Financial Market Report

Bosnia and Hercegovina

In cooperation with AUSSENWIRTSCHAFT AUSTRIA.

A U S S E N W I R T S C H A F T A U S T R I A

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Country Profile: Bosnia and Herzegovina Raiffeisen Research. As of March 2017.

The Bosnia and Herzegovina

Financial Market

1. The Political and Economic Situation in Bosnia and Herzegovina . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

2. Company Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

3. Accounting and Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

4. Taxes and Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

5. Buying Property and Land as a Foreigner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

6. Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

7. Subsidies and Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

8. Risk Hedging and Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

9. Payment and Account Services at Raiffeisen BANK d.d. Bosna i Hercegovina . . . . . . . . . . . . . . . . . 19

10 . Raiffeisen BANK d.d. Bosna i Hercegovina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

11. Your International Business Specialists at Raiffeisen BANK d.d. Bosna i Hercegovina

and the Global Raiffeisen Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Important:

Despite thorough research and the use of reliable sources, we cannot accept responsibility or liability for the completeness or accuracy of this brochure’s contents. The purpose of this brochure is to give you initial, general information to help you develop business relationships in Bosnia and Herzegovina. The content of this brochure does not constitute any form of advice or offer or invitation to make an offer.

Prepared in cooperation with AUSSENWIRTSCHAFT AUSTRIA at WKÖ (the Austrian FederalEconomic Chamber).

Sources:Raiffeisen Bank International AGWKO: Bosnia and Herzegovina Country Report; AWO Special Reports: Firmengründung und Steuern in Bosnia and Herzegovina (Setting up a Company and Taxes in Bosnia and Herzegovina); Eigentum und Forderungen in Bosnia and Herzegovina (Property and Receivables in Bosnia and Herzegovina), of the AUSSENWIRTSCHAFT AUSTRIA.Bibliography: Skok B., Gotwald A., Jungreithmeir T. (2008), Förderinstrumente für Südosteuropa (Subsidy and Support Instruments for Southeastern Europe). Vienna: Linde Verlag Wien.

Copy deadline: May 2017.

Currency: Bosnian marka (BAM) Gross Domestic Product and Budget 2015 2016 2017e 2018fReal GDP growth, % p.a. 3.0 2.5 3.0 3.5Nominal GDP, €bn 14.6 15.2 16.0 17.1Per capita GDP, PPP basis, € 7,300 7,500 8,800 9,700Growth in industrial output, % p.a. 2.6 4.3 5.5 7.0Consolidated budget deficit, % of GDP 0.7 -1.5 -1.0 -1.0 Inflation and Employment Jobless rate, annual average, % 27.7 25.4 24.3 23.0Average monthly gross wage, € 659.2 665.0 697.9 723.5Consumer price inflation, annual average, % p.a. -1.0 -1.1 2.0 2.0 Balance of Trade and Current Account Goods exports, €bn 4.6 4.8 5.1 5.6Goods imports, €bn 8.1 8.3 8.9 9.8Current account deficit, €bn -0.8 -0.8 -1.1 -1.3Current account deficit, % of GDP -5.6 -5.4 -7.0 -7.7Foreign debt, % of GDP 53.4 54.7 54.9 54.2 Rates of Exchange and Interest Rates Local currency/US$ (average) 1.76 1.77 1.90 1.86Local currency/€ (average) 1.96 1.96 1.96 1.963-month money market rate (TRIBOR), average, % n.a. n.a. n.a. n.a. Country Ratings S&P B Moody‘s B3 Fitch not rated n.a.: not available. U: unrated.

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2. Company Law

Legislative foundationsIn general, freedom of contract applies in Bosnia and Herzegovina law. Anything that is not mandatorily regulated by legislation is subject to mutual agreement between the parties. This includes, for instance, the representative powers granted to a company’s management. The ‘entities’ are largely autonomous when it comes to company law legislation. Consequently, when a company is formed, both the legal framework conditions at state level and the regulations of the respective entity must be observed. Within each entity, this is set out in a ‘Law on Business Companies’: • the Company Law of FBiH of 1999, most recently amended in 2003 (FBiH Zakon o privrednim društvima;

legal source: FBiH Official Gazette, Nos. 23/99, 45/00, 2/02, 29/03, 68/05, 91/07, 88/08); • the Company Law of RS of 2008 (in effect since 1 July 2009) (RS Zakon o privrednim društvima; legal

source: RS Official Gazette, No. 127/08).

