An entity of Bosnia Herzegovina, the Republic of Srpska is recognized within the constitution of Bosnia since 1995.
Foreign investment
According to sources in the Srpska government, recent strategic partnerships were formed between the Iron Ore Mine Ljubija Prijedor and a leading British steel producer LMN; and the Russian company Yuzuralzoloto with the Lead and Zinc Mine Sase Srebrenica. Additional foreign investments include privatisation of Telekom Srpske, which was acquired by the Serbian Telekom Srbija for (€646mln, and the sale of the petroleum and oil industry, based in Bosanski Brod, Modrica and Banja Luka, to Zarubezhneft of Russia, whose investment is expected to total US$970mln in the coming years. On May 16, 2007 the Czech power utility ČEZ signed a €1.4 bln contract with the Elektroprivreda Republike Srpske, to renovate the Gacko I power plant and build a second, Gacko II. Today Srpska offers a number of investment opportunities in waste and waste water treatment infrastructure and tourism sectors.
External trade
In recent years exports (not including trade with the Federation of Bosnia and Herzegovina) have grown significantly and the level of import coverage has improved – from 1,130,518mln KM (€565mln) and 38.3% in 2005, to 1,539,229mln KM (€770mln) and 55.8% in 2006. In the first two months of 2007 exports grew 19% year on year, and imports by 39%. In 2008 exports amounted to €960mln and imports €2.07bln.
Taxation
Since 2001, Republika Srpska initiated significant reforms in the sector of the tax system, which lowered the tax burden to 28.6%, one of the lowest in the region. The 10% rate of capital gains tax and income tax are the lowest in Europe and highly stimulating for foreign investment, and there are no limits on the amount of earnings. Increasing the number of taxpayers and budgeted incomes, and creating a stable fiscal system, were necessary for further reforms in the fields of taxation and duties; this area is a priority goal of the RS authorities. VAT has been introduced in 2006. Income tax is 46% in the RS, compared to nearly 70% in the Federation, and the corporate tax rate is 10%, compared to 30% in the Federation. These tax advantages have led to some companies moving their business to RS from the other entity.
Salaries
In January 2007, the average wage was 804KM (€400 gross) or 531KM (€265 net). Two years later, in January 2009, the average salary was 1228KM (€615) gross and 819KM (€410) net. SOURCE: Wikipedia online
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