonia and UNMIK/Kosovo.
Bosnia and Herzegovina has also signed a Free trade
agreement with Turkey, which provides access to a
new market of 70 million people.
3. EFTA
Free trade agreement between Bosnia and
Herzegovina and EFTA (Switzerland, Norway, Iceland
and Liechtenstein) was signed on 24 June 2013 in
Norway, and after the ratification of the agreement,
complete abolition of customs duties on imports of
goods between the parties shall come into force.
26
4. Stabilization and
Association Agreement
Interim Agreement on trade and trade-related matters
between the European Communities and Bosnia and
Herzegovina entered into force on 1 July 2008 and will
continue until the application of Stabilization and
Association Agreement.
The agreement effectively creates a free trade area
with the gradual opening of the market of Bosnia and
Herzegovina, facilitating economic and social
development.
Significant is the contribution of autonomous
measures introduced by the European Communities
for Bosnia and Herzegovina since 2002, and after
entering into force of the Interim Agreement, BiH
export was facilitated as well as import of the
European Communities to BiH.
5. Agreement on the
Promotion and Reciprocal
Protection of Investments
Following Agreements onthePromotionand Reciprocal
Protection of Investments, which Bosnia and
Herzegovina has signed with other countries, are
being applied:
Albania, Austria, Belgium and Luxembourg, Belarus,
Czech Republic, Denmark, Egypt, Finland, Greece,
Croatia, India, Iran, Italy, Jordan, Canada, Qatar,
China, Kuwait, Lithuania, Macedonia, Malaysia,
Moldova, the Netherlands, Germany, OPEC FUND,
Pakistan, Portugal, Romania, USA - OPIC, San
Marino,
Slovakia,
Slovenia,
Serbia,
Spain,
Switzerland, Sweden, Turkey, the United Kingdom,
Ukraine.
6. Preferential Export Regimes
Interim Agreement on trade and trade-related matters
between the European Union and Bosnia and
Herzegovina entered into force on 1 July 2008 and
shall remain in force until the European Communities
member states ratifythe Stabilization and Association
Agreement (SAA).
The agreement effectively creates a free trade area
with the gradual opening of the market of Bosnia and
Herzegovina, facilitating economic and social
development.
In accordance with the preferential export regime with
the European Communities, all goods from Bosnia that
meet the technical and technological standards and
requirements of the EU can be imported into all EU
member states without any quantitative restrictions
and without paying customs duties and other similar
duties.
BiH also has the unilateral preferential regime with the
USA, New Zealand, Switzerland, Norway, Japan,
Russia, Kazakhstan, Belarus, Canada and Australia.
Furthermore, B&H has preferential export regime with
Iran.
Diplomatic-consular offices in B&H
Albania
Algeria
Argentina
Angola
Australia
Austria
Bangladesh
Belarus
Belgium
Bulgaria
Burkina Faso
Canada
Chile
China
Croatia
Cuba
Czech Republic
Denmark
Egypt
European Union
Finland
France
Germany
Greece
Guinea Bissau
Vatican
Hungary
Island
India
Indonesia
Iran
Ireland
Israel
Italy
Japan
Jordan
DPR Korea
Serbia
R Korea
Kuwait
Latvia
Libya
Macedonia
Malaysia
Mali
Malta
Mexico
Moldova
Montenegro
Morocco
Netherlands
New Zealand
Nigeria
Norway
Oman
Pakistan
Palestine
Peru
Philippines
Poland
Portugal
Qatar
Romania
Russia
SaudiArabia
Slovakia
Slovenia
North Africa
Sove.Military Order of Malta
Spain
Sri Lanka
Sweden
Switzerland
Syria
Thailand
Turkey
Ukraine
United Arab Emirates
United Kingdom
USA
Yemen
Zambia
Azerbaijan
Brazil
Ecuador
Estonia
Georgia
Iraq
Kazakhstan
Cyprus
Kyrgyzstan
Congo
Costa Rica
Luxembourg
Mauritania
San Marino
27
VIII
INVESTMENT
INCENTIVES
IN BOSNIA AND
HERZEGOVINA
28
'Recognize great while still small.' – Sun Tzu
(FISCAL AND NON-FISCAL)
No
NAME AND A BRIEF DESCRIPTION OF THE
INCENTIVE
1.
VAT exemption on entry of goods into the free zone
2.
Equipment released for free circulation representing an
investment by a foreign person, except for passenger
vehicles, entertainment and slot machines, shall be
granted relief from payment of import duty (art. 176,
paragraph 1 of the Customs Policy Law of B&H)
3.
