The right of foreigners to real estate in Bosnia and Herzegovina – engagement of a law office
A law office performs representation before a notary office in order to acquire the right to real estate for foreign individuals and legal entities throughout Bosnia and Herzegovina, without the presence of a client or with the presence in Bosnia and Herzegovina, as well as consultations on acquiring real estate in Bosnia and Herzegovina.
A foreign natural person can acquire ownership of real estate in Bosnia and Herzegovina if there is reciprocity between our countries. Simply put, if a citizen of Bosnia and Herzegovina can acquire ownership of real estate in your country, then you in Bosnia and Herzegovina can acquire ownership of real estate under the same conditions. You can download the list of countries and an explanation for each country on the reciprocity and acquisition of property rights in Bosnia and Herzegovina here.
In accordance with the Law on Substantial Rights of Federation Bosnia and Herzegovina and the Law on Substantial Rights of
the Republic of Srpska as a complete novelty in the law of the Federation of Bosnia and
Herzegovina and the entity of Republic of Srpska, as well as the law of the former SFRY and
Bosnia and Herzegovina, for the first time foreign natural and legal persons are completely equal in terms of
substantial rights regime with the local population:
THE RIGHT OF FOREIGN PERSONS
Acquisition of ownership right of foreign persons
(1) The provisions of this Law shall also apply to foreign natural and legal
otherwise provided by law or an international agreement.
(2) Foreign persons acquire the right of ownership of real estate in the Federation / Republic of Srpska (Bosnia and Herzegovina) on the condition of reciprocity, except when the rights is acquired by inheritance unless otherwise provided by law or international agreement. Reciprocity is assumed. The list of countries with which there is no reciprocity is published by the Federal Ministry of Justice, with the previously obtained opinion of the Ministry of Foreign Affairs of Bosnia and Herzegovina, no later than January 31 of each year.
(3) Foreign persons who do not have the citizenship of Bosnia and Herzegovina shall not be considered foreign persons under this Law if they were born in Bosnia and Herzegovina or are their descendants.
Commentary on paragraph 1 of Article 15: This paragraph subjects foreign natural and legal persons to the same substantial rights regime as domestic persons.
Commentary on paragraph 2 of Article 15: No restrictions are foreseen in respect of foreign legal and natural persons. Identical rules apply to both natural and legal persons, regardless of whether these persons are in the role of a potential investor in Federation Bosnia and Herzegovina or not, whether they are permanently resident in Bosnia and Herzegovina or not, which is a novelty in relation to the provisions prescribed by Articles 87-92 of the Law on Property Relations. So now the legislator can equally treat foreign natural and legal persons with domestic persons and outside the category of foreign investments in Bosnia and Herzegovina, which is certainly a form of preparation for EU integration. Reciprocity is quoted as the only precondition for acquiring ownership of real estate that must be met, and whose existence is presumed. This provision should be interpreted in the way that reciprocity does not need to be proven in each case specifically, because reciprocity is presumed, and the Federal Ministry of Justice, with the previously obtained opinion of the Ministry of Foreign Affairs of Bosnia and Herzegovina, publishes a list of countries with no reciprocity, which is certainly a huge improvement to the previous solutions.
Commentary on paragraph 3 of Article 15: Special rules of the Law are foreseen for those Bosnia and Herzegovina citizens who have lost their citizenship, or were born in BiH or are descendants of citizens of Bosnia and Herzegovina. This legal provision is intended to avoid previous solutions for “foreigners” who have a close connection with their homeland, which is a positive commitment, especially if we take into account that during the war a large part of the population was displaced around the world as a result of aggression.
Restrictions on the acquisition of property
(1) A foreign person may not be the owner of real estate in an area which for
the protection of
the interests and security of the Federation is declared by law the area in which foreign
persons cannot have the right of ownership.
(2) If a foreign person has acquired the right of ownership over real estate before the area in which the real estate is located has been declared the area referred to in paragraph 1 of this Article, the right of ownership over that real estate shall cease and the foreign person shall be entitled to compensation under expropriation regulations.
Commentary on paragraph 1 of Article 16: This provision stipulates the possibility of restricting the rights of foreigners to acquire real estate in the Federation of Bosnia and Herzegovina and thus deviating from the general rule set out in Article 15 of the Federation Bosnia and Herzegovina Law on Substantial Rights. Restrictions refer to the possibility to prohibit foreigners from acquiring any real estate in a certain area of Federation Bosnia and Herzegovina, such a possibility, although not explicitly provided for, in the applicable legal regulations of Federation Bosnia and Herzegovina is currently in the Law on Agricultural Land of FBiH (Article 7, 99).
Commentary on paragraph 2 of Article 16: This provision regulates the practical situation in which a foreign natural or legal person acquired real estate on the territory of FBiH, and then a certain area was declared a so-called “forbidden” area. This provision is a de facto deprivation of property rights to all foreign natural and legal persons in a certain area.
