Commercial law and international commercial law in Bosnia and Herzegovina

Author: Attorney Azur Prnjavorac · Tuzla, Bosnia and Herzegovina · Updated: 2 August 2026

In today's business environment, companies in Bosnia and Herzegovina (BiH) face a complex legal framework that combines domestic commercial law with elements of international commercial law. Commercial law is the foundation of doing business, from setting up a company and concluding contracts to regulating obligations and resolving commercial disputes. At the same time, international commercial law is becoming ever more relevant for companies operating across borders, covering international contracts, foreign investment, arbitration and the recognition of foreign judgments in commercial matters. Below we set out the key aspects of commercial law in BiH, with particular attention to the international elements that matter to businesses, as part of the work of our law office founded in 1993.

Commercial contracts and day to day business

The everyday activity of any business rests on contracts and other legal transactions. Commercial contracts (sale of goods, provision of services, distribution, franchising, joint ventures and so on) are governed by domestic law of obligations. It should be noted that BiH applies many international contractual standards. For example, by succession BiH is bound by the UN Convention on Contracts for the International Sale of Goods (CISG) of 1980, which applies directly to contracts for the international sale of goods where the parties are from contracting states or where the conflict of laws rules point to the law of a contracting state. Domestic companies trading with partners abroad are therefore often subject to the CISG, unless they have expressly excluded its application in the contract.

In addition to the CISG, cross-border transactions are also governed by the domestic Act on the Resolution of Conflicts of Laws with the Regulations of Other Countries (PDF, Bosnian version), which determines the law applicable to a contractual relationship with a foreign element where the parties have not agreed on it themselves. A lawyer specialised in international commercial law in BiH helps clients to agree on the governing law and jurisdiction in international contracts, taking into account the most favourable outcome for the client and the easier enforceability of any future judgment. Timely legal advice at the negotiation stage is essential in order to avoid disputes and financial losses later on.

Commercial disputes and debt collection

Commercial disputes cover every kind of court and out-of-court proceeding arising from business relationships: from unpaid monetary obligations and contractual disputes to disputes among co-owners of a company or infringements of intellectual property rights. Our practice shows that poor payment discipline is unfortunately a frequent cause of litigation in BiH. If a business partner fails to pay a debt, it is advisable to react as early as possible and, after an attempt at an amicable solution, to initiate collection of commercial claims before the competent court. Lawyers will first seek an out-of-court settlement through negotiation or, where appropriate, alternative dispute resolution, since that is often faster and cheaper for the client. The contract may provide for additional guarantees, pledges or other security instruments to encourage the debtor to pay. If no agreement is possible, court-based collection follows.

In court proceedings, once the court has given judgment in favour of the creditor, the matter moves on to enforcement proceedings for compulsory collection. Enforcement in BiH is carried out under the Enforcement Procedure Act (PDF, Bosnian version) and other regulations, and collection may be pursued in several ways. Monetary claims are most often satisfied through measures such as seizure and sale of the debtor's movable or immovable property, freezing and compulsory collection from the debtor's bank accounts, assignment of the debtor's claims against third parties, and even the sale of the debtor's shares in other companies. For non-monetary obligations, enforcement may cover the handover of a specific item, eviction and handover of real property, performance of a specific act or toleration, and similar.

An important part of commercial litigation is securing evidence and claims before the dispute is concluded (interim measures, court injunctions on the disposal of assets and the like), so that a later judgment does not remain unenforced. In complex commercial disputes it is essential to gather all relevant documentary evidence, from contracts, purchase orders and delivery notes to invoices and financial statements, because the existence of a business relationship and of obligations is most often proved precisely through business documentation. An experienced commercial lawyer will carry out a detailed analysis of the case and of the evidence and advise the client on the best strategy. Our primary aim is to reach a settlement through negotiation wherever that is possible, but if an amicable solution fails, after a thorough analysis of the legal options and the collection of evidence, we represent the client energetically before the court. In doing so we never lose sight of the fastest and most cost-effective route to the client's objective.

International commercial law and cross-border transactions

The business of many companies in BiH is no longer confined to the domestic market: cross-border transactions and cooperation with foreign partners are becoming ever more common. International commercial law comprises the rules governing precisely such relationships with a foreign element, whether they concern the export and import of goods, international services, foreign investment or joint ventures. In these situations it is essential to consider which law will apply to the contract and which court or arbitral tribunal will have jurisdiction in the event of a dispute. As noted above, BiH has conflict of laws rules that apply where the parties have not chosen the law and the forum. In practice, however, it is advisable for contracts with an international element to contain express provisions on the governing law and on the forum for dispute resolution.

Domestic companies must also comply with international trade rules and standards. When exporting goods to the EU, for instance, it is necessary to meet quality and safety standards, to apply the Incoterms rules correctly in the contract, to provide the customs documentation and so on. Matters such as the double taxation of profits (tax treaty issues) or customs relief are governed by international agreements concluded by BiH. A lawyer for international commercial law in BiH follows these regulations and advises clients on how to align their business with the requirements of foreign markets while protecting their legal interests. Whether the matter concerns the drafting of an international contract, the establishment of a representative office of a foreign company in BiH, or advice on the regulatory conditions for import and export operations, expert legal support is of invaluable importance for the success of cross-border business.

