Restrictions on foreign direct investments in B&H

Restrictions on foreign direct investments in B&H

According to the Law on the Policy of Foreign Direct Investment in Bosnia and Herzegovina, foreign equity ownership of business entity engaged in the production and sale of arms, ammunition, explosives for the military use, military equipment and media shall not exceed 49% of the equity in that business entity.

In case of investing in the above-mentioned sectors, foreign investor must obtain prior approval from the competent body of the respective Entity. The Entity Government may decide, if it deems justified, that the share of foreign entity for certain enterprises engaged in the production and sale of arms, ammunition, explosives for military use, military equipment is not subject to the above restriction.

Restrictions applicable to domestic investment on account of public policy (l’order public), public health and protection of the environment are equally applied to foreign investment.

Testimonials & Success Stories
 

Global Investment Promotion Best Practices 2012 of the World Bank has cited one example of support that FIPA provides to foreign investors who are running business in Bosnia and Herzegovina in order to contribute to increase the flow of foreign capital in the country.

The article said:  

„The Foreign Investment Promotion Agency (FIPA) of Bosnia and Herzegovina was an early convert to the idea of providing facilitation services to agribusiness investors as a way to maximize the positive impact of agriculture on the economy.

In 2007, for example, FIPA assisted a Dutch food processing company establish a US$1.6 million production facility to process unused milk ingredients into value-added products in Sarajevo to sell to markets in Eastern Europe and the Middle East.

As part of its aftercare program, FIPA assisted the company with its expansion plans. Among other things, the agency helped facilitate veterinary permissions, navigate various bureaucratic hurdles and played an important role in securing funding for the company’s expansion. It also helped develop a network of local suppliers and customers. As a result of these efforts, the Dutch investor developed stronger links with the Bosnian economy, thus increasing the positive spillover effects on the local economy.

Currently a new investment to establish a drying facility for milk powder is under way. This will further expand the processing facilities of unused milk ingredients. This additional planned investment is worth approximately US$2.8 million, thus nearly trebling the company’s original investment in the country“.

 

Restrictions on foreign direct investments in B&H

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