A paradise for foreign investors

For companies looking to benefit from a rapidly growing economy on the European continent, Bosnia and Herzegovina presents a golden opportunity. As the center of South Eastern Europe, the Western Balkan country is quickly becoming a preferred choice for many foreign companies as an address for their operations.

Located between the Danube and the Adriatic Sea, this heart-shaped country represents a bridge between east and west, a crossroads of civilizations, cultures and trade. This geopolitical position has, over the years, made Bosnia and Herzegovina a multicultural, multilingual and diverse jewel with an authentic European cultural identity. The country is renowned for its strong trading history and has long had a diverse population.

A transition economy with enormous potential:

Bosnia and Herzegovina may be experiencing an economy in transition, but it is striving hard to integrate with Europe, showing strong potential to attract foreign direct investment in various sectors.

As a small open economy, Bosnia and Herzegovina offers many opportunities – its proximity to the European market, a well-educated workforce and potential for exporting goods and services. The country has significant export opportunities in many sectors, including wood processing, metal and automotive industries, tourism and information technology. Agriculture is also a sector with great potential, with the intention of moving from small-scale and subsistence farming to an industry that can compete internationally.

The country’s natural wealth, combined with its technical resources, makes it an absolute treasure trove of investment potential, especially given its excellent location, wide range of resources and fertile land with rivers, forests and mountains. Key industries with excellent investment potential include agriculture and food processing, forestry, wood and metal processing, automotive parts and manufacturing, tourism, and pharmaceuticals.

How is the economy?

Bosnia and Herzegovina is home to an active international community, rapidly adopting reforms to improve the business climate as the country seeks membership in the European Union. Simultaneously, the nation is actively seeking membership in the World Trade Organization.

The country is open to foreign investment and offers a liberal trade regime, and its simplified tax structure is one of the most liberal in the region and in Europe.

The full convertibility of the national currency, the convertible mark against the euro, is guaranteed by the arrangement of the monetary council of the Central Bank of Bosnia and Herzegovina, which has important implications for investors and the business community. Moreover, investors and the business community can count on the absence of inflationary shocks due to an overly expansionary monetary policy. In addition, due to the fixed exchange rate, the currency risk is significantly lower.

According to 2019 data, the trade volume between the Balkan nation and the UAE stood at around AED 130 million. The country exports a variety of products to the UAE, ranging from processed wood, length-processed oil, petroleum oils and other oils obtained from bituminous minerals to military arms and ammunition. The country’s companies regularly participate in the International Defense Exhibition and Conference (IDEX) in the United Arab Emirates, providing many business opportunities to improve bilateral relations.

What’s inside for investors?

A significant part of Bosnia and Herzegovina, 51.3%, is made up of agricultural land, which, in addition to the favorable climate, makes it a fruit and vegetable producing country. It is very well positioned with regard to world agricultural production; in terms of growing raspberries, for example, it is ranked 10th in the world, 15th in the world for plums and 35th for strawberries.

More than 63% of Bosnia and Herzegovina is covered by forests, providing a wide range of resources for various industries, from sustainable forestry and the timber industry to construction. Due to the specific potential to supply raw materials and semi-finished products on an annual and sustainable basis, more than 60% of the country’s timber production is exported.

Automotive and other sectors are present

Porche, Mercedes, Volkswagen, MAN, Skoda, Toyota, Mazda, Renault and Peugeot are just a few of the leading automotive brands that have relied on Bosnia and Herzegovina’s professional workforce for decades. By investing in the automotive industry, the country has enabled enterprises to experience dynamic development, reaching international standards and achieving an average export rate of 90% to 30 countries, providing services to many global brands.

Bosnia and Herzegovina’s fast-growing IT companies have an annual income of around 200 million euros and work for the most famous companies in the world, creating some of the most famous software products and solutions for the global IT market. What is particularly attractive is that through strategic investments, this sector can employ an additional 6,000 people and contribute up to €500 million to the national GDP.

Major international companies with offices in Bosnia and Herzegovina include multinationals and market leaders in their respective industries, such as Coca-Cola, Microsoft, Cisco, Oracle, Pfizer, McDonald’s, Marriott, Caterpillar, Johnson & Johnson, FedEx, UPS, Philip Morris, KPMG, PwC and others. Nevertheless, the country offers business opportunities for well-prepared and persistent exporters and investors.

The untapped potential of tourism:

Tourism is one of the fastest growing industries in Bosnia and Herzegovina. The country is recognized as one of the ten countries that record a significant increase in inbound tourism. Its natural resources and ecological diversity, as well as its mountains, rivers and forests, provide a solid base for the development of outdoor tourism and other investment opportunities. Hidden gems are waiting to be discovered like the towns of Mostar, Počitelj or Stolac, or the old town of Sarajevo.

One of Bosnia and Herzegovina’s most exclusive resources is its growing talent pool of highly skilled and multilingual young professionals who are extremely skilled and hardworking, attracting increasing numbers of foreign investors.

Bosnia and Herzegovina is where people turn their dreams and aspirations into tomorrow’s realities – it’s a haven for business prosperity.

-Ends-

About Eleanor Blackburn

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