Transcript SARAJEVO BUSINESS FORUM Executive Summary of the …

SARAJEVO
BUSINESS FORUM 2010
“ Why to Invest in BiH? ”
&
“ Investment Oppurtunities ”
6-7 April 2010 Sarejevo, Bosnia and Herzegovina
AAgriculture
HInfrastructure
Tourism
Energy
Sarejevo Business Forum
Why Sarejevo Business Forum 2010?
Bosnia and Herzegovina becomes increasingly a centre of attraction for the
investors mainly due to the fact that the country triumphantly undertakes
significant policy reform, aiming to establish business enabling environment and
more notably, there exists outstanding investment opportunities for foreign
investors. To respond to increasing demand and help investors to identify potential
projects, Sarejevo Business Forum will be held on 6-7 April 2010 in Sarejevo,
Bosnia and Herzegovina.
The forum intents to bring high level participants, including prime ministers,
ministers and government officials as well as representative of private sector to
discuss the current policy challenges while presenting concrete investment
opportunities, providing investors with essential and first hand information.
For further information, please contact to Bosnian Bank of International, whose
address and contact details are given at the last page.
Country Relevant Information
Key Facts about Bosnia and Herzogovina
Official Name
Bosnia and Herzogovina
Capital City
Sarajevo (Population 400000)
Geographic
Location
South Eastern Europe,borders with Croatia (932 km), Serbia (312 km)
and Montenagro (215 km)
Area
51209 km2
Ethnic Groups
Bosniaks, Serbs, Croats and Others
GDP
11,6 bilion EUR
Currency
Konvertibina Marka
Exchange Rate
1 EUR= KM 1.95 (fixed exchange rate)
The Federation of BiH consists of 10 cantons
1- Una-sana Canton
2- Posavina Canton
3- Tuzla Canton
4- Zenica-Doboj Canton
5- Bosnian-Podrinje Canton
6- Central Bosnia Canton
7- Herzegovina-Neretve Canton
8- West Herzogovina Canton
9-Sarajevo Canton
10- Canton 10
General Information about
Investment Environment in BiH
Bosnia and Herzegovina (BİH) is ideally located at the crossroads between West and East, the
Mediterranean and Continent, and its proximity to the main European business hubs makes it attractable
business destiny. Its position can be perceived as a natural gateway to markets while BiH has an easy
access to the of 60 Millions SEE citizens as defined by the SEE Free Trade Agreement. It has a population
of 4 million and a significant number of skillful labor force available.
Figure 1: Bosnia and Herzegovina, Central and Eastren European
Countries, Real GDP Growth Rates (%)
10,0
9,0
8,0
7,0
6,0
5,0
4,0
3,0
2,0
1,0
0,0
1999
2000
2001
2002
Bosnia and Herzegovina
2003
Euro area
2004
2005
2006
2007
2008
Central and Eastern European Countries
Source: IMF,WEO Database,October 2009;Bosnia and Herzegovina Agency For Statistics
Source : Bosnia and Herzegovina Agency for Statistics; Federation of Bosnia and Herzegovina
Federal Office of Statistics;Republika Srpska Institute of Statistics
Foreign investment Law (1998) of Bosnia & Herzegovina (BiH) grants foreign investors national
treatment with the right to invest, or reinvest profits from such investments, in any sector of the economy
under the same conditions as defined for the residents of BiH.
 In contrast to many other countries in the region, the BiH’s foreign investment legislation provides
overseas investors with the same property rights as those enjoyed by residents.
 According to World Bank World Wide Governance Indicator, Rule of the Law index of the BiH is one of
the highest in its Region: it is ranked -0.35 whereas Albania and Serbia have the scores of -0.6 and -0.46
respectively.
 The Corporate Income Tax legislation of the FBiH enables firms to deduct the amount of tax equal to
the percentage of foreign capital invested in the assets of the company for a period of 5 years, provided
that the foreign capital is greater than 20% of capital invested. The incentive is valid for companies with
100% foreign capital investment.
 In FBiH, companies investing their taxable profits (earnings before tax) in their own production
activities or in buildings are given a tax relief of 100% of the invested value or in the amount of 75% if they
invest in other activities of their company.
 Investment capital is exempted from paying import customs and customs duties (with the exception of
passenger cars, slot and gambling machines).
Agriculture
Availability of proper soil, water and mild climate make the organic farming possible and profitable as
world demand is continuously increasing.
