Bosnia and Herzegovina (BA)
Bosnia and Herzegovina (BiH) is a Balkan gem combining Ottoman heritage, Habsburg architecture, Adriatic mountain scenery, and one of the lowest costs of living in Europe.
Capital: Sarajevo
Region: Europe
Language: Bosnian
Currency: BAM (KM)
Cost of living: Very affordable (index 27)
Emergency: 112
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Business Setup
Start a business or go freelance in Bosnia and Herzegovina.
🧑💻 Freelancer / Self-Employed Guide
Steps to register:
- 1 1. Determine your activity type: Obrt (craft/trade business for commercial activities) vs. Slobodne profesije (free professions — lawyers, doctors, architects) vs. ugovor o djelu (service contract for occasional work without a registered entity).
- 2 2. Check which entity your activity is based in (FBiH or RS) — registration procedures differ between the two entities.
- 3 3. FBiH Obrt registration: submit application to the cantonal administrative service (Služba za privredu) or municipality. Required: ID/passport, proof of address, professional certificate if regulated. Fee: KM 50–150.
- 4 4. RS self-employed registration: register with the RS Business Registration Agency (APIF) at apif.net.ba. Fee: approximately KM 50.
- 5 5. Register with the entity Tax Authority (Porezna uprava) for income tax and social contributions within 5 days of business registration.
- 6 6. If annual turnover will exceed KM 50,000, register for VAT (PDV) with UIO (uio.gov.ba) within 10 days of exceeding the threshold.
- 7 7. Open a business bank account (poslovni račun) — required for all formal business transactions.
- 8 8. Set up monthly social contribution payments. As self-employed in FBiH, you pay both employee and employer shares — approximately KM 250–350/month minimum regardless of income.
- 9 9. Keep proper books (poslovne knjige). Consider hiring a certified accountant (ovlašteni računovođa) for monthly filings.
- 10 10. File annual income tax return (Prijava poreza na dohodak) by 31 March each year for the previous calendar year.
Tax registration
Register with Porezna uprava FBiH (pufbih.gov.ba) or Porezna uprava RS (poreskaupravars.org) within 5 days of starting business activity. You will receive a tax registration certificate. For VAT, register separately with UIO (uio.gov.ba) when annual turnover reaches KM 50,000.
VAT threshold
KM 50,000 annual turnover. Below this, VAT registration is voluntary. Above it, registration is mandatory within 10 days. BiH applies a flat 17% VAT rate (PDV) — no reduced rates.
Invoicing
Invoices (faktura/račun) must include: your business name and address, JIB (tax identification number), client name and JIB, invoice number, date, description of services, amount in KM, and — if VAT-registered — your PDV number and the 17% VAT amount shown separately. Maintain invoice records for at least 5 years.
Social security
Self-employed persons in FBiH pay the full combined contribution rate on a minimum declared income base: pension insurance (PIO) 23% (17% employee + 6% employer share), health insurance (ZO) 16.5% (12.5% + 4%), unemployment 2% (1.5% + 0.5%) = 41.5% total. Minimum monthly contribution base approximately KM 600–700 (set by the Federal Pension and Disability Insurance Institute). Contributions are paid monthly by the 10th of the following month to Porezna uprava FBiH.
💡 The ugovor o djelu (service contract) model allows clients to engage you for occasional projects without requiring a registered business — the client withholds taxes. Suitable for one-off work. Many BiH IT professionals work as remote freelancers for EU clients via Obrt — income is taxed at a flat 10% with low social contribution bases, making it tax-efficient. RS DOO formation is faster via APIF online with only KM 1 minimum capital. FBiH DOO requires KM 2,000 minimum capital deposited at a bank before registration.
🏢 Business Structures
Obrt / Samostalna djelatnost · Obrt (Craft/Trade Business) or Samostalna djelatnost (Independent Activity)
Sole Trader / Self-Employed
None
Min. capital
1–3 weeks
Setup time
Liability: Unlimited personal liability
Setup cost: KM 50–200 in municipal fees plus notarial costs
Best for: Freelancers, craftspeople, consultants, tutors, small service businesses. The simplest structure for a one-person business. Separate rules apply in FBiH vs RS.
DOO · Društvo s ograničenom odgovornošću
Limited Liability Company (LLC)
KM 2,000 minimum (FBiH); KM 1 minimum (RS)
Min. capital
2–6 weeks
Setup time
Liability: Limited to company capital
Setup cost: KM 500–1,500 (notary + court registration fees)
Best for: Small to medium businesses, IT companies, professional services. The most common company structure for foreign investors and local businesses. Can be 100% foreign-owned.
DD · Dioničko društvo
Joint Stock Company (Public Limited Company)
KM 50,000 minimum
Min. capital
4–10 weeks
Setup time
Liability: Limited to company assets
Setup cost: KM 3,000–8,000+
Best for: Large companies, regulated industries (banking, insurance), companies seeking public investment.
KD · Komanditno Društvo
Limited Partnership
None required
Min. capital
2–4 weeks
Setup time
Liability: Komplementari (general partners): unlimited personal liability; Komanditori (limited partners): liability capped at capital contribution
Setup cost: KM 300–800 registration fees; partnership deed essential (KM 500–1,500 with a lawyer)
Best for: Mixed-liability structures where some partners manage the business (unlimited liability) and others invest (limited liability). Rare in practice — DOO is almost always preferred for its cleaner liability cap and lower administrative requirements.
Podružnica / Predstavništvo · Podružnica (Branch) / Predstavništvo (Representative Office)
Branch Office / Representative Office
None
Min. capital
2–4 weeks
Setup time
Liability: Parent company is fully liable for all branch obligations; representative office cannot generate revenue
Setup cost: KM 300–1,000
Best for: Foreign companies entering the BiH market for market research, promotion or limited operations. Representative offices cannot conduct commercial activity; a full branch (Podružnica) can undertake commercial transactions.
Business Setup
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