Bosnia and Herzegovina (BiH) has a complex administrative structure due to its historical and political background. The country is divided into two main entities: the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS), and the Brčko District. Each entity has its own legislation and regulations, but there’s some consistency in the types of business entities recognized across the country. Here are the main types of companies in BiH:
Sole Proprietorship (Samostalni preduzetnik): This is the simplest form of business where an individual runs and owns the business. The owner has personal liability for the company’s debts.
General Partnership (Ortačko društvo – OD): A company where two or more partners jointly run the business. All partners have unlimited liability for the company’s obligations.
Limited Partnership (Komanditno društvo – KD): Comprises at least one partner with unlimited liability (complementary partner) and at least one partner whose liability is limited to their contribution (limited partner).
Limited Liability Company (Društvo s ograničenom odgovornošću – d.o.o.): The most popular form in BiH. The liability of shareholders is limited to their contributions. It requires a minimum starting capital, and the management structure typically includes a director and an assembly of shareholders.
Joint Stock Company (Akcioničko društvo – a.d.): Suitable for larger businesses and requires a higher minimum capital. Shareholders’ liability is limited to the value of their shares. This type of company can issue stocks, but the process is more complex and is subject to more rigorous regulations.
Branch Offices and Representative Offices: Foreign companies can establish these in BiH. While branch offices can perform commercial activities, representative offices are limited to non-commercial activities, like market research or promotional activities.
The process of establishing and operating a business in BiH can be somewhat complex due to the different regulations in the FBiH, RS, and Brčko District. It’s crucial to consult local legal and business experts when considering starting a company in Bosnia and Herzegovina.