The Zakon o registraciji poslovnih subjekata (Law on the Registration of Business Entities in the Court Register) is another important piece of legislation. It has also been approved by each entity (FBiH Official Gazette, Nos. 27/05 and 68/05, RS Official Gazette, No. 42/05). Since 2005, common principles have governed the registration of for-profit companies throughout Bosnia and Herzegovina. It should be empha-sised that there are no specific legal regulations for joint ventures.

Business formation, financing and equityIn general, freedom of contract applies in Bosnia and Herzegovina law. Anything that is not mandatorily regulated by legislation is subject to mutual agreement between the parties. This includes, for instance, the representative powers granted to a company’s management. The ‘entities’ are largely autonomous when it comes to company law legislation. Consequently, when a company is formed, both the legal framework conditions at state level and the regulations of the respective entity must be observed. The Law on Registration of Legal Entities in the Court Register, which has also been approved by each entity, forms an important legal basis. Since 2005, common principles have governed the registration of for-profit companies throughout Bosnia and Herzegovina. It should be emphasised that there are no specific legal regulations for joint ventures.

Business formation, financing and equityBosnian-Herzegovinian company law recognises the same legal forms that are standard practice in Austria. The most widely used and common type of company for start-ups is the limited liability company, also known as d.o.o. in Bosnia-Herzegovina. The types of company range from representations to joint partner-ships to corporations.

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Bosnia and Herzegovina has a GDP per capita equivalent to EUR 3,941, which is approximately 24% of GDP per capita in the Eurozone and corresponds to EUR 7,500 in purchasing power parity. GDP per capita has increased markedly in recent years. In 2016, GDP in Bosnia and Herzegovina grew by 2.5% compa-red to the previous year. Economic growth was therefore slightly down on 2015 levels but still significantly higher than in previous years. Growth was mostly driven by developments in the industrial and agricultural sectors. We expect economic growth to accelerate again slightly to 3% p.a. in 2017 and 3.5% p.a. in 2018, helped along by the recommencement of state investments in the Corridor Vc project and the TTP Tuzla project being started; this is augmented by investments in renewable energy (HP Vrandunk, WP Podveležje and Mesihovina). Hence, the gross fixed capital investment for 2017 would climb to 8.5% p.a., combined with the already positive outlook for goods exports with expected growth of 5.9% p.a., based on the favou-rable economic outlook for Bosnia and Herzegovina’s most important trading partners (EU and SEE). This encouraging outlook for exports is also helped by the expected moderate growth in industrial production of 5.5% p.a. in 2017, which may profit from rising prices for metals and electrical energy on the global markets. The potential downside risk of our outlook still relates to latent political disagreements and reticence about state investment, or to disruptions in fulfilling the EFF reform agenda as stipulated by the IMF.

Consumer prices sank in 2016 compared to the previous year for the fourth year running, but this trend is likely to come to an end in 2017. Imported inflation and base effects may once again result in inflation of 2.0% p.a. The unemployment rate in 2016 was 25.4%. We expect unemployment to fall further in 2017 and 2018, although it will remain high, at around 20%.

The budget deficit amounted to 1.5% of GDP in 2016, after exhibiting a small surplus of 0.7% of GDP in 2015. Similar budget deficits are expected for 2017 and 2018. National debt in 2016 was moderate, at 42.5% of GDP. In view of the above described development in the budget deficit, we expect the national debt ratio to stagnate in the coming years. Bosnia and Herzegovina’s current account had a deficit of 5.4% of GDP in 2016. However, we expect continuous economic growth in the coming years; this is associated with increasing export activity, but also more imports and therefore slightly higher current account deficits again. Foreign debt amounts to 54.7% of GDP (2016) and has therefore more or less stagnated over the past few years. We expect the foreign debt ratio to remain stable in the coming years.