Goods released for free circulation for projects of
rebuilding and reconstruction of B&H shall be relieved
from payment of import duty (art. 176, paragraph 3 of the
Customs Policy Law of B&H)
4.
Equipment released for free circulation intended for
production activities in the free zone shall be granted relief
from payment of import duty (art. 176, paragraph 4 of the
Customs Policy Law of B&H)
5.
Capital goods and other equipment imported on the
transfer of activities from a third country into B&H The capital goods and other equipment belonging to
undertakings which definitively cease their activity in a
third country and move to the customs territory of B&H in
order to carry on a similar activity there, shall be relieved
from payment of customs duty (art. 6 of the Annex to
Customs Policy Law of B&H)
6.
Products obtained by B&H farmers on Properties
Located in a Foreign Country -Agricultural, stockfarming, bee-keeping, horticultural and forestry products
from properties located in a country adjoining the customs
territory of B&H, which are operated by agricultural
producers having their enterprise in the said customs
territory, shall be relieved from payment of customs duty
(art. 7 of the Annex to Customs Policy Law of B&H)
INSTITUTION THAT ASSIGNS THE INCENTIVE /
INSTITUTION THAT CONDUCTS THE PROCEDURE
Governing Board of the Indirect Taxation
Authority of B&H
Indirect taxation authority of B&H
Indirect taxation authority of B&H
Indirect taxation authority of B&H
Indirect taxation authority of B&H
Indirect taxation authority of B&H
29
Investment incentives in B&H (continued)
No
30
NAME AND A BRIEF DESCRIPTION OF THE
INCENTIVE
7.
Seeds, Fertilizers and Products for the Treatment of Soil,
Imported by Agricultural Producers in Foreign Country for
Use in Properties Adjoining those Countries - Seeds,
fertilizers and products for the treatment of soil and corps
intended for use on property located in the customs
territory of B&H adjoining a foreign country and operated
by agricultural producers having their principle
undertaking within the said foreign country and adjacent
to the customs territory of B&H shall be relieved form
payment of customs duty (art. 8 of the Annex to Customs
Policy Law of B&H)
8.
Goods Imported for Trade Promotion Purposes shall be
relieved form payment of customs duty (art. 16 of the
Annex to Customs Policy Law of B&H)
9.
Consignments Sent to Organisations Protecting
Copyrights or Industrial and Commercial Patent
Rights - Trademarks, models or designs and supporting
documents as well as applications for recognition of
patents, innovations or similar, to be forwarded to
authorities dealing in protection of copyrights or the
protection of industrial or commercial patent rights shall be
relieved from payment of customs duty (art. 17 of the
Annex to Customs Policy Law of B&H)
10.
Educational, Scientific and Cultural Material, Scientific
Instruments and Apparatus - Educational, scientific and
cultural materials specified in the List to be adopted by the
Governing Board shall be relieved from payment of
customs duty (art. 20 of the Annex to Customs Policy Law
of B&H)
11.
Laboratory Animals and Biological or Chemical
Substances Intended for Research - Animals specially
prepared for laboratory use and biological or chemical
substances for which there is no equivalent production in
the customs territory of B&H and which are imported
exclusively for non-commercial purpose, shall be relieved
from payment of customs duty (art. 21 of the Annex to
Customs Policy Law of B&H)
12.
Therapeutic Substances of Human Origin and BloodGrouping and Tissue-Typing Reagents - Therapeutic
substances of human origin, blood-grouping reagents and
tissue-typing reagents shall be relieved from payment of
customs duty (art. 22 of the Annex to Customs Policy Law
of B&H)
INSTITUTION THAT ASSIGNS THE INCENTIVE /
INSTITUTION THAT CONDUCTS THE PROCEDURE
Indirect taxation authority of B&H
Indirect taxation authority of B&H
Indirect taxation authority of B&H
Indirect taxation authority of B&H
Indirect taxation authority of B&H
Indirect taxation authority of B&H
Investment incentives in B&H (continued)
No
NAME AND A BRIEF DESCRIPTION OF THE
INCENTIVE
INSTITUTION THAT ASSIGNS THE INCENTIVE /
INSTITUTION THAT CONDUCTS THE PROCEDURE
13.
Fund Foreign Investors Support in B&H*
*Due to lack of funds in the budget the Fund currently
does not providefunds to foreign investors
Council of Ministers of B&H
Foreign Investment Promotion Agency of B&H
(FIPA)
14.
