Bosnia and Herzegovina as natural person

[Zuzuud]

Hi!

I am wondering to move Bosnia and Herzegovina and be a natural tax resident there. As I see there is

• no CFC rule
• no tax on dividends
• if I am right there is no 183 days rule (I can travel)

Am I missing something?

What jurisdiction would be ideal and cheap to run a zero or low tax company from Bosnia (mostly EU, but global)

 

[mukkii]

Resident income tax is 10% on all incoms. There is no tax on dividends. You are considered a resident if you spend 183 days in total in an year.

 

[Zuzuud]

I think there is a different between two regio. But the interesting thing pwc and kpgm shows the opposite.
So I belive one of them should be enought a permanent address isntead of 183 days spending:

https://taxsummaries.pwc.com/bosnia-and-herzegovina/individual/residencehttps://home.kpmg/xx/en/home/insights/2015/07/bosnia-and-herzegovina-income-tax.html
Which is one is true? What do you think?

 

[mukkii]

FBiH


The FBiH PIT Law defines a resident taxpayer as an individual who:

• has permanent residence in the FBiH
• spends a cumulative period of at least 183 days in the FBiH during any calendar year; or
• earns income by carrying out a dependent activity outside the FBiH that is paid from the budget of the FBiH and/or BiH.
• Exceptionally, residents of the FBiH include natural persons – returnees who earned a return on the territory of the Republic of Srpska and/or Brcko District as well as other natural persons who reside on the territory of the Republic of Srpska or Brčko District, and which generate income from employment with an employer whose headquarters is in the Federation of Bosnia and Herzegovina.

If any of these is met, you are considered a resident. The law is just written differently for RS and FBiH, but rules are the same.

 

[Zuzuud]

Thank you, but it means to me there is no 183 days spend requirement. Am I right?

 

[mukkii]

I think it is enough to have permanent residence in the FBiH, you don't have to be there for 183 days.

 

[Jerry1911]

@Zuzuud OP did you end up moving to Bosnia then?

 

[Zuzuud]

Nope. But it's still on the table. Why are you asking?

 

[Zuzuud]

Hello Guys!

I have checked my old links and guess what, one of those is deprecated and the content of the second one is changed.
Is there any change on tax rules in BiH?

I am sure dividend was exempt from income tax as you can see in this old document:
2.7 https://webcache.googleusercontent....odyn_img/bosnia.pdf+&cd=1&hl=en&ct=clnk&gl=hu

and the page of the second link is changed to this:
https://taxsummaries.pwc.com/bosnia-and-herzegovina/individual/income-determination
Income determination:

• Capital gain income.
• Income from capital.
• Income from capital investments.

Do these are referred to dividends or not? I am not an expert.

thank you for you feedback

 

[TrueTroop]

FBiH changed it relatively recently and now there you have to pay taxes on dividends. However in another region (Brcko), it is still 0% tax on dividends...No CFC rules, and good EU banks (unicredit, sberbank, etc).

However, if you are not naturally Bosnian, it is hard to get citizenship...Not impossible, but hard. Residency as a foreigner is easer to get (get a local lawyer), and at least the police do not actually check if you are ever there or not.

Brcko is maybe the last place in Europe with no CFC rules and 0% dividend tax? Although it is recommended to not setup a local company, but in an offshore place like BVI, Delware, etc and work through that entity instead....

 

[Jerry1911]

Any updates? Has anyone here ever relocated to Bosnia? I am thinking about doing it myself, the company I'm working for at the moment has a subsidiary there so I can get residency fairly easily.

 

[mendo]

I think the company formation is the best option, if needed for a longer or basically permanent Residence. My wife is a lawywer in Banja Luka, (Republic of Srpska, but the licence is valid for the Federation of Bosnia and Herzegovina and for district Brcko also) and does incorporations for foreigners rather often. Cost of incorporation is rathere low, compared to most other countries...

 

[benbao]

I think the company formation is the best option, if needed for a longer or basically permanent Residence. My wife is a lawywer in Banja Luka, (Republic of Srpska, but the licence is valid for the Federation of Bosnia and Herzegovina and for district Brcko also) and does incorporations for foreigners rather often. Cost of incorporation is rathere low, compared to most other countries...

What does rather low mean as a ballpark figure?

 

[mendo]

What does rather low mean as a ballpark figure?

do you ask for the legal part only or for all costs?

 

[benbao]

do you ask for the legal part only or for all costs?

Both

 

[mendo]

Both

She charges 595 eur for the legal work and there is around 100 eur of government fees. That is for a Limited liability company with minimal capital of 1,00 Bosnian Mark (0,51 eur) and one shareholder.
If initial capital is higher or/and company has more than one owner, there is also a Notary needed, which costs about 150 eur.

 

[luap]

She charges 595 eur for the legal work and there is around 100 eur of government fees. That is for a Limited liability company with minimal capital of 1,00 Bosnian Mark (0,51 eur) and one shareholder.
If initial capital is higher or/and company has more than one owner, there is also a Notary needed, which costs about 150 eur.

Is there a website?

 

[Cloudbanck]

She charges 595 eur for the legal work and there is around 100 eur of government fees. That is for a Limited liability company with minimal capital of 1,00 Bosnian Mark (0,51 eur) and one shareholder.
If initial capital is higher or/and company has more than one owner, there is also a Notary needed, which costs about 150 eur.

Wait so Bosnian currency is called the Mark!? Learning something every day.

Had to look it up:

"The convertible mark (Bosnian: konvertibilna marka, Cyrillic: конвертибилна марка; sign: KM; code: BAM) is the currency of Bosnia and Herzegovina. It is divided into 100 Pfenig or Fening (Пфениг/Фенинг) and locally abbreviated KM.

The convertible mark was established by the 1995 Dayton Agreement. It replaced the Bosnia and Herzegovina dinar, Croatian kuna and Yugoslav novi dinar as the single currency of Bosnia and Herzegovina in 1998. Mark refers to the Deutsche Mark, the currency to which it was pegged at par."

Ok, so the Deutsche Mark never died!

It is 0.51 EUR because 1 Deutsche Mark is/was 0.51 EUR. For Germans that dont like the EUR, they can basically just use Bosnian Marks, and it is like having their old D-Mark.

 

[mendo]

Is there a website?

https://advokati-blagojevic.com/

 

[zzzzzz]

I think the company formation is the best option, if needed for a longer or basically permanent Residence. My wife is a lawywer in Banja Luka, (Republic of Srpska, but the licence is valid for the Federation of Bosnia and Herzegovina and for district Brcko also) and does incorporations for foreigners rather often. Cost of incorporation is rathere low, compared to most other countries...

Do you need to employ yourself as director and pay minimum salary when forming company (to get permanent residency)?