TUZLA CANTON

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THE CHAMBER OF ECONOMY OF TUZLA CANTON

TUZLA CANTON

Tuzla Canton

Tuzla Canton is located in the north-eastern part of Bosnia and Herzegovina,

with Tuzla as administrative center.

Basic information about Tuzla Canton Population 477.278

Area 2.649 km²

GDP per Capita 5.253 KM – 2.686 Eur

Foreign direct investment (FDI) 4.014.473 KM – 2.052.567 Eur

Number of companies (2013) 3.429

Number of crafts (2013) 10.723

Employment (2013) 80.727

Unemployment (2013) 98.956

Average monthly net salary 738 KM – 377 Eur

Export (2013) 1.045.846.000 KM

Import (2013) 1.247.897.000 KM

Why Tuzla Canton

Natural Resource Abundance

Favorable Geo-strategic Position

Region with long industrial tradition

Skilled, available and young workforce

Well developed transportation network

Well developed entrepreneurial infrastructure

Natural resources

Tuzla Canton has a variety of resources on which has developed a wide range of

industrial production.

Coal and rock salt are the two most important mineral resources in the region.

The salt-bearing is the only of its kind in Bosnia and Herzegovina, and by the

coal reserves this space is the largest energy sector of Bosnia and Herzegovina.

Agricultural land covers 49% of the territory of the Tuzla Canton, over one third of the total agricultural area of the Federation of Bosnia and

Herzegovina.

Canton also has significant hydropower. The most important water resource is the accumulation Modrac in Lukavac, with a volume of 100 million m³ of water and the area of 17 km². The most important waterways are rivers Spreca, Tinja and Drinjaca.

Main economic sectors

Energy The region has a large capacity to produce electricity.

TPP Tuzla –the biggest energy capacity in Bosnia and

Herzegovina

Installed capacity - 715 MW

Average annual generation of

electricity – 3100 GWh

Annual coal consumption -

about 3.3 million tons of coal

Future projects in energy sector Blok 7 TPP Tuzla Replacement cogeneration lignite

unit Installed capacity - 450 MW + 270

MW of thermal energy Annual production - 2756 GWh Investments in the construction of

Unit 7 - 1499.2 million KM

TPP Banovići The planned installed capacity -

300/350 MW Annual production - 2047, 5 GWh. Investments – 1142.6 million KM Construction is planned for 2015 -

2019.

Mining

Geological reserves of black coal in the Tuzla basin are estimated at 316 million tons, and of lignite to about 2.66 billion tons (24% of the reserves of black and about 60% of the reserves of lignite

in B&H) Annual coal production – 4.745.000 t 7500 employees Major companies RMU Banovići JP EPBiH ZD Rudnici Kreka Tuzla JP EPBiH ZD RMU Đurđevik

In the area of centuries of salt exploitation, estimated of industrial salt are 4.5 million tons.

Substantial reserves of other minerals: quartz sand (geological reserves of 5.8 million and exploitational 4.3 million tons), stone aggregates (technical construction stone at the location of Srebrenik 25 million tones, magnesite, limestone, marl and clay).

Major companies Rudnici Soli Tuzla Ingram Srebrenik Tuzla kvarc Terakop Tuzla Rudnik krečnjaka Vijenac Lukavac Rudnik nemetala Kladanj Jata Srebrenik Jablan Srebrenik Kamenolom Stupari – Tuzlaputevi doo

Metal and electrical industry Manufacture of metal structures, process equipment, transport systems, repulsive-

tensile devices, all kinds of cranes, construction equipment, metal doors and windows, facade elements, agricultural machinery and motor parts and lighting.

Alfe-Mi Ltd Živinice Helios Banovići Deling Tuzla Elektroremont Banovići Unis Tok Kalesija Elcom Tuzla Rudar doo Tuzla MI Fering Gračanica Europrost Gračanica LivElir Gračanica Cimos – TMD Ai Bosna Niless Lukavac Tvornica transportnih uređaja

Tuzla (TTU) Livnica čelika Tuzla Elir Nikola Tesla

Chemical and non-metals industry

Chemical industry in Tuzla Canton has a long tradition. Besides the production which is based

on salt, there are soda and coke production.

More recently, pharmaceutical and cosmetic industry are developing.

