State Department: Great Difficulties for Investing in BiH from abroad

Bosnia and Herzegovina (BiH) is open to investing from abroad, but investors must overcome endemic corruption, complex legal and regulatory frameworks and government structures, as well as non-transparent business procedures, insufficient protection of property rights and a weak judicial system, as stated in a State Department report on the investment climate for 2020.

The report criticizes the slow implementation of economic reforms that would aim to move from a socialist past to a market-oriented future, as well as a relatively low level of foreign investment.

The State Department recalls that before the global Covid 19 pandemic, economic growth was expected to accelerate in 2020, before reaching 4% this year, primarily due to consumption and, to a certain extent, public investment. The economy of BiH grew by about three percent in 2019.

According to the State Department, United States (U.S.)investment in BiH is low due to a small market, relatively low incomes, distance from the U.S., a difficult business climate, and a lack of investment opportunities.

But, the report mentioned that BiH offers good business prospects to well-prepared and persistent exporters and investors.

“Companies that manage to overcome the difficulties of establishing a presence in BiH usually redeem their investments. The large U.S. investment fund managed to enter the market with regional investment in 2014 and to generate income in 2019, ” it was emphasized in this report.

It was pointed out by the State Department that BiH has good natural resources, which enable potential opportunities in the energy, agriculture, wood industry, and tourism sector.

The report stressed that there were no attacks on foreign investment in BiH, but that there was still a risk of occasional, localized political or criminal violence, recalling protests over economic stagnation and the government’s inability to improve the situation in June 2013 and mid-2014.

The State Department also pointed out the low cost of labor compared to Western standards, while at the same time the number of students at universities is increased.

This report also mentioned the lack of professionals in certain sectors, due to lack of education, employment opportunities, and emigration of the population to other countries.

At the end of the report, the problem of corruption is noted, which is still present in many political and economic institutions, Biznis Info writes.


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