Biomass business development potential in Bosnia and Herzegovina

Transcription

1 Energy Biomass business development potential in Bosnia and Herzegovina mr. Sanjin Avdić, dipl.ing.mas., MBA Head of energy department Biomasse in Serbien und Bosnien-Herzegowina, 21. Juni 2012, München

2 INTRODUCTION BiH s legal framework/system Setting up a business in BiH Taxes in BiH Status and incentives for foreign investors in BiH Biomass feed-in-tariffs Co-financing opportunities (credit lines, CDM, TAM BAS programme...) Association Biomass in Bosnia and Herzegovina ina

3 BiH LEGAL SYSTEM Business related Laws and Regulations in BiH: Law on Value Added Tax of BiH Law on Corporate Income Tax of F BiH Law on Corporate Income Tax of RS Framework Law on Registration of Business Entities in BiH Law on Registration of Business Entities of FBiH Law on Registration of Business Entities of RS Customs Tariff of BiH Customs Policy Law of BiH Decision on Implemental Regulations of the Customs Policy Law of BiH Decision on Harmonizing and Establishing Customs Tariffs of BiH Foreign investors related Laws and Regulations in BiH: Law on the Policy of Foreign Direct Investment of BiH Law on Foreign Investment of FBiH Law on Foreign Investment of RS

4 BiH LEGAL SYSTEM Biomass business development potential in BiH

5 SETTING UP A BUSINESS IN BiH According to the law in BiH a company can be organized in one of the following forms: 1. Unlimited Joint Liability Company (d.n.o.) 2. Limited partnership (k.d.) 3. Joint Stock Company (d.d.) 4. Limited liability company (d.o.o.)

6 SETTING UP A BUSINESS IN BiH Registration facts (FBiH) Equity capital: KM (1.000 ) Registration costs: cca KM (500 ) Place of registration: Municipal Court with the economic/commercial department Required registration time: 40 days (theoretically) Q: REGISTRATION PROCESS?

7 SETTING UP A BUSINESS IN BiH Establishment Contract (made by notary) Payment of initial capital Registration at the competent court Registration of the company and staff at Pension and Disability Funds, TAX administration Opening a bank account in a commercial bank Making a company stamp Obtain permission for beginning of activity Start business

8 SETTING UP A BUSINESS IN BiH Establishment Contract (made by notary) Payment of initial capital Registration at the Ministry of Foreign Trade and Economic Relations of BiH Opening a bank account in a commercial bank Making a company stamp Registration at the competent court Registration of the company and staff at Pension and Disability Funds, TAX administration Obtain permission for beginning of activity Start business

9 TAX RATES Corporate income tax rate: 10% (no progressive rate in function of profit) Dividends tax rate: 5% Value added tax rate: 17% Property tax rate: depending on the location (FBiH 8%, Ze-Do Canton 3%, RS and Brčko District 5%) Personal income tax: 10% in FBiH and Brčko District, 8% in RS

10 TAX RATES Bosnia and Herzegovina has signed 32 Agreements on Avoidance of Double Taxation with the following countries: Albania, Austria, Belgium, Croatia, Czech,Rep.Cyprus, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Iran, Italy, Jordan, Kuwait, Moldova, Malesya, Netherlands, Norway, Pakistan, Poland, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden, Turkey, United Arab Emirates and United Kingdom Initiated but not signed with: Algeria, Belarus, Ireland, Latvia, Macedonia, Malta, Qatar, Russia, Syria and Singapore

11 TAX INCENTIVE 3 tax exemptions way: 1. The Federation Law on the Corporate Income Tax enables the taxpayer, who in the year for which the corporate income tax is being determined, has achieved 30% of their total revenue by export to be exempted from the tax payment for that year. 2. Taxpayer who in the period of five consequent years invests into production in the value of minimum 20 million KM, on the territory of the Federation of Bosnia and Herzegovina, is being exempted from the payment of corporate income tax for the period of five years beginning from the first investment year, in which minimum 4 million KM must be invested. 3. In the Federation of BiH, the taxpayer who employs more than 50% of disabled persons and persons with special needs longer than one year is being exempted from the payment of corporate income tax for the year in which more than 50% disabled persons and persons with special needs were employed.