Major companies

Global Ispat Coke Industry Lukavac Sisecam Soda Lukavac Solana Tuzla Cydonia Gračanica Zada Pharmaceutical Dita Tuzla Hempro Gradačac Limpio Tuzla Beat BH Živinice

Construction and construction materials industry

Construction and construction materials industry are qualified to implement significant contracts in residential construction, manufacturing and service facilities, civil and hydraulic engineering.

Xella BH – Ytong Tuzla Fabrika cementa Lukavac Vatrostalac – inženjering Širbegović Gračanica Tehnograd company Tuzla Luciana Lukavac Giprom Tuzla GPP Banovići Tehnograd Tuzla Cestotehnik Tuzla Gromex Srebrenik

Textile, Leather and Footwear industry

production of all types of men's, women's and children's clothing, bedding, work and protective clothing, lingerie, tablecloths and other confectionery products has several significant industrial capacities in Gradacac, Gracanica, Tuzla, Srebrenik, Doboj Istok, Kladanj, Zivinice, Kalesija and Lukavac.

IMK Kula Gradačac Werkkol Kladanj Olimp Gračanica Kanetex Gračanica New Export Kladanj Rentex-com Tuzla Kombax Lukavac Euro Galant Fortuna Gračanica Ligamont Lukavac Aida Tuzla

Agriculture and the food industry Tuzla Canton has 133,770 hectares of agricultural

land - 93% of arable land, rest the pastures, ponds and reeds. The land is underutilized, with low effects in primary

agricultural production and own production does not satisfy the population's needs in food.

The food industry: milling and baking industry,

meat processing, milk processing, beer, soft drinks and mineral water, cakes and confectionery product

Pivara Tuzla Menprom Tuzla Fana Srebrenik Corn Flips Srebrenik AgroLife Gradačac Pilkom Gradačac OPG Veselčić Vegamix Živinice Kobens Lukavac Bony Tuzla Inmer Gradačac Plant Tuzla ZZ Gračanka Noćko Živinice Vegafruit Farma Spreča

Plastics industry PVC + ALU products (doors, fences,

construction carpentry) Plastic Packaging Products (garbage

bags, packaging, foils) Products for construction, heating,

plumbing and electrical installations ...

Alpamm Tuzla Variplast Gračanica Herceg Srebrenik Plamingo Gračanica RPC Superfos – Helioplast

Gračanica Deplast doo Tuzla Buscherhoff - Plastikal d.o.o. Poly doo Tuzla Pullcom BH Gradačac Aluplastik Živinice Profine Živinice

Forestry and Wood processing facilities Forest land covers 139,000 hectares.

Available for the annual timber cut is 215,000 m³, of which the 66% hardwood and 34% softwood.

In the wood processing industry is channeled 115,000 m³, and the rest is used as fuelwood, roof supports in mines, etc.

Wood processing business have been developed in the field of production of kitchen, school and office furniture, interior design, bedroom furniture, carpentry, paper packaging, room sets, production of briquettes, panel furniture, primary processing of wood.

H-M-M Gradačac Jadrina Gračanica Malagić Živinice Konjuh Živinice Izazov Kalesija Elegance Tuzla Isowood Gračanica Grin Gračanica CPA Kalesija Iverex komerc Živinice Benf company Živinice FEN-BH Lukavac Prima Sofa Kalesija Extra doo Tuzla Solid Wood Gradačac

Trade During the last few years, the largest number of

established businesses is in the area of trade.

Now comes to the process of consolidation, opening a capacities with a complex supply, but also with specialized offerings, improving the quality of supply and service quality, and process of transparency and competition in the market is benefit for consumers.

International trade companies are coming to the

Canton, but also some domestic companies becoming stronger and follow trends in trade.

