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Shelter in Sarajevo: Real Estate Investment in Sarajevo, Bosnia and Herzegovina

Written By: Jacquelyn Annete García Vadnais

Bosnia and Herzegovina is a unique country with a fascinating history that dates back to ancient times. For this reason, there are many spectacular historic ruins to be enjoyed in the country along with a strategic position as being a gateway between the East and West. In terms of real estate development, there have been many strides recently to encourage foreign direct investment and lucrative real estate projects in the region due to the prospering economy. Sarajevo has been one of the target cities because of its large student population and key location for businesses to conduct commerce. If you are considering in investing in real estate in Bosnia and Herzegovina, consider the information below:

A Brief History of Sarajevo, Bosnia and Herzegovina

Bosnia and Herzegovina has a fascinating history that began when it was called Illyricum. It was conquered by the Romans in approximately 200 B.C. It was included in the Roman province of Dalmatia, and eventually it was claimed by the Byzantine Empire in the 6th century. It was not until the year 1200 A.D. that Bosnia won independence, and became a self-ruled Christian state for approximately 260 years. The expansion of the Ottoman Empire into the Balkans initiated an Islamic influence in Bosnia in which led to a period of 450 years where Bosnia was under Ottoman rule, up until World War I. Bosnia also developed a sizeable Jewish population during this time period, from Jews escaping the Spanish Inquisition in 1492.

At the end of World War I, Bosnia was annexed into the fragile new nation of Yugoslavia. In World War II, Yugoslavia was invaded by the Germans; however, at the end of the war, they were grouped into one of the six republics of the newly founded Communist Yugoslavia. Once the Iron Curtain began to fall, Bosnia and Herzegovina declared independence, requesting recognition from the EU in 1991.

In recent years, Bosnia has maintained one of the most stable currencies in the region, and is continuing to rebuild economically from the ground up. In particular, Sarajevo, the capital of Bosnia, is a burgeoning economic hub. In addition, it is known as multireligious, multiethnic city, with traditional architecture, mosques, churches, and synagogues, as well as vibrant food, and entertainment options.

Benefits of Investing in Real Estate in Sarajevo, Bosnia and Herzegovina

There are many benefits to investing in real estate in Sarajevo, Bosnia and Herzegovina. Consider some of the most favorable benefits below:

Free Trade Zones May Attract More Business

There are several Free Trade Zones in Bosnia and Herzegovina Including Sarajevo. This is quite important because the government has made it easier for companies to do business in Free Trade Zones, which will attract more foreign direct investment.

Favorable Geographic Location

The favorable geographic location of Bosnia and Herzegovina is absolutely worthwhile to consider in terms of real estate investment. In the coming years, as Bosnia and Herzegovina develops, it will be a key locale between the East and West. What this means is that more business investment will occur and that will have an impact on increasing property values quite substantially.

Ease of Citizenship & Residency for Business Owners

For foreign investors that would like to establish a second residence, it is possible to gain citizenship through establishing a company. Immigration loopholes are opening up in Bosnia and Herzegovina, which is favorable to real estate investors that potentially want a second citizenship while still investing in companies that can earn them additional income while residing abroad.

Affordable Manufacturing Options for Companies & Low Corporate Tax Rates

Currently Bosnia and Herzegovina’s corporate tax rate is at 10%, which means that many companies will likely consider moving there due to the affordability of the corporate tax rate along with lower cost manufacturing options. This has the potential to make a positive impact in real estate values because there will be a market to rent to employees of multinational companies deciding to increase their presence in Sarajevo, Bosnia and Herzegovina.

Low Taxation System for Property Sales

There is a very low taxation system in place for property sales in Bosnia and Herzegovina, which is only at 5%. This enables real estate investors to lose less on buying property, and to make more on renting the property out or flipping it in a few years to sell to other real estate investors.

Affordable Prices of Real Estate in Sarajevo, Bosnia and Herzegovina

In terms of pricing, real estate in Bosnia and Herzegovina ranges from 25,000 EUR to 100,000 EUR. In the city center of Sarajevo, real estate roughly costs 1,500 EUR per square meter. For outside areas, the price drastically decreases to 750 EUR per square meter.

Sarajevo’s Large Student Population

One of the major benefits of investing in real estate in Sarajevo is the large student population that exists there. The top universities in the country are there, but also these universities attract students to Sarajevo from Egypt, Turkey, the United States, India, and Austria. Due to this influx of students, Sarajevo has undergone many construction projects to support the housing demand. The large student population combined with the families coming into Sarajevo for work from domestic areas and abroad are creating a substantial demand for housing Sarajevo currently, which means a large potential demand for real estate investors to rent their properties to both students, and workers alike.

Final Remarks

Bosnia and Herzegovina is in a unique period its history where it is recovering from the Iron Curtain while now having the infrastructure in place to rebuild, and continue a booming economy. The country’s position geographically is fantastic for multinational companies to invest there. In terms of real estate there is a boom due to the student population in Sarajevo along with the many families coming there to work from the foreign direct investment that is occurring in the region. It is a wise decision to consider investing in Sarajevo, Bosnia and Herzegovina at the present moment because the prices are low and there is great potential to rent out property or resell for a higher value in the long term. It will be exceptional to see what Bosnia and Herzegovina achieves in the years to come.

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Jacquelyn Annete Garcia Vadnais is an Investment Consultant and field expert blogger for Barracuda Consulting. 

Jacquelyn has a JD/MBA from Suffolk University, an LL.M in International Law from the University of Miami, and a B.A. from the George Washington University in International Affairs with a Concentration in International Politics. Jacquelyn speaks English, Spanish, French, and Portuguese and has lived in ten countries. Jacquelyn has done work for firms such as Boston Consulting Group and has worked with firms based in over ten countries in the fields of Real Estate, International Law, Expat Living, International Business, Forex Trading, and Travel. She has also volunteered her time and expertise at the Victims Rights Law Center based in Boston, MA.

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