If your answer is YES, we believe we can help you with a thorough overview of the most important aspects of doing business in this dynamic region, rich in cultural diversity and history, located in the heart of Europe and offering a favourable business environment for both domestic and foreign investors.
In the following, we will present the basics of doing business in the countries of the region – Slovenia, Croatia, Serbia, Bosnia and Herzegovina, Montenegro and Macedonia – with a focus on the most represented industries, forms of legal entities, tax issues and employment relations.
BOSNIA AND HERZEGOVINA SERBIA NORTH MACEDONIA MONTENEGRO CROATIA SLOVENIA
Webinar: Doing Business in Western Balkan: Legal and Tax Perspective
Brošura: “Invest in Balkans” (EN)
BOSNIA AND HERZEGOVINA
Bosnia and Herzegovina stands out as a country with a dynamic business environment that attracts investors from various sectors of activity, and in the following we will explore the basics of doing business in BOSNIA AND HERZEGOVINA, focusing on the most represented industries, forms of legal entities, tax issues and labour relations.
MOST REPRESENTED INDUSTRIES IN BOSNIA AND HERZEGOVINA
Tourism
IT
Telecommunications
Energy sector
Pharmaceutical industry
Construction industry
Shop
Production
ECONOMIC CLIMATE IN BOSNIA AND HERZEGOVINA
In Bosnia and Herzegovina, economic activity continued to trend upwards, but at a slightly lower intensity than in previous years. According to currently available preliminary data, an increase of 1.7% in the physical output of industrial production is recorded for 2022 in Bosnia and Herzegovina compared to the same period of the previous year. A similar trend continued in 2023, as the recorded growth rates point to a further slowdown in both the physical output of industrial production and overall economic activity in Bosnia and Herzegovina.
Over the period 2023-2026, a gradual stabilisation of the economic situation is expected both in Bosnia and Herzegovina and globally, which will be reflected in the movement of output, employment and exports.
THE MOST COMMON FORM OF LEGAL ENTITY ORGANISATION IN BOSNIA AND HERZEGOVINA
Most common legal form of business: limited liability company (Ltd.)
Registration time: 1 month
Required number of founders: at least 1
Required number of directors/management board members: at least 1
Official register of legal persons:
- www.bizreg.pravosudje.ba (FBiH)
- www.apif.net (RS)
Other common forms of legal entities in Bosnia and Herzegovina: unlimited liability company – FBiH: Društvo sa neograničenom solidarnom odgovornošću (d.n.s.o.), RS: Ortačko društvo (o.d.), joint stock company – FBiH: Dioničko društvo (d.d.), RS: Akcjonarsko društvo (a.d.)
PROFIT TAX IN BOSNIA AND HERZEGOVINA
Corporate income tax rate: 10 %
Tax period: calendar year or financial year
VALUE ADDED TAX IN BOSNIA AND HERZEGOVINA
VAT rates:
- 17 % standard rate
- 0 % on exports of goods
VAT threshold: 100,000 BAM
VAT registration for non-residents: non-resident companies must register for VAT when they make taxable supplies of goods and services in Bosnia and Herzegovina.
LABOUR LAW AND EMPLOYMENT IN BOSNIA AND HERZEGOVINA
Who has the right to work in Bosnia and Herzegovina:
- Bosnia and Herzegovina nationals
- Foreigners with a residence permit and a work permit
Types of employment contracts:
- Full-time and part-time contracts
- Fixed-term and permanent employment contract
- Honoraria agreements
- “Management contract”
INCOME TAX IN BOSNIA AND HERZEGOVINA
Income tax rates
- 10 % on annual income in FBiH
- 8 % on annual income from an employment contract in the RS
- 10 % per year on annual income from self-employment in the RS
- 13 % on annual income from property and property rights, capital gains and income from foreign sources in the RS
Taxable income in FBiH includes: income from employment, independent business activities, property and property rights, capital investments, gambling and lottery winnings.
Taxable income in the RS includes: income from employment, independent business activities, property and property rights, capital gains and income from foreign sources.