Bingo Tuzla Omega Živinice Piemonte Tuzla AKM Commerce Tuzla Drampek Tuzla (Dramar)

Tourism

- Ethno Tourism - Water tourism - Religious tourism - Fair tourism - Sports tourism

Tuzla Canton Tourist Board

Tourist attractions: Husein kapetan Gradaščević Tower Gradačac Gradina Tower Srebrenik Archaeological Park - Neolithic pile settlement

in Tuzla Etno avlija Mačkovac Bosanska avlija Mala Lohinja Gračanica Tombstones (stećci) in Banovićima, Kladnju,

Živinicama, Kalesiji, Tuzli, Teočaku i Sapni Stone Spheres in Teočak Tourist train Ćiro Thermal spas Ilidža Gradačac Panonica lakes Tuzla Modrac lake Lukavac Rajsko lake Živinice Lakes Hazna i Vidara Gradačac Bistarac lake Lukavac Sniježnica lake Teočak Djevojačka pećina (cave) Kladanj Muška voda Kladanj Konjuh mountain

Accommodation: Hotel Tuzla Hotel Tehnograd Motel Royal Motel Rudar Tuzla Pansion Miris dunja Tuzla Golden Star hotel Tuzla Hotel Lukavac Hotel Senad od Bosne Lukavac Hotel Zlača Banovići Motel Sax Gračanica Motel Polo Junior Kalesija Hotel Bosna Kladanj Motel Orion Srebrenik Motel Gradina Srebrenik Hotel Banja Ilidža Gradačac

Financial Services

NLB banka dd Tuzla Raiffeisen bank BiH Sparkasse bank BiH UniCredit bank BiH Sberbank BiH Hypo-Alpe-Adria Banka Intesa Sanpaolo banka Moja banka Nova banka Razvojna banka Federacije

BiH

MKD Mikrofin MKF Mi-Bospo MKF Eki MKF Partner

Sarajevo osiguranje Euroherc osiguranje Bosna Sunce osiguranje VGT osiguranje

Transportation network Well developed local and regional road network

Road infrastructure - 1994 km Close to future transnational Vc corridor linking Central Europe and the Adriatic Sea

Railway infrastructure - 187 km Tuzla – Doboj Živinice – Zvornik Brčko - Banovići

Distance to international airports with non-stop access to major European destinations: International Airport Tuzla (16 km) Sarajevo International Airport (122 km) Airport Nikola Tesla Belgrade (186 km) International Airport Zagreb (340 km)

Cross Border Orašje (B&H -Croatia) – 82 km Cross Border Rača (B&H – Serbia) – 90 km Port of Ploče – 303 km

High concetration of transportation companies.

Future projects in transportation Regional CARGO Centar International Airport Tuzla (MAT) Activities:

Construction of Cargo Centre Building Air Park Extending airport runway Building a business and logistics center

with warehouses Strengthening tourist agency of MAT

Project Cost: 64 million KM

Highway Orašje-Tuzla-Žepče Highway Orašje-Tuzla – 61,02 km Highway Tuzla – Žepče (connection

to corridor Vc) – 52,13 km Project cost:

Highway Orašje – Tuzla 416 milion KM

Highway Tuzla - Žepče n/a

Transporters and Freight Forwarders

Activ Trans Tuzla Heroks Tuzla Klan prevoz Gračanica Kuna Tuzla Transkop Tuzla Transport Gračanica Tuzlaprevoz Tuzla Tuzlatransport Tuzla Top šped Gradačac Tomić prevoz Tuzla Ripčetrans Srebrenik

Freight Forwarders : Lamišped Tuzla Novošped Tuzla Interšped Sarajevo Eurošped Tuzla D&S Tuzla

29

Fairs in Tuzla canton

Gradačački sajam – Sajam šljive (agriculture) Grapos – expo Gračanica (general) Lukavački sajam turizma (tourism) Sajam Energa Tuzla (energy) Dani jagodičastog voća Čelić (agriculture)

Human potentials

Population Tuzla Canton: 498.911 (13% of B&H population)

70% of Tuzla canton population is age 15-64 Labor force: cca 200.000

Unemployed population: cca 100.000

qualification structure: University degree workers 6% High school degree workers 27% Skilled workers (craftsmen) 36% Unskilled workers 31%

Education: University of Tuzla

Academy of Performing Arts Faculty of Special Education and

Rehabilitation Faculty of Economics Faculty of Electrical Engineering Faculty of Physical Education and

Sport Faculty of Pharmacy Faculty of Philosophy Faculty of Mechanical Engineering Faculty of Medicine Faculty of Law Faculty of Science and Mathematics Faculty of Mining, Geology and Civil

Engineering Faculty of Technology

•American University Tuzla

•International business and informational Academy Tuzla

•Center for Adult Education Gračanica

•The Welding Institute Tuzla

•High schools of all profiles

Starting a Business The Company Law of the Federation of B&H (Official Gazette of FBiH No. 23/99,

45/00, 2/02, 29/03, 68/05, 91/07, 84/08, 7/09, 63/10 and 75/13) regulate the establishment, operation and termination of businesses in Federation of B&H.

