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Investment Incentives in the Republic of Srpska in 2011. (Fiscal and Non-Fiscal*)

 

 

Inventory of Investment Incentives by Awarding Republic of Srpska Government Institution (created in cooperation with International Finance Corporation - IFC)

 

Republic of Srpska Employment Institute


Republic of Srpska Ministry of Science and Technology


Republic of Srpska Ministry of Agriculture, Forestry and Water Management


Republic of Srpska Ministry Of Industry, Energy and Mining


Republic of Srpska Ministry of Trade and Tourism


Republic of Srpska Ministry of Finance


Republic of Srpska Investment Development Bank


Republic of Srpska Government Gender Center


Republic of Srpska Environmental Protection and Energy Efficiency Fund

 

 

 

 

 

 

Republic of Srpska Employment Institute

  • Subsidies for self-employment and employment with an employer of persons from the identified target group (Republic of Srpska Government by means of a World Bank loan and own participation through Republic of Srpska Employment Institute and Project Coordination Unit of the Republic of Srpska Ministry of Health and Social Welfare)
  • Subsidies for training, additional training and retraining and improving labor mobility (Republic of Srpska Government by means of a World Bank loan and own participation through Republic of Srpska Employment Institute and Project Coordination Unit of the Republic of Srpska Ministry of Health and Social Welfare)
  • Subsidies for recruitment of trainees with high school diploma (funding by the United Nations Development Program UNDP)
  • Subsidies for recruitment of trainees with college or university diploma (These include primarily the project of employment of highly educated trainees, entitled Prvi Posao (First Job). Through this project, trainee salaries are 70% co-financed by the Government of the Republic of Srpska, and 30% by employers. This project is carried out on an annual basis and for each year a new program is created)

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Republic of Srpska Ministry of Science and Technology

  • Co-financing of research programs in the field of technological development, knowledge and technology transfer, and encouragement of the application of scientific research work results

(This program/measure relates to the financial support for projects of new technology development or existing technology improvement, own equipment development or modern equipment procurement, and participation in/organization of expert events on technology development in the country/abroad)

  • Encouragement of inventiveness, innovations and intellectual property protection

(This program/measure relates to the financial support to innovators and innovator organizations)

  • Support to organizations for infrastructural support to technology development

(This program/measure relates to the financial support to organizations for infrastructural support to technology development, such as business and technology incubators, and technology transfer centers)

  • Program of basic, applied and development research

(This program/measure relates to the financial support for scientific and research projects in the fields of basic, applied and development research on a set topic or a free topic selected by the project team)

  • Program of provision and maintenance of scientific and research equipment and scientific and research work premises

(This program/measure relates to the financial support for procurement of scientific and research equipment and equipping of premises for scientific and research work) 

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Republic of Srpska Ministry of Agriculture, Forestry and Water Management

  • Premium for breeding cattle
  • Support for development of market production of milk
  • Premium for meat production
  • Support for beekeeping production
  • Measures for animal health protection
  • Other liabilities - relating to identified obligations arising from measures to support livestock production set forth by the Rulebook
  • Premium for manufactured and sold fruit and vegetables
  • Support per sowing area unit/subsidy - Incentive funds to subsidize fertilizer
  • Premium for seed material
  • Premium for planting material
  • Premium for industrial plants
  • Measures to protect plant health
  • Premium for wheat
  • Premium for tobacco
  • Other liabilities - relating to identified obligations arising from measures to support plant production set forth by the Rulebook in 2010
  • Investments in agricultural mechanization
  • Investments in livestock production (breeding stock, facilities, equipment)
  • Investments in plant production (greenhouses, hothouses, perennial plants and equipment and organic plant production)
  • Improvement of agricultural land (drainage, irrigation etc.)
  • Investments in modernization of the existing processing facilities and construction of the new
  • Support to organizations of agricultural producers and processors
  • Improvement of human resources
    • Support for seminars, counseling, study tours, working groups
    • Support for education and additional training of rural youth and training of working-age population in rural areas
    • Co-financing of innovative programs in livestock and plant production
  • Nature conservation and rational management of natural resources
    • Support for measures of proper solid waste disposal and treatment and protection of natural springs and streams for the purpose of regulation of rural dumps, rehabilitation of rural landfills, financing of measures of removal of waste of animal and plant origin, co-financing of program of power generation from plant and animal waste, prevention of pollution of drinking water sources etc., based on requests submitted to the Agency
  • Co-financing of anti-hail protection and agricultural production insurance premiums
    • Support for preventive measures to prevent and mitigate natural disasters

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Republic of Srpska Ministry Of Industry, Energy and Mining

  • Improvement of living conditions and introduction of diversity in generating income in rural economy
  • Incentives for recruitment of unemployed persons in the Republic of Srpska
  • Subsidies to boost exports for exporting companies affected by natural disasters or other extraordinary events

