Bosnia and Herzegovina - Country Commercial Guide
Distribution and Sales Channels
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As a result of different legal frameworks in the entities, there are two distribution areas in BiH: one in the Federation and one in the Republika Srpska.  Although some effort has been made to harmonize the entities’ legal systems, there are still significant differences.  Consequently, many manufacturers have developed multiple distribution channels and contracts with multiple distributors to cover both the Federation and the RS. 

There are three primary types of distribution channels in BiH:

For consumer goods

  • Producer to wholesaler to retailer to consumer

For industrial goods

  • Producer to industrial user; or
  • Producer to distributor to industrial user

For services

  • Service provider to consumer or industrial user

Wholesaling: Wholesalers offer the best channel for providing transportation, product storage, market information, financing, and risk management.  Most wholesalers are independent, full-service merchant wholesalers that import and distribute goods.  There is a significant degree of specialization in the wholesale sector by industry.  Foreign companies control their distribution channels in BiH in a variety of ways. 

Some manufacturers have opened representative offices in order to control distribution channels and supervise/manage marketing efforts.  For example, one major U.S. corporation relies on three distributors and several wholesalers to service the market.  The company’s sales offices, located across the country, coordinate marketing efforts.  Several U.S. IT companies cover the market directly and through a network of business partners, usually smaller IT companies.  Finally, some U.S. companies utilize a single distributor that covers the entire country, or rely on regional distributors, which is generally less effective. 

Retailing: The retail market has a number of large retailers, many of them foreign-owned, including Konzum (Croatian supermarket chain) and Mercator (Slovenian supermarket chain), as well as locally-owned retail companies Bingo, Tropic Centar, and Robot Komerc.  Lidl (German chain) announced in 2020 its intention to enter the BiH market, and construction is underway.  In addition, the continued expansion of the shopping mall concept has changed consumers’ habits.

Using an Agent or Distributor

Finding a good agent and/or distributor is the most effective means of market entry in BiH.  Reliable and capable local partners can be found with time and effort.  Companies should conduct thorough due diligence on future partners, including verifying creditworthiness and local reputation, before signing legal documents or conducting any business transactions. 

The Foreign Trade Chamber of BiH can assist with identifying local partners through its business registry.  U.S. Embassy Sarajevo can assist in locating potential partners and assessing their creditworthiness.  Through a partnership with the U.S. Foreign Commercial Service, the Embassy provides the International Partner Search (IPS) and the International Company Profile (ICP) services to U.S. companies.  The American Chamber of Commerce in Bosnia and Herzegovina is also a useful source of information on potential partners.

Establishing an Office

Establishing a business in BiH happens at the entity level and can be an extremely burdensome and time-consuming process.  The RS established a one-stop shop for business registration in the entity.  On paper, this dramatically reduced the time required to register a business in the RS, bringing the government-reported time to register a company down to an average of 7 to 14 days.  Some businesses, however, report that in practice it can take significantly longer.  There is no one-stop shop in the Federation.  Investors in the Federation may register their business as a branch office in the RS and vice versa.  Registration in BiH can sometimes be expedited if a local lawyer is retained to follow up at each step of the process. 

All three sub-national levels of government (entity, cantonal, and municipal) establish laws and regulations affecting businesses, creating redundant and inconsistent procedures that encourage corruption.  It can be difficult to understand all the laws and rules that might apply to certain business activities, given overlapping jurisdictions and the lack of a central information source.  It is therefore critical that foreign investors obtain local assistance and advice.

The most common U.S. business presence found in BiH are representative offices.  A representative office is not considered to be a legal entity and its activities are limited to market research, contract or investment preparations, technical cooperation, and similar business facilitation activities.  The BiH Law on Foreign Trade Policy governs the establishment of a representative office.  To open a representative office, a company must register with the Registry of Representative Offices, maintained by the BiH Ministry of Foreign Trade and Economic Affairs (MoFTER), and the appropriate entity’s ministry of trade.  Applications must contain the following information:

1)           A document indicating the decision of the founding or parent company to establish a representative office, to include:

  1. Name and address of the branch office (if such exists)
  2. Name and address of the founder
  3. Name and address of the office (in BiH)
  4. Names of persons managing the office
  5. Scope of activities of the office
  6. Terms of reference of the office

2)            A certified document proving registration of the parent company in the home country;

3)           A certified statement of liability for all liabilities that stem from activities of the office;

4)           Appointment of the person in charge of the office (in BiH); and

5)           Employment information including the number of employees in the local office and a list of foreign employees.

All documents must be original, and an authorized court translator must translate the documents into the local language.  If the documentation is complete and correct, the registration procedure should be completed within 30 days.  The BiH Ministry of Foreign Trade and Economic Relations (MoFTER) will appoint the office by a decree published in the Official Gazette.  After receiving the decree, the new representative office must notify MoFTER within 90 days of the beginning of operations.  If the representative’s office fails to do so, the appointment will be cancelled.

A representative office is allowed to have both foreign and local currency accounts with local banks.  Office equipment can be imported free of customs duties, based on a temporary permit with the possibility for extensions.  Office vehicles may be imported but only for expatriates.  Expatriates are required to obtain residence and work permits and to pay local income taxes.

