invest in bosnia and herzegovina

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  • 1.Bosnia and Herzegovina welcomes Chinese investmentsSpecially prepared for Shenzhen EnergyAmel Kovaevi, Ambassador

2. Europe : 51,197 : 460 GDP (2011) 3426 6 GDP 3.31%Bosnia and Herzegovina 3. 2011- The year of recovery for BH economy 2011 Bosnia and HerzegovinaGeneral Economic Indicators* in million of Euros 2004 200520062007 2008 20092010 2011**Nominal GDP8200 88009900 111001260012300 1265013200GDP per Capita in Euros2122 228325642898 32893194 32933426Real Growth Rate 6.30%3.90%6% 6.20%5.70%-0.29%0.70% 1.80%Industrial Production Growth Rate 9%10% 11% 10%9.20%-3.30%1.60% 6.10%Average Inflation on Annual Level0.40%3.80% 6.10% 1.50%7.40%-0.40%3.10% 3.80%BH Unemployment Rate43.20%43% 31% 29% 23.40% 24.10%27.10% 27.60%Average Net Wages in Euros258275 300 322385 404408 416Foreign Debt2.0612.218 2.081 2.0252.168 2.6583.195 3.323Foreign Debt / GDP 25.1%25.2% 21.0% 18.2%17.2% 21.6%25.3% 25.2%Current Account Deficit-1443.17 -1499.67-769.65 -1156.18-1797.7-761.57 -761.82 -1073.71CAD/GDP 17.60% 17.04% 7.77%10.41% 14.27% 6.19%6.02% 8.13%Exports 1676.942087.252687.243091.54 3522 2920.25 3761.93 4333.81Export Growth 28.70% 24.10%28.70%15.04% 13.92%-17.08%28.82% 15.20%Imports 5354.506092.926093.077233.588344.63 6330.11 7020.81 8006.46Imports Coverage30.29% 32.15%45.34%42.72% 42.21% 44.80% 52,1% 54.12%FDI 412282 4421329684 180174 240***Foreign Reserves 1779 216027873425 32193176 3301 3118.9* Source: Centra l Ba nk of Bos nia a nd Herzegovi na** Prel imina ry figures*** Prel imina ry figure for firs t three qua rters of 2011 4. 2011- The year of recovery for BH economy2011 Signs of recovery The industrial output in 2011 increased by 6% on annual basis. 2011 6% Exports in 2011 increased by 15.2 % on annual basis. 2011 15.2%Growth of GDP by 1.8% on annual basis. GDP 1.8%Total foreign currency reserves reached EUR 3.118 billion at the end of2011. 2011 31.18 External debt of BH is equivalent to EUR 3.323 billion account for 25.2% ofGDP 33.23 GDP 25.2%Average annual inflation in BH in 2011 is 3.8%. 2011 3.8%The average net wage in BH in December 2011 was CNY 4000. 2011 12 4000 5. Low level of sovereign debt Bosnia and Herzegovinain million of Euros2004 2005200620072008200920102011**Foreign Debt 2.0612.218 2.081 2.025 2.168 2.658 3.1953.323Foreign Debt / GDP25.1%25.2% 21.0% 18.2% 17.2% 21.6% 25.3%25.2%Current Account Deficit -1443.17 -1499.67 -769.65 -1156.18-1797.7 -761.57 -761.82 -1073.71CAD/GDP17.60% 17.04% 7.77% 10.41% 14.27% 6.19% 6.02%8.13% Conservative policy pays off 6. BH economy Open economyBosnia and Herzegovina in million of Euros 20042005200620072008 2009 20102011**Exports1676.94 2087.25 2687.24 3091.543522 2920.25 3761.93 4333.81Export Growth28.70%24.10% 28.70% 15.04%13.92%-17.08% 28.82% 15.20%Imports5354.50 6092.92 6093.07 7233.58 8344.63 6330.11 7020.81 8006.46Imports Coverage 30.29%32.15% 45.34% 42.72%42.21% 44.80%52,1% 54.12% Major trading partners are EU and neighboring countries 7. Why invest in Bosnia and Herzegovina?Geostrategic positionBusiness friendly environmentCompetitive industries Quality of Life 8. Geostrategic positionBosnia and Herzegovina is the heart shaped landthat lies in the heart of southeast Europe. Regional transport and energy corridors Vicinity of and access to lucrative markets 9. South East Europe Bosnia and Herzegovina 10. Business friendly environment Favorable trade and other agreements Favorable legislation Favorable tax and customs system Competitively priced labor force Foreign Investors Support Fund 11. Preferential Trade and Other Agreements Central European Free TradeAgreement (CEFTA) - 30 millFree Trade Agreement with Turkey- 70 millPreferential TradeAgreement with EU, 27countries - 500 mill 27 Preferential export regimeswith USA, Australia, NewZealand, Switzerland, Norway,Russia, Japan, Canada Free Trade Agreements 12. Favorable trade and other agreements AGREEMENTS ON PROMOTION AND PROTECTION AGREEMENTS ON AVOIDANCE OF DOUBLE OF INVESTMENTS TAXATION AUSTRIA BELGIUM AND BELGIUMCROATIA LUXEMBOURG BELARUS CROATIA CZECH REPUBLIC CHINA CZECH REPUBLICCHINA CYPRUS DENMARK DENMARK EGYPT EGYPTFINLAND FRANCEFINLAND FRANCE GERMANY GREECEGERMANY HUNGARYITALY HUNGARY ITALY IRAN MALAYSIA IRANINDIA JORDANKUWAITMOLDOVANORWAY MACEDONIA MALAYSIAPAKISTAN PHILIPPINES MOLDOVA NETHERLANDS POLAND ROMANIA OPEC FUND PAKISTAN SERBIA SLOVAKIA PORTUGALQATAR SLOVENIA SWEDEN ROMANIA SERBIA AND MONTENEGRO TURKEY UNITED KINGDOM SLOVENIASWITZERLAND UNITED ARAB EMIRATES MONTENEGRO SPAIN SWEDEN TURKEYUSA (OPIC) UKRAINE UNITED KINGDOM 13. 