Support for fair manifestations at home and abroad
15.
Products being exported shall be relieved from payment of
excise duty (art. 30 of the Law on Excise Duties in B&H
("Official Gazette of Bosnia and Herzegovina", No. 49/09)
Indirect taxation authority of B&H
16.
Fuel for planes and ships in international trafficshall be
relieved from payment of excise duty (art. 30 of the Law
on Excise Duties in B&H)
Indirect taxation authority of B&H
17.
Excise Duty Exemptions on import and/or supply of
alcohol used as a raw material for the production of
alcoholic beverages, to a person registered for production
in accordance with art. 13 of the Law on Excise Duties in
B&H (art. 30 of the Law on Excise Duties in B&H)
Indirect taxation authority of B&H
18.
Natural and legal persons using fuel oil for heating
residential and commercial buildings and facilities for
agricultural production (greenhouses and polythene
greenhouses)shall be entitled to a refund of excise on fuel
oil (art. 31 paragraph 1 of the Law on Excise Duties in
B&H)
Indirect taxation authority of B&H
19.
Entrepreneur and legal persons using alcohol for the
production of pharmaceuticals and/or medical purposes,
as well as ethyl alcohol used as a raw material in
manufacture of cleaning and washing products, cosmetic
products and other products exempted from excise duties
shall be entitled to a refund of excise (art. 31 paragraph 2
of the Law on Excise Duties in B&H)
Indirect taxation authority of B&H
20.
A legal person that exports excise products for which
excise duty was previously paid shall be entitled to the
refund of the amount paid (art. 31 paragraph 3 of the Law
on Excise Duties in B&H)
Indirect taxation authority of B&H
21.
Road tax is not paid for diesel fuel used in
coal mines, power plants and railways (for rail vehicles
drive) and the amount approved by the Board of Directors
at the proposal of entities governments and Brcko District
Government. (art. 36 paragraph 1 of the Law on Excise
Duties in B&H)
Indirect taxation authority of B&H
Council of Ministers of B&H
Ministry of Foreign Trade and Economic
Relations of B&H
31
IX
BUSINESS
OPPORTUNITIES
IN POSAVINA CANTON
Municipality Orasje
MunicipalityOdzak
Municipality
Domaljevac
32
‘An entrepreneur always searches for change, responds to it, and exploits it as an opportunity.'–
Peter Drucker
1. The procedure for allocation of
land and construction permits
No
Steps for allocation of land
1.
The procedure for allocation of land and
construction permits is within the competence
of the municipality.
Competent institution
Duration period
The public tender for allocation of undeveloped
construction land for the use of construction
Municipality Orasje
21 days
2.
The implementation of the tendering procedure
Municipal Commission
7 days
3.
The decision on the allocation of undeveloped
construction land for the use of construction
Municipal council Orasje
15 – 30 days
4.
The implementation of the Resolution of the
Municipal Council
registration in the
cadastre and land registry
5.
Obtaining urban planning consent
6.
Obtaining construction permit
8
9
Total duration:
Municipality Orasje – cadastre;
Municipal Court Orasje – land
registry
7 days
Municipality Orasje
7 days
Municipality Orasje
7 days
64 – 79 days
8
Assuming the completeness of requirements
See 8
9
33
2. First connection
to the electricity network
2.2. The costs of first connection
2.1. Legal framework and
procedure
To connect the facility to the electricity network
investor pays one-time fee prescribed by Regulation
of the connectors in JP "Elektroprivreda HZ HB" d.d.
Mostar.
Basic documents regulating this procedure in the area
of Posavina Canton (as well as the entire Federation of
Bosnia and Herzegovina) are: the Law on Electricity
(“Official Gazette of FB&H”, No. 66/13) and the
General conditions for electricity supply (“Official
Gazette of FB&H”, No. 35/08).
The one time fee is calculated in two parts:
The holder of the license for the distribution of
electricity prescribes Conditions for connection to
electricity network. In the area of Posavina Canton it is
a Public Enterprise "Elektroprivreda HZ HB" d.d.
Mostar - Distribution Area North Orasje, from which the
investor must obtain the prior electro energy consent
for the connection to the distribution network. It is a
fundamental document that prescribes the possibility
and the way of upcoming connecting of the investor’s
facility to the network. This is also a first step in the
process of connecting to the distribution network.
