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World Bank Document 23671 <: *h :? ' November 2001 J SIAED6JMEN PRI ES lNfE OATOF B SNI HER EGOVINA Public Disclosure Authorized INA ANT/ ~* EN4/\ AVB4 /\ TNCIA/ ANTON\/A NT ** T RZNgATN / NT \IAN - 4*N EVANTO Public Disclosure Authorized /.SA E NTON H G N A I \ / \_ *: NtRETVA\ tANTOs/ \ / \ / L / C_l /\\ / \ / \ / 29 K I~E *>tE'\STC+NTzONHx,ERZG/VINA X / \ : I L~~~~~~~~~~~~~~ Public Disclosure Authorized / CzNTOSRvJEV F/I\/E COPY Public Disclosure Authorized CANTONS IN THE FEDERATION OF BOSNIA AND HERZEGOVINA UNA - SANA CANTON No. 1 POSAVINA CANTON No. 2 TUZLA CANTON No. 3 ZENICA - DOBOJ CANTON No. 4 DRINA CANTON No. 5 CENTRAL BOSNIAN CANTON No. 6 NERETVA CANTON No. 7 WEST HERZEGOVINA CANTON No. 8 SARAJEVO CANTON No. 9 HERZEG BOSNIAN CANTON No.10 Authors: Miralem Porobic, lawyer and Senada Havic Design: Tirada, Sarajevo. Chris Miller Free publication November 2001 SEED. Sarajevo. Bosnia and Herzegovina This study was done with an aim to determine the level of the actual costs, which must have each small and medium business company when start their operations in the Federation of Bosnia and Herzegovina. It contains the defined costs for the business registration itself, and for construction of a facility where the registered activity will be performed. The data published in this study were collected through the survey conducted in all municipalities in the Federation of Bosnia and Herzegovina in July 2001. After summarizing all collected data, it was determined that there are few identical forms and approaches to the same category of the costs that a small and medium size business company can have as a precondition for starting its normal work. Due to those reasons, all data, which can be considered as common ones at the level of the Federation or an individual canton, are separated, and the other data are published in that form and shape in which they are applied in each municipality. Some municipalities are in the process of amending the decrees on the fee amount, which will be harmonized at the cantonal level, and therefore it will be possible to use the data for that purpose. COMMON CHARACTERISTICS FOR ALL MUNICIPALITIES IN THE FEDERATION OF B&H 01. MINIMUM LEVEL OF THE EQUITY REQUIRED FOR ESTABLISHING A BUSINESS COMPANY 01. Minimum of the equity Tangible assets In cash - Limited liability company Without any limit 2.000,00 KM (an individual is a founder) - Limited liability company Without any limit 10.000,00 KM (several persons are founders) -Joint stock company Without any limit 50.000,00 KM - Limited Partnership Is defined by a contract on establishing - General Partnership Is defined by a contract on establishing Minimum equity is deposited on a temporary account in a commercial bank, with which the business company will work, and after the completed registration at the competent court, and opening a giro-account, these funds are transferred to the giro -account of the business company, which can dispose those funds for its own needs. The value of the tangible assets that are invested is determined by an expert and extra judiciary procedure conduct- ed in front of a municipal court particularly for this purpose. The company is always responsible for its obligations with its total property. The amount of minimum equity is equal both for local and foreign investors. 02. OBTAINING THE CUSTOMS NUMBER The customs number is a basic precondition for normal foreign trade operations. The request for obtaining the customs number is submitted to a competent customhouse, with a 10 KM fee, and a certified copy of the business registration must be attached to the request as well as a certified copy of the statistic number. The costs of the foreign trade operations are paid separately in the amount of KM 64, 00. Introdaction 5 03. BORDER CROSSINGS The border crossings in the Federation of B&H are divided into the types of operations that can be performed through the crossings. The level of the customs duty is defined by the Custom Tariff that is equal for the whole territory of Bosnia and Herzegovina. Some particular taxes were imposed for some products, which are paid when imported (so- called excise and surcharges). The border crossings for international road traffic - BRCKO - GUNJA - ORAJE -ZUPANJA - BOSANSKI SAMAC - SLAVONSKI SAMAC - BOSANSKI BROD - SLAVONSKI BROD - BOSANSKA GRADISKA - STARA GRADISKA - BOSANSKA KOSTAJNICA - HRVATSKA KOSTAJNICA - VELIKA KLADUSA - MALJEVAC - IZACICi -LICKO PETROVO SELO - BOSANSKO GRAHOVO - STRMICA - KAMENSKO - KAMENSKO - GORICA -VINJANI DONJI - DOLJANI -METKOVICt - NEUM I -KLEK - NEUM 11- ZATON DOLI The border crossings for import, export, transport of all kinds of commodities including also high tariff commodities - BRCKO - GUNJA - ORAJE -2UPANJA - BOSANSKI SAMAC - SLAVONSKI SAMAC - BOSANSKA GRADISKA - STARA GRADISKA - IZACIC -LItKO PETROVO SELO - KAMENSKO - KAMENSKO - DOLJANI - METKOVICi The border