There is no doubt that Bosnia and Herzegovina is a country that is attractive to many investors who want to expand their business into the Balkans and Central Europe. In all this, it is important for an investor to have a reliable and experienced partner.You get all this at Unija Consulting, where a team of experts advises and assists you throughout your business. Our contact in Bosnia and Herzegovina: Džejna Mahović, dzejna.mahovic@unija.com
SERBIA
Serbia, as a country with a rich history and a developing economy, offers diverse business opportunities, and in the following we will explore the basics of doing business in Serbia, focusing on the most represented industries, legal forms, tax issues and labour law.
MOST REPRESENTED INDUSTRIES IN SERBIA
Automotive industry
IT
Telecommunications
Energy sector
Construction sector
Shop
Production
ECONOMIC CLIMATE IN SERBIA
Serbia’s economy will grow by 2.2% this year and accelerate to 3.1% in 2024 and 3.7% in 2025, the European Commission estimates. Average inflation is expected to be 12.5% this year and 4.6% next year.
Serbia’s economy is expected to accelerate in the coming years, mainly due to expected growth in private consumption, lower inflation and increased investment.
The expected increase in investment is driven by the reasons why Serbia is a good environment for investment. The reasons for investing well in Serbia relate mainly to the good strategic position for doing business in relation to the European Union, the acceptable tax burden taking into account tax incentives, the ease and speed of setting up a business, the existence of free zones, the possibility of employing foreigners, as well as the existence of tax incentives for employing foreigners.
THE MOST COMMON FORM OF ORGANISATION OF LEGAL PERSONS IN SERBIA
Most common legal form of business: limited liability company (Ltd.)
Registration time: up to 5 working days
Required number of founders: at least 1
Required number of directors/management board members: at least 1
Official register of legal persons:
Other common forms of legal entities in Serbia: unlimited liability company – Ortačko društvo (o.d.), joint stock company – Akcjonarsko društvo (a.d.).
PROFIT TAX IN SERBIA
Corporate income tax rate: 15 %
Tax period: calendar year or financial year
VALUE ADDED TAX IN SERBIA
VAT rates:
- 20 % standard rate
- 10 % reduced rate
VAT threshold: 8,000,000 RSD
VAT registration for non-residents: non-resident companies must register for VAT when they make taxable supplies of goods and services in Serbia.
LABOUR LAW AND EMPLOYMENT IN SERBIA
Who has the right to work in Serbia:
- Citizens of Serbia
- Foreigners with a residence permit and a work permit
Types of employment contracts:
- Full-time and part-time contracts
- Fixed-term and permanent employment contract
- Honoraria agreements
- “Management contract”
INCOME TAX IN SERBIA
Income tax rates
- 10 % – 20 % depending on the nature of the income
Taxable income in Serbia includes: employment income, royalties, business income, agricultural and forestry income, investment income, income from immovable property, capital gains, other income.
Serbia is undoubtedly a country that is attractive to many investors wishing to expand their business in the Balkans and Central Europe. For an investor, it is important to have a reliable partner.You get all this at Unija Consulting, where a team of experts advises and assists you throughout your business. Our contact in Serbia: Dragana Asic Ratkovac, dragana.asic@unija.com
NORTH MACEDONIA
As a country with a rich cultural heritage and a developing economy, North Macedonia attracts the attention of investors from various fields of activity, and in the following we will explore the basics of doing business in North Macedonia, focusing on the most represented industries, forms of legal entities, tax issues and labour relations.
THE MOST REPRESENTED INDUSTRIES IN NORTH MACEDONIA
IT
Telecommunications
Energy sector
Construction
Shop
Production
ECONOMIC CLIMATE IN NORTH MACEDONIA
The European Commission (EC) forecasts that the economy of North Macedonia will grow by 2.7% in 2024. This projection forecasts further progress after the country’s economy grew by 2% in the previous year. Inflation is also projected to slow to 9.5 per cent in 2023, while North Macedonia’s economic output grew by 2.1 per cent in 2022. This projected growth provides a perspective of stability and potential strengthening of the country’s economy in the period ahead.