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Republic of Srpska Ministry of Trade and Tourism

  • Financial incentive for tourism sector - small-scale state aid (grant)

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Republic of Srpska Ministry of Finance

  • Article 11 of the Law on Profit Tax sets forth that for depreciable machinery and equipment, a deduction shall be allowed for accelerated depreciation, to be calculated as follows: a) first year: 40%, b) second year: 30%, v) third year: 30%
  • Article 12 of the Law on Profit Tax sets forth that capital gains or losses incurred during a fiscal year can be offset, and net gain or loss can be added to or subtracted from tax base, if they are not included in income or expenses
  • Article 13 of the Law on Profit Tax sets forth that fiscal loss, which is a negative difference between revenues and expenses in determining the tax base, shall be carried over and compensated for by reduction of tax base in the following five years, and if a taxpayer suffers a loss in several fiscal years, the fiscal loss from an earlier fiscal year shall be compensated before the fiscal loss from a later fiscal year
  • Article 14a of the Law on Profit Tax introduces a relief in the form of reduction of tax base for the amount of investment made in equipment, plant and immovable property for a taxpayer performing their own registered manufacturing activity
  • Article 14b of the Law on Profit Tax sets forth a relief relating to reduction of tax base when computing profit tax by the amount of income tax and contributions paid for the newly employed workers, for at least 30 new employees in one fiscal year during a period of three years from the date of employment of those workers
  • Article 28, paragraph 2 of the Law on Profit Tax sets forth that withholding tax shall not apply to the following revenues: a) profit repatriated to the country of the foreign legal person that is attributable to their permanent place of business, provided that the foreign person owns 10% or more of the stock of the foreign legal person in the Republic of Srpska. Repatriated profit means legal person’s remaining profit after tax payment; b) revenues in the form of interest on debt instruments issued or guaranteed by persons mentioned in Article 7, paragraph 1, item (v); v) revenue in the form of interest on deposit; g) revenue in the form of dividends; d) revenue in the form of interest or its functional equivalent paid on a debt obligation between the permanent place of business or subsidiary to its foreign parent, if no reduction was taken by the interest payer when computing their tax base; đ) revenue in the form of royalties paid by the permanent place of business or subsidiary to its foreign parent, if no reduction was taken by the payer in computing their tax base; e) interest on loans and credits used by a resident for investments in equipment, plant and immovable property in the sense of Article 14a of this Law
  • Article 18 of the Law on Income Tax sets forth the treatment of losses arising from self-employment
  • Article 9 of the Law on Real Estate Tax sets forth real estate exempted from the payment of the real estate tax
  • Article 8, paragraph 2 of the Law on Real Estate Tax sets forth that, in case of performance of deficient manufacturing or craft activity, the payer may be exempt from liability

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Republic of Srpska Investment Development Bank

  • RSIDB loans for start-up activities
  • RSIDB loans for microbusiness in agriculture
  • RSIDB loans for agriculture
  • RSIDB loans for entrepreneurs and enterprises
  • Housing loans
  • Loans for local self-government units
  • Loans for employment of demobilized soldiers
  • EAF (Enhancing Access to Finance for Small- and Medium-Sized Enterprises) Project loans for small- and medium-sized enterprises (SME)
  • EAF Project loans for small- and medium-sized enterprises (SME) – additional financing
  • European Investment Bank (EIB) loans for small- and medium-sized enterprises (SME)
  • Loans for companies
  • Loans for agriculture and processing industry
  • Loans for agriculture and agricultural produce processing industry
  • Loans for health services

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Republic of Srpska Government Gender Center

For the purpose of implementation of the BiH Gender Action Plan, by means of donor funds of the BiH FIGAP program, through the Agricultural Advisory Service

  • Organization of trainings through which women are given opportunities to develop and enhance their entrepreneurial potentials
  • Program focused on empowering women through information and granting incentive funds for development of business activity by rural women through various forms of organization (associations and cooperatives)

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Republic of Srpska Environmental Protection and Energy Efficiency Fund

  • Funding programs, projects and studies

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Investment incentives may be defined as „any measurable economic advantage accorded to specific enterprises or groups of enterprises by a government, in order to direct investments to the preferred sectors or regions or to influence the nature of those investments.” These advantages may be of fiscal (such as tax exemptions) or non-fiscal (such as grants, loans or reduction of liabilities as a way to support the development of business entities or to strengthen competitiveness) nature.

Fiscal incentives - any tax/customs-related benefit with the deliberate purpose to influence firm’s (investment) behavior and targeted towards specific firms, groups of firms or sectors.

Non-fiscal incentives - any financial or regulatory measure with the deliberate purpose to influence firm’s (investment) behavior and targeted towards specific firms, groups of firms or sectors.

 

 

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