12 SOCIAL SECURITY CONTRIBUTIONS In the BiH there are contributions paid by the employer and those paid by the employee (on gross wage amount in addition to contributions and taxes). Employee s Share: FBiH: 17% for pension insurance, 12.5% for health insurance, 1.5% for unemployment insurance (in total: 31% on gross wage) RS: 17% for pension insurance, 11,5% for health insurance, 0,7% for unemployment insurance, 1,4% for child protection (in total: 30,6 % on gross wage) Brčko District: 17% for pension insurance, 12% for health insurance (total: 29% on gross wage) Employer s Share: FBiH: 6% for pension insurance, 4% for health insurance, 0.50% for unemployment insurance (in total: 10.50% on gross wage) Brčko District: Brčko District: 6% for pension insurance (in total: 6% on gross wage for employers who apply FBiH Law). In RS no such contributions are paid

13 SOCIAL SECURITY CONTRIBUTIONS In the BiH there are contributions paid by the employer and those paid by the employee (on gross wage amount in addition to contributions and taxes). 12% 10% 8% 6% 4% 2% 35% 30% 25% 20% 15% 10% 5% child protection unemployment insurance health insurance pension insurance 0% FBiH RS Brčko D. 0% FBiH RS Brčko D. Employer s Share Employee s Share

14 STATUS AND INCENTIVES FOR FOREIGN INVESTORS 2 basic facts: 1. Company with foreign investment enjoys equal legal status and carries on its business under equal conditions and in an equal manner as do domestic companies 2. Foreign citizens in BiH exercise the same rights and freedoms as citizens of BiH exercise in the country of the foreign citizen

15 STATUS AND INCENTIVES FOR FOREIGN INVESTORS One of the incentives is the Foreign Investor Support Fund, provided by the Government of BiH (projects in production, research and development sectors) - 2 million KM annualy Central Bank of Bosnia and Herzegovina maintains monetary stability by issuing domestic currency according to the Currency Board arrangement - 1 KM: EUR Bosnia and Herzegovina has ratified/signed 39 Agreements on Promotion and Protection of Investments with the following countries: Albania Austria Belgium and Luxembourg Belarus China Croatia Czech Republic Denmark Egypt Finland France Germany Greece Hungary India Iran Italy Jordan Kuwait Lithuania Macedonia Malaysia Moldova Netherlands OPEC Fund Pakistan Portugal Qatar Romania Serbia Slovakia Slovenia Spain Switzerland Sweden Turkey Ukraine United Kingdom USA (OPIC) Risk insurance is guaranteed by: - European Union Investment Guarantee Trust Fund for Bosnia and Herzegovina - US Overseas Private Investment Corporation (OPIC)

16 FOREIGN TRADE Biomass business development potential in BiH

17 FOREIGN TRADE Bosnia and Herzegovina signed the Central European Free Trade Agreement (CEFTA) with the following countries: Albania, Serbia, Moldova, Montenegro, Croatia, Macedonia, UNMIK/Kosovo. Free Trade Agreement with Turkey. BiH has preferential export regimes with: all EU countries, Australia, Canada, Japan, New Zealand, Norway, Russia, Switzerland, USA and Iran BiH is a member of the WIPO Convention

18 Biomass feed-in-tariffs in FBiH Guaranteed purchase price for biomass generated electricity (feed into the national grid)! Gc = Rc x C Gc - Guaranteed purchase price Rc reference price (for ,26 pf/kwh) C tariff coeficient (depending on installed capacity and biomass source) Increase for biomass within the last legistlation update (about 7%) Pouke za prelazak na privredu s manjom emisijom ugljika,, Sarajevo Hotel Europa 18/33

19 Biomass feed-in-tariffs in FBiH Gc = Rc x C C - tariff coeficient Gc = 16,79 pf/kwh 18,02 pf/kwh Solid biomass from forestry and agriculture Solid biomass from wood-processing industry Micro (1kw 150 kw) Mini (>150 kw - 1MW) Small (>1 MW 10 MW) Large (>10MW) 1,47 1,43 1,45 1,41 1,43 1,39 1,41 1,37 Pouke za prelazak na privredu s manjom emisijom ugljika,, Sarajevo Hotel Europa 19/33

