The business environment in Bosnia and Herzegovina is expanding, with a combination of major corporations and small and medium-sized companies (SMEs). The primary pillars of the nation’s economy are industry, services, and agriculture.
Key Industries:
- Mining: Bosnia has substantial reserves of metals and minerals, and mining is a major sector of the economy. The nation possesses significant coal reserves in addition to iron, bauxite, and other mineral deposits.
- Manufacturing: The manufacturing sector includes industries such as automotive, textiles, wood processing, and furniture production. Sarajevo, the capital, and other major cities have seen growth in manufacturing activities.
- Tourism: Due to its stunning natural surroundings and rich cultural and historical legacy, Bosnia and Herzegovina is a popular travel destination. Sarajevo and Mostar are two popular destinations. There is a chance that tourism may boost the economy considerably.
- Services: The services sector, including banking and finance, has been growing. Sarajevo is the financial center, and the country has seen an increase in foreign investment in this sector.
- Additionally, the country is showing potential in the energy industry, especially in the areas of hydropower and renewable energy.
Challenges
Political Complexity: Businesses may face difficulties due to the nation’s political system, which is characterised by a complex administrative framework with entities and cantons. Bosnia and Herzegovina’s complicated political structure—which comprises of the Federation of Bosnia and Herzegovina and the Republika Srpska, two entities with different governments and legal systems—has an impact on the country’s business environment.
Corruption: In Bosnia and Herzegovina, corruption has been a problem that could have an impact on the business climate.
Infrastructure: Despite advancements, several regions still need to build out their infrastructure, which may have an effect on connectivity and logistics.
High rates of unemployment have been a recurring problem, especially for young people.
Business Environment:
- Foreign Investment: Bosnia and Herzegovina has sought to attract foreign investment, and there have been efforts to streamline business processes and regulations.
- Trade Agreements: The country benefits from trade agreements with neighboring countries and has a preferential trade agreement with the European Union.
- Currency: The country uses the Convertible Mark (BAM) as its official currency.