The political situation in Bosnia and Herzegovina continues to be characterised by uncertainty; political crises are resolved, but often resurface at a later point. The last time such a crisis was triggered was at the start of 2017 due to the sudden (and unusually implemented) decision of Bakir Izetbegovic, the Bosnian member of the tripartite presidency, to appeal against the 2007 ruling of the International Court of Justice (ICJ) against Serbia concerning responsibility for the genocide committed in Srebrenica. However, the International Court of Justice (ICJ) officially rejected the request for an appeal against the 2007 ruling, because the decision had not been submitted by all three members of Bosnia and Herzegovina’s presi-dency. This caused political tensions to cool off again. The authorities are now busy preparing the materials for the European Commission’s questionnaire and fulfilling the IMF’s reform agenda, which could mean that candidate status is achieved by the end of 2017 and that the second IMF tranche is disbursed during the year. However, the earliest that EU membership can be realistically achieved is in 10 years.

1. The Political and Economic

Situation in Bosnia and Herzegovina

RepresentationsIn principle, every foreign company which has been entered into its country’s commercial register can found a representative unit in Bosnia-Herzegovina. It can be founded alone or in affiliation with other foreign companies. Market research and marketing activities are the main activities of representative units of foreign companies in Bosnia-Herzegovina. The unit can accept assignments, but cannot do business in its own name or at its own expense. Representations of foreign airlines are exempt from this regulation. These airlines may very well conclude contracts in the name of the foreign company in accordance with international contracts and conventions that Bosnia-Herzegovina has drawn up or in which it is mentioned. The representative unit is part of the foreign company and does not have a legal personality; in other words, it has no status as a legal entity. The representation trades in the name of the foreign company and refers to the fact that it constitutes a representation of this company.

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3. Accounting and Financial Reporting

Accounting and annual financial statementsThe international accounting standards (IASs, IFRSs) and the international standards on accounting (ISAs) apply. The accounting and auditing commission monitors adherence to the regulations. Annual financial statements must be prepared by 28/29 February of the following year. If the 28th or 29th falls on a weekend, the financial statements must be prepared by the last working day in February.

4.1. Business tax Corporation tax is charged at a rate of 10%. Here too, regulations differ between entities.

Tax deducted at source is charged at a rate of 10%. Here too, regulations differ between entities. Revenues of non-resident foreign persons that were generated in the territory of BiH are liable to pay tax deducted at source. Due to the double taxation agreement, since 1 January 2012 the mechanism of deducting tax at source has, for the most part, not been used. Commercial tax for all enterprises amounts to between BAM100 (approx. €50) and BAM750 (approx. €380) per year depending on the area of activity.

4.2. VATVAT is charged at a flat rate of 17%. There are exceptions for a number of services in the health, education, humanitarian aid and international transportation sectors as well as for financial services relating to the management of loans, guarantees, deposits, savings and bank accounts and payments. Exports from BiH are generally VAT exempt.

4.3. Reverse charge systemAfter the double taxation agreement came into effect, in accordance with Bosnian Turnover Tax Law the place of performance for ‘catalogue goods and services’ (e.g. PR, advertising, technical and economic consultation) is at the foreign companies’ location at the place of delivery. For Austrian beneficiaries, this service is taxed as reverse charge turnover, provided that the Bosnian service provider is not registered and/or does not need to be registered for turnover tax in Austria. Caution: From a Bosnian viewpoint, the foreign place of performance is only recognised if it can be proven that this turnover is taxed in Austria.

4.4. Excise tax Certain types of products are taxed by a special type of tax – excises – in the territory of Bosnia and Herzegovina.

The revenue from excises is paid into the Indirect Taxation Authority’s single account. It is distributed in accordance with the Law on Payments to the Single Account and Distribution of Income.The excise products are: crude oil derivatives; tobacco products; alcohol-free beverages; alcohol and beve-rages containing alcohol; beer and coffee.

4. Taxes and Legislation

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4.5. Double taxation agreementSigned on 1 December 2008. The ratification process has already been put in place. It came into force on 1 January 2012.

