How to register a d.o.o. in FBiH
Startup owners usually decide to register a startup as a trade or as a limited liability company (d.o.o.). In a limited liability company, the liability for business is limited, so the founder or more of them are not liable for the obligations of the company with their personal property, but only the amount of the entered share. Precisely because of this characteristic d.o.o. makes it one of the most common forms of business in Bosnia and Herzegovina
In this text we will describe in detail the registration procedures of d.o.o. in the Federation of BiH, list the documents you need, and what costs you can expect when registering your d.o.o. companies in the Federation of BiH.
What is a limited liability company (d.o.o.)?
A limited liability company (d.o.o.) is a company that establishes one or more legal or natural persons for the purpose of performing a certain activity under a joint venture by entering a share in a pre-agreed share capital.
A member of a limited liability company is liable for the obligations of a limited liability company with his share. The shares of the founders of a limited liability company may be different, and each founder may acquire only one share.
Registration procedure d.o.o. begins with the Founding Decision, if there is only one founder, or with the Founding Agreement if there are several founders.
Who can be the founder (s) of a d.o.o.?
The founders can be domestic or foreign, legal or natural persons.
What are the steps and costs of registering a d.o.o.?
Below we present the steps that are the answer to the question of how to establish a d.o.o. in the Federation and what are the costs of establishing a d.o.o. in the Federation.
STEP 1: Choose a company name. You submit 3 possible company names to the notary.
STEP 2: The notary checks in the register of companies in the Court whether the chosen name is available.
STEP 3: Determine the amount that represents the founding capital.
Minimum initial capital for d.o.o. is 1,000 KM. If several partners establish a company, this founding capital is divided into the number of partners, provided that the minimum contribution of each partner must not be less than 100 KM.
STEP 4: Drawing up the founding act.
The basic and most important document for d.o.o. is its founding act. The founding act can be in the form of a decision (if there is one founder) or in the form of a contract (if there are several founders). Each founding act has its obligatory parts.
The memorandum of association is drawn up by a notary, and you must provide him with the following information:
- name and surname, and address of the founder of the company (if the founder is a foreign company, then the name and address of the company shall be stated)
- what is the amount of the initial share capital (the minimum amount prescribed by law is 1,000 KM)
- who is the founder / founders
- who is the director – business management and representation of the company (appointment of persons authorized for business management and representation, as well as for registration of the company in the court register)
- what is the name of the company, the seat and the activity in which the company will be engaged
- rights and obligations of company members (business policy, profit distribution, etc.)
- procedure in case one of the founders of the company does not pay his investment in money by the agreed deadline or does not fulfill some other agreed obligation
- settlement of the costs of founding a company (by the founder or a new company)
- Consequences of the failed establishment of the company
- certified signature of the founder or authorized representative for company registration in BiH (notarized)
Costs: lawyer’s or notary’s processing = 400-500 KM
Registration in the Court
Director in d.o.o. he can establish an employment relationship, and in such a case he must be health and socially insured and cannot hold the position of director at the same time in another company, but there is a possibility that the director is not employed, but hired through a managerial contract. In this case, the company must have at least one employee.
If the director of a company in BiH needs to be a foreigner, then he must register his residence in BiH and obtain a work permit.
STEP 5: Pay in the founding capital.
You pay the founding capital to the transfer account of one of the banks in BiH (you need the payment slip as proof that you submit to the court). The founder / founders may pay the share capital directly or through an authorized lawyer. If someone else makes the payment, a written statement should be prepared stating that the payment was made on behalf of the founder.
STEP 6: Registration with the municipal court.
Registration is done at the department of the register for registration of legal entities. Data entered in the register are data on the establishment, merger and termination of the subject of entry, establishment or termination of a part
subject of registration, all status changes that include changes in the form of organization of the subject of registration, data on the subject of registration relevant to legal correspondence and their changes, data on bankruptcy and liquidation of the process, data on the initiated procedure of termination of registration and other legally prescribed data.
What documentation is required for registration?
For registration, it is necessary to submit the following documentation (translation of the documentation with a certified court interpreter in one of the official languages in Bosnia and Herzegovina):
- application for registration (forms can be downloaded from the court or on the court website) founding act
- proof of payment of share capital to a temporary bank account
- Proof of payment of court fee and certificate of payment of fee for publishing an announcement on the establishment of a company in the Official Gazette of FBiH
- certificate from the Tax Administration on the absence of debt
- certified signature of the person authorized to represent the company in internal and external traffic – the signature is notarized
- Director’s statement on acceptance of duty (made by a lawyer or notary, certified by the Municipality or notary).
