C I T Y OF BIHAĆ

DEVELOPMENT PROJECT:
„BUSINESS ZONE
KAMENICA“
 contents
Key indicators for business zone “Kamenica” ..................................................... 3
Selling – auctioning urban construction land..................................................... 5
The procedure.......................................................................................................... 5
State of equipment.................................................................................................. 6
Costs of preparations for construction................................................................ 7
a) Purchase price.......................................................................................................7
b) Rent..........................................................................................................................7
c) Fee for regulation of urban construction land.............................................. 8
d) Overview of the total costs............................................................................... 9
e) An example of calculation of the total costs preceding construction.........10
Investor incentives ................................................................................................ 12
a) Tax benefits...........................................................................................................12
b) Rent discounts.....................................................................................................13
c) Customs benefits................................................................................................13
d) Other incentives..................................................................................................13
Contacts.................................................................................................................. 16
 KEY INDICATORS

f or business zone “ K amenica

The business zone “Kamenica” is located in the North-West part

of the Bihac city area, at the highway M.5 connecting Bihac and
Izacic border crossing and thus facilitating further connections
with other European Union member states through the Republic
of Croatia. The zone is approximately 4 km away from the city
and 8 km away from the Izacic border crossing.

ZAGREB
PLITVIČKA JEZERA
BANJA LUKA
A
UN

GP Izačić
M5
Pokoj

Kamenica
BIHAĆ

Pritoka

Ripač
Lohovo

M5
SARAJEVO
GP Užljebić
SPLIT

DEVELOPMENT PROJECT: BUSINESS ZONE “KAMENICA” 3

 The distance to Zagreb is 150 km, Karlovac 100 km, Rijeka and
its international seaport 170 km. There are 112 km to the border
with Slovenia, 270 km to Austria, and 242 km to Hungary. In
terms of other BiH cities, the zone is 310 km away from Sarajevo
and 149 km away from Banja Luka, by road.

According to the “Kamenica” Regulatory Plan (“Bihac Muni-

cipality Official Gazette,” No. 03/03), the business zone covers
392,000 m² and includes 71 lot ranging from 2090 to 7800 m²
in size and intended for small and medium enterprises, a 35,810
m² fairs and exhibitions lot, a 10,380 m² motel, 9000 m² for
administration premises and an info centre, along with 10,100
m² of parking space. In terms of ownership structure, 24 lots
or approximately 133,070 m² are owned by the Municipality of
Bihac, 12 lots or approximately 45,180 m² by the Socialist Union,
while 39 lots or approximately 213,750 m² are private property.

The spatial planning and project documentation are completed

in their entirety and at the moment investments are made for
building and paving the roads.

Present situation in the business zone: Ten commercial buil-

dings have been constructed already, housing 13 active busine-
sses. The construction of another commercial building is under
way, while premises for 7 more businesses are at different stages
of preparation. The “Kamenica” Regulatory Plan includes 5 Bihac
city-owned construction lots that were not built on and remain
available for potential investors.
No. of active
Total land built
Municipality Business zone Size (ha) businesses
on (m²)
inside the zone
13
Bihać Kamenica 39,2 11.802
(in 10 buildings)

Table 1. Business zones in the Bihac area

4 DEVELOPMENT PROJECT: BUSINESS ZONE “KAMENICA”

 SELLING – AUCTIONING
URBAN CONSTRUCTION LAND

The procedure

ff Expression of interest by investors;

ff City Council decision on the sale of land;

ff Tender publication in daily and weekly newspapers and at the

City’s home page;

ff Tender Panel conclusions on the selection of the best bidder;

ff Signing a Sale and Purchase Contract;

ff Payment by the investor;

ff Entering the lot in the Cadastre and Land Registry records.

The described procedure takes approximately three (3) months.

The urban-planning and building permit/location approval are

issued within approximately two (2) months.

Detailed information on the procedure for obtaining the urban-

planning and the building permit are available at: www.bihac.org.

DEVELOPMENT PROJECT: BUSINESS ZONE “KAMENICA” 5

 The city applies the public tender procedure to sell its construc-
tion land to:

ff Natural persons, for construction of family residences;

ff Natural persons and legal entities for construction of business,

commercial, combined commercial and residential, and
other types of premises they are either to own or place on
the market.

State of equipment

Pending on the level of preparedness in terms of available utili-

ties and infrastructure, as well as whether there is a Programme
of Regulation of Urban Construction Land in place, urban con-
struction land can be:

ff Fully equipped;

ff Equipped with the basic utilities;

ff Partially equipped; and

ff Unequipped

6 DEVELOPMENT PROJECT: BUSINESS ZONE “KAMENICA”

 COSTS OF PREPARATIONS
FOR CONSTRUCTION

a) Purchase price

Purchase price determined based on the market value of the

land, i.e. the technical findings and assessment by an expert
with background in construction, in line with the Law on
Expropriationi.

b) Rent

Rent – based on the natural advantages of the given urban con-

struction land and the advantages of available utilities and infra-
structure that may arise from the use of the land and that are not
the results of investments by the party owning or using the real
estate.