Arbitration and alternative dispute resolution

Arbitration is a frequent choice for resolving international commercial disputes because it offers a neutral forum and a more flexible procedure than court litigation. Bosnia and Herzegovina recognises arbitration in its legislation: the provisions on arbitration are incorporated into the entity civil procedure acts, which are based on the UNCITRAL Model Law (Bosnian version). In practice this means that two parties may agree an arbitration clause and thereby exclude the jurisdiction of the ordinary courts in favour of arbitration. Domestic arbitral institutions operating in BiH include the Permanent Court of Arbitration attached to the Foreign Trade Chamber of BiH in Sarajevo (rules of procedure, Bosnian version) and the Arbitration attached to the Chamber of Commerce of Republika Srpska in Banja Luka. These institutions provide rules of procedure and a list of arbitrators for domestic and international disputes, on condition that the dispute is of a commercial nature and does not fall within the exclusive jurisdiction of the courts (certain disputes concerning real property or personal status, for example, are not arbitrable).

BiH is also a party to the New York Convention of 1958 on the recognition and enforcement of foreign arbitral awards (PDF, Bosnian version). The Convention was adopted with the reservation that BiH recognises and enforces only those arbitral awards made in states party to the Convention, and only in disputes regarded as commercial under domestic law. In practice this covers the vast majority of international arbitral awards, since almost all relevant states are parties to the New York Convention. The procedure for recognising foreign arbitral awards in BiH is laid down both by the Convention itself and by the domestic conflict of laws act, and jurisdiction for recognition lies with the entity courts of higher rank (cantonal, district or Brčko District courts). Once recognised, foreign arbitral awards are enforced in the same way as domestic ones.

It is worth noting that the Civil Procedure Act of the Federation of Bosnia and Herzegovina (Articles 434 to 453) also governs proceedings before an arbitral tribunal chosen by the parties, that is to say ad hoc arbitration, which the parties may agree even where they have not chosen institutional arbitration. In such cases the ordinary courts provide support to the proceedings, above all by appointing arbitrators where the parties cannot agree, in accordance with the prescribed rules. This possibility further strengthens legal certainty and the flexibility of the arbitration mechanism within the legal system of BiH.

It should be added that arbitration is still less widely used in BiH than ordinary court proceedings: many business people prefer, out of habit, to resolve disputes before the commercial courts. Nevertheless, as international investment and trade grow, arbitration is becoming increasingly important. We draft arbitration clauses (arbitration agreements) tailored to the particular transaction, represent clients in arbitration, and subsequently obtain recognition and enforcement of arbitral awards in BiH.

Recognition of foreign judgments in commercial disputes

Where a domestic company wins a case before a foreign court against a business partner, or where a foreign company sues a BiH company abroad, the question arises of recognition of the foreign judgment in BiH so that it can be enforced. Foreign judgments produce no legal effect in BiH until they are recognised by the competent courts of BiH in separate proceedings. For a foreign judgment to be recognised in BiH, certain conditions laid down by the Act on the Resolution of Conflicts of Laws with the Regulations of Other Countries must be met. The basic conditions are that the foreign decision is final and enforceable in the country of origin, that its recognition would not be contrary to the public policy of BiH or to mandatory BiH regulations, and that the principle of reciprocity in the recognition of judgments exists between BiH and the country in which the decision was given. Reciprocity is presumed in BiH as a matter of principle, unless the contrary is shown, and in practice the court will where necessary ask the Ministry of Justice for information on the existence of reciprocity with the state concerned.

If the conditions are met, the court will issue a decision on recognition. A recognised foreign judgment is placed on the same footing as a domestic judgment: it has the same force as a judgment of a court in BiH. The creditor may therefore initiate enforcement proceedings in BiH on the basis of the recognised foreign judgment and collect the claim from assets of the debtor located here. A similar procedure applies to the recognition of foreign arbitral awards, with the New York Convention as the key legal basis.

Our law office regularly acts in the recognition and enforcement of foreign judgments. The procedure begins with an application to the competent court, together with certified translations of the necessary documents (the judgment, proof of finality and enforceability and so on). It is important to note that these proceedings do not examine the merits of the dispute: the BiH court will not review whether the foreign court applied the law correctly, but only whether the formal conditions for recognition are met.

When concluding contracts with foreign partners, it should be borne in mind that a dispute resolution clause only makes sense if the final decision will be enforceable in the jurisdiction where the debtor's assets are located. Otherwise even a judgment in your favour will not make collection possible. Expert legal advice at the contracting stage, and where necessary in the conduct of proceedings abroad, is therefore essential in order to protect the interests of a business.

In short, commercial law in BiH covers a broad range of rules governing the business of domestic companies, while international commercial law adds the complexity of cross-border relationships and disputes. The combination of these two areas calls for expertise, experience and a proactive approach. Our Law Office Prnjavorac has the knowledge and the willingness to give clients comprehensive legal support, from company formation, contract drafting and advice in day to day business, to representation in commercial disputes and the collection of commercial claims, as well as the resolution of disputes through arbitration or the recognition of foreign decisions. As experienced lawyers for commercial and international commercial law in BiH, we always seek to anticipate future legal risks and to remove possible harmful consequences for our clients. In a dynamic business world, timely legal assistance makes the difference: secure a reliable legal partner who will protect your business interests at home and abroad.

Frequently asked questions about commercial law in BiH