Best Project Finance Lawyers in Bosnia and Herzegovina

About Project Finance Law in Bosnia and Herzegovina

Project finance is a specialized way of funding large-scale and capital-intensive projects, such as infrastructure developments, energy facilities, and public-private partnerships. In Bosnia and Herzegovina, project finance involves securing long-term financing based on the projected cash flows of the project, rather than the balance sheets of the project sponsors. This allows for non-recourse or limited-recourse financial structures, where lenders primarily rely on the success and revenue of the project itself for repayment.

Given Bosnia and Herzegovina's ongoing development of its infrastructure and increasing interest from domestic and international investors, project finance law is a growing and important field. The legal landscape combines local commercial and banking regulations with international best practices and is shaped by Bosnia and Herzegovina’s unique political and legal structure.

Why You May Need a Lawyer

Engaging in project finance in Bosnia and Herzegovina often requires navigating complex legal, regulatory, and financial environments. You may need a lawyer in situations such as:

• Structuring and negotiating project finance agreements
• Conducting due diligence on projects, sponsors, and offtake agreements
• Ensuring compliance with local and international regulations
• Obtaining licenses, permits, and regulatory approvals for infrastructure projects
• Managing relationships with government authorities and public entities
• Resolving disputes between stakeholders, such as investors, lenders, and contractors
• Advising on tax and investment incentives or obligations relevant to the project
• Negotiating and drafting construction contracts, supply agreements, and financing documents
• Advising on risk mitigation, insurance, and security arrangements
• Guiding foreign investors through local legal and business practices

Local Laws Overview

Bosnia and Herzegovina’s legal framework for project finance is influenced by its complex political structure. The country consists of two entities - the Federation of Bosnia and Herzegovina (FBiH) and Republika Srpska (RS) - plus the Brčko District, each with its own laws and regulations governing commercial activity, banking, and concessions.

Key aspects relevant to project finance include:

• Concession and PPP Laws: Each entity has its own laws regulating concessions and public-private partnerships, outlining how the public sector can grant rights and obligations to the private sector for infrastructure projects.
• Secured Transactions and Collateral: Both entities provide legal means for creating and perfecting security interests over assets, such as mortgages on property, pledges over movable assets, and assignment of receivables.
• Banking and Finance Regulation: The Central Bank of Bosnia and Herzegovina supervises monetary policy, while entity-level agencies regulate banking and lending activities.
• Foreign Investment Rules: Laws are generally favorable, ensuring national treatment of foreign investors, but specific documentation and registration processes must be followed.
• Environmental and Construction Permits: Projects must secure proper environmental approvals and comply with entity-specific planning, building, and operational licensing regimes.
• Taxation: Taxation is mainly governed at the entity or Brčko District level, with specific provisions for corporate tax, VAT, and project-related incentives in some cases.

Frequently Asked Questions

What is project finance and how is it used in Bosnia and Herzegovina?

Project finance is a financing method where funds are provided for a specific project, with repayment dependent on the project's cash flow rather than the sponsors' assets. In Bosnia and Herzegovina, it is mostly used for large infrastructure projects, including roads, energy facilities, and public utilities.

Do foreign investors have the right to participate in project finance?

Yes. Foreign investors typically enjoy the same rights as domestic entities, including the ability to own shares and participate in project finance arrangements, subject to certain registration and compliance requirements.

What legal structures are commonly used for project finance in Bosnia and Herzegovina?

Common structures include special purpose vehicles (SPVs) established as limited liability companies, joint ventures, or concession agreements, depending on the nature and requirements of the project.

Are there specific laws regulating public-private partnerships and concessions?

Yes. Both the Federation of Bosnia and Herzegovina and Republika Srpska have legislation regulating concessions and public-private partnerships, detailing the procedures for approvals, rights, obligations, and operational requirements.

What collateral can be used to secure project finance?

Typical forms of collateral include mortgages over real estate, pledges over movable assets, assignments of receivables, and sometimes government guarantees, subject to negotiation and the specifics of each project.

What permits are required for infrastructure projects?

Projects generally need construction and operating permits, environmental clearances, and sector-specific licenses. Requirements can vary significantly between the Federation and Republika Srpska.

How are disputes resolved in project finance agreements?

Many project finance agreements specify arbitration or specialized courts to resolve disputes. Parties often select international arbitration for cross-border investments, but local courts are sometimes used for purely domestic projects.

What tax considerations apply to project finance?

Project entities are subject to corporate income tax, VAT, and other local taxes. Some projects may benefit from tax incentives or exemptions, especially if they support development goals or utilize renewable energy.

Is government support available for project finance?

Government support can include grants of land, permits, or guarantees, particularly for projects deemed in the public interest. These are typically governed by concession or PPP laws and awarded through competitive tendering.

Does project finance law differ between the Federation of Bosnia and Herzegovina and Republika Srpska?

Yes. While there are similarities, each entity maintains its own legislation and procedures, so laws and regulatory bodies may differ. It is important to consult local experts depending on project location.

Additional Resources

For those seeking further information or assistance with project finance in Bosnia and Herzegovina, the following resources and organizations can be helpful:

• Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina
• Federal Ministry of Energy, Mining and Industry (Federation of Bosnia and Herzegovina)
• Ministry of Industry, Energy and Mining (Republika Srpska)
• Concessions Commission of Bosnia and Herzegovina
• Foreign Investment Promotion Agency of Bosnia and Herzegovina (FIPA)
• Local chambers of commerce and economic associations
• International financial organizations active in Bosnia and Herzegovina, such as the European Bank for Reconstruction and Development (EBRD)
• Law firms and consulting agencies specialized in project finance

Next Steps

If you need legal assistance in project finance, consider the following steps:

• Clearly define the scope and objectives of your project
• Identify the entity or territory in which your project will be based, as this determines the applicable laws and procedures
• Gather all necessary documentation, such as business plans, financial projections, and identification of potential stakeholders
• Consult with lawyers or legal advisors who have experience with project finance and local regulations
• Organize meetings with potential partners, authorities, or financiers to discuss your project framework and legal requirements
• Review all proposed agreements carefully, ensuring your interests are protected and all compliance obligations are met
• Submit required applications for permits, licenses, and registrations following legal guidance
• Continue to seek expert advice as the project progresses, especially if you encounter regulatory changes or disputes

Engaging knowledgeable legal counsel can provide valuable support throughout the planning, structuring, and execution of your project, helping you to manage risks and maximize your chances of success in Bosnia and Herzegovina's evolving project finance market.