THE MOST COMMON FORM OF ORGANISATION OF LEGAL PERSONS IN NORTH MACEDONIA
Most common legal form of business: limited liability company (Ltd.)
Registration time: 1 month
Required number of founders: at least 1
Required number of directors/management board members: at least 1
Official register of legal persons:
Other common forms of legal entities in North Macedonia are: unlimited liability company – Public Trade Association (JTD), joint stock company – Shareholders’ Association (AD), one-person limited liability company – Društvo so ograničena odgovornost osnovano od edno lice (DOOEL).
PROFIT TAX IN NORTH MACEDONIA
Corporate income tax rate: 10 %
Tax period: calendar year
VALUE ADDED TAX IN NORTH MACEDONIA
VAT rates:
- 18 % standard rate
- 5 % and 10 % reduced rate
VAT threshold: 2,000,000 MKD
VAT registration for non-residents: non-resident companies must register for VAT when they make taxable supplies of goods and services in North Macedonia.
LABOUR LAW AND EMPLOYMENT IN NORTH MACEDONIA
Who has the right to work in North Macedonia:
- Citizens of North Macedonia
- Foreigners with a residence permit and a work permit
Types of employment contracts:
- Full-time and part-time contracts
- Fixed-term and permanent employment contract
- Honoraria agreements
- “Management contract”
INCOME TAX IN NORTH MACEDONIA
Income tax rates
- 10 %
- 15 % income from gambling and lottery winnings
Taxable income in North Macedonia includes: income from employment, , independent business activities, income from copyright and related rights, income from the sale of own agricultural produce, income from industrial property rights, income from leasing and subleasing, capital income, capital gains, income from gambling and lottery winnings, insurance income and other income.
There is no doubt that North Macedonia is attractive for many investors who want to expand their business into the Balkans and Central Europe. For an investor, it is important to have a reliable and experienced partner.You get all this at Unija Consulting, where a team of experts advises and assists you throughout your business. Our contact in North Macedonia: Milan Aleksovski, milan.aleksovski@unija.com
MONTENEGRO
As a country with a rich cultural heritage and a developing economy, Montenegro attracts the attention of investors from various fields of activity, and in the following we will explore the basics of doing business in Montenegro, focusing on the most represented industries, forms of legal entities, tax issues and labour relations.
THE MOST REPRESENTED INDUSTRIES IN MONTENEGRO
Tourism
IT
Telecommunications
Energy sector
Wood industry
Shop
Production
ECONOMIC CLIMATE IN MONTENEGRO
Growth in activity on the Montenegrin market was recorded in tourism (18.86%), forestry (65.3% in weighted index terms) and industrial production (6%). The banking system in Montenegro is stable and highly liquid. Annual inflation in September 2023, measured by consumer prices, was 7.9%.
THE MOST COMMON FORM OF ORGANISATION OF LEGAL ENTITIES IN MONTENEGRO
Most common legal form of business: limited liability company (Ltd.)
Registration time: 10 working days
Required number of founders: at least 1
Required number of directors/management board members: at least 1
Official register of legal persons: /
Other common forms of legal entities in Montenegro: unlimited liability company – Ortačko društvo/ortakluk (OD), joint stock company – Akcjonarsko društvo (AD).
PROFIT TAX IN MONTENEGRO
Corporate income tax rate: progressive rate
- up to 100,000.00 EUR of taxable profits 9%;
- from 100,000.01 EUR to 1,500,000.00 EUR: 9,000.00 EUR + 12% on the amount above 100,000.01 EUR;
- Profits above 1,500,000.01 EUR: 177,000.00 EUR + 15% on the amount above 1,500,000.01 EUR.
Tax period: calendar year
VALUE ADDED TAX IN MONTENEGRO
VAT rates:
- 21 % standard rate
- 7 % reduced rate
VAT threshold: 30,000 EUR
VAT registration for non-residents: non-resident companies must register for VAT when they make taxable supplies of goods and services in Montenegro.
LABOUR LAW AND EMPLOYMENT IN MONTENEGRO
Who has the right to work in Montenegro:
- Montenegrin citizens
- Foreigners with a residence permit and a work permit
Types of employment contracts:
- Full-time and part-time contracts
- Fixed-term and permanent employment contract
- Honoraria agreements
INCOME TAX IN MONTENEGRO
Income tax rates
- Income up to €700 gross is tax-free
- Gross income between €701 and €1000 is taxed at 9%.
- Income above €1001 gross is taxed at 15%
Taxable income in Montenegro includes: personal income, self-employment; property; capital; capital gains; income from sporting activities; income from copyright and related rights, patents, trademarks and income from freelance cultural professionals; non-wage income.
There is no doubt that Montenegro is attractive to many investors wishing to expand their business into the Balkans and Central Europe. In all this, it is important for an investor to have a reliable partner.You get all this at Unija Consulting, where a team of experts advises and assists you throughout your business. Our contact in Montenegro: Iva Asanović, iva.asanovic@unija.com
CROATIA
Croatia has a diversified economy with a focus on several key sectors that are the main drivers of economic growth and are always of interest to investors from other EU markets.In the following, we will explore the basics of doing business in Croatia, focusing on the most represented industries, legal forms, tax issues and labour relations.
THE MOST REPRESENTED INDUSTRIES IN CROATIA
Tourism
IT
Telecommunications
Energy sector
Wood industry
Shop
Production
ECONOMIC CLIMATE IN CROATIA
Expectations in the Croatian economy fell in March from their highest level in just over a year, under pressure from pessimism in the retail sector and among consumers, a survey by the European Commission shows. The Economic Sentiment Index (ESI) in Croatia fell by two points in March compared to its February level, when it reached its highest level since January last year, slipping to 107.3 points, the EC report shows. The mood of retail business leaders deteriorated the most, reflected in a 3.5-point drop in the index, while consumers were significantly more pessimistic, with a 3.2-point drop in the index. Expectations in the industry also deteriorated, with the index falling by 2.7 points.
In 2024, the Croatian economy is forecast to grow by 2.6%, 0.3 percentage points higher than in April. They raised their estimate of inflation this year to 8.6% from 7.5% in June. Prices are expected to rise half as fast next year, at a rate of 4.2%.
THE MOST COMMON FORM OF ORGANISATION OF LEGAL ENTITIES IN CROATIA
Most common legal form of business: limited liability company (Ltd.)
Registration time: 14 working days
Required number of founders: at least 1
Required number of directors/management board members: at least 1
Official register of legal persons:
Other common forms of legal entities in Croatia: simple unlimited liability company – jednostavno društvo s ograničenom odgovornošću (j.d.o.o.), craft (there are several types of craft, one of them is a lump sum), joint stock company (d.d.).
PROFIT TAX IN CROATIA
Corporate tax rate:
- 18 %
- 10 % up to 1,000,00 EUR of revenue (from 1.1.2024)
Tax period: calendar year
VALUE ADDED TAX IN CROATIA
VAT rates:
- 25 % standard rate
- 0 %, 5 % and 13 % reduced rate
VAT threshold: 40,000 EUR (from 1.1.2024)
VAT registration for non-residents: non-resident companies must register for VAT when they make taxable supplies of goods and services in Croatia.
LABOUR LAW AND EMPLOYMENT IN CROATIA
Who has the right to work in Croatia:
- Croatian and EU citizens
- Foreigners with a residence permit and a work permit
Types of employment contracts:
- Full-time and part-time contracts
- Fixed-term and permanent employment contract
- Honoraria agreements
- “Management contract”
INCOME TAX IN CROATIA
Income tax rates
- 20 % and 30 %
Taxable income in Croatia includes: income from employment, independent business activities, property and property rights, rents, capital investments, gambling and lottery winnings, other income.
There is no doubt that Croatia is attractive to many investors who want to expand their business into the Balkans and Central Europe. In all this, it is important for an investor to have a reliable partner.You get all this at Unija Consulting, where a team of experts advises and assists you throughout your business. Our contact in Croatia: Ivan Podgorski Boček, ivan.podgorskibocek@datalinkunija.hr
SLOVENIA
Slovenia, a small and dynamic country located in the heart of Europe, offers a favorable business environment that attracts domestic and foreign investors. Below we will explore the basics of doing business in Slovenia, focusing on the most represented industries, forms of legal entities, tax issues and labor relations.