Type of Company Number of founders Minimum initial capital

Unlimited Joint Liability Company (DNO)

two or more partners, domestic or foreign, natural persons only

None

Limited Liability Company (DOO)

one or more domestic/foreign natural and/or legal entities

2.000 KM (min.100 KM per founder)

Limited Partnership (KD) two or more domestic/foreign natural and/or legal entities

None

Joint Stock Company (DD)

one or more domestic/foreign natural or legal shareholders

4.000.000 KM – open (minimum 40 shareholders) 50.000 KM – closed

Steps for establishing a business 1.STEP - Establishment Contract (by notary) 2.STEP - Payment of initial capital 3.STEP - Registration at the competent court (municipality/district commercial court) 4.STEP - Making a company stamp 5.STEP - Opening a bank account in a commercial bank 6.STEP - Registration of the company and staff at the Tax Administration 7.STEP - The statement of the company founder about fulfilemnt of all requirements

for starting activity (submit to the competent inspection department) No. Steps Cost

1 Establishment contract/decision (notary) BAM 300

2 Payment of basic capital at a bank BAM 2000

3 Registration of the company at the competent court BAM 405 (registration fee) + BAM 150 (publishing fee for an advertisement in the Official Gazette of Federation of Bosnia and Ferzegovina)

4 Manufacturing the stamp BAM 20 – 50

5 Opening a bank account No charge

6 Registration at the tax administration No charge

7 Municipality notification BAM 15 (administrative fee)

8 Lawer costs BAM 600

Investment locations The total area of business zones in Tuzla Canton is 518.39 hectares and in

these business areas operate a total of 313 businesses.

Business zones in Tuzla Canton City Name Status Surface (ha) Number of businesses

Tuzla Razvojno-poduzetnička zona

Tuzla

Zone in the phase of establishment

16 -

Čelić Privredni kompleks - poslovna zona

„Brnjik“

The existing business zones

29 3

Doboj Istok Poslovna zona „Luke“ i Poslovna zona

„Starača“

Zone in the phase of establishment

20 + 32 -

Gračanica Poslovna zona Gračanica

The existing business zones

234 187

Gradačac Industrijska zona 1 i 2 The existing business zones

42,7 35

Kalesija Industrijska zona Kalesija

The existing business zones

12 11

Poslovna zona Kalesija Gornja

The existing business zones

16 12

Kladanj Poslovna zona „Ravni Stanovi“

Zone in the phase of establishment

24,4 -

Business zones in Tuzla Canton

City Name Status Surface (ha) Number of businesses

Lukavac Industrijska zona Lukavac

The existing business zones

14,4 1

Sapna Industrijsko-poslovna zona 1 (IP 1)

Zone in the phase of establishment

2 -

Srebrenik „Špionica I“ Općina Srebrenik

The existing business zones

30 10

Teočak Poslovna zona „Janja“ Zone in the phase of establishment

0,5 -

Živinice Poslovna zona Maline The existing business zones

5,5 26

Poslovna zona Ciljuge 2 Zone in the phase of establishment

9,4 0 PS 38 parcels

Poslovna zona Kasarna Ljubače

The existing business zones

18,85 4

Poslovna zona Novi grad

The existing business zones

5,6 22

Poslovna zona Aerodrom Ciljuge

The existing business zones

6,04 2

Business incubators and technology parks

RPC Tuzla 74 SMEs incubated in the period 2004-2014 physical infrastructure and advisory services for SMEs, networking,

education and promotional activities BIT Center Tuzla – Business innovation and technology place for ICT business to grow 42 SMEs incubated since opening in 2005. physical infrastructure and advisory services for SMEs, networking,

education and other services according to SMEs needs MTTC d.o.o. Gračanica - Center for Advanced Tehnologies Technology park Virtual tools design and virtual engineering