Other forms of establishing a business in BiH include:

Unlimited Joint Liability Company

An Unlimited Joint Liability Company is a company of at least two persons who bear unlimited mutual liability for the company.  The company is founded by a founding contract of two or more domestic/foreign legal entities.  Every member has the right and obligation to manage the company.  The company has no statute and no management bodies because members manage the company directly, including representation of the company.

Limited Liability Company

A Limited Liability Company (LLC) is founded by an establishment act or establishment contract by one or more domestic/foreign legal entities with basic capital divided in parts.  A member of an LLC is liable for the value of his/her investment in that company.  Minimum basic capital is KM 2,000 (approximately $1,100).

The following steps are required to establish a limited liability company (the most frequent business entity form).  The steps are uniform for the whole territory of BiH:

1. Establishment of contract

2. Initial capital payment

3. Registration at the competent court           

4. Registration of a company stamp

5. Opening of a bank account in a commercial bank

6. Registration at the tax administration

7. Registration at the local municipality

8. Initiation of business activity

Limited Partnership

A Limited Partnership is a company in which one or more members has unlimited solidarity liability for the liabilities of the company including members’ private assets.  Risk of one or more members is limited by the value of their share in that company.  A Limited Partnership is founded by a contract of two or more domestic/foreign legal entities.  General partners manage the business of the company, and the company is represented by each general partner.

Joint–Stock Company

A Joint–Stock Company is founded by the establishment contract of one or more domestic/foreign shareholders with basic capital divided into shares.  A Joint-Stock Company is not liable for the obligations of shareholders and can be established by one or more founders.  The minimum basic capital is KM 50,000 (approximately $27,000).

Additional English-language information on the registration process can be obtained from:

BiH Ministry of Foreign Trade & Economic Relations (MoFTER)

Musala 9

71000 Sarajevo

Bosnia and Herzegovina

Tel: +387-33-220-093

Fax: +387-33-445-911

BiH Foreign Investment Promotion Agency (FIPA)

Grbavička 4

71000 Sarajevo

Bosnia and Herzegovina 

Phone: ++ 387 33 278 080

Fax: ++ 387 33 278 081


For the latest Investment Climate Statement (ICS) which includes information on investment and business environments in foreign economies pertinent to establishing and operating an office and to hiring employees, visit the U.S. Department of Department of State’s Investment Climate Statements website.


While U.S. franchises have traditionally been too expensive for BiH consumers and BiH has no specific franchise laws, several examples over the past 5-10 years have proven that U.S. franchises can succeed in BiH provided they select local partners with caution.  Current U.S. franchises operating in BiH include several Marriott hotels, KFC, Caribou coffee, UPS, and car rental companies (Hertz, National, Budget, Alamo).  The first McDonald’s franchise arrived in 2011 and there were four McDonald’s restaurants in BiH operating successfully until McDonald’s abruptly decided to pull out of the market and closed all outlets in December 2022 due to a corruption-related dispute with the local franchisee.  Burger King and Hilton have announced plans to enter the BiH market in the near future.

Direct Marketing

Direct-response selling remains popular in BiH.  With the steady growth in credit card usage, there are attempts to market consumer goods through catalog sales, direct response advertising (TV, radio, and print media), and e-commerce.  Marketing is usually carried out via formal or informal multi-level marketing groups or direct sale chains.  Often, informal gatherings are used to promote the products and encourage sales.

Joint Ventures/Licensing

Joint ventures are rare in BiH.  The BiH Law on the Policy of Foreign Direct Investment and the Law on Companies regulate the establishment of joint ventures, investment in companies with mixed ownership, as well as other types of foreign or domestic investment.  Establishing a joint venture requires a local lawyer and registration with the local court. 

The Law on Obligations (“Commercial Code”) addresses contract law.  The licensing contract covers intellectual property rights issues (trademark, model, patent, or copyright), payments/royalties, the term of the contract, and restrictions on using trademarks, among other topics.  A local lawyer should be consulted to ensure that provisions of the contract do not contravene BiH law.

Express Delivery

There are several express delivery, courier, and shipping services available to companies operating in the country, including FedEx, UPS, DHL, and other local and international express couriers.  The average transit time for document shipments from large U.S. cities to BiH is about three to four business days.

Due Diligence

The complex legal environment in BiH and endemic corruption dictate the need for a local attorney.  The legal framework is sometimes contradictory or overlapping, creating confusion and uncertainty.  Local attorneys’ experience with international commercial matters is still limited but improving.  Companies’ in-house legal counsel should be prepared to oversee their in-country counsel, with explicit explanations and directions regarding objectives.  U.S. Embassy Sarajevo maintains a list of local lawyers willing to represent U.S. citizens in BiH.  The list can be accessed at the U.S. Embassy Sarajevo’s website.  The U.S. Embassy can assist you in due diligence though its International Company Profile service (ICP), or by locating requested professional services as available.  The Economic/Commercial Section can be reached at +387 (33) 704-000 or via email at

To access the BiH Investment Climate Statement (ICS), which includes more information on the need for due diligence in specific areas, visit the U.S. Department of Department of State’s Investment Climate Statements website.