Foreign Companies Entering the BiH Market: Why a Representative Office is an Excellent First Step?

Although this business form has clear legal limitations, it offers specific advantages that can significantly simplify the initial phase of operations.

Here are the key specifics you need to know (based on the framework of the Federation of BiH):

✔️ Focus on Promotion and Market Research A representative office does not hold the status of a separate legal entity. Its primary purpose is marketing activities, market research, and representing the interests of the parent company, meaning it cannot directly enter into commercial contracts on behalf of the founder.

✔️ Tax Relief and Exemptions Given that it does not perform commercial activities or generate direct revenue, a representative office:

• Is not subject to corporate income tax.
• Does not enter the VAT system (except in rare cases, such as foreign airlines).

✔️ Significantly Less Administration Accounting regulations in FBiH regarding the mandatory preparation and submission of official annual financial statements do not apply to representative offices. Their financial results are integrated directly into the financial statements of the parent company abroad.

✔️ Specific Treatment of Salaries and Contributions A representative office holds a non-resident status. This means that personal income tax (10%) and employee-side social security contributions are calculated, but the employer is exempt from paying employer-side contributions. However, care must be taken regarding statutory minimum net salaries, which are graded based on the employees' professional qualifications.

For years, our agency has successfully supported the operations of some of the world's largest brands, including global leaders in their industries, who have chosen to launch their operations in BiH through this business structure.

When major global enterprises choose business partners, they seek security, precision, and absolute compliance with the law. The trust of such systems is proof that with the right partner, even the most complex procedures can be completed smoothly and efficiently.

Thinking about establishing a representative office or expanding your business into the BiH market? Do not leave administration and tax labyrinths to chance. Entrust them to a team with 30 years of experience in guiding international and domestic companies.

🏢Agencija Poslovnost d.o.o.
📧info@poslovnost.ba
📞033/246-421
📍Kotromanića 48, Sarajevo