Bosnia and Herzegovina: Operating a Business

Setting Up a Company | Working Conditions | Cost of Labor | Social Partners

Setting Up a Company

Legal Business Entities

Types of Companies and Capital (Max/Min)	Number of Partners/Shareholders and Liability
Limited Liability Company Minimum 2,000 BAM	One to thirty. Liability is limited to the amount contributed.
Joint-Stock Company Minimum 10,000 BAM for companies incorporated simoultaneously in Republic of Srpska or minimum 20,000 BAM for companies incorporated successively in Republic of Srpska or minimum 50,000 BAM in Muslim-Croat Federation part of the country.	One to fifty. Liability is limited to the amount contributed.
Unlimited Joint Liability Company No minimum capital.	Two or more. Founders are liable to use all their assets, including personal property.
Limited Partnership No minimum capital.	Minimum two. There must be at least 1 partner with full liability (including private property) and at least 1 partner with limited liability.
Representative Office No minimum capital.	No minimum. A representative office does not have the status of a legal entity - It may only engage in non-profit making activities: market research, promotional and informative activities, representing the company. A representative office is restricted from signing contracts on behalf of the parent company (with the exception of foreign airlines representative offices).

The Competent Organization: In order to establish a business with foreign ownership in Bosnia and Herzegovina several administration registrations are necessary:
1. Registration at the Ministry of Foreign Trade and Economic Relations
2. Registration at the competent (municipality) court
3. Registration at Statistical register and Tax department
4. Registration at the customs and VAT department at the Indirect Taxation Authority
5. Registration of the company and staff at Pension and Disability Insurance Fund, for Muslim-Croat part see Federal fund here (in local language only), for Srbian part fund see here (in local language only)
6. Obtaining permission for beginning of activity at the Inspection Department

Setting Up a Company	Bosnia and Herzegovina	Eastern Europe & Central Asia
Procedures (number)	12.0	6.3
Time (days)	55.0	16.3

Source: Doing Business.

Business Setup Procedures: Consult Doing Business Website, to know about procedures to start a Business in Bosnia and Herzegovina.
Trade Register

Working Conditions

Legal Weekly Duration: Full time working hours are limited to 40 hours per week. The working week lasts 5 days (Monday-Friday).
In case of force major (fire, earthquake, flood) or sudden increase in the volume of work, as well as in other similar cases of emergency need, an employee, at the request of the employer, is obliged to work longer hours than his/her full work hours (overtime work), up to 10 hours weekly. In case there is need for longer overtime working hours, the employee may give his/her consent to another 10 hours per week.
Retirement Age: 65 years (and at least 20 years of contributiing period).

Cost of Labor

Minimum Wage: The minimum wage in Bosnia and Herzegovina depends on the industry and collective working agreements. The average monthly minimum wage in the Muslim-Croat Federation of Bosnia and Herzegovina is 157 EUR and in the Srbian Republic of Srpska the "minimum price of work" used as a base for the salary scale of government employees is 127 EUR.
Average Wage: The average monthly gross earnings in Bosnia and Herzegovina is BAM 937 (EUR 480).
Social contributions: Social Security Contributions Paid By Employers: In Muslim-Croat Federation of Bosnia and Herzegovina there is a total of 11.5% employer contribution on gross wage.

In Brcko District entity there is a total of 7% (pension insurance) employer contribution on gross wage.
In Srbian Republic of Srpska of Bosnia and Herzegovina no such contribution is paid.
Social Security Contributions Paid By Employees: In Muslim-Croat Federation of Bosnia and Herzegovina there is a total of 32% employee contribution on gross wage and 5.5% on net wage.
In Srbian Republic of Srpska of Bosnia and Herzegovina there is a total of 42-57% employee contribution on net wage, depending on the tax contribution (0-15%).
In Brcko District entity there is a total of 29% contribution on gross wage plus 10% on net wage for employees from Muslim-Croat Federation of Bosnia and Herzegovina while for the employees from the Srbian Republic of Srpska of Bosnia and Herzegovina there is a total of 34% contribution on net wage plus 12% on gross wage.

Social Partners

Social Dialogue and Involvement of Social Partners: The law provides for the right to organize and conduct union activities without interference; however, authorities did not impose sanctions against employers who obstructed union organizing and activity. The right to bargain collectively is provided by law in the Srbian Republic of Srpska and in a comprehensive collective bargaining agreement in the Muslim-Croat Federation. However, collective bargaining in both entities involve rather work agreements between the government and workers in the public sector. In the Federation, there were no collective bargaining agreements between private employers and unions. In the Republic of Srpska, the general collective bargaining agreement applied to all workers without exception.
Unions: Autonomous Trade Union of Agriculture, Food, Tobacco, Water industries, Trade, Catering and Tourism Workers of Bosnia and Herzegovina (PPDIVUT)
Confederation of Independent Trade Unions of Bosnia and Herzegovina (SSS BiH)
Confederation of Independent Trade Unions of Republic of Srpska (SSS RS)
Unionization Rate: The great majority of trade unions in Bosnia and Herzegovina is quite small and of limited power due to the fact that country is divided into three parts and due to the ethnic and religious contrasts of the country and because the unions are organised in industry sectors. The unionization rate is much higher in public sector and state owned companies while at private owned companies (especially smaller domectic owned companies) the unionization is frequently not yet developed.
Labor Regulation Bodies: Ministry for Work and Social Policy - in Muslim-Croat Federation of Bosnia and Herzegovina (in local language only)
Ministry for Work and Warriors' Disability Insurance - in Srbian Republic of Srpska (in local language only)

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