 Even though employment in agricultural sector forms 21 percent, its share in GDP is relatively small, 7.4
percent.
In BiH, Climate is mild and soil productivity is immensely high. It contains 4.8 million hectare land and
agricultural area accounts for 51 % of the total whereas thirty-four percent can be landed. Arable lands are
mostly located in Republic of Serbska.
Wide grassland could be employed for livestock activities as it is largely available.
The existence of the subsidy policies for agricultural production is an impetus for attracting investors.
By differentiating products; associated with the efficient usage of fallowing land, it is highly possible to
raise the agricultural production.
Below are the investment profiles for which there exists
opportunities available (for further information please contact
to Bosna Bank of International)
* Beekeeping and honey packaging plant investment Profile
* Trout pool Fishing plant investment profile
* Greenhouse plant investment profile
* Meat and meat products production plant investment profile
* Poultry Farming (Meat) investment profile
* Fruit juice concentration production plant investment profile
* Potatoes chip plant investment profile
* Frozen Potatoes production plant investment profile
* Dairy product production plant investment profile
* Compound feed production plant investment profile
* Leather processing production plant investment profile
* Densified wood and particle board, oriented strand board
(OSB) production plant investment profile
In sum, Agricultural Sector of the BiH provides investors with
outstanding prospects as high domestic demand and export
opportunities ensure high rate of return. Furthermore, fertile land, high
soil productivity, mild climate conditions together with cheap labour
supply and lower cost, as well as marketing possibilities abroad, make
agricultural sector an attractive investment niche.
Tourism
Owing to a rich history, cultural, natural assets and mild climate as well as intact environment,
tourism could offer exceptional investment opportunities.
Due to its geographical position and close proximity to European tourism markets constitute notable
prospects in tourism sector. To achieve high visibility, however, publicity campaigns and marketing
activities should be better organized to promote the touristic assets abroad.
BiH offers numerous alternatives such as winter tourism, rafting, trekking, extreme sports as well as
thermal springs
The cultural inheritance creates highly conducive environment for the development of tourism sector
in BiH
BiH is at the crossroad of three abrahamic religions (Judaism, Christianity and Islam), hence their
signs is everywhere across the country, leaving open niches for religious tourism
As the country is full of tourism endowment, transportation infrastructure needs to be improved to
enhance the competiveness of the sector. Moreover, accommodation facilities should be multiplied in
order to meet increasing demand.
Total number of tourist visiting BiH rises from 380,819 in 2003 to 610,817 in 2005, indicating high
potential for the sector growth.
Below are the investment profiles for which there
exists opportunities available (for further
information please contact to Bosna Bank of
International)
Tourism Sector Investment Profile
Thermal tourism facilities investment profile
 Three stars hotel investment profile
Energy & Infrastructure
Energy industry accounts for significant share of the GDP and it has a highly comparative advantage in
the region. Moreover, It is among the one of the top ten sectors, having exported substantially in the
recent years.
The country can be classified as energy rich in terms of coal and hydraulic energy endowment
whereas it has exported and natural gas. The coal reserve is estimated to be over 10 billion ton and the
current consumption rate accounts for negligible share of the total reserve, 8 million per year.
The share of the hydraulic sources in energy production is relatively high (35 percent), compared to
world average, (16 percent).
There is a high potential for small scale hydroelectric power plants to increase their capacity without
degrading the environment.
High energy demand of the South Eastern Europe, currently at the deficit level of 22TWh provides
outstanding market niches for investment opportunities in energy sector.
BiH has considerable transport infrastructure, road, airports, inland waters, railways however they
urgently need to be improved.
BiH is located on the shortest transport route connecting the central Europe to Adriatic as this place
the country at the forefront of the EU agenda, together with geostrategic and economic policy
implications.
If completed, VC corridor, linking Budapest to Adriatic sea, is estimated to be 330 km. will play an
important role in creating vibrant economy and contributing to sustainable development.
Contact Information
If you want any further information, pls contact the name(s)
which are given below.
Bosnian Bank of International
Bosna Bank International d.d. Sarajevo is established on October
19, 2000 as the first bank in Europe to operate on the principles of
Islamic banking.
Salih Purisevic (Secretary General of the Bank)
Office: + 387 33 275 100
Office Direct: + 387 33 275 160
Fax: + 387 33 203 122
e-mail: [email protected]
SBF 2010 will be held held in collaboration with
Financial and Economic Advisor