For customers connected to the medium voltage
network it is calculated as:
[Connected load (kW) x 280 x 0.5] KM + VAT
Through continuous investment in the distribution
network and alignment with development plans of
municipalities in Posavina, the high standards of
electricity supply are enabled, especially in business
areas in the Canton. Two main feed points in the
Canton are:
 Substation 110/x "Orasje" installed capacity of
2x20 MVA, and
 Substation 110/x "Odzak" installed capacity of 20
MVA.
1) Compensation for the connected load
For customers connected to the low voltage network it
is calculated as:
[Connected load (kW) x 466 x 0.5] KM + VAT
2) Compensation for other costs
The fee for other expenses relating to the costs
incurred in the process of acquiring the right of
construction and right of service, and it is calculated
on the basis of the actual costs of the proceedings.
The purchaser pays only 50% of that amount.
Electricity prices are determined in accordance
with the tariffs adopted by the Regulatory
Commission for Electricity in Federation of
Bosnia and Herzegovina - FERK.
Contact:
Elektroprivreda HZ-HB d.d. Mostar – Distribution Area North,
Tel.: (+387) 31 713 002, 711 775
Web: http://www.ephzhb.ba
Branch Orasje: (+387) 31 712 065
Branch Domaljevac: (+387) 31 791 719
Branch Odzak: (+387) 31 761 045
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3. Industrial zones in Posavina Canton
3.1. MUNICIPALITY ORASJE
„Industrial zone- Dusine“
INFO
BENEFITS FOR USERS
"Industrial zone - Dusine" Orasje is established by the
decision of Municipal Council Orasje ("Official Gazette of
the municipality Orasje, No. 2/10) on 18.03.2010.
 Exemption from fees for the use and
arrangement of construction land;
The zone covers a total usable area of 351,749.00 m²,
divided into 50 plots.
"Industral zone - Dusine" is formed by the merger of the
eastern part of the "Industrial Zone II" and "Industrial zone
III Orasje”. This merger aims to create a complete whole,
which requires a unique development program,
construction of infrastructure, promotion, and the unique
incentive for investment in the zone.
 Exemption of utility fees;
 The decision on a new employment
incentive measures in the area of
municipality Orasje ("Official Gazette of
municipality Orasje", No. 4/09).
Companies currently active in the zone are:
"Industrial zone - Dusine" Orasje is located on the main
road Orasje - Tuzla, only 1 km from the municipality
center and border crossing Orasje - Zupanja, and 12 km
from the Zagreb - Belgrade highway.
1. "Mix" Ltd. Orasje (production and processing
industry - production of animal feed)
2. "Dinoza" Ltd. Orasje (manufacturing activity processing of raw hides and skins)
The zone is partially equipped with basic infrastructure,
access road, electricity network, water supply system,
and PTT connections.
3. "Coprotec systems" Ltd. Orasje (production
activity - production of metal parts for the
automotive industry)
4. "Yimor" Ltd. Domaljavac (trading activity)
Price of available land in the industrial zone amounts 3
KM/m² to 7 KM/m², depending on positional
advantages of plots.
5. "ASD" PJ Orasje Ltd. (service industry)
The plots range from 3,221.00 m² to 30,763.00 m². The
current number of available plots is 13, divided into four
levels, from the main road towards the eastern part of the
zone
8. “B2 Marine” Ltd. Orasje (productive activity)
6. "Badzo" Ltd. Gradacac (trade of construction
material)
7. “Sokcevic” Ltd. Orasje (trading activity)
9. "Granit" Ltd. Orasje (manufacturing activity processing of stone).
35
„Industrial zone - Dusine“ Orasje
Highway
ZAGREB-BELGRADE
12 km
Road area
36
Free area
PLOT SIZE
Allocated
undeveloped area
Allocated constructed or
partially constructed area
3.2. MUNICIPALITY ODZAK
„Industrial zone - Sjever“
INFO
"Industrial zone - Sjever" Odzak was established by
the decision of Municipal Council Odzak on 2 June
2010.
The zone covers a total area of 46.85 ha, divided
into 49 business plots.
Zone construction is planned to be carried out in two
phases. Currently in Phase I (20 ha) 18 business
plots are available in size of 3,600.00 m² to
15,500.00 m². All plots of this phase are by
infrastructure fully prepared for entry of potential
investors.
