SME Policy Index for Western Balkans and Türkiye 2026 – Economy Profile for Bosnia and Herzegovina

1. Assessment findings by policy dimension

Abstract

This chapter assesses policy performance across 13 dimensions key to SME growth and competitiveness as part of the SME Policy Index 2026 assessment cycle. For each dimension, scores are benchmarked against the 2022 assessment to track progress over time, situated within the regional distribution of results and contextualised relative to economy’s own performance profile across dimensions. Results are disaggregated by sub-dimension and thematic block, with comparisons drawn to regional averages throughout. The analytical sections identify recent achievements and persistent gaps underpinning score changes, while implementation reviews for each sub-dimension document key developments recorded during the assessment period against recommendations issued in the previous cycle.

The chapter is intended as a practical reference for policymakers, offering a structured overview of areas where measurable progress has been achieved and areas where challenges remain. It is to be read in conjunction with the cluster section of the economy profile, which sets out forward-looking recommendations to support continued reform efforts.

Dimension 1: Entrepreneurial learning and women’s entrepreneurship in Bosnia and Herzegovina

Overview of Bosnia and Herzegovina’s performance on Dimension 1

Bosnia and Herzegovina received an overall score of 3.24 for Dimension 1 (Figure 1.1), reflecting broadly stable performance since the previous assessment cycle. This score remains below the Western Balkans and Türkiye (WBT) average of 3.72, positioning the economy as the lowest scorer in the region. Nevertheless, Dimension 1 remains one of Bosnia and Herzegovina’s better performing areas, reflecting the comparatively advanced nature of the policy environment in the local context.

The stagnation of Bosnia and Herzegovina’s overall score since 2022 reflects contrasting developments: progress in entrepreneurial learning has been offset by a weakening of support to women’s entrepreneurship (Figure 1.1). It also conceals divergent performance across entities, as the Federation of Bosnia and Herzegovina performs comparatively well in entrepreneurial learning across all thematic blocks while Republika Srpska demonstrates stronger outcomes in women’s entrepreneurship. Despite these variations, both sub-dimensions reveal persistent challenges in complementing policy frameworks and support measures with systematic monitoring and evaluation to assess effectiveness and guide evidence-based policymaking. These gaps have been further accentuated by recent methodological changes that assign a greater weight to monitoring and evaluation – an area in which both entities tend to perform more weakly.

Figure 1.1. Overview of Bosnia and Herzegovina’s dimension score and evolution over time

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Sub-dimension 1.1: Entrepreneurial learning

Performance in this sub-dimension has improved, as demonstrated by the increase in score from 2.82 in 2022 to 3.00 in 2026. This improvement primarily reflects ongoing efforts to align with the main state-level strategy on entrepreneurial learning and the preparation of the first systematic report on its implementation, which together provide a clearer strategic framework and initial steps toward regular monitoring.

Planning and design vary considerably between the Federation of Bosnia and Herzegovina and Republika Srpska. On the one hand, the Federation of Bosnia and Herzegovina is aligned with the state-level strategy, “Priorities in the Integration of Entrepreneurial Learning and Entrepreneurial Key Competences into Education Systems in Bosnia and Herzegovina (2021-2030)”, alongside curricula guidelines defining entrepreneurship as a cross-curricular competence at all levels of education. In contrast, Republika Srpska relies on its own strategies for education and small and medium-sized enterprises to guide the development of entrepreneurial competences. This approach remains more limited, focusing on standalone provision within vocational education and training rather than cross-curricular integration across the education system. Despite these differences, both entities face significant gaps in teacher training on entrepreneurship competences. Pre-service training is entirely absent (Table 1.1), while in-service training is offered inconsistently, limited to certain cantons in the Federation of Bosnia and Herzegovina and largely unavailable in Republika Srpska.

Persistent difficulties in operationalising policy commitments have contributed to stagnating performance within the implementation thematic block. This is illustrated in the 2024 document, “Information on the Implementation of the Priorities in the Integration of Entrepreneurial Learning and Entrepreneurial Key Competences into Education Systems in Bosnia and Herzegovina (2021-30)”, which reiterates this limited progress in translating agreed-upon priorities into practice. Ambiguous guidance and the absence of a dedicated budget have led to uneven progress across cantons and entities in realising concrete reforms. Key areas, such as the introduction of practical entrepreneurial experiences, remain underdeveloped: only one of the Federation of Bosnia and Herzegovina’s ten cantons has made tangible progress, while no advances are recorded in Republika Srpska. Activities such as student enterprises or co-operatives, therefore, remain ad hoc and largely confined to VET institutions.