4.6. Input tax rebate/ accountingIn order to reclaim input tax, the Austrian company must have registered as liable for VAT in Bosnia-Herzegovina. Every company that generates turnover of more than BAM50,000 (approx. €25,000) in the territory of Bosnia and Herzegovina must become registered as liable for VAT. In this case, the law does not explicitly differentiate between foreign and local companies. Since the services are rendered in the territory of Bosnia-Herzegovina, the Bosnian company must invoice for 17% VAT.This country does not have a system for rebating input tax, as is the case in the EU. The procedure is some-what lengthier and more complicated.

4.7 Income taxIn accordance with Bosnian regulations, foreign employees are liable for income tax in Bosnia-Herzegovina provided that they have been working in Bosnia-Herzegovina for more than 183 days throughout the calen-dar year. Income tax is regulated at entity level (FBiH and RS (Federation of Bosnia and Herzegovina and Republika Srpska)). In the Federation of Bosnia and Herzegovina, income tax is charged at 10%, and in Republika Srpska 8%. The tax-free monthly income is BAM300 (approx. €150) in the Federation of Bosnia and Herzegovina. The tax allowance in Republika Srpska has been repealed.

Generally, the 1998 Law on Legal Property Relations of the FBiH allows foreigners to acquire mova-ble property and real estate. Foreign natural persons and legal entities carrying on a business activity in the Federation of BiH can own land, business premises, apartments and residential buildings (real estate). Under certain circumstances, foreigners’ rights to acquire property can be restricted on the grounds of reciprocity, namely if the legal system of another country prohibits the acquisition of property by citizens of Bosnia and Herzegovina. However, an application can be made to the responsible ministry asking it to declare a property acquisition to be permissible in the individual case.

If an Austrian enterprise sets up a subsidiary in BiH, the subsidiary acquires real estate as a Bosnia and Herzegovina (i.e. domestic) company. Austrians (as individuals) can acquire real estate without any pro-blems if they can prove they have a residence permit.

One cannot acquire ownership of certain properties that are of special public interest, in particular in con-nection with the protection of nature, the environment and historic buildings and monuments.

Property is generally acquired by title and procedure. Title is established by (for instance) a valid contract (on the basis of a lawful business activity), an official ruling or inheritance. The procedure for acquiring ownership of immovable property comprises registration in a land register similar to Austria’s. As a rule, ownership of movable property is transferred by delivering it to the new owner.

The procedure for the acquisition of property is generally the same for foreign legal entities, but certain documents (excerpt from the commercial register, powers of attorney, etc.) need to be produced in trans-lated and certified form.

5. Buying Property and Land as a

Foreigner

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6. Arbitration

Unlike the judgements of state courts, arbitral awards can be enforced practically worldwide. For a dispute to be settled by a court of arbitration, its jurisdiction must have been agreed upon beforehand in writing. It is therefore advisable to include an arbitration clause in the contract with your foreign counterparty.The Austrian Federal Economic Chamber offers institutional arbitration as a service through the International Arbitral Centre of the Austrian Federal Economic Chamber.The arbitration clause of the International Arbitral Centre of the Austrian Federal Economic Chamber reads as follows (versions are also available in the languages that are most important for Austrian exporters):‘All disputes arising out of this contract or related to its violation, termination or nullity shall be finally settled under the Rules of Arbitration and Conciliation of the International Arbitral Centre of the Austrian Federal Economic Chamber in Vienna (Vienna Rules) by one or more arbitrators appointed in accordance with these Rules.’Useful agreements to supplement this arbitration clause: • the number of arbitrators shall be .......................... (one or three); • the applicable law shall be ............................; • the language used during arbitration proceedings shall be ......................................

Detailed information:

Internationales Schiedsgericht der Wirtschaftskammer Österreich International Arbitral Centre of the Austrian Federal Economic Chamber Dr. Manfred Heider; Phone: +43-5-90 900-4398; Fax: +43-5-90 900-216. E-mail: arb@wko.at; Internet: wko.at/arbitration

The fact that you as an Austrian company are a member of the Federal Economic Chamber can in some circumstances be a cause for concern for a strong foreign counterparty. In this case we recommend that you agree on a different arbitral court, such as the one belonging to the International Chamber of Commerce. This has its headquarters in Paris and is represented in Austria by ICC Austria.

