Corporate Law at Bosnia and Herzegovina
Corporate Law in Bosnia and Herzegovina
1. Legal Framework:
Bosnia and Herzegovina (BiH) has a complex legal system due to its political structure composed of two entities: the Federation of Bosnia and Herzegovina (FBiH) and the Republika Srpska (RS), each with its own corporate laws.
Additionally, the Brčko District has its own regulations.
The main laws governing corporate entities include:
Law on Companies in the Federation of BiH (2003)
Law on Companies in Republika Srpska (2004)
Various entity-specific laws regulate company formation, operation, and dissolution.
2. Types of Business Entities:
| Entity Type | Description |
|---|---|
| Limited Liability Company (d.o.o.) | Most common company form; limited liability; flexible structure. |
| Joint Stock Company (a.d.) | Suitable for larger businesses; capital divided into shares; can be publicly traded. |
| Partnerships | Includes general and limited partnerships, mainly for small businesses or professional firms. |
| Sole Proprietorships | Individual ownership with unlimited liability. |
3. Incorporation and Registration:
Companies are registered at the Entity-level Commercial Courts or Registries:
Federation of BiH: Cantonal courts or municipal registries.
Republika Srpska: District commercial courts.
Brčko District: District court registry.
Incorporation requires submission of Articles of Association, identification documents, and payment of registration fees.
Electronic registration is increasingly available but still varies.
4. Capital Requirements:
Limited Liability Company (d.o.o.): Minimum capital is generally 2,000 BAM (~1,000 EUR).
Joint Stock Company (a.d.): Minimum capital is 50,000 BAM (~25,000 EUR).
Capital must be paid up according to entity-specific laws.
5. Corporate Governance:
Limited Liability Company (d.o.o.):
Managed by one or more directors.
Shareholders’ assembly is the highest decision-making body.
Joint Stock Company (a.d.):
Managed by a board of directors.
Supervisory board may be required.
Shareholders’ assembly holds ultimate authority.
6. Reporting and Compliance:
Companies must prepare annual financial statements and file them with the relevant authorities.
Audit requirements depend on size and type of company.
Companies must keep statutory books and records.
7. Foreign Investment:
Foreigners can own 100% of a company.
No special restrictions on foreign ownership in general.
Registration procedures are similar to those for domestic investors.
8. Dissolution and Liquidation:
Voluntary or involuntary dissolution procedures are provided by law.
Liquidation involves settling debts, selling assets, and distributing proceeds to shareholders.
Summary
Corporate law in Bosnia and Herzegovina is governed at the entity level, with d.o.o. (LLC) and a.d. (Joint Stock Company) being the main corporate forms. The system allows for full foreign ownership and provides a relatively flexible framework, though the complex political structure means navigating multiple jurisdictions.
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