Monitoring and evaluation mechanisms show early signs of progress, with the “Information on Implementation” report marking the first systematic attempt to document actions at the state, entity and cantonal levels. Although currently a one-off exercise, it could potentially serve as a foundation for developing more regular and comprehensive monitoring and evaluation practices in the future. However, neither the Federation of Bosnia and Herzegovina nor Republika Srpska currently conducts tracer studies to track students after graduation, constraining the assessment of how learning outcomes translate into employability and labour market relevance. Efforts by the Ministry of Education and Culture of Republika Srpska to develop a graduate monitoring system mark an important initial step in addressing this gap.

Table 1.1. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 1, Sub-dimension 1.1

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Build a multi-stakeholder policy partnership for entrepreneurial learning, as set out in the new state-level strategy	Despite functioning policy partnerships in both entities, there has been no progress in building a multi-stakeholder partnership for entrepreneurial learning at the state level.	None	See Cluster 4: “Fostering entrepreneurial skills and mindsets through education”
Match pre-service teacher training provision to the needs of the core curricula, the newly developed entrepreneurial and digital learning outcomes developed, and support the new entrepreneurial learning strategy	While efforts are underway to expand in-service teacher training in line with the state-level strategy “Priorities in the Integration of Entrepreneurial Learning and Entrepreneurial Key Competences into Education Systems in Bosnia and Herzegovina (2021-2030)”, no corresponding initiatives have been launched to update or reform pre-service teacher training.	None	See Cluster 4: “Fostering entrepreneurial skills and mindsets through education”
Strengthen the commitment to the practical implementation of the 2021-2030 strategy for entrepreneurial learning at the entity level	Progress in implementation has varied significantly between and within entities, depending on institutional commitment. The preparation of the 2024 implementation report for the 2021-2030 strategy nevertheless demonstrates ongoing efforts to co‑ordinate actions across state, entity and cantonal levels.	Moderate	See Cluster 4: “Fostering entrepreneurial skills and mindsets through education”

Sub-dimension 1.2: Women’s entrepreneurship

Bosnia and Herzegovina scored 3.60 on Sub-dimension 1.2 on women’s entrepreneurship, marking a decline from 3.85 in 2022 (Figure 1.1). The overall decrease reflects a combination of stagnation in Republika Srpska – where performance remains at a relatively advanced level – and more limited progress in the Federation of Bosnia and Herzegovina, most notably in monitoring and evaluation, where gaps in data collection and systematic assessment practices persist.

In terms of planning and design, strategies targeting women’s entrepreneurship across different levels of government reveal substantial variation in emphasis and operational clarity. A well-developed framework is evident both in Republika Srpska’s SME Strategy as well as its dedicated Strategy for the Development of Entrepreneurship of Women (2025-2031), reflecting a clear policy focus and actionable measures. in the Federation of Bosnia and Herzegovina, women’s entrepreneurship is addressed only as part of a single measure within the Small Business Development Strategy 2022-2027, bundled with youth and social entrepreneurship, with no dedicated budget, minimal progress indicators and a single action (“implement programmes to support the development of women's entrepreneurship”) (Table 1.2). Consequently, despite Republika Srpska’s continued strong performance, the thematic block saw little substantial change. More positively, institutional support for gender equality remains robust across both entities, with gender centres, dedicated councils and working groups providing an enduring foundation for co-ordination and policy implementation.

The implementation score has more or less stagnated, reflecting limited systemic shifts in delivery architecture since 2022. In Republika Srpska, support for women’s entrepreneurship is comparatively structured and growth-oriented, combining skills development, advisory services and targeted financial instruments. Participation in initiatives such as the regional GRANDIS project signals strategic alignment with the twin green and digital transitions, positioning women entrepreneurs within higher-value and future-oriented sectors (Interreg Europe, n.d.[1]). This is reinforced by multi-level support: entity-level programmes, including the Chamber of Commerce’s Women’s Entrepreneurship Support Programme 2024 as well as more general trainings by the Council for Women’s Entrepreneurship, provide tailored technical assistance, while local self-government units extend networking and advisory services across 16 municipalities (Ministry of Economy and Entrepreneurship of Republika Srpska; Development Agency of Republika Srpska, 2025[2]). Financial allocations by the Ministry of Economy and Entrepreneurship of BAM 4.5 million (EUR 2.3 million), distributed to 197 women-owned enterprises in 2025 alone, further indicate sustained investment and policy prioritisation.