Therefore you have the following options:• If your company has a strong starting position in contract negotiations or if you and your counterparty are

roughly equal, we recommend you use the arbitration clause of the Austrian Federal Economic Chamber.• If on the other hand your company holds a weaker position, or if your counterparty is of equal strength

and will not agree to the Austrian Federal Economic Chamber’s arbitration clause, then we recommend that you agree on a different arbitral court, such as that of the International Chamber of Commerce (ICC).

The arbitration clause of the International Chamber of Commerce (ICC) reads as follows: ‘All disputes ari-sing out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.’ This arbitration clause is also available in other languages.

Detailed information:

• Internationales Schiedsgericht der Wirtschaftskammer Österreich International Arbitral Centre of the Austrian Federal Economic Chamber Manfred Heider; Phone: +43-5-90 900-4397; Fax: 05 90 900-216; e-mail: arb@wko.at; Internet: wko.at/arbitration• ICC Austria, International Chamber of Commerce Maximilian Burger-Scheidlin; Phone: +43-5-90 900-3701; Fax: +43-5-90 900-3703; e-mail: icc@wko.at; Internet: www.icc-austria.org.

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7. Subsidies and Support

EU cohesion policy / regional policy 2014-2020Initial situation / status quoThe various regions of Europe, especially Central and Southeastern Europe, exhibit large differences in economic and social development. To strike a balance between the regions, the EU has set the following targets as part of its Europe 2020 strategy:

• Creation of jobs• Strengthening companies’ competitive position• Promotion of economic growth and sustainable development• Improvement in EU citizens’ life quality

The cohesion / regional policy is aimed at all regions in the EU in order to create intelligent, sustainable and integrative growth. The cohesion policy is defined for a seven-year period (2014-2020). A budget of EUR 351.8 billion, i.e. almost one third of the entire EU budget, is set aside for achieving the above targets in the timeframe mentioned. Within the scope of this budget, funding is granted in the form of non-repayable grants.

Structure of the funding programmes / From EU target to national funding programmeThe individual EU member states use the EU targets set under the Europe 2020 strategy to define their national and regional priorities, from which the individual Operational Programmes (OPs) are derived.The Operational Programmes are structured according to region and topic. Within these programmes “priority axes” are defined, which are subject to guidelines approved by the European Commission. The following topics are priorities for the individual countries: Innovation, research & development, job creation, environmental protection, education, SMEs, transport and regional development.

Dedicated national funding agencies (ministries and investment agencies) are responsible for awarding the grants. While grants can be applied for continuously in framework programmes in Austria, they are mostly awarded in the context of “calls” (tender exercises) in Eastern Europe.

For each priority axis mentioned above, tender exercises are held once or twice a year and are open for one to three months. The main assessment criteria for company grants are company size, location, content and impact of the funding project.

How can your company obtain funding?Clearly defined projects can be submitted during the period when the tender exercise is open. Only complete applications (project description, approvals, budget,...) in the respective national language are accepted. The submitted projects are then evaluated by assessors using a points system based on the guidelines specified/defined in the program. All projects within a “call” take part in a competition. Only those with the highest score are shortlisted for funding commitments.

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Getting from the application to the possible disbursement of grants involves going through a complex, time-consuming process.It requires experience in dealing with public authorities and their targets.

National grantsIn addition to the EU structural funds, companies can also apply for funding from national resources.

The economic importance for the country or region is very important for determining whether the investment project can be funded.The criteria for evaluation are: Minimum investment volume and the number of jobs created as well as the minimum period for which these jobs will exist.

The following investment incentives are possible:• Tax reductions, tax deferrals and tax exemptions• Grants• Loans• Sureties• Equity participations• Discounted land purchases

However, these are subject to the respective national regulations and must be applied for at regional fun-ding agencies.

