Bosnia and Herzegovina: Buying and Selling

Market Access Procedures

International Economic Cooperation: Bosnia and Herzegovina is a member of the Central European Free Trade Agreement (CEFTA) and has signed a Free Trade Agreement with Turkey. The Stabilisation and Association Agreement (SAA) between the EU and Bosnia and Herzegovina went into effect on 1 June 2015. The SAA Agreement is a commitment to further the relationship between the EU and Bosnia and Herzegovina and will complement the existing interim trade agreement. Bosnia and Herzegovina also has preferential regimes with the U.S., Australia, New Zealand, Switzerland, Norway, Russia, Japan and Canada.
Non Tariff Barriers: In moving forward to gain membership into the WTO and the EU, the Bosnian Government has taken significant steps to liberalise its trade policy. This includes the elimination of import quotas, reduction of import licensing and the reduction of tariff and non-tariff barriers. There is no longer a need for special approval or administrative procedures for conducting re-export transactions. However, there are still barriers to entry with regards to the manufacturing and exporting of arms.
Customs Duties and Taxes on Imports: Import customs rates according to the customs tariffs are: 0%, 5%, 10% and 15%, while 1% of customs value is paid for the purpose of customs registration. The average customs tariff is 1.09 according to the World Bank. This is significantly lower than most of the world. The variation of custom tariffs is dependent on the product. The administration in charge of customs duty is the Indirect Taxation Authority of Bosnia and Herzegovina.

Customs Classification

Bosnia and Herzegovina passed the 2015 Customs Tariff to harmonise its customs classification with the EU to comply with its ratification of the Stabilisation and Accession Agreement.

Import Procedures

Imports must be accompanied by a customs declaration, completed in one of the three official languages of BiH (Bosnian, Serbian, or Croatian), and submitted by the person named on the waybill or an authorized representative. The declaration must be accompanied by any relevant documents (invoice, shipping documents, and quality control certificates). The customs office may inspect the goods and take samples to determine that the goods correspond to the information on the customs declaration.
Once the customs office determines the amount of customs duty, the importer is required to obtain a guarantee covering the customs duty with the Customs Authority in the form of a cash deposit or a bank guarantee. The goods cannot be placed in circulation until customs duties have been paid or the payment has been guaranteed.

No customs duty is levied on equipment imported as part of the share capital. This exemption does not apply to passenger vehicles, slots and gambling machines. Foreign investors should submit a written request for custom duty exemption beforehand to the competent customs authority (according to the location of the company) with additional documentation.

For more information, please visit the website of Bosnia and Hercegovina Customs procedures.

Importing Samples

Samples of goods of negligible value are free of customs.

For Further Information: Indirect Taxation Authority (ITA) of Bosnia and Herzegovina

Reaching the Consumers

Marketing opportunities

Consumer Profile: The per capita income in the country is significantly less than in other European countries (USD 6,730 in 2021 - IMF). Unemployment remains high (17.5% of the total labour force in 2021 - IMF), including among heads of households, while rural household income is low. These factors limit the growth potential of certain markets and increase price sensitivity. The CPI or cost of items has been on the rise since the global recession and is now significantly higher than it was in 2005 (nevertheless, the price level of goods and services in Bosnia and Herzegovina is relatively low due to the low cost of labour). The Bosnian consumer is mainly focused on buying basic commodities. The informal sector is still considered to be substantial. However, with Bosnia and Herzegovina's path towards EU accession, the movement of goods between the EU and the country may rise rise significantly.
The median age in Bosnia and Herzegovina is 43.1 years (United Nations, 2020). The population is currently declining and ageing, increasing the number of single-person households, although couple-with-children households remain dominant. Urbanization is continuing, with over 48.6% of the population now living in urban areas in 2019 (World Bank, latest data available).

Consumer Behaviour

Bosnia appears as one of the least economically developed European countries. Household consumption accounts for a significant share of Bosnia and Herzegovina's GDP: more than 75% in 2019 (World Bank, latest data available). Most household spending is oriented towards commodities. Other consumption sectors are developing with difficulty.

Ever since 2017 the consumer price index increases progressively reaching 104.8 in 2019 (World Bank, latest data available). The main marketing technique in the country is direct response marketing. However, the spread of credit cards allows the development of other media such as sales catalogues, advertising on television, radio, in the press. E-commerce is starting to develop in Bosnia. In 2019, 69.9% of the population used the internet (World Bank, latest data available).

Most consumers prefer to pay in monthly instalments, even low-cost products. For the sale of capital goods, customer service and sales services are essential for maintenance and training. For consumer goods, consumers prefer domestic products. Flagship products focus on creating permanent contact with consumers and aggressive promotions.

Consumers Associations: Consumers International

Main Advertising Agencies: Via Media
RE:Design
M.I.T.A Group (Publicis)
McCann-Erickson

Distributing a Product

Evolution of the Sector: As a result of different legal frameworks in the entities, Bosnia and Herzegovina is divided between two distribution areas: one in the Federation and one in Republika Srpska. Although some effort has been made to harmonize the entities’ legal systems, there are still significant differences. Consequently, many manufacturers have developed multiple distribution channels and contracts with multiple distributors to cover both the Federation and Republika Srpska.

Wholesalers offer the best channel for providing transportation, product storage, market information, financing, and risk management. Most wholesalers are independent, full-service merchant wholesalers that import and distribute goods. There is a significant degree of specialization in the wholesale sector by industry. Foreign companies control their distribution channels in BiH in a variety of ways. Some manufacturers have opened representative offices in order to control distribution channels and supervise/manage marketing efforts.