In contrast, support in the Federation of Bosnia and Herzegovina remains primarily activation driven. The 2025 Self-Employment Co-financing Programmes of the Federal Employment Institute, where women accounted for 43.6% of beneficiaries, are explicitly designed to integrate unemployed women into the labour market. This activation focus shapes the broader policy approach, where entrepreneurship is framed predominantly as a tool for employment inclusion rather than firm growth or innovation upgrading. The relatively low share of incentives awarded to women-led SMEs (11.3%1) under the Federal Ministry of Development, Entrepreneurship and Crafts further suggests limited mainstreaming of gender considerations within general enterprise support instruments.

Yet, despite the development and use of support mechanisms, these have not translated into meaningful improvements in women’s entrepreneurship in either entity, with women owning only around 20% of SMEs, underscoring the limited impact of existing measures (Figure 1.2).

Figure 1.2. Key statistic for sub-dimension 1.2. on women’s entrepreneurship, Bosnia and Herzegovina, 2024

Notes: The overall figure of 20% is based on available aggregate data. Entity-level statistics are currently available only for RS, where in 2024 businesses owned or co-owned by women accounted for 28.4% of the total. Comparable data for the FBiH are not available, precluding a full entity-level comparison.

Source: World Bank (2025[3]).

Both entities have monitoring and evaluation mechanisms in place but remain at different levels of advancement. Reporting is more established in Republika Srpska, with a dedicated chapter on women’s entrepreneurship included in the annual SME report. However, this monitoring remains largely descriptive, focusing on activities and participation rather than outcomes such as gains in productivity, profitability or skills development – information essential to determine whether support mechanisms deliver their intended results. Conversely, the Federation of Bosnia and Herzegovina lacks a unified system for monitoring or evaluating support to women entrepreneurs, as a consolidated annual reporting framework has not yet been developed. Broader data constraints further hinder evidence-based policymaking, given incomplete gender-disaggregated datasets in the Federation of Bosnia and Herzegovina and delays in operationalising a dedicated women’s entrepreneurship database in Republika Srpska. The recently established Working Group for Monitoring of Women’s Entrepreneurship in Republika Srpska is expected to strengthen data collection and analytical capacity, potentially addressing some of these shortcomings.

Table 1.2. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 1, Sub-dimension 1.2

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Ensure there are active women’s entrepreneurship strategies covering all areas of the economy addressing actions related to financial support, training, leadership, inclusion of women in key decision-making bodies and actions that support women who are primary carers in accessing entrepreneurship as a valid career pathway	The Federation of Bosnia and Herzegovina addressed the previous absence of dedicated policies by including a measure for women entrepreneurs in its Small Business Development Strategy 2022‑2027, though the scope remains limited. Meanwhile, Republika Srpska reinforced its framework with the new Strategy for the Development of Entrepreneurship of Women (2025‑2031), covering key areas of support.	Moderate	See Cluster 4: “Improving talent availability by empowering women entrepreneurs”
Upgrade the depth and quality of monitoring and evaluation of actions related to women’s entrepreneurship and increase the availability of gender-disaggregated data relevant to women’s economic engagement and SME development	Progress in strengthening the monitoring and evaluation of women’s entrepreneurship has been uneven across the two entities. In the Federation of Bosnia and Herzegovina, key data are still not collected, including the share of businesses owned by women, and there is no centralised database on women entrepreneurs. Republika Srpska already publishes gender-disaggregated data, but a dedicated database on women entrepreneurs, planned since 2022, has yet to become operational.	Limited	See Cluster 4: “Improving talent availability by empowering women entrepreneurs”

Dimension 2: Bankruptcy and second chance for SMEs in Bosnia and Herzegovina

Overview of Bosnia and Herzegovina’s performance on Dimension 2

Bosnia and Herzegovina scored 3.20 on Dimension 2 (Figure 1.3), marking a decrease from 3.38 in the previous assessment, albeit still higher than the regional average of 2.97. Bosnia and Herzegovina ranks third in this dimension. While this dimension remains among the economy’s average-performing areas, the decline indicates that further policy improvements are needed to maintain and enhance its effectiveness.

