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).

Serbia, for at least 30 minutes

It happens to us all in the end. The 90 day tourist visa is up and we had to leave Bosnia and reenter again to reinstate our right to be here. We had all sorts of plans. Pre children we'd have driven to Budapest for a romantic weekend. We could have taken a romantic weekend down in the coastal town Dubrovnik, also stunning. We could have hopped on a bus to Zagreb and, with a bit of luck and endurance to go further, gone skiing in the Slovenian mountains. We could have gone for a party weekend in Belgrade, recently cited as the best nightlife in Europe by the Times (article here).

All options a bit tricky with the kids. Partying is severely restricted when you need to be home for an absolute latest 9pm bedtime. Long car journeys to the coast or eastern European capitals are even less attractive when you need to sing Baa Baa Black Sheep for 3 hours continuously. Skiing might be a bit ambitious when Lukey has only known how to stand for under a year.

So instead we left the dog behind and drove to the nearest border, happening to be with Serbia which is about an hour away. We parked the car (don't have insurance to drive outside of Bosnia at the moment), changed a nappy and walked across a bridge spanning the Drina river, huddled against the biting wind signalling the arrival of winter, snow, hail and ice. Once on the other side we sidled into a cafe, ordered a quick coffee / hot chocolate to warm up and then headed straight back the way we had come from.

Next stop, badgering our landlord to come to the police station with us to complete all the necessary paperwork. The boys love this part, the long corridors in the police station echo and make brilliant running tracks. The police don't love this at all.

Now that D's company is fully operational (crack open the champagne, he has even managed to open a bank account), we can now start the process to apply for temporary residency visas which will negate the need to be making this sort of trip every 3 months.

stamps and visas

D's company continues the long trek to official recognition in BiH. Having been recognised by a Federal Ministry and also been to the Tuzla Cantonal offices (each step involving lawyers, court translators and reams of paper) he now has an official company stamp. Innocuous looking, this stamp is the key to all things useful. For example, the company cannot have a Bosnian bank account without the stamp (and therefore cannot employ anyone and so on and so forth). It is such an important part of being a Bosnian company that if it is lost or stolen he must immediately report it to the Bosnian police.

So one step closer to having a fully functioning Bosnian company brings us one step closer to sorting out our visa situation. We need to apply for temporary residency visas, but cannot do so until D can show that he is employed by a Bosnian company. Until that time we exist on 90 day tourist visas. These are pretty easy to renew, and to be honest we suspect that many people remain on their tourist visas, just popping across the border for a long weekend on the Croatian coast or a partying weekend in Belgrade when it needs to be renewed.

This isn't an option for us for two reasons. Firstly, D is a director of a company and we are not comfortable not complying with the strict letter of the law. Second, those on tourist visas need to register where they are staying with the police. For us this means hauling our landlord down to the police station during the working day which is inconvenient for everybody. The only people who enjoy a trip to the police station are the boys. They rapidly discovered that they could race down the long corridors of the police station at full speed and if they screeched really loudly there was an echo. Yes, I do believe that everyone, including the police, would be happier if we didn't have to go back every 90 days.

you can doo it if you really want to

D is setting up a software development company in Bosnia and has been going through the fairly torturous process of registering a new company in BiH. Fortuitously combining a trip to pick us all up from the airport yesterday, he also managed to pop into the Ministry of Foreign Trade and Economic Relations and pick up his registration papers. Champagne all round - metaphorically speaking only. I'd been in sole charge of 2 fairly fractious toddlers on the plane so a cup of tea and an early night was really all I was going to be able to manage in terms of celebrations.

D's company is a limited company which in Bosnia is denoted by the use of d.o.o. after the company name. I love this - there is something so positive about having doo after the company name. ABC doo has a real can do spirit, take on all obstacles, climb those brick walls and emerge triumphant kind of feel. It'll be needed: Bosnian red tape is legendary.