Guest Post - How to set up a company in Bosnia

D has finally negotiated the labyrinthine red tape surrounding setting up a company in Bosnia and is now officially registered, with a bank account and an employee. He started the process in August. Along the way he's learnt a few lessons. Things like the employer needs to pay 60-70% in taxes to the government on top of an employees salary - that makes employing someone a whole lot more expensive. Things like it takes 3 people to check an office 20m sq. Anyway, if anyone is thinking of setting up a company in Bosnia they would do well to read the following post - written by the man himself.


Here’s the process I went through to setup a business in Tuzla (in the Federation). For most of the steps I was following advice given by either the business centre where I was renting office space, the notary, or the accountant.

Step 1.
Get an accountant. I didn’t bother for a couple of months and it caused all sorts of issues. Ideally get a recommendation from someone, I ended up using the accountants that also worked for the business centre. For a small company 1-5 employees with a few transactions a month the fees seem to be around 250KM a month.

Step 2.
You will need to visit a Notary to prepare all your documents. I paid around 900KM for all my documents but I don’t know if that was a good price. It normally takes only a couple of days for the documents to be prepared. If you want the Bosnian company to be owned by another company you will need notarized documentation that show that you have authorization to act on the parent company’s behalf.

Note: Get used to visiting the notary. Almost all documents that you submit for applications, from opening personal bank accounts to work registration, will require notarized copies of documents such as your passport. Why they can’t take their own copy of the passport I don’t know, it’s very frustrating, time consuming and costly.

Step 3.
You will need to deposit 2,000KM into a bank account for the company’s initial capital.

Step 4.
You will need to pay around 1,000KM in various state and federal taxes. The notary should advise you on what needs to be paid.

Step 5.
You will need to get approval from Sarajevo to start your company. The notary will provide you with the documents to send.

Step 6.
It normally takes 1-2 weeks for the company to be approved. Unless you employ an agent to act on your behalf you will need to pick up the documents from Sarajevo in person.

Step 7.
You then need to get approval from the local Tuzla court which takes another week. In my case they wanted to remove one of the permitted activities for the company which required me going to the notary to get an official document removing the listed activity.

Step 8.
You need to get a company stamp. Whenever you sign a company document you will also use your stamp. The stamp is very important and if you lose it you need to notify the authorities.

Step 9.
You need to register the office lease with the tax department, they will need notarized copies of the office lease and will stamp the back of your lease agreement.

Step 10.
You next need a statistics number (company ID number), which again involves providing notarised copies of the office leases (with the tax department stamp) and other notarized documents used for registering the company. This took about a week.

Step 11.
You can then open your company bank account. Again this will require notarised copies of the various documents showing the company registration and your identification.

Step 12.
You then need to arrange for the municipality to come around and check your offices are fit for the business purpose. From the date of application to the first time they were available to visit was around 3 weeks. (In my situation they sent 3 people to check that an office of 20 square meters in size was suitable for writing software.) It’s then another couple of weeks before the documentation arrives.

Step 13.
You are now allowed to employ someone. But you cannot register them for social security or health care until the director of the company is registered. This is something the accountant can help you out with.

I started the process in mid-August and finished around mid-Jan. It could have probably been done a little quicker if I had really pushed but not much.

Other things to be aware of:

- As a foreign person working for the company you need to pay yourself at least the average wage, which is currently 800KM. The employer social security tax is then another 60-70% on top of that.
- Once the company has been registered (Step 7) you will need to be paying yourself and state taxes.
- Your accountant will need to file a tax return for the company bi-annually (Jan-June and July-Dec).

The next step is to get temporary residence status (issued for one year) for that you need notarized copies of:

- Passport
- White card (visitor permit issued by police)
- University degree translated by a court interpreter.
- Company registration documents
- Contract for lease of office
- Company ID document
- Permit for technical use of offices
- 2 x 100KM fees paid to Canton and Biro

Once you have permission to stay you need to leave the country and come back in then register with the police (you may need to have a police report from home).