Since 2022, Bosnia and Herzegovina’s score has shown stable strategic planning for preventive measures, a decline in the performance of bankruptcy procedures, and improved preparedness for second-chance measures. Overall implementation across sub-dimensions has remained essentially unchanged, while monitoring and evaluation remain weak, highlighting persistent gaps in translating strategic goals into effective action and assessing their impact.

Figure 1.3. Overview of Bosnia and Herzegovina’s score on Dimension 2 and evolution since 2019

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Sub-dimension 2.1: Preventive measures

Performance in this sub-dimension remained stable, ranging from 2.80 in 2022 to 2.97 in 2026. While the planning and design of preventive policies have strengthened, implementation remains limited, and monitoring and evaluation, given greater weight in this cycle, remain underdeveloped.

Both entities now include preventive measures in their small and medium-sized enterprise (SME) development strategies. These measures increasingly aim to improve crisis response and safeguard entrepreneurial activity. In this regard, Republika Srpska has been more specific, notably through including the establishment of an early warning system (EWS) to detect financial distress at an early stage in its strategic action plan.

Implementation shows mixed results. Republika Srpska has included a concrete activity to develop an integrated digital EWS, but progress is constrained by capacity and resource limitations (see Table 1.3). In the Federation of Bosnia and Herzegovina, no progress has been reported on developing an EWS to systematically monitor financial distress in the SME sector. Advisory and self-assessment support is available in both entities, mainly through chambers of commerce, but remains reactive and largely request-based.2 Pre-insolvency procedures are available in both entities and provide some scope for prevention, yet they are typically activated only when insolvency is already imminent.

Table 1.3. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 2, Sub-dimension 2.1

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Develop insolvency prevention policy measures, including a fully-fledged early warning system	The RS Development Agency planned to develop and commission an EWS for entrepreneurs facing business difficulties. However, implementation has been delayed since 2022 due to insufficient funding. Only BAM 5 500 (~EUR 2 800) was allocated, clearly inadequate to build a robust, data-driven early warning system.	Limited	See Cluster 2: “Fostering SME sustainability and resilience”
	In the Federation of Bosnia and Herzegovina, there is no reporting on the implementation of SME strategy activities. While one measure addresses accelerating business entry and exit and improving access to finance to safeguard liquidity, more concrete actions and indicators are needed to scale preventive action.

Note: RS: Republika Srpska; BAM: Bosnia and Herzegovina convertible marka.

Monitoring and evaluation remain the weakest part of the policy cycle. Data collection, particularly in courts, is insufficient, and there is limited insight into the use and effectiveness of pre-insolvency procedures. This makes it difficult to assess the impact of preventive support measures and constrains the development of evidence-based programmes to prevent the failure of otherwise viable SMEs.

Sub-dimension 2.2: Survival and bankruptcy procedures

Bosnia and Herzegovina scored 3.37 on Sub-dimension 2.2 on survival and bankruptcy procedures, a notable decline from 3.80 in 2022. The decline is mainly due to ongoing gaps in design and planning, as well as ongoing problems with systemic monitoring and evaluation.

The legal frameworks for bankruptcy in both entities still lack reforms introducing simplified procedures, thus leaving SMEs to rely on standard reorganisation proceedings when pre-insolvency eligibility cannot be established.

Out-of-court settlements are also not explicitly provided for in legislation, thereby limiting incentives for faster, less costly restructuring solutions tailored to SMEs. A meaningful step, however, was the establishment of the Institute of Consensual Out-of-Court Financial Restructuring in Republika Srpska in 2023 (see Box 1.1).

Box 1.1. Spotlight: Out-of-court financial restructuring in Republika Srpska

Policy context

Under the Law on Consensual Out-of-Court Financial Restructuring3, the RS Chamber of Commerce is designated as the institutional intermediary for extra-judicial restructuring. It conducts procedures through authorised intermediaries, independent and impartial professionals who mediate between debtors and creditors. The objective is to address the problems of indebted or illiquid companies and entrepreneurs more effectively, while reducing reliance on costly court-based procedures and safeguarding public resources.

Operational aspects

In 2023, the Chamber of Commerce established the Institute of Consensual Out-of-Court Financial Restructuring for business entities and entrepreneurs and trained 15 brokers to conduct these procedures. It also carried out awareness-raising activities, including information days, and informed its members through multiple communication channels about the institute and the new responsibilities assigned by the RS Ministry of Economy and Entrepreneurship.

Policy impact

Although no settlement agreements have yet been concluded and two initial cases have been suspended, the mechanism represents meaningful progress toward expanding access to faster, lower-cost, and survival-oriented restructuring options outside the courts.

Source: Chamber of Commerce of Republika Srpska (2025[4]).

Implementation has primarily focused on digitalisation and transparency. In the Federation of Bosnia and Herzegovina, digital components of bankruptcy registers and operational improvements were introduced in 2022-2023, reducing administrative burdens and increasing transparency, with further steps, such as automatic notifications and business register integration, under development with international partners (Table 1.4). In Republika Srpska, although a unified public bankruptcy register remains absent, targeted measures have been implemented to improve data accessibility for economic actors.4

Lastly, monitoring and evaluation remain weak in both entities. SME-specific data on the demand for pre-insolvency procedures, reorganisation, liquidation, and extra-judicial restructuring are largely missing. Where data exist, they are not sufficiently disaggregated, limiting the identification of policy gaps, constraining impact assessment, and weakening the evidence base needed to guide strategic optimisation of insolvency procedures.

Table 1.4. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 2, Sub-dimension 2.2

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Introduce simplified bankruptcy proceedings for SMEs	Progress in establishing simplified SME bankruptcy procedures remains limited, particularly in the Federation of Bosnia and Herzegovina, where no advances have been made. In both entities, the beneficiaries of pre-insolvency procedures are not clearly defined, preventing fast-tracking and targeted access for viable SMEs. In Republika Srpska, the introduction of an extra-judicial financial restructuring procedure represents an important first step towards easier SME access, although it is not yet explicitly targeted at smaller businesses/debt thresholds, and its use remains limited (see Box 1.1).	Limited	See Cluster 2: “Fostering SME sustainability and resilience”

Sub-dimension 2.3: Promoting second chance

Bosnia and Herzegovina scored 2.92 on Sub-dimension 2.3 on promoting second chance for SMEs, significantly up from 2.00 in 2022. This improvement reflects stronger planning and design, as both entities have incorporated second-chance and recovery measures into their SME development strategies. However, there are persistent delays in implementation.

At the planning stage, important legal gaps remain. Civil and economic restrictions on debtors apply only in the Federation of Bosnia and Herzegovina, potentially undermining creditor confidence, reinforcing stigma that could constrain recovery options for debtor SMEs in Republika Srpska. In addition, neither entity defines a maximum discharge period, as insolvency proceedings can be repeatedly extended and fraudulent bankruptcies are not clearly defined by law, both of which undermine predictability and second-chance outcomes.

In terms of implementation, Republika Srpska planned training measures for 2025, while the Federation of Bosnia and Herzegovina foresaw awareness raising, education and promotion of good practices for business restart (see Table 1.5). Despite these plans, there is no evidence of concrete actions taken since the previous OECD assessment cycle.

Table 1.5. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 2, Sub-dimension 2.3

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Promote second chance to honest entrepreneurs	Republika Srpska planned to deliver 12 trainings and seminars on second chance by 2025. The Federation of Bosnia and Herzegovina set out strategic measures in its SME Development Strategy focused on entrepreneurial skills for rapid restart after failure, promotion of good practices, and awareness raising. However, neither entity reports on the implementation of these measures.	Limited	See Cluster 2: “Fostering SME sustainability and resilience”

A major bottleneck remains due to a lack of qualified trainers, with no measures yet in place to address this gap. Encouragingly, both the FBiH Ministry of Development, Entrepreneurship and Crafts and the RS Development Agency report sufficient institutional capacity to run future programmes, suggesting potential for scaling up once implementation barriers are addressed.

Dimension 3: Institutional and regulatory framework for SME policymaking in Bosnia and Herzegovina

Overview of Bosnia and Herzegovina’s performance on Dimension 3

Bosnia and Herzegovina scored 3.15 on Dimension 3 (Figure 1.4), up from 2.72 in 2022. Although it continues to lag Western Balkans and Turkiye (WBT) economies in this dimension, the relative gap has narrowed amid a generalised downward trend, as reflected in the regional average stagnation from 3.79 in 2022 to 3.77 in 2026. In addition, Dimension 3 continues to perform above the economy’s average score across the other policy dimensions.

Bosnia and Herzegovina’s performance improvement is driven mainly by the operationalisation of updated entity-level small and medium-sized enterprise (SME) strategies and policy frameworks, the expansion of support instruments, formal advances in evidence-based policymaking and administrative simplification. Progress, however, remains constrained by limited permeability and alignment between entity-level frameworks. While SME policy is primarily an entity-level competence, limited harmonisation across systems risks undermining the development of a fully coherent, economy-wide policy environment for SMEs.

