Amendments to the Law on Foreign Investments in FBiH

The Parliament of the Federation of Bosnia and Herzegovina (FBiH) adopted amendments to the Law on Foreign Investments, which entered into force on 8 October 2015.

The most notable changes are as follows:

• If deemed justified, the government of FBiH may decide, based on a proposal from the competent ministry, to exempt certain companies from the existing restriction stipulating that the participation of a foreign entity in the equity capital of a company engaged in the production and sale of arms, ammunition and explosives for military use, in the production of military equipment or in the media business shall not exceed 49% of the total capital of the company.

• The transfer of funds, which foreign investors have received from their investments in FBiH, shall be carried out through commercial banks upon fulfilment of all tax and other statutory obligations related to public finances in Bosnia and Herzegovina and in FBiH. This applies to funds received in the form of profit, dividends, interest and other such income, funds earned by investors after partial or full liquidation of their investments in FBiH, funds from the sale of equity or proprietary rights and funds from compensation for any damage incurred as a result of nationalisation, expropriation and other measures with similar consequences in FBiH.

• With the purpose of assisting  and promoting  foreign investments and improving  the overall business environment for foreign investors in FBiH, the government will establish a Council for Foreign Investors as an advisory body to it.

Impact on investors: The amendments to the Law on Foreign Investments in FBiH are expected to provide for an environment that promoted and encourages foreign investments.