crossings where veterinary and phyto-sanitary control will be carried out - GORICA -VINJANI DONJI The border crossings for international railway traffic: - BRCKO - DRENOVCI - BOSANSKI SAMAC -SLAVONSKI SAMAC - DOBRLJIN -VOLINJA - MARTIN BROD - LICKO DUGO POLJE - CAPLJINA - METKOVICt The border crossings for international passenger traffic - BOSANSKA DUBICA -HRVATSKA DUBICA - BOSANSKI NOVI -DVOR - PRISIKA - ARZANO - OSOJE -VINJANI GORNJI - ORAHOVLJE - ORAH - CRVENI GRM - MALI PROLOG - GAVELA POLJE I - GABELA - IVANICA -BRGAT The border crossing for commodity transport including oil and oil derivatives: - CRVENI GRM - MALI PROLOG 6 Introduation 04. TAXES The taxes that the business company has to pay are divided into several categories: 1. Sales tax on goods and services; categorized into the sub-categories according the tariffs; a. Taxes on high tariff goods (excise) b. Special protective taxes for imported good (surcharges) c. Sales tax on products, tariff number 1... 10% d. Sales tax on products, tariff number 1... 10% e. Sales tax on services 10% 2. Payroll tax and contributions a. 5% of the payroll b. 20% of the contributions on gross salary c. 12% of contributions on gross salary born by a worker 3. Income tax at the level of 30% of determined income, with a possibility of exemption in case of reinvesting into production, i.e. other investments, as well as tax exemption for the first three years of operations, i.e. five years in case of foreign investments, which is 100% of decrease for the first year, during the second year 70% and 30% of decrease during the third year, and for the foreign investment it is proportional to the percentage of the investment into the capital assets of the company. 05. FEES FOR TOURIST ASSOCIATION The fee for a tourist association is determined as a single rate of 0,20% on the total revenues in the current year. 06. CONNECTION TO ELECTRICITY NETWORK The price for connection to the electricity network is calculated by engaged (turned on) power i.e. the type of elec- tricity transmission. The consumption of electricity is calculated based on the "peak power" and therefore the attention has to be paid when constant needs are determined for turning on electricity. If there is infrastructure to which a beneficiary is connected, without any needs for additional works, and it means that a facility to be connected is not far more than 50m from the existing network, then the prices are as follows: Above -ground single hase power supply Above -ground three phase ower supply to the facility Up to 2 KW j 750,00 KM Up to 26 KW 9 A 1.700,00 KM 3,5 KW 900,00 KM 11 KW 17 A 2.200,00 KM 7,5 KW 1.500 KM 23 KW 35 A 3.800,00 KM - For the underground and single phase and three - phase supply it is need to pay 50 % - If the facility to be connected is further than 50 meters from the existing infrastructure network, then the prices are increased for the costs of the additional works required for connection on the existing network. -In addition to the mentioned prices, the investor is obliged to pay to the responsible electricity distribution company a)For sending an expert team to issue a connection permit 55,00 KM b)Registry of connection (business premises) 30,00 - 50,00 KM * The above mentioned amounts are mostly harmonized at the level of the Federation of B&-H Introduction 7 07 CONNECTION TO THE PTT NETWORK Types of connection l | Total Usual connection 291,70 KM Costs of materials Costs of materials +291,70 KM ISDN connection Basic 291,65 KM Primary (30 lines) 8.052,40 KM ISDN + new connection ISDN 291,65 KM 291,70 KM 583,35 KM ISDN with ceding the existing line ISDN 291,65 KM Change of the previous 323,65 KM I__________ _ _ _ _ _ number 22,00 KM -A special attention is to be paid on a coefficient for multiplying usual connection when primary connection is installed. -All mentioned prices are valid for the existing infrastructure, and costs of the materials and laying the lines to the new location where the network is set up, depend on a distance, configuration of the terrain, engagement of the labor, and is determined for each concrete case respectively. - Sending the team in order to survey the terrain is free of charge. * Tariffsfor connection on the PTT network in West Herzegovina, as well as in the cantons with Croat Majority, are determined by HPTMostar. 08. CONNECTION TO THE PUBLIC ROAD Road land is deemed to be a strip of 7 meters from the edges of the roadway from the both sides. In order to obtain a permit for connection to the public road, concerning regional roads and highways, it is neces- sary to pay: Administrative fee 250,00 KM Lease of the road land 1,50 KM/M 2 Design for connection to the public road 500,00 - 2.000,00 KM Concerning the issue of a firm sign along the public road, a beneficiary of the right is expected to pay an annual lease of the road land where the poster board with the firm sign is placed.
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