What are the most common legal obstacles to establishing and running a business/company in BiH – and how to successfully avoid them?
Bosnia and Herzegovina, as a complex constitutional state with multiple levels of government, faces a number of legal and institutional obstacles that make it difficult to establish and run a business. Among the most prominent obstacles are inconsistent legal regulations between the entities and the Brčko District, lengthy and complex administrative procedures, and fragmented jurisdiction of regulatory bodies. Although recent efforts have been made to digitize business processes (e.g. through e-registration), business practice still often depends on physical presence in institutions and personal contacts with officials. In order to overcome these obstacles, it is recommended to engage a legal advisor (lawyer) with knowledge of entity regulations early on, and to strategically choose a business location depending on the efficiency of administration in a particular entity. A transparent legal structure, proper registration and documentation, as well as monitoring changes in legislation, are key elements of legal business security.
How do constitutional and private international law affect the operations of foreign companies/firms in BiH – and what should domestic companies/firms know when entering foreign markets?
The Constitution of Bosnia and Herzegovina and the international legal framework have a significant impact on the operations of foreign companies, as well as on the positioning of domestic companies in the international market. The constitutional principle of non-discrimination and free movement of capital, supported by numerous bilateral and multilateral agreements, formally ensures legal protection for foreign investors, who are treated the same as domestic companies. However, in practice, problems such as inconsistent application of the law, difficult access to rights due to uneven administrative practices and lack of functional coordination between institutions continue to be recorded. For foreign investors, especially from the US and the EU, it is important to rely on international protection mechanisms, including ICSID and other arbitration forums. At the same time, for domestic companies wishing to enter foreign markets, systematic legal preparation is recommended: protection of intellectual property in target markets, adaptation of contractual provisions to international standards (EU, USA, etc.), analysis of tax obligations in accordance with double taxation agreements, and use of alternative dispute resolution mechanisms. Legal support must also include advice on compliance with international regulatory regimes, including GDPR, FATCA and other relevant standards.
Given your extensive experience in criminal law and human rights protection, what do you advise companies/firms as a preventive measure – how to avoid disputes and reputational risk?
Experience from the practice of criminal and human rights law indicates the need for business entities to seriously understand the importance of legal prevention. In the context of increased attention to issues of corporate responsibility, human rights protection and anti-corruption standards, companies – especially those with international participation – must have developed internal legal policies that include a code of ethics, a zero-tolerance policy on corruption, compliance with personal data protection laws, as well as procedures for the prevention of mobbing, discrimination and harassment at work. Regular legal audits of contractual relationships, as well as proactive communication with employees, contribute to reducing the risk of labor and commercial disputes. In addition, it is recommended to develop a crisis plan to protect the company's reputation – including clearly defined communication with the media and the public in the event of legal or ethical challenges. Ultimately, building a culture of legal responsibility and institutional integrity not only protects the company from potential sanctions, but also significantly contributes to its credibility in the market.