Figure 1.4. Overview of Bosnia and Herzegovina’s score on Dimension 3 and evolution since 2019

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Sub-dimension 3.1: Institutional framework

Bosnia and Herzegovina’s performance in this sub-dimension remained essentially stable, moving from 3.20 in 2022 to 3.25 in 2026. Progress in operationalising the updated SME policy framework in the Federation of Bosnia and Herzegovina, which has narrowed the performance gap with Republika Srpska, has offset the more stringent assessment standards. Nonetheless, Bosnia and Herzegovina continues to lag in this sub-dimension, reflecting limited harmonisation across systems that constrains coherent policy implementation and firm operations across the economy.

Since 2022, the regulatory basis for SME policy has been strengthened in both entities. In the Federation of Bosnia and Herzegovina, the framework was updated through the adoption of a new EU-aligned SME definition and the SME Development Strategy 2022-2027, establishing a medium-term strategic basis for policy delivery. The scope of SME policy was further expanded with the adoption of the Law on Social Enterprises in January 2025, which was complemented by several bylaws aimed at improving the operational environment. In Republika Srpska, reforms focused on adopting new legislation on individual traders and business incentives, alongside amendments to the SME law to enhance alignment with EU standards, thereby reinforcing the legal and policy architecture for enterprise support.

Both entities expanded their portfolios of SME support instruments, although implementation capacity has evolved differently. In the Federation of Bosnia and Herzegovina, the Federal Ministry of Development, Entrepreneurship and Crafts (FMRPO) experienced a significant strengthening of resources: its structural budget increased from BAM 10.7 million (Bosnia and Herzegovina convertible markas) (approximately EUR 5.5 million) in 2022 to BAM 30.9 million (~EUR 15.8 million) in 2025, underpinned by the introduction of a mandatory minimum annual budget allocation for SME incentives in 2024. Staffing increased from 23 to 34 employees, although it remained below planned levels. In Republika Srpska, SME support is channelled both through the Ministry of Economy and Entrepreneurship and the Development Agency (RARS). The Ministry manages a substantially larger budget for SME incentives, reaching approximately BAM 25 million, reflecting increased allocations in recent years. In contrast, the RARS recorded only marginal budget growth, from BAM 640 000 to BAM 700 000 (equivalent to an EUR 30 000 increase), while staff numbers declined from 20 to 16.

Operationally, both entities implement their SME policies through annual programmes of grants, subsidies and advisory support, with a growing focus on competitiveness, innovation and entrepreneurship. In the Federation of Bosnia and Herzegovina, four core support streams structure annual expenditure programmes, with the flagship competitiveness subsidy absorbing over half of the FMRPO’s budget and supporting just under 200 innovative and export-oriented SMEs in 2024. Implementation capacity was temporarily scaled up in 2025 through a one-off wage-support scheme of BAM 100 million in response to the statutory minimum wage increase. In Republika Srpska, implementation continues through a structured activity framework, combining targeted financial support with pilot instruments such as mentoring schemes and digital tools, with generally high execution rates against planned activities.

Monitoring and evaluation arrangements remain limited in analytical depth across both entities. While budget execution and activity implementation are systematically tracked, the assessment of outcomes and impacts is constrained by limited availability of statistical data (Table 1.6) and by limited institutional and analytical capacity. This restricts the ability to evaluate effectiveness, identify differential impacts on SME segments, and adjust policy instruments based on evidence, resulting in monitoring systems that remain largely input- and output-oriented rather than results-driven.

Table 1.6. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 3, Sub-dimension 3.1

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Expand SME data collection	Since 2008, Republika Srpska has collected and published SME sector statistics in a dedicated annual report. Yet, no evidence was provided to indicate an expansion of available indicators.	No progress	See Cluster 1: “Creating an enabling environment for SMEs and entrepreneurs”

Sub-dimension 3.2: Legislative simplification and regulatory impact assessment

Bosnia and Herzegovina’s score for legislative simplification and regulatory impact assessment increased from 2.39 in 2022 to 3.04 in 2026, reflecting the strengthening of formal frameworks and procedures for evidence-based and simplified regulation, albeit unevenly across entities. While the coverage of impact assessment has expanded, its application remains inconsistent and largely procedural, limiting its impact on regulatory quality, burden-reduction and SME-relevant outcomes.