Warning:• The application must be made before the project begins (= first legally binding obligation).• The details of the guidelines can change during the tender exercise and must therefore always be kept in view.• Make contact with the company’s bank/funding agency as early as possible.

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8. Risk Hedging and Financing

Risk hedging of Austria Wirtschaftsservice

Gesellschaft mbH (aws, federal funding agency)

Legal framework conditions:

The legal framework conditions of the guarantees issued by aws were redrafted on 1 January 2017.In detail, the regulations are based on the guidelines of the Austrian Federal Ministry of Finance (BMF) for accepting guarantees by aws pursuant to the Guarantees Act 1977, including supplementary conditions for grants.

The aws offers small and medium-sized companies (max. 3,000 employees) with their registered office and operating site in Austria guarantees for loans and lease financing as part of domestic and foreign invest-ments.

Guarantees for national investments:aws guarantees the financing of economically desirable projects by Austrian companies, i.e.: Construction/expansion investments, modernisation of production facilities, the innovation of processes and procedures, environmental measures or the purchase of, or participation in, companies.

aws guarantees up to 80% (max. EUR 25 m) of the financing amount in the form of a financing guarantee and covers the economic risk of the investor (loan default due to the insolvency of the domestic company) for the bank. In the case of large projects, aws guarantees up to a maximum of one third of the project volume.

Guarantees for international investments:aws supports Austrian companies (max. 3,000 employees) with direct investments abroad, i.e. establish-ment of subsidiaries/joint ventures, acquisition of companies/company shares, expansion investments and investments in environmental technologies.The risk hedging of aws is provided either in the form of a project guarantee or a financing guarantee.

Under the project guarantee, aws hedges the economic risks (insolvency or similar circumstances) of a company’s investment project and undertakes to provide a certain amount of capital up to the maximum guaranteed amount in the event of damage or loss.

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aws guarantees up to 50% of the loan used (for large projects up to 1/3 of the project volume). The gua-rantee fee is dependent on the ratings result calculated when examining the respective project, as well as the term of the guarantee.

Under the international financing guarantee, aws guarantees the financing of Austrian companies for eco-nomically desirable projects abroad, i.e.: construction/expansion investments, modernisation of production facilities, the innovation of processes and procedures, environmental measures or the purchase of, or participation in, companies.

aws guarantees up to 80% (max. EUR 25 m) of the financing volume and thereby covers the economic risk of the investor for the bank.

Conditions of the aws guarantee:

National guarantees: • Processing fee: 0.25% (one-off) of the assessment basis (max. EUR 30,000)• Guarantee fee: The guarantee fee depends on the ratings result calculated when examining the

respective project as well as the term of the guarantee

International guarantees:• Processing fee: 0.25% (one-off) of the assessment basis (max. EUR 50,000)• Guarantee fee: The guarantee fee depends on the ratings result calculated when examining the

respective project as well as the term of the guarantee.

Austria

Abroad

BANK

OeKB (Oesterreichische Kontrollbank AG)In order to achieve sustainable success in the export business and for investments made abroad, com-panies need good risk management and attractive financing arrangements. With federal export guaran-tees and OeKB refinancing packages, the OeKB offers instruments via the respective house banks that strengthen Austrian companies and their partners in global competition. By processing export guarantees, the OeKB acts as the Export Credit Agency (ECA) of the Republic of Austria.

Export guarantees protect the entrepreneur against payment defaults (for economic or political reasons) related to export transactions. In the case of foreign investments, export guarantees provide protection against political risks.

Federal export guarantees also offer an attractive way to access financing for export and investment acti-vities. Export guarantees can be utilised by all large, medium and small companies whose guaranteed transactions have a positive impact on Austria’s current account balance or are in the national interest.

Companies can learn more about the ideal kinds of guarantee from the OeKB Export Service (www.export-service.at) or from their house bank. OeKB’s export financing process provides the possibility of refinancing exports and equity participations abroad. This export financing process is available as a source of refinan-cing at domestic and foreign commercial banks and is offered to companies via these banks within the scope of their export business and foreign investments.

