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
Article 15.
Acquisition of ownership right of foreign persons
(1) The provisions of this Law shall also apply to foreign natural and legal
persons, unless
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.
Article 16
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.