14. Favourable Legislation FDI Law National treatment of foreign investors Repatriation of profits Protection against nationalization, expropriation or similarmeasures Right to freely employ foreign nationals, subject to the labourand immigration laws in B&H Rights and benefits for foreign investors may not be abolishedor denied by passing subsequent laws or regulations 15. Favourable Legislation FDI Law Foreign investors may own real and enjoy the sameproperty rights in regards with real estate as locals Foreign capital in equipment is exempt from payingimport fees and customs duties (with the exceptionof passenger cars, slot machines and gamblingmachines). Foreign investors may open accounts in anycommercial bank in domestic and/or in convertiblecurrency 16. Favourable Legislation FDI Law Foreign investors who are worried about the risks involvingrestrictions of transfer, expropriation, war, civil unrest anddenial of justice, may be insured against such risks with theEuropean Union Investment Guarantee Trust Fund for BiH,run by MIGA agency (member of the World Bank Group Multilateral Investment Guarantee Agency). Corporative organization There are no citizenship/nationality limitations for partners orthe members of the management and board of directors 17. Favorable Tax and Customs System Tax system Bosnia and Herzegovina17Serbia18 Czech Republic19Slovakia 19Romania19 Poland 20 Croatia 22 Unique VAT rate of 17% 17% Profit tax is 10% 10% Favorable incentives and tax exemptions Customs system Exemption from payment of customs duties for foreign investorsfor the first five years 5 Customs rates 0-15% 0 15% 18. Competitively Priced Labour Force Technologically-minded (long industrial tradition),innovative spirit Excellent IT & foreign language skills (English,German, South Slavic languages ) IT Cost-effective and regionally competitive labour forcewith estimated monthly gross salaries as follows: low skilled CNY 4,000 4000 skilled CNY 6,500 6500 engineer CNY 11,000 11000 computer engineer CNY 16,000 16000 19. Quality of life 20. Areas of economic cooperation thatshould be explored by Chinese corporatesectorThere is immediate opportunity for Chinese corporatesector to take participation in development of our transportinfrastructure including construction of backbone highwaynetwork.Chinese corporations should be able to use leverage ofits technological superiority as well as domestic source ofsoft funds competing for the projects. 21. Power production is one of the most significant exportoriented sector of Bosnia and Herzegovina, with longtradition and huge potentials and opportunities forfurther development and investment.There are concrete projects prepared by relevantgovernmental bodies to build numerous hydro andthermo power plants as well as wind farms. 22. Chinese reputation in this field is unequivocal and weare very keen to see Chinese corporate playersinterested to participate.Furthermore, there is great potential development ofmini hydro power plants with private sector as well. 23. Sectors to Consider Investing in BHOther economic sectors with comparative advantages in BH opened for Chinese investments are: Wood processing industries Texile & leather industries Agriculture & food processing Machinery & automobile industries Pharmaceutical industry Tourism Education 24. Bosnian Chinese Friendship free industrial Zone A free zone is part of the customs territory of Bosnia and Herzegovina under special conditions in accordance with the Law on Customs Policy of Bosnia and Herzegovina and the Law on Free Zones of B&H. A founder of free zone can be one or more national or foreign legal and natural persons and a user of free zone can be the founder of free zone or any other legal and natural persons. 25. Bosnian Chinese Friendship free industrial Zone Free zone shall be export oriented The users of free zone do not pay VAT and importcustoms. Investment in the free zone, transfer of profit andtransfer of investment are free of charge. Customs and tariffs are not paid on imports into the freezone. The imports of equipment that will be used formanufacturing within the free zone are exempt from payingcustoms duties and fees. 26. Bosnia is offering itself as a one of the strategicgateways for Chinese firms into the lucrativeEuropean Union as well as the Central Europeanmarkets, both of which have a consumer base ofup to 600 million and strong purchasing power. 6 27. That means, in principle, that anything producedin Bosnia by Chinese corporations can be sold inEU,CEFTA, Turkey without being subjected toquotas, tariffs or customs duties. 28. Bosnia and Herzegovina welcomes Chinese investments 29. Amel Kovaevi, ambassadore-mail: amel.kovacevic@mfa.gov.ba

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