Investment incentives are provided at both the national and local levels.
The Law on Incentives in the Economy of the Republic of Srpska (“Official Gazette of the Republic of Srpska”, No. 52/19, 78/20) provides incentives for economic development: incentives to increase salaries of employees in economic entities and incentives for direct investment.
Employment support program in the economy
The Employment Service of the Republic of Srpska is a key organization in the labor market, which participates in the preparation, development, and implementation of employment projects that are in line with the Employment Strategy of Republic of Srpska and the Employment Action Plan for the implementation of the Strategy for each year. The Bureau implements projects to support employment in the economy of the Republic of Srpska, on the basis of the Rulebook on conditions, criteria, and manner of implementing active employment policy measures, and through a public call that is announced for this year individually. All current public calls of the Office can be found on the portal www.zzzrs.net.
At the end of 2019, the Investment and Development Bank of the Republic of Srpska (IRBRS) introduced a new credit line allowing companies that plan to introduce new technologies in their production process to have favorable loans at interest rates below 3%, with a repayment period of 12 years and the grace period of 24 months.
The Law on Profit Tax of the Republic of Srpska (“Official Gazette of the Republic of Srpska”, No. 94/15, 01/17, 58/19) stipulates that companies that invest in equipment and facilities for performing registered production activities on the territory of the Republic of Srpska have the right to reduce the tax base by the value of the investment.
The Law on Income Tax (“Official Gazette of the Republic of Srpska”, No. 60/15, 66/18, 105/19, 49/21, 119/21) provides for certain advantages in the benefits for the annual income of a qualified investor (Article 42 -50).
The Ministry of Agriculture, Forestry, and Water Management of the Republic of Srpska provides financial incentives for agricultural and rural development. Every year, the Ministry adopts the Rulebook on requirements and ways of obtaining financial incentives for agricultural and rural development.
Local incentives – At the local level, there are different forms of incentives related to local benefits and services:
- Assistance in finding a greenfield or brownfield investment site in the municipality
- Assistance in registering a company and obtaining the necessary permits
- Post-investment support to investors and promotion through municipal presentations at investment conferences, through brochures, presentations at fairs, and connecting with relevant partners
- Municipal incentives for businessmen (150,000 KM planned in 2022) and farmers (200,000 KM planned in 2022)
- Co-financing the introduction of ISO standards in companies
- Deferred payment in rent installments and fees for arranging construction land
- Co-financing the employment of new workers
- Co-financing the participation of companies in international and domestic fairs
The following information is also available to prospective investors on the official website of the Government of the Republic of Srpska: https://investsrpska.vladars.net