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VIENNA ECONOMIC TALKS - SARAJEVO MEETING 28 September 2009 Presented by: Haris Bašić, director of FIPA BiH INVESTMENT INVESTMENT POSSIBILITIES POSSIBILITIES IN BOSNIA AND HERZEGOVINA IN BOSNIA AND HERZEGOVINA

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  • VIENNA ECONOMIC TALKS - SARAJEVO MEETING

    28 September 2009

    Presented by:

    Haris Bašić, director of FIPA BiH

    INVESTMENT INVESTMENT POSSIBILITIESPOSSIBILITIES

    IN BOSNIA AND HERZEGOVINAIN BOSNIA AND HERZEGOVINA

  • 1. Stable financial sector

    2. Favorable trade and other agreements

    3. Favorable legislation

    4. Favorable tax and customs system

    5. Competitively priced human capital

    6. Foreign Investors Support Fund

    BUSINESS ENVIRONMENT

    REASON TO INVEST IN BIH

    ww

    w.f

    ipa

    .go

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  • 8.8

    12.2

    9.2

    4.8

    9.010.0 11.0 10.0 9.2

    0

    2

    4

    6

    8

    10

    12

    14

    2000 2001 2002 2003 2004 2005 2006 2007 2008

    Source: CB BiH, Agency for Statistics of BiH, FIPA

    Nominal GDP, billion € Real GDP growth rate, %

    Industrial production growth rate, % Annual unemployment rate, %

    5.5 5.96.6

    7.48.1

    8.79.8

    11.1

    12.6

    0

    2

    4

    6

    8

    10

    12

    14

    2000 2001 2002 2003 2004 2005 2006 2007 2008

    GDP/C

    3,648 € 3.0

    6.3

    3.94.5

    5.4

    6.86.7

    5.55.5

    0

    1

    2

    3

    4

    5

    6

    7

    8

    2000 2001 2002 2003 2004 2005 2006 2007 2008

    40.940.339.7 43.242.0 43.0

    31.0 29.023.4

    0

    5

    10

    15

    20

    25

    30

    35

    40

    45

    50

    2000 2001 2002 2003 2004 2005 2006 2007 2008

    Average5.3

    Average9.4

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    The most stable currency in SEE (1KM =0.51 EUR)

    The lowest inflation in SEE

    “B2” credit rating with the stable outlook by Moody’s Agency

    Foreign ownership in private banking sector in BiH is 86%

    STABLE FINANCIAL SECTOR

    Annual inflation rate, %

    Source: IMF, CB BiH, Agency for Statistics of BiH

    1.5

    7.4

    1.60.60.43.1

    4.80.4 3.7

    6.1

    -0.9

    7.96.15.75.6

    6.6

    11.3

    18.9

    24.4

    28.2

    -5.0

    0.0

    5.0

    10.0

    15.0

    20.0

    25.0

    30.0

    2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

    BiH

    CEE

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    PREFERENTIAL TRADE AND OTHERAGREEMENTS

    Free Trade Agreements:

    - Central European Free Trade Agreement

    (CEFTA) - 30 mill consumers

    - Free Trade Agreement with Turkey - 70 mill consumers

    Preferential Trade Agreements:- EU, 27 countries - 500 mill consumers

    - Preferential export regimes with: USA, Australia, Canada,

    Japan, New Zealand, Switzerland, Norway, Russia

    Agreements on Avoidance of Double Taxation

    - with 32 countries

    Agreements on Promotion and Protection of Investments – with 39 countries

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  • • Tax system

    – Unique VAT rate of 17%

    – Profit tax is 10%

    – Favorable incentives and tax exemptions

    • Customs system– Exemption from payment of customs duties for foreign

    investors– Customs rates 0-15%

    22

    20

    19

    19

    19

    18

    17Bosnia and Herzegovina

    Serbia

    Czech Republic

    Slovakia

    Romania

    Poland

    Croatia

    FAVOURABLE TAX AND CUSTOMS SYSTEM

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  • 874

    693

    674

    509

    422

    395

    388

    0 200 400 600 800 1000

    Slovenia

    Croatia

    Slovakia

    Hungary

    Serbia

    Montenegro

    Bosnia and Herzegovina

    COMPETITIVELY PRICED HUMAN CAPITAL

    • Average net wages (2008), €

    • Creative, skilled and educated workforce

    ww

    w.f

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  • 4.6

    7.0

    14.7

    4.35.5 5.8 5.6

    2.92.2

    0

    2

    4

    6

    8

    10

    12

    14

    16

    2000 2001 2002 2003 2004 2005 2006 2007 2008

    159 133282

    338

    567478

    564

    1,628

    701

    0

    200

    400

    600

    800

    1,000

    1,200

    1,400

    1,600

    1,800

    2000 2001 2002 2003 2004 2005 2006 2007 2008

    FDI by Sectors

    Total - 5.6 billion €

    Total FDI inflow, mill € FDI contribution to GDP (%)

    Source: CB BiH, Agency for Statistics of BiH,MoFTER, FIPA

    Tourism; 1%Manufacturing;

    33%

    Trade; 12%

    Telecomm.; 14% Banking; 22%

    Transport; 2%

    Other f inancial

    service; 7%

    Real estate; 2%

    Service; 7%

    Average

    5.8

  • Mil

    lio

    n€

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    Top investor countries in BiHMay 1994 - August 2009 – Total amount 5.6 billion €

    Source: CB BiH, MOFTER, FIPA

    660

    70

    100

    114

    130

    215

    304

    364

    640

    656

    834

    1,483

    0 200 400 600 800 1,000 1,200 1,400 1,600

    All other Countries

    Turkey

    USA

    Italy

    The Netherlands

    Russia

    Germany

    Switzerland

    Croatia

    Slovenia

    Serbia

    Austria

  • INVESTMENT OPPORTUNITIES

    • Availability of natural resources and supply networks

    • Highly competitive overall cost structure

    • Privatisation process

    • Concessions

    • Bankruptcy opportunities

    • Investment projects

    • Joint ventures

    • Investment locations

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    INVEST IN BOSNIA AND HERZEGOVINA

    YOUR NEW OPPORTUNITY

    THANK YOU FOR YOUR ATTENTION

    Sarajevo Office

    Avaz Twist Tower, Tešanjska 24A

    Phone: +387 33 278 080

    Fax: +387 33 278 081

    E-mail: [email protected]

    Banja Luka Office

    Ðure Daničića 1/III

    Phone/ Fax: : +387 51 226 180

    E-mail: [email protected]

    Mostar Office

    Rade Bitange 30

    Phone /Fax: +387 36 558 815

    E-mail: [email protected]