Privatization Opportunities

Privatization Opportunities

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Privatization in Bosnia and Herzegovina is an overall process, which provides an array of the possibility to both local and foreign physical and legal entities to participate in the purchase of the state capital, including enterprises, banks and apartments with existing tenancy rights.

The “strategic enterprises” were selected for tender privatization, offering numerous privatization opportunities to remain throughout Bosnia and Herzegovina.

The privatization process of state-owned companies is well underway. An estimated 60% of small companies and more than 30% of the large ones are now privately owned or publicly traded. Bosnia and Herzegovina is accelerating the privatization process for companies of strategic importance in order to increase economic growth and enhance the volume of foreign investment.

Nevertheless, a number of these “strategic enterprises”, which includes large enterprises, telecommunications and power utilities sectors, public utilities, mines, etc, are not still privatized, presenting a choice of opportunities for potential foreign and local investors.

Privatization is managed by the FB&H Privatization Agency and cantonal privatization agencies in the Federation of Bosnia and Herzegovina, and the Republic of Srpska Investment-Development Bank (IRBRS).

Constitutionally, the Entities are responsible for structural reform, though, for instance, state level law deals with non-discrimination and transparency of the privatization process throughout the country, and in the FBiH significant implementing authority is at the cantonal level in the privatization of enterprises.

Agency for Privatization in Federation of Bosnia and Herzegovina (FPA) is specialized organization in Bosnia and Herzegovina performing professional, advisory, promotional, educational and other business activities relating to the privatization process.

The Republic of Srpska Investment-Development Bank (IRBRS)  is authorized to sell state capital in and restructure enterprises with majority state capital which is subject to privatization.

Testimonials & Success Stories
 

Global Investment Promotion Best Practices 2012 of the World Bank has cited one example of support that FIPA provides to foreign investors who are running business in Bosnia and Herzegovina in order to contribute to increase the flow of foreign capital in the country.

The article said:  

„The Foreign Investment Promotion Agency (FIPA) of Bosnia and Herzegovina was an early convert to the idea of providing facilitation services to agribusiness investors as a way to maximize the positive impact of agriculture on the economy.

In 2007, for example, FIPA assisted a Dutch food processing company establish a US$1.6 million production facility to process unused milk ingredients into value-added products in Sarajevo to sell to markets in Eastern Europe and the Middle East.

As part of its aftercare program, FIPA assisted the company with its expansion plans. Among other things, the agency helped facilitate veterinary permissions, navigate various bureaucratic hurdles and played an important role in securing funding for the company’s expansion. It also helped develop a network of local suppliers and customers. As a result of these efforts, the Dutch investor developed stronger links with the Bosnian economy, thus increasing the positive spillover effects on the local economy.

Currently a new investment to establish a drying facility for milk powder is under way. This will further expand the processing facilities of unused milk ingredients. This additional planned investment is worth approximately US$2.8 million, thus nearly trebling the company’s original investment in the country“.

 

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