Law on the policy of direct foreign investments in Bosnia and Herzegovina
(“Official Gazette of Bosnia and Herzegovina”, No.: 17/98 and 13/03) - EXCERPT

Basic politics and principles of participation of foreign investors in the economy of Bosnia and Herzegovina are regulated by the Law on the Policy of Direct Foreign Investments.

Basic Provisions of this Law explain the concepts of “Foreign investor”, “Direct foreign investor”, “Foreign control”, “Resident of Bosnia and Herzegovina”, “The roles”, “Free convertible currency” and “Public informing”.

Foreign investor is entitled to invest, to reinvest the profit from such investments into any and every sector of the economy of Bosnia and Herzegovina in the same form and under the same conditions which are defined for residents of Bosnia and Herzegovina and in accordance with valid laws and regulations of BiH and Entities, unless otherwise stipulated by this Law.
Regardless the policy of direct foreign investment, foreign share in capital of an enterprise dealing with production and sale of weapon, ammunition, explosive intended for military purposes, military equipment and public informing, cannot exceed 49% of the capital in that enterprise.
If it is invested into mentioned sectors liable to restrictions, it is necessary first to obtain the approval by relevant body of the Entity.
If there is no response to the request submitted, within 30 or 90 days from the date the request is submitted for the approval, direct foreign investment will be considered approved.
Approval of direct foreign investment right of which is invoked of in this Article, is permanent.
Conditions which foreign investor has to meet in order to submit the request, will be regulated by by-laws.
Foreign investors in BiH are to register their investment simultaneously at relevant body of the State.

Bosnia and Herzegovina and the Entities may publish general decisions on foreign investments taking into consideration the legitimate interests of enterprises and securing their business secrets are not disclosed.
Minister Council of BiH will establish appropriate institution for the purpose of stimulating and facilitating direct foreign investments. Entities may establish such institutions as well. Foreign investors have the same rights and liabilities as residents of BiH do.
Fiscal taxation of foreign investors and direct foreign investments will be performed in the accordance with Tax Law of the Entities.
Entrepreneurship tax regimes will not make discrimination between foreign and domestic investors.

Foreign investments will be exempted from customs duty and custom liabilities, excluding custom registration, unless otherwise stipulated by the Provisions of the Law on Custom Policy of BiH. For the purpose of its investments, foreign investors are entitled to open bank account at any commercial bank at the territory of BiH in either domestic or free convertible currency as well as to transfer abroad the profit generated from their investment in BiH, in free convertible currency,

Foreign investors have the same rights over real estate as residents of BiH do with restrictions on reciprocity for the citizens from the territory of the Republics which are successors of SFRY, as well as they have the same right to employ staff from abroad unless otherwise stipulated by other laws of BiH.
Rights and franchises provided to foreign investors as well as liabilities resulting from this Law cannot be abolished or annulled by entering into force of laws and by-laws passed additionally. In the case laws passed additionally are more favorable for foreign investors, foreign investors are entitled to select the regime which will be competent for their investments.

BiH and Entities are obliged to pass by-laws related to enforcement of this Law, within 60 days from the date this Law is enforced.

- This Law was published in "Official Gazette of Bosnia and Herzegovina", No. 17/98, on September 14, 1998.
- Modifications and additions of the Law on the policy of direct foreign investments in Bosnia and Herzegovina was published in “Official Gazette of Bosnia and Herzegovina“, No. 13/03.