The proximity of the railway line (7 km) in
Modrica, river port (15 km) in Samac and Brcko
(70 km), airport in Tuzla and Osijek (80 km),
Sarajevo, Zagreb and Belgrade (200 km), as
well as the construction of a highway through
the municipality of Odzak on the Corridor Vc
(1.5 km away from the Zone) make this Zone
even more attractive for entrepreneurs from
The Regulatory Plan and complete project
documentation, and all consents necessary for
construction of "Industrial zone - Sjever" Odzak
have been obtained.
A roundabout at the entrance to the zone has
been built, substation 10/04 kv has been set,
and most of the streets in the first phase of the
project have been built but not paved.
There is a possibility of connection to a
complete urban infrastructure, except sewage.
The starting price for the sale of available
business plots in the zone is 10 KM/m².
Financial assets obtained from the sale of
business plots of phase I of the project as well
as all other available funds will be invested in
the completion of the Industrial zone
infrastructure.
B&H as well as for those from abroad.
37
„Industrial zone- Sjever“ Odzak
38
3.3. MUNICIPALITY DOMALJEVAC-SAMAC
Business zones „Veliko blato“ and „Malo blato“
INFO
Business zone "Malo blato"
The municipality of Domaljevac-Samac has adopted
a regional plan with marked economic zones on the
location "Veliko blato" and business-service zone on
the location “Malo blato”. The zones are intended for
developing small and medium-sized enterprises.
Basic information:
 Location: near the road Samac-Orasje
 Area: 2.5 ha
 Intended purpose: commercial - financial center of
the Municipality
 Constructed facilities: seven privately owned
facilities
 Existing infrastructure: electricity, water, telephone
/ internet, travel network
 Planning documentation: spatial plan with marked
zones
 Legal status: 100% owned by the Municipality
 Estimated land price within the Zone: 10 KM/m²
 Zone management: the Municipality
 Possibility of Zone expansion: none
Regulatory plan of the zone is created according to
the needs of investors – an easy way of negotiation
and land cession.
The advantage of these zones is the proximity to the
highway Zagreb – Belgrade (15km), main road
Orasje – Tuzla (10km), railway in Samac (10km),
and river port Samac (10km).
Border crossings Orasje and Samac are only 10 km
away from the business zones in Domaljevac.
Business zone "Veliko blato"
Benefits that the Municipality offers for
companies:
-
-
An entrepreneur who enters the zone pays only
compensation for land, and is relieved from
payment of the utility rents and rents for
business premises.
For urban planning consent pays only 80.00
KM, while for the construction permit and
occupancy permit pays only 0.25% of the
construction value of the object (that is, if the
object is worth 1 million – the investor pays
2,500 KM).
Basic information:
 Location: 500m from the road Samac-Orasje
 Area: 5 ha
 Intended purpose: green zone for SME
Development
 Constructed facilities: one privately owned facility
 Existing infrastructure: electricity, travel network
 Planning documentation: spatial plan of the
Municipality with marked zones
 Legal status: 100% owned by the Municipality
 Land price within the Zone: 5 KM/m²
 Zone management: the Municipality
 Possibility of Zone expansion: not limited,
alongside the Zone is the land owned by the
Municipality
39
Business zone„Veliko blato“ and „Malo blato“ Domaljevac
Companies operating in the business zone are: "M&K Company" Ltd. Domaljevac, "Koturic-Toni" Ltd.
Domaljevac, "Dom-grad" Ltd. Domaljevac, "Mirnovec" Ltd. Citluk, "Oranica" Ltd. Domaljevac and "Argus" Ltd.
Grebnice.
40
GOVERNMENT OF POSAVINA CANTON
Jug I, Obilaznica bb
76270 Orasje
Tel.: (+387) 31 713 265, 713 277,
713 402, 717 057, 717 058
Email: [email protected]
Web: http://www.zupanijaposavska.ba
MUNICIPALITY ORASJE
3.ulica 45.
76270 Orasje
Tel.: (+387) 31 712 322, 712 011
Email: [email protected]
Web: http://www.orasje.ba
MUNICIPALITY ODZAK
Trg broj 1
76290 Odzak
Tel.: (+387) 31 762 027, 710 811
Email: [email protected]
Web: http://www.odzak.ba
MUNICIPALITY DOMALJEVAC-SAMAC
Posavskih branitelja 148
76233 Domaljevac
Tel.: (+387) 31 716 600, 716 604
Email: [email protected]
Web: http://www.domaljevac.ba
CANTONAL ADMINISTRATION FOR
INSPECTION ISSUES
5. ulica 19.