The costs of rent shall be calculated on the basis of average final

construction price for a m² of usable residential area in the city
zone for the previous year as determined by the City Council no
later than by March 31 of the current year and valorised every
three (3) months in the course of the year.

DEVELOPMENT PROJECT: BUSINESS ZONE “KAMENICA” 7

 The usable structure surface shall be the sum of floor surfaces
of all the premises at all the levels of the buildings as calculated
according to the JUS-u-c2-100 standard and expressed in m².

The costs of rent for a m² of usable surface of a structure to be

built on urban construction land, be it state or privately owned,
shall be determined as a percentage of the average final con-
struction price for a m² of usable residential area reached in the
course of the previous year with regard to construction of apar-
tments in the municipality zone, as follows:

ff Zone I 6%

ff Zone II 5%

ff Zone III 4%

ff Zone IV 3%

ff Zone V 2%

ff Zone VI 1 %.

c) Fee for regulation of urban construction land

The amount of fee for regulation of urban construction land per

a m² of usable structure surface at a given location shall be de-
termined by dividing the total real or the costs as assessed by
the valid Programme of Regulation of Urban Construction Land
by the total size of usable surface of the structure for the con-
struction of which the given urban land lot has been or shall be
regulated over a set deadline.

8 DEVELOPMENT PROJECT: BUSINESS ZONE “KAMENICA”

d) Overview of the total costs

Costs related to location approvals and preparatory works

Fee with the urban-planning consent application 33 EUR

Geodetic survey outsourcing
Development of preliminary design outsourcing
Preparation of the studies required to obtain the
outsourcing
necessary consents/permits
Fee for regulation of urban construction
land (in accordance with the Decision on
0.6058 x 45.0 = 27.5 EUR/m2
the Construction Land and the Decision
of usable structure surface(for
Determining the Starting Price of the Costs of
prepared and equipped locations)
Regulation of Urban Construction Land for the
Year 2010)
Change of designation of agricultural
outsourcing
into construction land

Costs related to building permits and preparatory works

Fee for obtaining the building permit 5 - 75 EUR

Development of the main project design outsourcing
Geo-mechanical testing outsourcing
Fee arising from the natural advantages of the KAMENICA (Zone VI): 4.5 EUR/m2
urban construction land – rent (pursuant to the of usable structure surface
Law on Construction Land and the Decision on
the Construction Land) RIPAČ: 0 EUR

Fee for construction of shelters (Should the

1% of investment value of the
investor build a shelter as part of the structure,
structure
this fee shall not be charged.)
Supervision of construction works outsourcing

DEVELOPMENT PROJECT: BUSINESS ZONE “KAMENICA” 9

 Costs related to certificates of occupancy

Fee for obtaining the certificate of occupancy 5 - 75 EUR

Costs of technical handover
(based on the Pricelist on the Manner of Cal-
culating and Collecting the Costs of Technical
Structure Inspection)
max. 15,000 EUR
(0.5 – 0.45 – 0.35 % of investment
value of the structure – the greater
the investment value the lower the
costs)

e) An example of calculation of the total costs preceding construction

Example for a building of approximately 1000 m2

Amount in BAM for approx. 1000 m2

Fee with the urban-planning consent
65.0 65.0
application
Geodetic survey outsourcing outsourcing
Development of preliminary design outsourcing outsourcing
Preparation of the studies required to
outsourcing outsourcing
obtain the necessary consents/permits
(coefficient)
determined
Fee for regulation of urban construction
pending on the
land (in accordance with the Decision Determined based
state of equipment
on the Construction Land and the on the state of
of the location x
Decision Determining the Starting Price equipment of the
(starting price) 90.0
of the Costs of Regulation of Urban location
= 55.0 BAM / m²
Construction Land for the Year 2010)
of usable structure
surface
Change of designation of agricultural into
outsourcing outsourcing
construction land
Fee accompanying the building permit
15.0 15.0
application

Development of the main project design outsourcing outsourcing

Geo-mechanical testing outsourcing outsourcing

10 DEVELOPMENT PROJECT: BUSINESS ZONE “KAMENICA”

Fee for the permit drafting approx. 150.0 approx. 150.0
Fee arising from the natural advantages of
KAMENICA (Zone
the urban construction land – rent
VI):9.0 BAM / m²
(pursuant to the Law on Construction 9.000,0
of usable structure
Land and the Decision on the
surface
Construction Land)
Fee for construction of shelters
1% of investment 1% of investment
(Should the investor build a shelter as part
value of the value of the
of the construction, this fee shall not be
structure structure
charged.)

