With large energy and infrastructure projects under development in Bosnia and Herzegovina, local legal professionals are facing an uphill battle against the double standards in their industry, according to Sajic Law Firm Senior Partner Natasa Krejic.
"We are a small country in the middle of Europe with a huge energy and infrastructure potential," Krejic says. "We are rich in natural resources due to our natural characteristics – we have very developed landscapes and favorable climate, including an abundance of precipitation." According to her, "investors from many different countries, especially China, consider Bosnia and Herzegovina a good destination to move their capital and start new projects."
Krejic says that, in the past few months, this process has accelerated. "With the energy crisis in general and the rise in renewable energy demand, currently, there are several projects in different stages of development," she notes. "For example, the construction of hydroelectric, solar, and other power plants from renewable sources is increasing." Additionally, Krejic notes that "large infrastructure projects are being developed, such as the construction of highways, in which Chinese investors are not only constructors but financiers, as well."
"Other than China, a large number of foreign investors who are also interested in Bosnia and Herzegovina are coming from European countries, including Germany," Krejic continues. "They are not only looking at our energy potential but, more importantly, they started moving their production facilities to our region. In particular, companies that produced materials/goods in China in the past are now more inclined to relocate to Balkan countries, including Bosnia and Herzegovina." According to her, the main reasons for such moves are, "first, the COVID-19 crisis and, now, the situation with Russia and Ukraine, which led them to take into account their expensive logistics and reconsider their choices." Additionally, she notes, "our profit tax is very low, which makes Bosnia and Herzegovina attractive to these foreign investors."
On a different note, Krejic says that Bosnia’s legal sector is currently struggling for several different reasons. "The other very relevant and unpleasant topic of conversation among colleagues – notably local law firms – is the unfair competition with both larger and smaller foreign law firms," she points out. "Foreign law offices that operate on our market are registered as limited liability companies and enjoy the benefits of that, while local law firms do not have such an option. Our legal framework regulating the local law offices’ activities, on the other hand, is very conservative and outdated, not allowing us to advertise, or establish offices or branches locally and, especially, abroad." Krejic says that foreign law firms that register as limited liability companies can access all those opportunities. "We are obviously in some kind of disadvantaged position, and we do not yet have sufficient tools to compete with them," she notes.
Finally, Krejic says that another problem legal professionals are struggling to deal with is a high degree of corruption. "It is very difficult to work and function properly, as we encounter corruption in all levels of administration, especially judiciary," she notes. "This affects not only lawyers but also regular people and businesses and is an impediment to the further development of our market."