World Business Year (WBY) talks to Gordan Milinić the Director of the Foreign Investment Promotion Agency of Bosnia and Herzegovina (FIPA) Sarajevo on Investment opportunities in country ,incentives for investment .
Which areas of the economy do you see significant opportunities for investment?
Promoting opportunities and potentials of Bosnia and Herzegovina (BiH) as a location for investing, we point out the first its favourable geographical location, availability of natural resources and beauties, a long tradition of industrial production, a large number of available industrial zones, attractive locations and manufacturing facilities, favourable legislation for foreign investors, currency pegged to the euro, the undersigned regional and bilateral trade agreements, and the prospect of joining the European Union.
Bosnia and Herzegovina provides a wide variety of investment opportunities in different sectors. It is a favourable destination for all export-oriented production programs, considering the very favourable geo-economic position of our country, easy and fast access to large markets, contracts of the duty free trade or preferential status with almost all the major countries which allows duty-free export of all goods produces in BiH around the world. At the same time we have a very large offer of cheap production and office space, acceptable business costs, availability of labour at affordable prices, along with the existing incentives related to foreign investment and exports.
Bosnia and Herzegovina has a great potential in the field of energy, both renewable (water, wind, solar, biomass) and thermal energy based on coal reserves and this area could really attract investments worth up to 10 billion EUR in the coming period.
There is a significant industry of auto parts in the country and there is a large number of companies that manufacture various components for the automotive industry, such as braking systems, couplings, motors, spark plugs, etc., and they most of their products to the EU market.
The agricultural sector of BiH offers huge opportunities for potential investors, based on the following major advantages: plenty of agriculture land - about 50% of agricultural land is uncultivated, favourable climatic conditions, availability of skilled and cheap labour and a long tradition in agriculture.
The large natural resources and beauty of the country are slightly used, so that the field of development of tourism activity is at beginning of development. The most promising branches of the BiH tourism are: winter and mountain tourism, ecotourism, spa tourism, cultural and religious tourism and partly marine tourism.
Among the attractive sectors for foreign investors, we would point out also the metal sector in Bosnia and Herzegovina, which has a long history, great potential, has a natural competitive advantage mainly because of existing resources of raw materials, labour, and similar.
The wood sector is also important. The most famous natural resource of Bosnia and Herzegovina is a tree. 53% of the country is covered by forests used for wood processing and furniture production.
Finally, we invite you to visit the FIPA Agency and to discover investment opportunities in Bosnia and Herzegovina! FIPA will help you to find suitable investment projects in Bosnia and Herzegovina and to realize it as soon as possible.
What incentives do you offer for foreign investor in your area?
According to the Law on the Policy of Foreign Direct Investments of B&H, many incentives are offered to foreign investors, such as: National treatment of foreign investors, i.e., foreign investors have the same rights and obligations as residents of B&H; Foreign investors are entitled to open accounts in any commercial bank in domestic and/or any freely convertible currency on the territory of B&H; Foreign investors are entitled to freely employ foreign nationals, subject to the labour and immigration laws in B&H; Foreign investors are protected against nationalization, expropriation, requisition or measures having similar effects;
Equipment being imported as part of share capital is exempt from paying customs duties (with the exception of passenger cars, slot and gambling machines); The rights and benefits of foreign investors granted and obligations imposed by the Law (mentioned above) cannot be cancelled or modified by subsequent laws and regulations.
Foreign investors may own real estate in B&H. Foreign investors enjoy the same property rights in respect to real estate as B&H legal entities.
Foreign investors are entitled to transfer abroad, freely and without delay, in convertible currency, proceeds resulting from their investment in B&H.
Free trade zones in B&H are part of the customs territory of B&H and have status of legal entity. According to the Law on Free Trade Zones of B&H, free trade zone founders may be one or more domestic and foreign legal entities or natural persons and establishment must be economically justified.
The users of free zone do not pay VAT and import customs. Investment in the free zone, transfer of profit and transfer of investment are free of charge. Incentives related to the taxes, customs, employment exist also.
Foreign investors can insure their investment at the European Union Investment Guarantee Trust Fund for Bosnia and Herzegovina, administered by the Multilateral Investment Guarantee Agency (MIGA, member of the World Bank Group). Also, insurance is possible through insurance (international and domestic) companies existing in B&H.
Iran's sanction has been lifted , What plans do you have for expansion of economic cooperation between Iran and Bosnia and Herzegovina?
I had a meeting with the Ambassador of the Islamic Republic of Iran to Bosnia and Herzegovina HE Seyed Hossein Rayabi dedicated to the possibility for economic cooperation between the two countries.
The Ambassador Rayabi said on this occasion that after a long period of sanctions opportunities for economic cooperation with Bosnia and Herzegovina (BiH) are opening, particularly with the private sector, and that Iranian companies are interested in investing in energy, agriculture, mining, metal and tourism sector and auto industry.
He also stressed the fact that there are great possibilities for cooperation in the field of tourism.
Considering the expressed interest in investing in BiH, FIPA is in permanent contact with the Ambassador in order to provide all necessary information to all potential investors in Bosnia and Herzegovina.
We hope in the near future to have opportunity to visit the Islamic Republic of Iran within a state business delegation in order to speak about possibilities for strengthening our cooperation.
What is your outlook for 2016?
Specifically, for 2016, the Agency has set itself a responsible and ambitious plan of activities on establishing a large number of contacts with potential foreign investors, foreign companies and business associations, foreign embassies and economic missions in Bosnia and Herzegovina, BiH Diplomatic and Consular Network, BiH Diaspora, etc. From the beginning of 2016 until today, we held more than 100 meetings with different actors of economic developments abroad and in BiH. We had a large number of meeting with Chinese investors, Japanese, Germans and Italians who are interested in the energy sector, wood industry and food production, with Austrians who want to invest in the leather industry, investors from Saudi Arabia who are interested in tourism, wood industry, agriculture, investors from the UAE and Qatar, which have expressed interest in tourism, Pakistani in the textile industry, Brazilians, Russians and British in agriculture and horticulture, Turks, Greeks and Slovenians are interested in energy, wood and food industries, etc.
Some of the foreign investors that we met in the recent four months have already started investing. For example a company from Dubai is investing in tourism sector, a company from Serbia is investing in agriculture, several Chinese companies are investing in the road infrastructure and the energy sector, Austrian in the shoes industry, a Turkish company is investing in solar, wind energy and tourism, a German company will invest in metal sector, etc.
In October we will have a big business delegation of investors from Japan which will visit Bosnia and Herzegovina in order to make familiarized with possibilities for investing in the country.
Our objective is to reach the target amount of FDI in 2016 defined by the Direction for Economic Planning of Bosnia and Herzegovina.
We are open for all kind of cooperation, so we invite all interested potential investors to contact Foreign Investment Promotion Agency of BiH (FIPA) to meet with us and to speak about possibilities for cooperation.
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