Bosnia - Market Challenges Bosnia - Market Challenges
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The lack of a single economic space in BiH affects companies trying to do business across the entire country. The country’s political environment and complex government structure creates significant obstacles to economic development.
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According to the World Bank (WB), BiH is among the least competitive economies in Southeast Europe and is currently ranked 89 out of 190 global economies in the WB’s 2018 Doing Business report. The WB report ranks BiH particularly low for its lengthy and arduous processes to start a new business, obtain construction permits, and register property. BiH’s poor investment climate, endemic corruption, complex legal and regulatory frameworks and government structures, non-transparent business procedures, insufficient protection of property rights, and a weak judicial system has resulted in stagnant foreign direct investment inflow over the past five years.
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Historically, U.S. investment in BiH has been low due to the small market size, relatively low-income levels, distance from the United States, challenging business climate, and the lack of investment opportunities.
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Government and public procurement tenders have been criticized for a lack of openness and transparency.
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Dispute resolution is also challenging as the judicial system moves slowly, often does not adhere to existing deadlines, and provides no recourse if the company in question re-registers under a different name. Arbitration and mediation of commercial disputes is infrequently used.