The National Assembly of Republika Srpska adopted the Law on Incentives in the Economy of Republika Srpska at its 12th regular session on 28 November 2024.
After several years of applying this law and continuously monitoring trends and developments in the economic sectors, as well as engaging in active communication with the business community, it became evident that changes to the law were necessary and urgent. The new legislative solution does not fundamentally change the Government of Republika Srpska’s commitment to encouraging the economy; instead, it improves certain provisions, aligns them with European trends, and introduces more opportunities for the business community to engage and collaborate in the creation of incentive measures.
The business environment and conditions are constantly changing, which requires a more flexible approach and quicker response. Therefore, this matter, by its economic nature, requires more specific regulation through sub-legal acts.
Specifically, the existing three types of incentives are retained, with certain formulations being changed and simplified.
The concept for determining the initial wage amount under the previous incentive for increasing workers’ salaries is being changed. Specifically, the initial wage amount will now be the average wage paid to workers in the previous business year, instead of the previous practice where the starting wage was based on the month of December from the previous business year. This new approach takes into account frequent changes in the labor market, as well as the continuity and stability of employment. Considering the accounting period and deadlines, and the fact that this incentive measure must be consistently applied over two accounting periods in the current year, an expedited process was undertaken to adopt this legal solution.
Furthermore, in order to simplify and align with European terminology, the remaining two types of incentives are being modified as follows:
- The incentive for direct investments will be renamed to incentives for investments in enhancing technological levels and transitioning the economy to a green and circular economy.
- The incentive for direct investments of particular significance will be renamed to incentives for investments of particular significance.
This legislative solution is of crucial importance for the economy of Republika Srpska. It will ensure more favorable conditions for stimulating the economy, with the aim of establishing sustainable growth and development, increasing investments, and preserving or enhancing employment in the economy.