In general, small retailers are slowly losing out to large wholesalers with developed retail operations. Over the last fifteen years, the appearance of shopping centers (malls) has been significant and has prompted significant changes in the retail market. The largest foreign retail chain, Croatian Konzum is being challenged by local food retailers (Bingo, Tropic and Amko Komerc) that have consolidated their presence and are becoming increasingly competitive. Hotel, Restaurant and Institutional (HRI) Shopping centers import and distribute food and offer a great variety of fresh meat, exotic and new-to-market foods, and ready-to-eat foods. They also provide good professional service, restaurants with ready meals at favorable prices and a festive environment (entertainment for kids, clowns, and games/ lotteries). Quite often, they organize in-store promotions and product tastings and provide small gifts with purchased products. A special discount is offered to faithful customers. Food items are also sold in a number of small independent groceries and open markets.
Market share: The most significant development in the retail market is the emergence of large distributors, most of whom are foreigners, Konzum (Croatian supermarket chain), Interex (French supermarket chain), and local distribution companies including MIMS Group, Tropic Centar, Bingo, and Robot Komerc. In addition, the continued expansion of the shopping centre concept - including the major newcomer, the Sarajevo City Center Shopping Centre which opened in 2014 - has changed consumer habits. There are currently 46 chains in the entire distribution sector in Bosnia and Herzegovina, the fashion and clothing segment having the highest share with a total of 10 chains (Retail Index, latest data available).

The market share of small (individual) retailers has fallen since the introduction of larger retailers. The biggest two retailers in Bosnia and Herzegovina are the domestic Bingo and regional Konzum, both of which have led to consolidation in the grocery sector. Their market share among grocery retailers was respectively 17% and 16%. Among non-grocery retailers, Phoenix, dm-Drogerie Markt and CM-Cosmetic Market lead the pack. Non-store retailing (e.g. e-commerce, mail-order) is led by Avon Cosmetics BiH, Studio Moderna and Oriflame Kozmetika (Source: Euromonitor International, latest data available).
Retail Sector Organisations: Foreign Trade Chamber of Bosnia Herzegovina
Chamber of Economy of the Federation of Bosnia and Herzegovina
Ministry of Trade

E-commerce

Internet access: By the end of 2017, Bosnia and Herzegovina had a population of 3.5 million people, out of which 2.8 million were internet users, making the penetration rate 80.7%. Internet cafes are relatively rare, but almost all hotels and most cafes offer free wi-fi. Some towns also have free wi-fi hotposts. BH Telecom is the leading network provider in the country. Thanks to the widespread use of smartphones, there is a rise in consumption of media over the internet. In 2017, there were 98.1 Mobile-cellular subscriptions per 100 inhabitants, and 66% of homes in the country were connected to the internet. According to the The Global Information Technology Report published in 2016 by the World Economic Forum, the country's mobile network coverage ranked 49 out of 139, making it above average, while their internet bandwidth speed ranked 59 out of 139. The number of websites is constantly increasing, but ownership of online media is unregulated and there is no effective oversight. There are no government restrictions on access to the internet, but in 2016 the Law on Public Peace and Order was amended to expand the definition of "public space" to include the internet, which coud have negative effects on freedom of assemby and journalism. Average cost of Internet is USD 17 per month. As of September 2018, the most popular search engines in the country by market share were Google (97.84%), Yahoo! (1.13%), bing (0.77%), MSN (0.15%), DuckDuckGo (0.04%) and Ask Jeeves (0.03%). As for browser, the most popular ones were Chrome (77.49%), Firefox (6.35%), Safari (5.77%), Samsung Internet (3.55%), Opera (1.8%) and Android (1.65%).
E-commerce market: E-commerce is not well developed in Bosnia. Citizens and businesspeople generally do not shop or conduct business on the internet. Many companies maintain websites, but ordering online through use of a credit card is very rare. According to a research study carried out by students at the Burch University in Sarajevo, the reason e-commerce has not taken off in Bosnia is not infrastructural nor technological but cultural. They point out that the technologies needed for the implementation and development of e-commerce in the country are available, and online shops do exist in Bosnia and Herzegovina, but the population is not yet accustomed to shopping online. However, internet users are willing to pay for content. That same study showed that 65% of the internet users they interviewed had paid to download or access some kind of online content from the internet including music, software and apps. As for the methods of online content access, the majority of the internet users pay for subscription services (23%), versus downloading an individual file (16%), or accessing streaming content (8%). Still, the biggest segment online is the financial sector, with many commercial banks offering e-banking to their clients. Mobile devices are not yet used for doing business online as much as in other more developed countries, mainly due to high mobile internet service prices. The fastest-growing e-commerce pages in Bosnia are Mbuy, eKupi.ba and citydeal.ba. Bosnia was one of the last countries in the region to develop and adopt a major law and related regulations regarding e-business.

Organizing Goods Transport

Airports: Sarajevo International Airport
Mostar International Airport
Banja Luka Airport
Air Transport Organisations: Directorate of Civil Aviation of Bosnia and Herzegovina
Rail Transport Organisations: Railway Regulatory Board

Identifying a Supplier

Type of Production: Main industries in Bosnia and Herzegovina include metal production, car-making , textile , tobacco and furniture. After the global crisis, the industry sector suffered significantly and is only now showing small signs of recovery. Other growing industries are the wood industry, transport sector, energy sector, food processing and tourism.

To search directories by industry in Bosnia and Herzegovina, check out our service Business Directories.

Professional Associations by Sector: 1 professional associations listed for Bosnia and Herzegovina.

Trade Agencies and Their Representations Abroad: Chamber of Commerce and industry of Republic of Srpska
Chamber of Economy of the Federation of Bosnia and Herzegovina (in Bosnian)
Foreign Trade Chamber of Bosnia and Herzegovina
General Professional Associations: List of Different Trade Associations within the country
APBiH (Employers' Association of Bosnia and Herzegovina)

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