Since declaring independence in 1992, Bosnia-Herzegovina has grown to be one of the most dynamic economies in the south-eastern European region. Its total GDP (PPP) of 33.251 billion USD, or 8,589 USD per capita, has grown steadily since a period of turmoil in the mid to late 1990s, and the country is now establishing itself as an economic power in the region. Bosnia-Herzegovina's economy is split into three main sectors: services (65.3% of total GDP), industry (26.4%), and agriculture (8.1%). Much of its economic output is concentrated in Sarajevo, the capital city, and other industrial cities like Mostar. Tourism is also a growing sector, and it is estimated that Bosnia-Herzegovina will have the third highest tourism growth rate in the world between 1995 and 2020. Expatriates working in Bosnia-Herzegovina tend to do so for NGOs, in ambassadorial or governmental positions, in senior industrial roles, or as English teachers.
Expatriates working in Bosnia-Herzegovina will need a work permit. Although Bosnia-Herzegovina is a candidate for EU membership, it is not yet a member of the European Union, so this also applies to EU/EEA nationals. Obtaining a work permit for Bosnia-Herzegovina can be a lengthy process, so you are advised to apply in advance. In order to apply for a permit to work in Bosnia-Herzegovina, you will need to have already secured work in the country, as your prospective employer will need to apply to the country's Employment Service on your behalf. Once this has been done, the Federal Employment Agency will issue an approval for the employment of foreign persons for your prospective place of work, after which you can apply through your local embassy or consulate. Work permits are issued on a temporary basis, and are usually only active for a period of up to one year.
Expatriates living and working in Bosnia-Herzegovina will be required to pay income tax on their earnings. Unlike many other European nations, Bosnia-Herzegovina does not use a progressive, sliding scale income tax system, and instead applies a flat tax of 10% to all income from employment, interest, royalties, and capital gains. As a result, it is a popular expatriate destination for high earners wanting to avoid progressive income tax systems. However, the income on which you pay income tax at Bosnian rates depends on your residency status in Bosnia-Herzegovina. If you live and work in Bosnia-Herzegovina for more than 183 days in a year, you are considered a resident for tax purposes, and will pay income tax at Bosnian rates on your worldwide income. If you live and work in Bosnia-Herzegovina for less than that, you will pay income tax at Bosnian rates on your Bosnian income only.
Social security contributions are added on top of this flat rate, and are used to pay for public services like education and healthcare. Like most other countries, the bulk of the contribution is paid by the employer, with the expatriate paying on average 33% of the cost.