Frequent questions about acquiring real estate by foreigners in Bosnia and Herzegovina
Question: I am a foreigner from Germany / Austria / Switzerland, I want to buy a property in Bosnia and Herzegovina, is that possible?
Lawyer: It is possible to acquire property rights in Bosnia and Herzegovina because BiH has reciprocity with the listed countries.
Question: I am a foreigner, I would like to buy real estate in Bosnia and Herzegovina, could you as a lawyer help me with that?
Lawyer: Yes we can, we represent in legal matters of transfer or acquisition of ownership or other substantial rights over real estate in Bosnia and Herzegovina, work on sales contract, representation before a notary as well as implementation of the contract after concluding it at the land registries in Bosnia and Herzegovina.
Question: I am a foreigner, I have the citizenship of Serbia / Croatia / Montenegro / can I acquire ownership over real estate in Bosnia and Herzegovina?
Lawyer: Yes, you can acquire property in Bosnia and Herzegovina because BiH has reciprocity with the mentioned countries.
Question: I am a foreigner, I come from countries where there is no reciprocity between our countries in acquiring ownership of real estate, is there still a possibility to acquire ownership of real estate in BiH?
Lawyer: It is possible, however, you have to establish a legal entity (d.o.o.) and then register the property to the legal entity in Bosnia and Herzegovina.
Question: I am a foreigner from a country with which Bosnia and Herzegovina does not have reciprocity when buying real estate, can I inherit property in Bosnia and Herzegovina?
Lawyer: Foreigners are equal in inheriting with citizens of Bosnia and Herzegovina, so you can inherit property in Bosnia and Herzegovina.
Question: How do foreigners acquire the right of ownership in Bosnia and Herzegovina?
Lawyer: The purchase agreement does not automatically provide the right of ownership over real estate in Bosnia and Herzegovina for foreigners. It is necessary to register your right in the land register. Therefore, it is necessary that after each purchase of your property, you submit your proposals for registration in the land register, and after the property tax is paid. Submit the proposal to the land registry office of the Municipal Court in Bosnia and Herzegovina in whose territory the real estate, that is, the subject of the sale is located. Upon registration, the buyer becomes also the land registry owner.
Question: How is entry performed in the land registers in Bosnia and Herzegovina for foreigners?
Lawyer: For registration in the land register as well as in the Book of Deposited Contracts it is necessary to enclose: - Request for registration. – Evidence documentation on which the request is based, that is, the basis for acquiring the substantial right that is necessary when it comes to registering a change of ownership. –Proof that the court fee was paid. –The decision of the tax administration on the assessment of real estate transfer tax when registering buildings, it is necessary to enclose a construction and use permit. When registering residential and business buildings in the Book of Deposited Contracts, it is necessary to enclose PS form. Entry in the land register shall be allowed only with the consent of the person who at the time of filing the request was entered in the land register as the ownership titular or some other substantial right that is to be transferred. Therefore, this approval must be an integral part of the evidence, whether the consent is part of the contract or is subsequently submitted in the form prescribed by law.
Question: What is the first step when buying real estate in BiH for me as a foreigner?
Lawyer: Before buying or selling a property, checking the land registry excerpt should be the first step. It is important for buyers to know if the property has a certain encumbrance, what is the area of the flat, whether the owner is one person or more of them, etc. On the other hand, the seller should be available to ensure transparency and insight into the land registry excerpt. It is important that the buyer is familiar with the existing condition of the property in order to know what the conditions of sale and its characteristics are. Knowing for example the co-owner’s ownership ratio can be important in the buying and selling process, e.g. if there are two property owners, it is important that both owners agree to the sale. Both must be present at the signing of the sales contract and give their written consent or provide a notarized power of attorney for the sale of the real estate. The land registry excerpt is the starting point of every purchase and sale of real estate and the only proof of its ownership.
Question: What needs to be done before buying real estate in Bosnia and Herzegovina for me as a foreigner?
Lawyer: You as a foreigner in BiH need to determine the land registry status, that is, whether the property for which the transfer of ownership is proposed and the owner of the property are registered in the land registers. Therefore, it is necessary for the party (buyer) to contact the land registry, knowing the number of the cadastral parcel, and request a land registry excerpt, which contains all the information about a particular property as they are registered in the land registry. From the land excerpt it is possible to see who the owner of the real estate is, whether the real estate has one or more owners, whether it is encumbered with a mortgage or some other encumbrance. Insight into the condition of a certain real estate, i.e. obtaining a land registry excerpt is provided to all persons after the payment of the fee. The land registry excerpt is the only proof of ownership of your real estate or some other right that may be the subject of entry in the land registry in Bosnia and Herzegovina. Excerpts from the land register have the status and probative value of public documents.