Costs: court fee 320 KM + 150 KM publication in the Official Gazette = 470 KM
STEP 7: Pay the administrative costs and take the Company Registration Decision from the Court.
What after we get the Registration Decision?
STEP 8: Making the seal.
After completing the registration, you make a stamp with the name of your company. In order to be able to make a stamp, it is necessary to enclose a certified copy of the document Decision on registration, ie Decision on entry of the company in the court register. The name and address of the company must be indicated on the stamp.
Costs: 30-50 KM
STEP 9: Sign the Contract with a Certified Accountant and the Premises Lease Agreement.
STEP 10: Request for issuance of statistical ID number and activity code.
After completing the registration in the Court, you need to register your company in the Register of Companies in the Statistical Office, ie in the Tax Administration. You submit to the Tax Administration a Request for obtaining an ID number (which represents the “identity card” of your company) and a Notice of classification by activity code.
Costs: copying + certification of documentation = about 30 KM
STEP 11: Registration in the VAT system (conditional).
After obtaining the identification number, the Company can be entered in the Register of Indirect Taxpayers, only if it plans to achieve an annual taxable turnover of more than 50,000 KM. In that case, he is obliged to present proof that he will earn more than 50,000 KM in the next year. Such evidence may be the Contract with the client.
Costs: administrative fee + copying + certification = approx. 50 KM
STEP 12: Open a transaction account in the bank.
To open a bank giro account, you need to submit copies of the following documents:
- Decisions on entry in the court register
- ID number certificate
- Certificate of VAT number
- Identification document for persons who need to obtain a power of attorney for the giro account to be opened
- Certified signature of authorized persons for payment operations
Costs: copying + certification of documentation = approx. 30 KM
STEP 13: Pay the utility fee.
STEP 14: Develop an Employment Contract for employees.
STEP 15: Reporting the company and employees to the Tax Administration.
Registration of the company with the competent Tax Administration
To register a company with the competent Tax Administration, you need the following documents (originals or certified copies):
- Decision on registration, ie decision on entry in the court register
- ID number certificate
- Completed company application form. The following document is required for the registration of employees: Appropriate form for entry in the unified register (can be downloaded from the competent Tax Administration according to the company’s headquarters). NO COST (you already have all this).
STEP 16: Apply for initial fiscalization. Companies must have a fiscal cash register.
Costs: fiscalization + fiscal device = approx. 700 KM
Recent administrative requirements
STEP 17: Obtaining a business license.
You need to submit a statement to the competent municipal or cantonal authority (depending on the activity) on the fulfillment of the technical requirements of the business premises in order to start performing the activity. To obtain this permission, you need to submit the following documents:
- Statement on fulfillment of technical conditions of business premises for the beginning of performing activities
- Notice of commencement of activities
- Application for a permit
- Power of attorney, unless the director himself takes the necessary steps
- Proof that the company has business premises and necessary equipment (statement from the cadastral office, purchase agreement, loan agreement, etc.)
- Proof of registration of directors and employees in the tax administration
- Proof of payment of the administrative fee
- Expert opinion on noise protection
- Certificate of electrical installations (certificate)
- Certificate of fire protection
The permitting process may vary slightly from one municipality to another.
The period of time when it comes to the registration procedure d.o.o. from the submission of complete documentation to the court until the receipt of the Decision is 15-20 days.
What are the costs of establishing a d.o.o. in the Federation of BiH?
Minimum founding capital 1000 KM
Compilation of the founding act 400-500 KM
Court fee 320 KM
Publication of registration in the Official Gazette 150 KM
Production of stamps 30-50 KM
Issuance of statistical ID number and activity code (copying + certification of documentation) approx. 30 KM
CONDITIONAL: Registration in the VAT system (administrative fee + copying + certification) 50 KM
Opening a transaction account in the bank approx. 30 KM
Fiscalization approx. 700 KM
TOTAL (WITHOUT VAT REGISTRATION) 2660-2780 KM
TOTAL (WITH VAT REGISTRATION) 2710 -2830 KM