Bosnia and Herzegovina

Bosnia and Herzegovina Overview

Bosnia and Herzegovina offers low operational costs and duty-free access to key markets through CEFTA and preferential trade agreements with the EU and Turkey. The country’s strengths lie in manufacturing, energy (hydropower), agriculture, and mining. While bureaucracy remains a challenge, regional development zones and investment incentives help offset costs, making it attractive for companies seeking affordable production bases.

Corporate tax rates & incentives

  • Corporate Tax Rate: 10%
  • Investment Incentives:
    • Tax Holidays: Up to 5 years of corporate tax exemption for significant investments.
    • Employment Incentives: Tax deductions proportional to the number of new employees.
    • Free Trade Zones: Exemptions from VAT and customs duties within designated zones

Key Industries:

  • Metal Processing & Machinery: Strong production of automotive parts, steel, and aluminum.
  • Energy: Huge potential in hydropower (already one of the biggest in the region).
  • Tourism: Emerging destination — nature, adventure, and cultural tourism are growing.
  • Agriculture: Known for organic food, meat production, and dairy products.
  • Textiles: Affordable production base for fashion and industrial textiles.

Investment Opportunities:

  • Energy projects (hydropower plants and renewable sources).
  • Export-oriented manufacturing in metals and machinery.
  • Tourism development in untapped regions (mountains, rivers, cultural sites).
  • Industrial zones offering tax incentives.

Local Business Culture Tips

  • Trust is Everything: Personal connections and introductions carry weight. Cold outreach may struggle to gain traction — networking is key.
  • Respect the Diversity: The country is divided into two entities with different administrative systems. Be aware of cultural sensitivities and regional differences.
  • Formality First: Start with titles and formal language, especially in the Republika Srpska region. Meetings may feel more relaxed in the Federation of Bosnia and Herzegovina.
  • Patience is a Virtue: Business processes can be slower than in Western Europe — persistence without pressure works best.
  • Coffee Culture: Inviting a potential partner for coffee is a great way to break the ice and move things forward informally.

See Croatia, Montenegro, Serbia