INCREASED NUMBER OF FOREIGN INVESTMENTS IN THE RS: Tax reliefs and qualified workforce attract foreign investors

The number of foreign investors in the Republic of Srpska is constantly increasing. The official data show that 1,825 companies with foreign and mixed capital operate in local communities across the RS. The main reason for the increased interest of foreign investors is a set of measures that make the RS market competitive, such as tax reliefs and qualified workforce.

17.01.2020 News
Foreign Investments

According to the data provided by the Intermediary Agency for IT and financial services (APIF) from Banja Luka, most of the foreign companies work in the area of Banja Luka – 850, followed by 173 companies registered in Bijeljina, 93 in Gradiska, 92 in Laktasi, and 47 in Trebinje. Most of these companies are engaged in business consulting, trade, engineering, computer programming, and electricity production.

Based on the official data, in the same period last year, there were close to 1,200 companies with foreign capital operating in the RS.

President of the Regional Chamber of Commerce from Banja Luka, Goran Racic, points out that, although the number of foreign companies in the RS is constantly increasing, the domestic potential is much greater and the market offers plenty of new businesses opportunities.

“Main reasons why foreign investors register their companies in the RS are business-friendly environment and tax deductions, followed by tax rates and social insurance contributions that are more favorable in the RS than in their respective countries”, said Racic.

Furthermore, Racic added, the Republic of Srpska can offer a qualified workforce which is also a significant precondition for attracting foreign investors.

The mayor of Gradiska, Zoran Adzic, points out that this municipality is located next to the border with the European Union, which has significantly influenced the decision of many foreign investors to start their business in this area.

“Compared to other local communities in the RS, the location of Gradiska is our great advantage but we did not use its’ whole potential during the previous period. Furthermore, we want to offer a good service to both domestic and foreign investors, which is why we have simplified all the administrative procedures for establishing a company. Among other things, in our municipality the first company registration is free of charge, we introduced a one-stop-shop model and reduced the fees by 50 percent. Also, the procedures for obtaining a location and building permits take five to seven days”, said Adzic, and highlighted that many companies from Italy, Austria, and Germany are interested to start their business in this area.

While he believes that the wood, textile, and metal industries offer great potential for the development of this city, Adzic points out that the opening of a production line for fruit and vegetable processing would also be very significant.

“We are currently working on creating the conditions to bring an investor who will make the best use of our natural potentials in Lijevce and Potkozarje region. This project can generate new employment and economic growth”, said Adzic.

The new bridge

Zoran Adzic said that the construction of the new bridge in Gradiska will create numerous development opportunities, not only for Gradiska but also for the surrounding municipalities.

“We intend to use around 400 hectares of city and state land to create a free economic zone close to the bridge, and we expect the support of republic-level institutions for this project”, said Adzic.

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