The prerequisites for this type of financing are• A federal guarantee as required by the Export Funding Act (EFA), or• A guarantee from a credit insurer within the meaning of the EFA• A guarantee from aws, or• A guarantee of an international organisation within the meaning of the EFA.Furthermore, the financing of the underlying supplies/services must bring about a direct or indirect impro-vement in the Austrian current account balance or be in the Austrian national interest.

ERP fundThe ERP fund is a fund with its own legal personality, which was attached to aws in 2002. ERP loans are reduced-interest loans with multi-year redemption-free periods and multi-year redemption periods, and are collateralised by a guarantee from aws or a bank.

ERP financing programme Companies are eligible to apply which have their registered office and operating site in Austria and which are active in one of the following sectors: industrial or commercial production, research and development services, transport, processing of agricultural products, and trading companies.

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The following provides an overview of the available ERP financing programmes:• ERP - Micro-Credit• ERP - Technology Programme• ERP - SME Programme• ERP - Regional Programme• ERP - Tourism Programme• ERP - Transport Programme• ERP - Forestry Programme• ERP - Agriculture Programme

Conditions of ERP loansThe maximum financing volume is EUR 30 m.• Term: 6 years (up to 15 years is possible)• Utilisation period: 0.5 years• Redemption-free period: 2-3 years, interest fixed at 0.50% p.a.• Redemption period: 3–4 years, interest fixed at 0.75% p.a.

- Longer redemption-free and redemption periods are offered for some programmes, i.e.:- Future industries, research infrastructure within the scope of the technology programme- Infrastructure measures within the scope of the Regional Programme

• Interest rate and redemption costs are anticipatory• Processing fee: 0.5% - 0.9% of the ERP loan• The guarantee fee of the guaranteeing bank must be added to these costs.

Austrian Company

BANK

Guarantee

Trust Money

ERP LoanLoan Agreement

Chart 2: ERP Loan Process

9. Payment and Account Services at

Raiffeisen BANK d.d. Bosna i Hercegovina

9.1. Cash Management ProductsAccount Services Local Currency Foreign Currencies (LCY) LCY Deposits (FCY) FCY DepositsResidents 3 3 3 3

Non-residents 3 3 3 3

Credit interest • Resident 3 3 3 3

• Non-resident 3 3

Overdrafts 3

Cash Management: Group Products and Services

• International Account Reporting• International Disbursement Service*• Intra Group Payments (IGP)• Cash Management International

Payments, Deposits • Domestic payments (LCY)• Domestic payments (FCY)• Foreign payments (FCY)• Cheques• Cheque collections• Travellers cheques• Purchase & Sale of FCY• Credit cards• Standing order• Direct Debit/LCY*• Cash transaction LCY and FCY/

residents & non-residents

* however, restrictions due to local regulations

Cash Management: Local Products and Services

Electronic Banking• Internet Banking Solution• SWIFT MT940• SWIFT MT101 (receiving)

Liquidity Management • Cash Pooling Zero and

Target Balancing – Domestic

* Subject to restrictions due to local regulations.

• CMI@Web• Cross-border Margin Pooling• SWIFT for Corporates (SCORE)• Central Conversion Solution

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9.2. Legal & Foreign Exchange RegulationsCurrent Accounts • Local and foreign corporate customers are allowed to maintain domestic and foreign currency accounts

in local banks.• FCY payments between residential and non-residential clients are considered as international payments

according to law. Domestic payments • All domestic payments have been done by licensed commercial banks since January 2001. Foreign payments • In case domestic and foreign companies need to execute foreign payments or to transfer payments to a

non-residential account, additional information has to be provided to the bank (by invoice, agreement). As import/export transactions have to be completed within 90 days, the customer has to apply for exten-sion from an authorized Ministry in case of non-settlement after this period.

• If foreign payments are received from abroad, domestic companies are allowed to either keep theirincoming foreign currencies on their accounts, convert it into another foreign currency or to use it for domestic payments.

Cash Payments/Withdrawals

• Cash withdrawals in local currency are limited in respect to amount and purpose.

