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Introduction – Bosnia and Herzegovina:
Capital – Sarajevo
Currency – Bosnian Convertible Mark (BAM)
GDP – 23.37 billion USD (2021)
People/Nationality- “Bosnian” or “Herzegovinian”
Language – Bosnian, Croatian, and Serbian
Major Religion – Islam, Orthodox Christianity, and Roman Catholicism
Population – 3,207,409 (as of September 15, 2023)
Bosnia and Herzegovina have a diverse economic structure, with various sectors contributing to its GDP. The key sectors include manufacturing, services, agriculture, and mining. The manufacturing sector plays a significant role in the Bosnian economy. It includes industries such as automotive, steel, machinery, textiles, and food processing. The country has attracted foreign investments in its manufacturing sector.
The services sector, including retail, finance, and tourism, has been growing steadily. Tourism is an important source of income for the country, with visitors drawn to its natural beauty, historical sites, and cultural heritage.
Agriculture is still a significant part of the economy, employing a substantial portion of the population. The country produces a variety of agricultural products, including grains, fruits, vegetables, and livestock.
The country engages in trade with neighbouring countries and international partners. Its main trading partners include Germany, Croatia, Italy, Serbia, and Slovenia, and the currency of Bosnia and Herzegovina is the Bosnian Convertible Mark (BAM), which is pegged to the euro.
Living in Bosnia and Herzegovina offers a diverse cultural experience with rich traditions due to its ethnic diversity. The country boasts natural beauty, outdoor activities, and a generally affordable cost of living. Knowledge of local languages is essential. Healthcare and education vary by region. Safety is generally good and enjoying the local cuisine is a highlight.
Contract of Employment
The employment relationship relies on a written employment contract that must adhere to the Employment Law of the Federation of Bosnia and Herzegovina (published in the Official Gazette of FBiH, no. 26/16 and 89/18). Before starting employment, the employer must provide the worker with a copy of the agreement.
If the contract doesn’t specify a specific duration, it is considered an indefinite agreement by default.
May not exceed three months.
Termination by the Employee: If an employee wishes to terminate their employment, they are typically required to provide notice to the employer in advance. The notice period is usually defined in the employment contract or by labor laws. The length of the notice period may depend on the length of service and other factors.
Termination by the Employer: Termination by the employer can occur for various reasons, including:
– Just Cause: Termination for misconduct or breach of employment terms.
– Redundancy: Termination due to economic reasons, such as business closure or restructuring.
– Unsatisfactory Performance: Termination based on an employee’s inadequate job performance.
– Expiration of Fixed-Term Contract: For fixed-term contracts, termination occurs when the contract reaches its agreed-upon end date.
Full work hours of an employee shall not exceed 40 hours weekly.
In many cases, labor laws stipulate that the maximum daily overtime limit is four hours. This means that an employee’s regular daily working hours plus any overtime hours should not exceed this limit.
13th Month Pay
In Bosnia and Herzegovina, there is no standard or legally mandated 13th-month pay. However, some employers in certain industries or through collective agreements may offer a form of annual bonus or a 13th-month salary to their employees as an extra payment, typically around the holiday season or the end of the year.
Employees have the right to 20 working days of paid annual leave, which is set by both the employment contract and labour law, and it should not exceed 30 working days. Annual leave can be taken in two portions, with the first segment being a minimum of 12 working days within a calendar year.
The duration of sick leave can vary depending on the specific medical condition, as determined by a medical doctor. Typically, sick leave can range from a few days to several weeks, depending on the severity of the illness or injury.
The employer provides salary compensation for the initial 42 days of sick leave. After this period, the employer continues to offer salary compensation to the employee; however, the employer can seek reimbursement from the appropriate health insurance fund.
Maternity and Paternity Leave
Female employees are entitled to maternity leave before and after childbirth. The duration of maternity leave can vary but is typically set at a total of one year. It often consists of both prenatal and postnatal periods.
Male employees, typically fathers, may be entitled to paternity leave, which is usually shorter in duration compared to maternity leave. The specific duration can vary but is often a few days to a week.
VAT / GST
The standard VAT rate in Bosnia and Herzegovina is 17% as of 2023.
Income tax is levied at a uniform rate of 10% on various types of income, including earnings from employment, interest, royalties, and capital gains. Social security contributions are applicable to most employment income, with employees contributing 33% of their gross salary, while employers make an additional contribution of 10.5%.
Employer / Employee Contributions
– Employees pay income tax, typically at a flat rate, often around 10%.
– They also contribute to social security, usually at a rate of approximately 33% of their gross salary.
– Employers are responsible for withholding and remitting income tax on behalf of their employees.
– They make contributions to social security at a lower rate, usually about 10.5% of the employee’s gross salary.
– Employers may incur additional costs, such as contributions to insurance coverage and other employment-related taxes, which can vary by entity or district.
The specific rates and regulations may differ depending on the region within Bosnia and Herzegovina, and compliance with the latest requirements is crucial for both employers and employees.
January 1 – New Year’s Day
January 7 – Orthodox Christmas day
January 14 – Orthodox New Year
January 27 – St. Sava Day
March 1 – Independence Day
April – Easter Sunday
May 1 – Labour Day
August 15 – Velika gospa (Assumption)
November 1 – All Saints Day
November 25 – Statehood Day
December 25 – Christmas Day
In addition to these holidays, there are also religious holidays observed by various communities, such as Eid al-Fitr and Eid al-Adha for Muslims and Easter for Christians.
Please note that this is not an exhaustive list, and there may be additional holidays, regional variations, and cultural celebrations throughout Bosnia and Herzegovina. Holiday dates and observances can also change.
The severance pay amount is influenced by factors such as the collective agreement, company regulations, and the employment contract. It should not be lower than one-third of the average monthly salary of the final three months for each year of service with the employer. The actual severance pay is contingent upon the duration of the employee’s service with the employer.
Work and Residence Permits (Expatriates)
Here is a general overview of the process:
Job Offer: Expatriates seeking employment in Bosnia and Herzegovina usually need to secure a job offer from a local employer. The employer must demonstrate that they have been unable to find a qualified local candidate for the position.
Employer’s Application: The employer initiates the work permit application process by submitting an application to the relevant government authority. This authority varies depending on the entity or district.
Documentation: The application typically requires various documents, including the employment contract, proof of the employer’s financial stability, and any necessary qualifications or certifications related to the job.
Approval: Once the application is reviewed and approved, a work permit is issued to the expatriate, allowing them to work legally in Bosnia and Herzegovina.
Application: After obtaining a work permit, the expatriate needs to apply for a residence permit. The application is typically submitted to the Ministry of Security or a similar authority in the respective entity or district.
Documentation: The residence permit application generally requires documentation such as proof of accommodation, proof of health insurance, a valid passport, and a certificate of no criminal record.
Biometric Data: Expatriates may need to provide biometric data, including fingerprints and photographs, as part of the application process.
Interview: In some cases, an interview with immigration authorities may be required.
Approval: If the application is successful, a residence permit is issued, allowing the expatriate to legally reside in Bosnia and Herzegovina for the duration of their employment.