Many smaller and younger firms have difficulty gaining access to credit; therefore, an outside investor might consider financing options for the local reseller, whether in the area of industrial or consumer goods. Most buyers prefer to pay in monthly installments, even for low-priced goods.
Close and frequent contact with buyers, motivated and trained intermediaries, and aggressive market promotion are additional factors critical to success. Selling to state-owned companies and other state entities still relies on cultivating relationships.
It is important to provide product literature and manuals in local languages, as well as to use locally available service and maintenance.
Trade shows are a common vehicle for company promotion in BiH. Local and regional firms rely on trade fairs to establish business connections, gain market visibility, and learn about new products. Trade shows are held throughout the country. The most important shows take place in Sarajevo (https://www.skenderija.ba/), Banja Luka https://www.banjaluka-turizam.com/, Zenica (https://www.zeps.com/), Mostar https://www.mostar-fair.com/), and Gradacac (http://gradacackisajam.com.ba/). For agriculture and food trade shows, please visit the U.S. Embassy Sarajevo’s website.
Electronic media (television, cable TV, and radio), outdoor advertising, print media, and online media are the leading advertising mediums. The standard means to pursue advertising services is to contact one of the many advertising agencies in BiH. Media Group and Media Pool are two key advertising groups. Media Group includes BBDO and McCann Erickson, while Media Pool consists of SV-RSA, Fabrika, J.W. Thompson, Communis and M.I.T.A. Group/Saatchi & Saatchi. There are also several smaller, locally-owned firms, such as Via Media.
The broadcasting scene is crowded, with three Public Broadcasting Service (PBS) broadcasters at the state and entity level, 12 local public TV stations, 45 private TV stations, and 144 radio stations (78 private, 62 public, 3 PBS, plus 3 non-profit). The full list of TV and radio broadcasters is available on the Communications Regulatory Agency’s website.
Among the most popular private TV stations are NTV Hayat, TV Pink, OBN, BNTV, ATV, TV1, and N1. The three public broadcasters are a state-level TV and radio station (BHT), as well as two entity-level TV and radio stations (FTV and RTRS).
Mareco Index Bosnia, a member of Gallup International, and Ipsos are leading public opinion, media and market research companies in BiH. Both companies conduct consumer, media, and public opinion research throughout the country.
Since January 1, 2006, BiH has had a single, national 17 percent value-added tax (VAT) rate. This is one of the lowest rates in the region. The price level of goods and services in Bosnia and Herzegovina is relatively low due to the low cost of labor. The market generally determines prices.
Sales Service/Customer Support
Sales service and customer support are relatively undeveloped as marketing tools. As foreign companies come to the market, they and their distributors are developing new standards of customer service. These higher standards of sales service and customer support are slowly being adopted by local firms. When selling capital goods, sales services and customer support are essential, particularly in terms of maintenance and training. A well-trained local distributor can provide a competitive edge in this area.
Principal Business Associations
The American Chamber of Commerce in BiH (AmCham BiH) was established in 2001 as a nonprofit, independent association with the role of advancing the interests of U.S. and other foreign usinesses in BiH. AmCham BiH plays an important role in improving the business climate in BiH and promoting high standards of business practices. AmCham BiH brings together companies and organizations, including: law and consultancy firms; consumer goods and service providers; public relations, marketing and advertising companies; information technology companies; non-profit and educational organizations; engineering and construction firms; pharmaceutical companies; food and beverage producers; manufacturers of tobacco products; and various financial institutions. AmCham’s activities include advocacy on members’ behalf in addressing issues impacting their ability to conduct business in BiH; lobbying for legislation that is in accordance with European Union and international standards; and organizing regular meetings for members to discuss issues of interest.
The Foreign Investors Council (FIC) was established in 2006 as a non-profit business association, representing the interests of foreign businesses in BiH. FIC members come from different sectors including metal industry, mining, construction, legal and financial services, oil and energy, trade, banking, telecommunications, food and beverage production, and others. FIC objectives include the improvement of the investment and business environment in BiH and the promotion of communication and cooperation between the business council and BiH authorities.
There are also several local Chambers of Commerce on the state, entity, and canton administrative levels. The Chambers of Commerce represent member companies’ interests with government related to adopting and amending economic laws, regulations, and programs.
Limitations on Selling U.S. Products and Services
The state-level “Law on Foreign Direct Investment” provides a generic framework for foreign investment. The law accords foreign investors the same rights as domestic investors, including bidding on privatization tenders. The primary exceptions are the defense industry and the media sector, where foreign control or ownership is limited to 49 percent. However, either entity government may decide, if it deems justified, to waive the 49 percent foreign ownership limit for defense industry companies. As a result of FDI Law amendments adopted in March 2015, foreign investors can now own more than 49 percent of capital business entities dealing with media activities, such as publishing newspapers, magazines and other journals, publishing of periodical publications, production and distribution of television programs, privately-owned broadcasting of radio and TV programs, and other forms of daily or periodic publications of edited produced program content through transfer of recordings, voice, sound or images. The new FDI Law maintains the restriction that foreign investors cannot own more than 49 percent of public television and radio services.