#

Ease of Doing Business in

Bosnia and Herzegovina

Bosnia and Herzegovina Download Profile (1777.9KB, pdf)
Region Europe & Central Asia
Income Category Upper middle income
Population 3,810,416
GNI Per Capita (US$) 4,680
City covered Sarajevo

190

1

DB 2017 Rank

1

100

DB 2017 DTF (% points)

  • local_library
  • group
Topics DB 2017 Rank DB 2016 Rank info_outline Change in Rank DB 2017 DTF (% points) info_outline DB 2016 DTF (% points) info_outline Change in DTF (% points) info_outline
Overall 81 79 down
2
63.87 63.07 down
0.80
Starting a Business 174 175 up
1
65.09 63.60 up
1.49
Dealing with Construction Permits 170 168 down
2
52.54 51.54 up
1.00
Getting Electricity 123 120 down
3
60.05 60.00 up
0.05
Registering Property 99 97 down
2
61.54 61.52 up
0.02
Getting Credit 44 42 down
2
65.00 65.00
-
Protecting Minority Investors 81 78 down
3
55.00 55.00
-
Paying Taxes 133 151 up
18
60.08 55.15 up
4.93
Trading across Borders 36 36
-
91.87 91.87
-
Enforcing Contracts 64 63 down
1
60.60 60.60
-
Resolving Insolvency 41 40 down
1
66.93 66.42 up
0.51

Positive= Doing Business reform making it easier to do business.Negative= Change making it more difficult to do business.

DB 2017 Rank:

41

DB 2016 Rank:

40

Change in Rank:

down1

DB 2017 DTF (% points):

66.93

DB 2016 DTF (% points):

66.42

Change in DTF (% points):

up0.51

Indicator Bosnia and Herzegovina Europe & Central Asia OECD high income
Recovery rate (cents on the dollar) info_outline 37.3 38.2 73.0
Time (years) info_outline 3.3 2.2 1.7
Cost (% of estate) info_outline 9 13.1 9.1
Outcome (0 as piecemeal sale and 1 as going concern) info_outline 0 .. ..
Strength of insolvency framework index (0-16) info_outline 15 9.9 12.1
  • Indicator Explanation Answer
    Recovery rate (cents on the dollar) 37.3
    Proceeding It is very likely that, based on information provided in case study assumptions, BizBank will initiate foreclosure, as Mirage can neither obtain a new loan from any other financial institution nor renegotiate its current loan with BizBank. Additionally, Mirage expects to have negative net worth and operating losses in both following years. Having these facts in mind, it is unlikely that any reorganization plan could be approved by the court. Therefore, the proceedings will be continued as foreclosure which will result with the sale of the hotel. foreclosure
    Outcome If BizBank initiates foreclosure, the hotel will be sold in order to settle the Mirages obligation toward BizBank. piecemeal sale
    Time (in years) It takes 3.3 years to finish foreclosure proceedings in Bosnia and Herzegovina. Most delays in the proceeding are due to the sale of the immovable property. Steps for sale of movable property are simpler. Generally, movable property could be sold by bankruptcy administrator either directly in negotiations with the third party or at a public auction. The main steps in the foreclosure proceedings (for sale of immovable property) are: 1. assessment of the immovable property value; 2. sale of the immovable property. The sale of the property is conducted by the court. 3. payment of the price and transfer of the immovable property to the buyer. There are 3 main reasons for delay during the sale of immovable property: • the slowness of the courts that lead the sale procedure; • the complexity of the court procedure for sale of the immovable property, which slows the sale procedure. For example, the immovable property cannot be sold below 1/2 of the assessed value at the first court hearing for the sale, respectively below 1/3 of the assessed value at the second court hearing for the sale of the property. Only at the third court hearing for the sale, the immovable property might be sold without any limitations regarding the assessed value. • potential objections of the secured creditor’s claim by a third party. In this case third party initiates separate litigation proceeding where he/she proves that the creditor does not have secured claim. This litigation might take a year or more. 3.3
    Cost (% of estate) Most of the expenses will be used to pay attorneys' fees. 9.0
    Answer Score
    Strength of insolvency framework index (0-16) 15.0
    Commencement of proceedings index (0-3) 3.0
    What procedures are available to a DEBTOR when commencing insolvency proceedings? (a) Debtor may file for both liquidation and reorganization 1.0
    Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (a) Yes, a creditor may file for both liquidation and reorganization 1.0
    What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) Debtor is generally unable to pay its debts as they mature 1.0
    Management of debtor's assets index (0-6) 6.0
    Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the debtor? Yes 1.0
    Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts? Yes 1.0
    Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0
    Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0
    Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of insolvency proceedings? Yes 1.0
    Does the insolvency framework assign priority to post-commencement credit? (b) Yes over ordinary unsecured creditors but not over secured creditors 1.0
    Reorganization proceedings index (0-3) 3.0
    Which creditors vote on the proposed reorganization plan? (b) Only creditors whose rights are affected by the proposed plan 1.0
    Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as what they would obtain in a liquidation? Yes 1.0
    Are the creditors devided into classes for the purposes of voting on the reorganization plan, does each class vote separately and are creditors in the same class treated equally? Yes 1.0
    Creditor participation index (0-4) 3.0
    Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency representative? Yes 1.0
    Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor? Yes 1.0
    Does the insolvency framework provide that a creditor has the right to request information from the insolvency representative? No 0.0
    Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting creditors' claims? Yes 1.0

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”.