Panelist: Mr.Mirsad Jašarspahić , President

CHAMBER OF ECONOMY OF THE FEDERATION OF

Frankfurt am Main, 20. Mart, 2018 CHAMBER OF ECONOMY OF THE FEDERATION OF BIH

The Chamber of economy as a general chamber, was established in accordance with the law on Chambers of commerce in the Federation of BIH. All chambers in the Federation of BIH are legal entities and have a wide mandate in representing and promoting the economy of their region.

Chamber network: - CHAMBER OF ECONOMY OF THE FEDERATION OF BOSNIA AND HERZEGOVINA - CHAMBER OF ECONOMY OF THE FEDERATION OF BIH – OFFICE IN - CHAMBER OF COMMERCE OF CANTON - CHAMBER OF COMMERCE OF CANTON - CHAMBER OF COMMERCE OF UNA-SANA CANTON - CHAMBER OF COMMERCE OF - CANTON - CHAMBER OF COMMERCE OF BOSNIAN PODRINJE CANTON - CHAMBER OF COMMERCE OF CANTON - CHAMBER OF COMMERCE OF - CHAMBER OF COMMERCE OF HERCEG-BOSNIA CANTON - CHAMBER OF COMMERCE OF - CHAMBER OF COMMERCE OF HERZEGOVINA-NERETVA CANTON MOSTAR CHAMBER OF ECONOMY ORGANIZATIONAL STRUCTURE ACTIVITIES OF THE CHAMBER OF ECONOMY:

- COOPERATING WITH INSTITUTIONS OF GOVERNMENT AND PUBLIC ADMINISTRATION AT THE FEDERATION OF BIH LEVEL; - FOSTERING ECONOMIC ACTIVITY AND ENTREPRENEURSHIP; - PROMOTING THE ECONOMY OF THE FEDERATION OF BIH; - PROVIDING EXPERT ADVISORY SERVICES TO MEMBERS AND CANTONAL CHAMBERS IN DEVELOPING PROJECTS; - CARRYING OUT PUBLIC AUTHORIZATIONS DELEGATED TO THE CHAMBER BY LAW; - SERVING AS A COURT OF HONOR AND PERMANENT COURT OF ARBITRATION; - OTHER ACTIVITIES RELATED TO THE FUNCTIONS OF THE CHAMBER. REASONS TO INVEST IN BOSNIA AND HERZEGOVINA

Favorable tax Strategic and customs location system

Competitively Stable priced and financial educated sector work force

Favorable Low trade and other operating agreements costs

Natural Favorable legal resources, environment for attractive foreign investors investment locations and industrial zones ADVANTAGES OF INVESTING IN BIH:

- STRATEGIC LOCATION – EUROPEAN MARKET, MIDDLE EASTERN AND ASIAN MARKETS, - STABLE MACROECONOMIC ENVIRONMENT AND INVESTMENT DESTINATION, - MOST STABLE CURRENCY IN SOUTH EAST EUROPE, BOUND TO THE EURO, - B CREDIT RATING WITH STABLE OUTLOOK ACCORDING TO STANDARD&POOR’S, - LOWEST INFLATION RATE IN THE REGION, - VAT AND CORPORATE TAX AMONG THE LOWEST IN THE REGION AND EUROPE, - NATIONAL TREATMENT OF FOREIGN INVESTORS, - SPECIALIZED AND COMPETENT WORK FORCE, - AGREEMENTS ON AVOIDANCE OF DOUBLE TAXATION, PROMOTION AND PROTECTION OF INVESTMENTS WITH MANY COUNTRIES ...

TO ENCOURAGE INVESTMENTS, FOREIGN INVESTORS ARE GIVEN THE FOLLOWING BENEFITS:

- NATIONAL TREATMENT OF FOREIGN INVESTORS; - FOREIGN INVESTORS HAVE THE RIGHT TO OPEN ACCOUNTS IN DOMESTIC OR OTHER FREELY CONVERTIBLE CURRENCIES; - FOREIGN INVESTORS CAN FREELY EMPLOY OTHER FOREIGN CITIZENS FROM ABROAD; - FOREIGN INVESTORS ARE PROTECTED FROM NATIONALIZATION, EXPROPRIATION, REQUISTION OR OTHER SIMILAR MEASURES; - FOREIGN INVESTORS HAVE THE SAME RIGHTS OF OWNERSHIP OVER IMMOVABLE PROPERTY AS BOSNIAN LEGAL ENTITIES; - FOREIGN INVESTORS HAVE THE RIGHT TO CONDUCT TRANSFERS ABROAD; - FOREIGN INVESTMENTS ARE EXEMPT FROM CUSTOMS DUTIES, WITH THE EXCEPTION OF THOSE RELATED TO PASSENGER VEHICLES, SLOT MACHINES AND GAMES OF CHANCE; - FOREIGN INVESTORS WHO INVEST AT LEAST 20 MILLION KM IN MANUFACTURE FOR FIVE CONSECUTIVE YEARS IN THE FEDERATION OF BIH ARE EXEMPT FROM CORPORATE TAX FOR FIVE YEARS, STARTING FROM THE FIRST YEAR OF INVESTMENT, DURING WHICH AT LEAST FOUR MILLION KM SHOULD BE INVESTED

Strategic location , Close to All Major European Capitals

• A strategic location to European, Middle Eastern and Asian markets

• Pan-European Corridor: Corridor Vc going from Hungary through Croatia and Bosnia and Herzegovina to the Port Ploce (Croatia)