Tax system

Categories Tax rate

Value Added Tax (PDV)* (lowest in the region) 17%

Corporate Income Tax* (lowest in the region) 10%

Personal Income Tax 10%

Property tax depends on the type

Social security contributions paid by the employer and employee 68%

Excise tax depends on the tariff

10%

16% 19% 19% 19% 19% 20% 20% 23%

B&H

Romania Hungary Poland Ukraine Czech Croatia Russia

Slovakia

Corporate Income Tax

10%

15%

Do 40% 32% Do

20% 19% 17%

16%

Do 50%

Personal Income Tax

B&H

Czech Romania Ukraine Slovakia

Poland Croatia Slovenia

Serbia

VAT

17%

18%

20%

21%

23%

24% 25% 27% 20%

B&H Ukraine Czech Slovakia Poland Romania Croatia Hungary

Macedonia

Tax benefits Law Corporate Income Tax taxpayer, who in the year for which the corporate income tax is being

determined, has achieved 30% of their total revenue by export to be exempted from the tax payment for that year.

The taxpayer who in the period of five consequent years invests into

production in the value of minimum 20 million BAM, on the territory of the Federation of Bosnia and Herzegovina, is being exempted from the payment of corporate income tax for the period of five years beginning from the first investment year, in which minimum four million BAM must be invested. If the taxpayer, in the time period of five years, does not achieve the prescribed census

for investment, he loses the right of tax exemption, and the unpaid corporate income tax is determined in accordance with the provisions of the Law on Corporate Income Tax augmented for penalty interest payable for untimely paid public revenues.

The taxpayer who employs more than 50% of disabled persons and persons

with special needs longer than one year is being exempted from the payment of corporate income tax for the year in which more than 50% disabled persons and persons with special needs were employed.

Incentives for foreign investors Law on the Policy of Foreign Direct Investments of Bosnia and Herzegovina

(Official Gazette of B&H, 17/98, 13/03 and 48/10) ensures: National treatment of foreign investors, i.e, foreign investors have the same

rights and obligations as residents of B&H. Foreign investors are entitled to open accounts in any commercial bank in

domestic and/or any freely convertible currency on the territory of B&H. Foreign investors are entitled to freely employ foreign nationals, subject to

the labor and immigration laws in B&H. Foreign investors are protected against nationalization, expropriation,

requisition or measures having similar effects; such measures may take place only in the public interest in accordance with the applicable laws and regulations and against the payment of an appropriate compensation, i.e. compensation that is adequate, effective and prompt.

Foreign investors are entitled to transfer abroad, freely and without delay, in convertible currency, proceeds resulting from their investment in B&H

Foreign investors may own real estate in B&H. Foreign investors enjoy the same property rights in respect to real estate as B&H legal entities.

The most important foreign investments in Tuzla canton

Global Ispat koksna industrija Lukavac Sisecam Soda Lukavac Fabrika cementa Lukavac Xella Tuzla CIMOS - TMD Ai Gradačac German Gourmet Dairy Zott Gradačac Lactalis BH Traktionssysteme Bosnia doo Tuzla NLB banka dd Tuzla

Tuzla canton

Government of Tuzla canton Ministry of Agriculture, Forestry and Water

Management Ministry of Industry, Energy and Mining Ministry of Physical Planning and

environmental protection Ministry of Trade, Tourism and Transport Ministry of Development and Entrepreneurship Ministry of Finance Ministry of Labour, Social Affairs and return

Banovići municipality Čelić municipality Doboj – Istok municipality Gračanica municipality Gradačac municipality Kalesija municipality Kladanj municipality Lukavac municipality Sapna municipality Srebrenik municipality Teočak municipality Tuzla city Živinice municipality

•Chamber of Economy of Tuzla Canton •Chamber of Crafts of Tuzla Canton •Tuzla Canton Tourist Board •Northeast regional development association NERDA •Association of Employers Tuzla Canton

With current and new partners, the economy of Tuzla Canton wants intensive business cooperation with mutual

benefits, especially through direct investments in joint projects, industrial cooperation, privatization, opening new markets, and knowledge and technology transfer.

Trg slobode b.b., 75000 Tuzla

Tel. +387 35 258-260 // Fax: +387 35 258-271

komora@kpktz.ba

www.kpktz.ba

THE CHAMBER OF ECONOMY OF TUZLA CANTON