Bosnia and Herzegovina provides several business forms for investors, of which the main forms include:

• Limited Liability Company (LLC / D.O.O)
• Joint Stock Company (Open and Closed)
• Unlimited Joint Liability Company
• Limited Partnership
• Foreign Business (Branch or Representative Office)

Limited Liability Company

LLC is most common legal entity form used by the entrepreneurs for setting up business in Bosnia and Herzegovina. Foreign shareholders are allowed subject to maximum equity shareholding of 49% in the company. Further, an LLC is permitted to re-domicile from Bosnia and Herzegovina, subject to certain conditions.

Federation of Bosnia and Herzegovina (FBiH)

The key aspects of a Limited liability company (LLC / D.O.O) include:

• Can be formed by a minimum of 1 shareholder and 1 director of any nationality and may not be a resident of the country
• Minimum Paid up share capital requirement is BAM 2,000
• Liability of the shareholder is limited to their investment in the company

Republic of Srpska (RS)

The key aspects of a Limited liability company (LLC / D.O.O) include:

• Can be formed by a one or more shareholder of any nationality
• Liability of the shareholder is limited to the amount of contracted but non-inserted investment in the company
• Minimum Paid up share capital requirement is BAM 2,000
• Can have maximum 50 members. In case the number of members increases from 50 (but not more than 100) and if that number is maintained for a period more than a year then the LLC’s legal form changes to Closed joint stock company

Brcko Distrikt (BD)

The key aspects of a Limited liability company (LLC / D.O.O) include:

• Can be formed by a one or more shareholder of any nationality
• Liability of the shareholder is limited to the amount of contracted but non-inserted investment in the company
• Minimum Paid up share capital requirement is BAM 2,000
• Can have maximum 50 members. In case the number of members increases from 50 then the LLC is required to take special permissions from the government of BD

Joint Stock Company

A joint stock company can be an open joint stock company and closed joint stock company.

FBiH

The key aspects of an Open Joint Stock Company (D.D) include:

• Can be formed by a minimum of 1 shareholder (person or legal entity) of any nationality and may not be a resident of the country
• Shares can be offered to the public
• Minimum capital requirement is BAM 50,000
• Liability of the shareholder is limited to their investment in the company

The key aspects of a Closed Joint Stock Company (D.D) include:

• Can be formed by a minimum of 1 shareholder (person or legal entity) of any nationality and may not be a resident of the country
• Not permitted to offer shares to the public
• Minimum capital requirement is BAM 50,000
• Liability of the shareholder is limited to their investment in the company

RS

The key aspects of an Open Joint Stock Company (D.D) include:

• Can be formed by a minimum of 1 or more shareholder (person or legal entity)
• Shares can be offered to the public
• Minimum capital requirement is BAM 50,000
• Shareholders can be more than 100 and the number is to be maintained for more than a year
• Liability of the shareholder is limited to their investment in the company
• Mandatory to have board of directors

The key aspects of a Closed Joint Stock Company (D.D) include:

• Can be formed by a minimum of 1 shareholder (person or legal entity) and maximum of 100 shareholders
• Not permitted to offer shares to the public
• Minimum capital requirement is BAM 20,000
• Minimum 1 director is required
• Liability of the shareholder is limited to their investment in the company

BD

The key aspects of a Joint Stock Company (D.D) include:

• Can be formed by a 1 or more shareholder (natural person or legal entity)
• Can issue ordinary and preferred shares
• Minimum capital requirement is BAM 15,000
• Liability of the shareholder is limited to their investment in the company

Unlimited Joint Liability Company

FBiH / RS / BD

The key aspects of an Unlimited Joint Liability Company include:

• Minimum 2 (natural) persons or legal entities are required (domestic or foreign)
• No minimum capital requirement
• Liability of the shareholders is unlimited and includes their personal assets

Limited Partnership

FBiH / RS / BD

The key aspects of a Limited Partnership include:

• Can be formed by a minimum 2 partners (natural person or legal entities)
• Liability of atleast 1 partner is limited to their investment in the firm and it cannot participate in the management decisions
• Liability of atleast 1 partner being unlimited to the extent of its personal assets
• No minimum capital requirement

Foreign Business

Foreign company may conduct commercial activities in FBiH / RS through a Subsidiary or a Branch or a representative office. A branch in FBiH / RS must have 1 resident individual to act as the representative of the company in the country. The rulebook for setting up a branch office in FBiH has come in force from 22 July 2017 onwards.

As per BD regulations, setting up branch of a foreign entity is not permissible.

A foreign company may also set up representative offices in Bosnia and Herzegovina by registering them with the ‘Foreign Representatives Office’ which is regulated by the Ministry of Foreign Trade and Economic Relations. However, it is not considered as a legal entity and is not permitted to conduct any commercial activities in the country. A representative office may only engage in market research and promotional activities on behalf of their foreign head office.

Further information on the general investment, tax and regulatory regime about the country is available at the following external references:

• “Doing Business” report from World Bank - click here
• Reports and publications from OECD – click here
• Reports and publications from IMF - click here
• Invest in Bosnia and Herzegovina – click here
• Taxation overview – click here