9.3. Clearing MechanismsSettlement • Description: All commercial banks hold clearing accounts at the Central Bank

of Bosnia and Herzegovina.

• Type, Transaction value, Settlement cycle:

Clearing Membership of the Bank mandatory

Payments below BAM 10,000 are done by means of Giro Clearing elec-tronic system with 3 (three) clearing sessions a day. Payments exceeding BAM 10,000 are done by means of RTGS (Real Time Gross Settlement), which is directly connected to SWIFT FIN COPY Service.

Assets, €m 2,057

Branches 98

Staff 1,268

Raiffeisen has been doing business in Bosnia and Herzegovina since taking over Market Banka in 2000. In 2016, it was operating through 98 business outlets and had more than 450,000 clients.

In 2016, Raiffeisen BANK dd Bosna i Hercegovina continued introducing innovative products and services tailored to the needs of its customers. Among others, it adapted its offer through the new digital communi-cation and business channels. Raiffeisen reinforced its status as a successful all-finance institution with its subsidiaries Raiffeisen INVEST, CAPITAL, LEASING and ASSISTANCE.

In 2016, Raiffeisen BANK was honored by Global Finance, EMEA Finance and The Banker as “Best Bank in Bosnia and Herzegovina”.

Raiffeisen BANK d.d. Bosna i HercegovinaZmaja od Bosne bb, 71000 SarajevoPhone: +387-33-287 100, 287 121Fax: +387-33-213 851http://www.raiffeisenbank.ba/

10. Raiffeisen BANK d.d.

Bosna i Hercegovina

Shareholder structure:

Raiffeisen SEE Region

Holding GmbH

Other

99.9951%

0.0049%

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Raiffeisenlandesbank Oberösterreich AGHelmut Zeindlingerzeindlinger@rlbooe.atPhone: +43 / 732 / 6596 – 23113

Artem Snegirevsnegirev@rlbooe.atPhone: +43 / 732 / 6596 – 23161

Raiffeisenverband SalzburgBernhard Knollbernhard.knoll@rvs.atPhone: +43 / 662 / 8886 – 14161

Raiffeisen-Landesbank Tirol AGAndrea Zanklandrea.zankl@rlb-tirol.atPhone: +43 / 512 / 5305 – 12230

Raiffeisenlandesbank VorarlbergAlexandra Weltealexandra.welte@raiba.atTel.: +43 / 5574 / 405 - 528

Raiffeisenlandesbank BurgenlandWilhelm Schedlwilhelm.schedl@raiffeisen-burgenland.atPhone: +43 / 2682 / 691 – 605

Raiffeisenlandesbank KärntenMichael Stegmüllermichael.stegmueller@rbgk.raiffeisen.atPhone: +43 / 463 / 99300 – 2280

Herbert Schöffmannherbert.schoeffmann@rbgk.raiffeisen.atPhone: +43 / 463 / 99300 – 2269

11. Your International Business

Specialists at Raiffeisen BANK d.d.

Bosna i Hercegovina and the Global

Raiffeisen Network

Your specialist at Raiffeisen BANK d.d.

Bosna i HercegovinaSandro KOMLJENOVICrbbh.international@raiffeisengroup.ba+387 33 287 283

Your international business specialists Raiffeisen Bank International AGHerwig Haidnherwig.haidn@rbinternational.comPhone: +43 / 1 / 717 07 – 1574

Raiffeisen Bank International AGRudolf Lercherrudolf.lercher@rbinternational.comPhone: +43 / 1 / 717 07 – 3537

Raiffeisenlandesbank NÖ-Wien AGNadja Wattinadja.watti@raiffeisenbank.atTel: +43 / 5 / 1700 – 92426

Irene Kammerhoferirene.kammerhofer@raiffeisenbank.atTel: +43 / 5 / 1700 – 92157

Raiffeisen-Landesbank Steiermark AGFranz Rogifranz.rogi@rlb-stmk.raiffeisen.atPhone: +43 / 316 / 4002 – 7110

Beatrix Narathbeatrix.narath@rlb-stmk.raiffeisen.atPhone: +43 / 316 / 4002 – 7141

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