THE MOST REPRESENTED INDUSTRIES IN SLOVENIA
Tourism
IT
Telecommunications
Energy sector
Automotive industry
Shop
Food industry
Pharmaceutical industry
Production
ECONOMIC CLIMATE IN SLOVENIA
The value of the economic climate indicator in Slovenia was -5.5 percentage points in October 2023, unchanged from October last year.
The positive contribution came from the indicator of consumer trust (up by 1.1 percentage points) and the indicator of retail trade (up by 0.2 percentage points). The indicator of manufacturing trust (down by 0.8 percentage points) and the indicator of construction trust (down by 0.4 percentage points) had a negative impact, while the indicator of trust in services was not affected.
THE MOST COMMON FORM OF ORGANIZING LEGAL ENTITIES IN SLOVENIA
The most common legal form of business: limited liability company (Ltd.)
Registration time: 1 month
Required number of founders: at least 1
Required number of directors/board members: at least 1
Official register of legal entities:
Other common forms of legal entities in Slovenia: sole proprietorship (s.p.), unlimited liability company (ULC), joint-stock company (JSC).
PROFIT TAX IN SLOVENIA
Corporate income tax rates: 22 %
Tax period: calendar month
VALUE-ADDED TAX IN SLOVENIA
VAT rates:
- 22 % standard rate
- 9.5 % reduced rate
VAT threshold: 50,000 EUR
VAT registration for non-residents: Non-resident companies are required to register for VAT when they perform a taxable supply of goods or services in Slovenia and, in connection with that, generate income exceeding 50,000 EUR in a 12-month period.
LABOR LAW AND EMPLOYMENT IN SLOVENIA
Who has the right to work in Slovenia:
- Citizens of Slovenia and the EU
- Foreigners with approved right of residence and work permits
Types of employment contracts:
- Full-time and part-time employment contract
- Fixed-term and permanent employment contract
- Freelance contracts
- “Management contract”
CITIZEN’S INCOME TAX IN SLOVENIA
Income tax rates
- 16 %, 26 %, 33 %, 39 %, 50 %
Taxable income in Slovenia includes: Income from employment, independent business activities, property and property rights, lease, capital investments, winnings from games of chance and lotteries, other income.
There is no doubt that this Southeastern European country is attractive to numerous investors who would like to expand their business to the Balkans, as well as Central Europe. In all of this, it is important for the investor to have a reliable partner by their side.You get all this at Unija Consulting, where a team of experts advises and assists you throughout your business. Our contact in Slovenia: Nina Orehek Ručigaj, nina.orehek@unija.com
Overview and comparison of tax rates
| TAX RATE | BIH | SRBIA | NORTH MACEDONIA | MONTENEGRO | CROATIA | SLOVENIA |
| TAX ON PROFIT | 10 % | 15 % | 10 % | 9 % – 15 % | 18 % and 10 % | 22 % |
| VALEU ADDED TAX | 17 % | 20 % and 10 % | 18 % 5 % and 10 % | 21 % and 7 % | 25 % 0 %, 5 % and 13 % | 22 % and 9,5 % |
| INCOME TAX | 10 % (FBIH) 8 %, 10 % and 13 % (RS) | 10 % – 20 % | 10 % and 15 % | 9 %-15 % | 20 % and 30 % | 16 %, 26 %, 33 %, 39 %, 50 % |
There is no doubt that these countries in South-Eastern Europe are attractive to many investors who want to expand their business into the Balkans and Central Europe. In all this, it is important for an investor to have a reliable partner.
This is all available at Unija Consulting, where a team of experts can advise and assist you throughout the entire transaction.
More information can be found at the link below:
https://unija.com/wp-content/uploads/2023/09/Unija_INTERNATIONAL-EXPANSION_By-Country_A4-H_3kor.pdf