• Well developed road and railway network

4 international airports , Sarajevo, Mostar, Tuzla with multiple daily flight to mayor Europan cities

2 river ports and 2 international ports Sarajevo – Belgrade 206 km/ 128 miles Istanbul 930 km/ 578 miles London 1620 km/ 1006 miles Munich 708 km/440 miles Paris 1349 km/838 miles Rome 516 km/320 miles Vienna 511 km/317 miles Zurich 859 km/533 miles Zagreb 288 km/179 miles Liberal Foreign Trade Regime with a Major Number of Countries

Central European Free Trade Agreement (CEFTA) - 30 million

Free Trade Agreement with Turkey - 70 million

Free Trade Agreement with EFTA (Iceland, Liechtenstein, Norway, Switzerland) - 13 million

Preferential Trade Agreement with EU, 28 countries - 500 million

Preferential export regimes with USA, New Zealand, Japan, Russia, Kazakhstan,Belarus, Canada, Australia and Iran . FAVORABLE TAX ENVIRONMENT

VAT and CIT in Bosnia and Herzegovina are among the lowest in the region and Europe

BiH 17 10 BiH Serbia 20 Bulgaria 20 16 Romania Slovakia 20 19 Poland Czech Rep. 20 Poland 23 19 Czech Rep. Romania 24 20 Croatia Croatia 25 Hungary 27 20 Turkey VAT (%) CIT(%) Tax benefits FAVORABLE TAX ENVIRONMENT

Corporate Tax Rates 2015 Source: https://www2.deloitte.com/

40 35 35 33 33.33

30 27.5 27 28 25 25 25 25 22 21 20 19 19 20 20 20 20 17 18 15 15 15 16 15 15 10 10

5

0 Skilled Labour Force • Highly talented, creative and skilled labor • Price competitive (in comparison to other EU countries) •A “can do” business attitude that reduces the risk of investment, within collaborative and innovative environment • Fluency in foreign languages - mostly English and German

Average net monthly wages, EUR

5000 4450 4500 4089 4000

3.7 M

3500 3000

2253 People

2180

2158

2155

2124 2091

2500 2033

2000

1500 1002

765

742

705

704 643

1000 584

482 423 500 2.6 M 0 1.1 M Working Labour age force people Operating costs – significantly lower than in EU Electricity prices for medium size industries - €/kWh

Source:http://ec.europa.eu/

0.16

0.1435

0.14

0.12 0.1081

0.0943

0.1 0.0898

0.0869

0.0833

0.0818

0.0809

0.079

0.0778

0.0766

0.0761

0.0755

0.0731

0.0721

0.0714 0.0707

0.08 0.0682

0.0625

0.0617

0.0612 0.0609

0.06 0.0438 0.04 0.02 0

Prices of real estate always depend on a number of factors such as: location, condition and equipment, age, current market situation. Prices of buying/leasing office space are ranging as follows: Leasing office space (without ground floor): 5 EUR/m2 – 20 EUR/m2 per month Buying office space: Central position 1,500 EUR/m2 – 3,000 EUR/m2 ; Peripheral position 500 EUR/m2 – 2,000 EUR/m2 Price of agricultural land: 2 EUR/m2 – 25 EUR/m2 ; Price of construction land: 25 EUR/m2 – 700 EUR/m2 Prices of leasing/buying workshop (production building) are: Leasing production building: 2 EUR/m2 – 10 EUR/m2 per month Buying production building: 50 EUR/m2 – 1,000 EUR/m2 Source: Real Estate Agencies

What FB&H can offer?

 Metal Proccesing Sector;  Wood Sector;  Energy sector;  Agricultural, Food and Beverage Sector;  Tourism Sector.

What FB&H can offer?

Metal Proccesing Sector

*Development and construction; *Grinding, forging, deformation; *Parts of metal, thermal treatment, surface protection; *Parts of plastic, leather and textile; *Electronic parts, tools, dies.

One of the best organized industry thanks to the implementation of the necessary standards.

What FB&H can offer?

Wood Sector

According to official data, forests and forest land cover an area of about 2,708,800 ha, which makes up 53% of the country's surface.

What we do? -wood processing and production of products, -furniture manufacturing.

Of the total exports of BiH, 43% is export of furniture.

Many successful companies are winning the awards for their products all over the world. What FB&H can offer? Energy sector

Bosnia and Herzegovina is endeavored with various indigenous energy recourses, as follows:

-The main resource of primary energy in BiH is coal (brown coal and lignite); -Only about 35% of huge hydro potential of over 6000 MW is in use; -According to the extensive researches, there is significant wind energy potential; -Raw material resources for the bio-mass energy are extremely favorable, including approximately 1.5 million m3 of forest / wood industry residues (all wood waste, sawdust, chips, and chipped technical wood), etc. -Potential for exploitation of geo-thermal and solar energy are available too; What FB&H can offer? Agricultural, Food and Beverage Sector

What FB&H can offer?

Tourism Sector

Bosnia and Herzegovina stunningly beautiful country with an abundance of natural landscapes, cultures, traditions and hospitality people.

In the heart of Southeast Europe, in BiH there are great potential for tourism development: rivers, mountains, historical and cultural monuments, geographic position.

CHAMBER OF ECONOMY OF THE FEDERATION OF BOSNIA AND HERZEGOVINA Address: Branislava Djurdjeva 10 71000 Sarajevo Tel/Fax: +387 33 217 782 / +387 33 217 783 www.kfbih.com

e-mail: [email protected]

THANK YOU FOR YOUR ATTENTION