76270 Orasje
Tel.: (+387) 31 714 706
Email: [email protected]
PRIVATIZATION AGENCY OF POSAVINA
CANTON
3. ulica bb
76270 Orasje
Tel.: (+387) 31 712 997
Email: [email protected]
CHAMBER OF COMMERCE OF
POSAVINA CANTON
Jug 1 bb
76270 Orasje
Tel.: (+387) 31 713 277
MUNICIPALITY COURT ORASJE
Jug I, Obilaznica bb
76270 Orasje
Tel.: (+387) 31 712 073, 716 800
Email: [email protected]
Web: http://opsud-orasje.pravosudje.ba
OFFICE FOR STATISTICS OF
POSAVINA CANTON
3. ulica 15.
76270 Orasje
Tel.: (+387) 31 712 391
EMPLOYMENT BUREAU OF
POSAVINA CANTON
3.ulica 50.
76270 Orasje
Tel.: (+387) 31 714 417, 710 680, 712 306

Office Orasje: (+387) 31 713 964

Office Odzak: (+387) 31 761 421

Office Domaljevac-Samac: (+387)
31 791 931
CANTONAL TAX OFFICE
8. ulica 40.
76270 Orasje
Tel.: (+387) 713 827

Branch office Orasje for
Municipalities Orasje and
Domaljevac-Samac: (+387) 31
712 555

Branch office Odzak for
Municipality Odzak: (+387) 31 761
768
CUSTOMS BRANCH OFFICE SAMAC
Put Srpskih Dobrovoljaca bb
76230 Samac
Tel.: (+387) 54 611 676, 611 902
CUSTOMS BRANCH OFFICE ORASJE
Autoput bb
76270 Orasje
Tel.: (+387) 31 716 141, 716 145
INDIRECT TAXATION AUTHORITY RC
TUZLA
Mitra Trifunovica Uce 161
75000 Tuzla
Tel.: (+387) 35 368 000
INDIRECT TAXATION AUTHORITY RC
BANJA LUKA
Mladena Stojanovica 7.
78000 Banja Luka
Tel.: (+387) 51 312 009
COMMERCIAL BANKS IN
POSAVINA CANTON:
UNICREDIT BANK JSC MOSTAR
 Business office Orasje
3. ulica 47., 76270 Orasje
Tel.: (+387) 31 716 700, 716
701,
716 709
 Business office Odzak
Titova 17, 76290 Odzak
Tel.: (+387) 31 762 437
HYPOALPE-ADRIA-BANK JSC
MOSTAR
 Business office Orasje
5. ulica 29., 76270 Orasje
Tel.: (+387) 31 719 808
 Business office Domaljevac
Posavskih branitelja 148.,
76233 Domaljevac
Tel.: (+387) 31 719 900
NLB BANK JSC
Branch office Gradacac
 Business office Orasje
3. ulica bb, 76270 Orasje
Tel.: (+387) 31 712 047
 Business office Odzak
Titova bb, 76290 Odzak
Tel.: (+387) 31 762 824
RAIFFEISENBANK JSC
Main branch Tuzla
 Agency „Orasje“
3. ulica 33., 76270 Orasje
Tel.: (+387) 31 712 001
 Agency „Odzak“
Titova bb, 76290 Odzak
Tel.: (+387) 31 763 432
INTESA SANPAOLO BANK BiH
Branch office Tuzla
 Business office Odzak
Titova bb, 76290 Odzak
Tel.: (+387) 31 762 118
SBERBANK BHJSC
Main branch Tuzla
 Business office Orasje
14. ulica 97., 76270 Orasje
Tel.: (+387) 31 719 441
41
POSAVINA CANTON GOVERNMENT
Coordination:
Posavina Canton Government
Prepared by:
Ana Dominkovic, grad.econ.
Blanka Coskovic, grad.econ.
Ruzica Zivkovic, M.A.econ.
Franc Kljajic, grad.econ.
Project associates and consultants:
Municipality Orasje – Department for Economy and Infrastructure
Municipality Odzak – Department for Economy and LED
Municipality Domaljevac-Samac – Department of Finance and Economics
Employment Service of Posavina Canton
Damir Zuparic, grad.econ.
Petar Damjanovic, grad.arch.
Daniel Dominkovic, LL.B.
Translated from Croatian to English by:
Certified Court Interpreter for English Language
Natalija Mijic
Print:
Grafolade & 77x7
ORASJE, February 2014
GUIDE TO INVESTMENTS IN THE AREA OF POSAVINA CANTON