Supervision of construction works outsourcing outsourcing

Fee with the certificate of occupancy

15.0 15.0
application

Fee for the certificate drafting approx. 150.0 150.0

Costs of technical handover(based on max. 30,000(0.5 max. 30,000(0.5

the Pricelist on the Manner of Calculating – 0.45 – 0.35 % of – 0.45 – 0.35 % of
and Collecting the Costs of Technical investment value of investment value of
Structure) the structure) the structure)
TOTAL (not including the costs of outsourced services and the
39.395,00 BAM
fee for regulation of urban construction land)
UKUPNO (bez troškova eksternih usluga i naknade za uređenje
39.395,00 KM
gradskog građevinskog zemljišta)

Notice: The investment value of a structure shall be determi-

ned by the main project design and shall depend on the ma-
terials, internal structures and technology used. The above are
the approximate costs in the cases when all property and legal
issues concerning the given lot are regulated and the location
itself is prepared and equipped.

DEVELOPMENT PROJECT: BUSINESS ZONE “KAMENICA” 11

 INVESTOR INCENTIVES

a) Tax benefits

Corporate income tax shall be paid at the rate of only 10 % to the

tax base defined by the tax return.

Corporate income tax exemptions shall be granted as follows:

ff All taxpayers with over 30 % export share in the total annual income
for the given tax year shall be exempt from paying corporate
income tax for the year;

ff All taxpayers with a minimum of 20 million BAM invested into the

production in the FBiH territory over five consecutive years, at least
4 million BAM of which invested already during the course of the
initial year, shall be exempt from paying corporate income tax for
the five-year period;

ff All taxpayers having persons with disabilities or persons with special

needs as more than 50 % of their staff, each hired for over one year,
shall be exempt from paying corporate income tax for the year.

12 DEVELOPMENT PROJECT: BUSINESS ZONE “KAMENICA”

b) Rent discounts

The costs of rent related to construction of production facilities

shall be reduced:

ff By 10 %, if the facility should employ up to 5 workers

ff By 20 % if the facility should employ 6-10 workers

ff By 30 % if the facility should employ 11-20 workers

ff By 40 % if the facility should employ 21-30 workers

ff By 50 % if the facility should employ 31 or more workers.

c) Customs benefits

Foreign investments shall be exempt from all customs duties

except the fee for customs registration, unless defined otherwi-
se by the BiH Law on Customs Policy (Law on the Policy on
Direct Foreign Investments in B&H).

d) Other incentives

ff Low costs of starting up a business

Type of cost EUR
Start-up capital 1000
Costs of notarisation 500
Court fee for registration of business 108
Costs of publication in the official gazette
75
(approximately)
TOTAL 1683

DEVELOPMENT PROJECT: BUSINESS ZONE “KAMENICA” 13

 ff Competitive workforce compared to the rest of the region
Gross Wages (EUR)
Net Wages
Territory (incl. paid contributions to the pension
(EUR)
funds and health insurance)
Bihać 460 706
Republic of Croatia
716 1030
average
Bosnia H. average 419 650
Republic of Serbia average 355 489

ff The lowest VAT rate in the region

Value Added Tax Rate Income Tax Rate
Countries
(VAT) in % (legal entities) in %
Bosnia and Herzegovina 17 10
Croatia 25 20
Serbia 20 15
Montenegro 19 9
Macedonia 18 10
Albania 20 10
Turkey 18 20
Slovenia 20 21
Hungary 27 19
Bulgaria 20 10
Romania 24 16

ff Liberal and stimulating regulations in line with the policy on

direct foreign investments

ff High quality and efficient local administrative services

14 DEVELOPMENT PROJECT: BUSINESS ZONE “KAMENICA”

Present state of affairs in the “Kamenica” business zone

DEVELOPMENT PROJECT: BUSINESS ZONE “KAMENICA” 15

 CONTACTS

Contact person: Mayor Emdžad Galijašević

Address: Bosanska 4, 77 000 Bihac, Bosnia and Herzegovina

Phone: + 387 (0) 37 22 42 22 (OP); + 387 (0) 37 22 96 05
(Cabinet of the Mayor)
Fax:+ 387 (0) 37 22 22 20
E-mail: kabinet@bihac.org, bihac@bihac.org
Web: www.bihac.org

Service for General Administration, Economic and Social Affairs

Phone: +387 (0) 37 22 96 19; Fax: +387 (0) 37 22 96 29
E-mail: razvoj@bihac.org
 INV EST IN BIHAĆ
B OSNIA A ND H ERCE GOVINA

The PLACE
f or I nvestment