20 Biomass feed-in-tariffs in Republica Srpska Two prices: Guaranteed purchase price for biomass generated electricity (feed into the national grid) Premium price Pouke za prelazak na privredu s manjom emisijom ugljika,, Sarajevo Hotel Europa 20/33

21 Biomass feed-in-tariffs in Republica Srpska Biomass generated electricity 1 MW 1 MW 10 MW Guaranteed price [KM/kWh] Refernt price [KM/kWh] Premium price [KM/kWh] 0,1988 0,0541 0,1447 0,1730 0,0541 0,1189 Company needs to qualify for the premium price! Pouke za prelazak na privredu s manjom emisijom ugljika,, Sarajevo Hotel Europa 21/33

22 Co-financing opportunities EE/RES credit lines CDM projects (emission trading) Other possibilities Pouke za prelazak na privredu s manjom emisijom ugljika,, Sarajevo Hotel Europa 22/33

23 Co-financing opportunities EE/RES credit lines Raiffeisen Bank d.d. Bosna i Hercegovina (via EBRD) NLB Razvojna a.d. Banja Luka (FiM GGF) Pouke za prelazak na privredu s manjom emisijom ugljika,, Sarajevo Hotel Europa 23/33

24 Co-financing opportunities CDM projects (emission trading) Kyoto protocol financing mechanism Developed countries CER Investing in projects BiH (transition country) Pouke za prelazak na privredu s manjom emisijom ugljika,, Sarajevo Hotel Europa 24/33

25 Co-financing opportunities CDM projects (emission trading) BiH is a non-annex 1 country No obligations for emission reduction DNA in BiH (since december 2010.) 1 tco2 = 1 CER (grid emission factor of BiH 0,70 tco2/mwh - conservative) Pouke za prelazak na privredu s manjom emisijom ugljika,, Sarajevo Hotel Europa 25/33

26 Co-financing opportunities CDM projects (emission trading) - CO2-40 GWh/godišnje - EF = 0.7 t CO2/MWh - sedmogodišnji ugovor n CER = n 40,000 MWh MWh * EF * t CO2/MWh 0.7 t CO2/MWh 28,000 t CO2/a 1 CER = 3,55 = 28,000 CER/a

27 CDM projects (emission trading) Market volatility 20 /CER (2008.) 12 /CER (midd2011.) 3,55 /CER ( )

28 Co-financing opportunities Other possibilities EBRD TAM-BAS (private company, 51% domestic ownership) Development Bank of FBiH and RS (4% interest rate, 1 year grace period) International development organisations and institutions Pouke za prelazak na privredu s manjom emisijom ugljika,, Sarajevo Hotel Europa 28/33

29 Association Biomass in Bosnia and Herzegovina Supported by UNDP GEF in BiH 22 founders of which 18 legal entities State level Members: Equipment producers, energy carrier producers, ESCO companies, consulting companies, Thermal energy and electricity producers, project developers, private persons Pouke za prelazak na privredu s manjom emisijom ugljika,, Sarajevo Hotel Europa 29/33

30 Association Biomass in Bosnia and Herzegovina Contact information: Udruzenje Biomasa u BiH Vilsonovo setaliste Sarajevo Bosnia and Herzegovina Association Secretary - Mrs. Dragana Ristić [email protected] Pouke za prelazak na privredu s manjom emisijom ugljika,, Sarajevo Hotel Europa 30/33

31 CONCLUSION BiH s legal framework/system Tax exemptions Biomass feed-in-tariffs Co-financing opportunities (credit lines, CDM, TAM BAS programme...) Association Biomass in Bosnia and Herzegovina 31/33

32 THANK YOU FOR YOUR ATTENTION! mr. Sanjin Avdić, dipl.ing.maš, MBA Voditelj odjela energije/ Head of energy department CETEOR d.o.o. Sarajevo TEL: MOB: