Bosnia and Herzegovina is located in southeastern Europe and borders Croatia, Serbia, and Montenegro. The population is about 3.5 million, with a GDP of 16.5 billion per year. The economy has remained stable for the past several years, focused on export-based growth and tourism. Unemployment continues to be a challenge, with a 35% unemployment rate and one of the highest youth unemployment rates in the world.
There are 4 common types of business entities set up in Bosnia and Herzegovina including joint stock, limited liability, foreign branches, and representative offices. The tax year is based on the company financial year (often the calendar year). In the FBiH (Federation of Bosnia and Herzegovina) region, the tax return and payment is due by the end of March the following year. In the RS (Republika Srpska) region, the tax deadline is 90 days after completion of tax year.
Labor and Payroll Considerations:
- Employment contracts must be written
- Minimum wage is 406 convertible maraca per month
- In the RS region, employee social security contributions are withheld from employee pay at 33%
- Employers in the RS region do not pay social security
- In the FBiH region, employee social security contributions are 31% and withheld from pay
- Employers in the FBiH region must contribute to social security
- There are annual quotas for hiring foreign workers
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