Options for registering companies in Bosnia and Herzegovina
Bosnia and Herzegovina (BiH) is a decentralised state comprising the Federation of Bosnia and Herzegovina (FBiH), the Republika Srpska (RS) and the Brčko District. The jurisdiction offers a strategic geographical position for trade with the European Union and operates under a Stabilisation and Association Agreement (SAA) that provides preferential access to many EU markets.
Business operations are regulated at the entity level by the Law on Business Companies. Foreign investment is protected by the Law on the Policy of Foreign Direct Investment, which ensures that international firms receive national treatment and the right to freely transfer profits and capital abroad.
Bosnia and Herzegovina offers international investors the following legal structures for establishing a local presence:
Limited liability company (Društvo sa ograničenom odgovornošću - D.O.O.)
- A D.O.O. is a limited liability operating company in which shareholders' liability is restricted to the amount of their capital contribution.
- This structure is used for establishing a fully operational and revenue-generating business presence with legal separation from the parent or shareholders.
- The statutory minimum share capital is BAM 1,000 (approximately €500). In the Federation of Bosnia and Herzegovina, this amount must be fully paid prior to registration, while the Republika Srpska permits lower symbolic minimums.
- A D.O.O. is subject to a flat corporate income tax rate of 10%. Entity-level tax legislation provides investment-linked corporate income tax relief for qualifying production investments under defined incentive regimes. The company must appoint at least one shareholder and one director, with no nationality restrictions and maintain a locally registered office address.
- This structure involves full incorporation, ongoing compliance and substance obligations and is not designed for short-term or purely exploratory market presence.
Branch office (Ogranak/Poslovna jedinica)
- A branch operates as an extension of a foreign parent company and does not have separate legal personality, with the parent retaining full responsibility for all branch liabilities.
- This structure is used where a foreign company requires a registered local presence to perform specific business activities under direct parent-company control.
- No statutory minimum share capital is required to register a branch in Bosnia and Herzegovina.
- Branches are subject to the standard corporate income tax rate of 10% on profits generated in Bosnia and Herzegovina and must appoint a local legal representative and maintain a registered office.
- As liabilities attach directly to the foreign parent company, this structure does not provide liability isolation or ring-fencing of risk.
Representative office (Predstavništvo)
- A representative office has no legal personality and is restricted to conducting non-commercial activities on behalf of a foreign entity.
- This structure is used for market research, promotion, liaison and preparatory activities prior to formal market entry and must be replaced by a company or branch once business activities commence.
- No minimum share capital is required to establish a representative office in Bosnia and Herzegovina.
- A representative office must be registered with the Ministry of Foreign Trade and Economic Relations.
Free zone company (Slobodna zona)
- A free zone company is an operating entity, most often incorporated as a d.o.o., that conducts business activities within an officially designated free economic zone.
- This structure supports export-oriented manufacturing, processing and logistics activities governed by the free-zone regime, with designated zones positioned along major transport corridors to enable international logistics.
- The company must satisfy the statutory minimum share capital requirements of its legal form, which for a d.o.o. is BAM 1,000 in the Federation of Bosnia and Herzegovina, with lower minimums permitted in the Republika Srpska.
- Free zone operations suspend VAT and customs duties on goods, equipment and raw materials imported into and used within the zone. Corporate income tax is applied at the standard entity-level rate of 10%, with investment-linked relief provided under statutory production investment incentives.
- This structure is contingent on compliance with free-zone approval conditions, including export-ratio and operational requirements. Applications must be supported by a feasibility study demonstrating that at least 50% of the value of manufactured goods moved out of the free zone will be exported and the preparation time for this study falls outside standard setup timelines.
To help you choose the right structure, we have created an ‘at a glance’ summary table for the common company types that outlines key differences in formation processes, requirements and timelines. It serves as a valuable resource for foreign companies looking to set up or expand a business in Bosnia and Herzegovina.
Comparison of the common types of companies in Bosnia and Herzegovina
Information verified against Foreign Investment Promotion Agency of Bosnia and Herzegovina (FIPA)
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