In the Federation of Bosnia and Herzegovina, regulatory impact assessment (RIA) remains anchored in the 2020 Decree on RIA and supported by a dedicated RIA Manual. Recent developments have focused primarily on capacity-building measures, notably civil service training, and on the gradual diffusion of RIA practices through cantonal legislation, most prominently in Sarajevo Canton. By contrast, Republika Srpska has undertaken a more substantive reform of its RIA framework. The 2023 Decision on RIA significantly broadened the scope of ex ante assessment by extending requirements to bylaws, decrees and rulebooks, supported by a new Methodological Manual adopted in 2024, and the introduction of standardised assessment templates reviewed by the Ministry of Economy and Entrepreneurship. Although data constraints preclude precise measurement of coverage, the RS framework is institutionally designed to subject a substantially broader share of regulatory acts to systematic ex ante scrutiny than in the previous assessment cycle.

In practice, the application of RIA in the Federation of Bosnia and Herzegovina remains narrow and selective. Only draft laws deemed to have “significant impact” undergo impact assessment, and both coverage and analytical depth remain limited. Assessments generally do not systematically quantify costs, examine policy alternatives or assess SME-specific impacts, constraining their contribution to evidence-based policymaking. In Republika Srpska, the reformed framework signals a shift towards more comprehensive implementation, with RIA requirements embedded across a wider range of regulatory instruments and supported by standardised procedures and central review.

In parallel, approaches to administrative simplification diverge sharply across jurisdictions. At the state level, in the Federation of Bosnia and Herzegovina and the Brčko District, no institution is formally mandated to lead simplification policy, resulting in separate, largely ad hoc burden-reduction efforts. Republika Srpska stands out as the only jurisdiction with a structured approach, having adopted a dedicated action plan to optimise administrative procedures and formalities.

Monitoring arrangements for both RIA and simplification remain uneven and institutionally asymmetrical (Table 1.7). Outside Republika Srpska, the absence of a designated lead body for simplification limits systematic tracking of regulatory stock, reform progress and burden-reduction outcomes. In Republika Srpska, monitoring is embedded in the implementation architecture of the optimisation agenda: through the Project for the Optimisation of Administrative Procedures and Formalities, 932 formalities were mapped, 42 (4.4%) proposed for repeal and 243 (25.5%) for simplification, with around 95% of those selected for abolition eliminated by 2023. While this provides a measurable evidence base for regulatory stock reduction, comparable monitoring mechanisms do not exist in the Federation of Bosnia and Herzegovina or in the Brčko District, resulting in an uneven governance landscape and limited capacity for economy-wide evaluation, benchmarking and learning

Table 1.7. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 3, Sub-dimension 3.2

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Strengthen quality control of regulatory impact assessment and ensure enforcement	Efforts to enhance the consistency of RIA implementation were observed over the assessment cycle, albeit unevenly across entities. However, no evidence was provided of a corresponding strengthening in the systematic application of quality control. While all levels of government have designated bodies responsible to review RIA, oversight remains largely procedural.	No progress	See Cluster 1: “Creating an enabling environment for SMEs and entrepreneurs”

Sub-dimension 3.3: Public-private consultations

Bosnia and Herzegovina scored 3.07 in this sub-dimension on public-private consultations, up from 2.42 in the previous cycle. This increase, apart from early-stage modernisation efforts in Republika Srpska, largely reflects methodological recalibration (see Methodology), as consultation practices remains largely unchanged. Although legal requirements are in place, they are generally poorly implemented and subject to minimal quality control, thereby limiting meaningful SME participation in the policymaking process.

Public consultation is formally required for draft laws, secondary legislation, and sector strategies at all levels of government in Bosnia and Herzegovina, but practice remains weak and uneven. Requirements in terms of minimum consultation periods exist at the state and RS levels (15 days), in the Federation of Bosnia and Herzegovina (10 days), and in the Brčko District (8 days), and ministries are required to report consultation results to the government. However, compliance with minimum deadlines is weak: it is respected in only 50% of cases in Republika Srpska and in less than 30% in the Federation of Bosnia and Herzegovina and Brčko District, and the obligation to publish consultation reports is followed even less frequently. (OECD, 2025[5])

In 2023, around half of all laws were adopted without written consultation with external stakeholders, while all adopted strategies in the Federation of Bosnia and Herzegovina and Republika Srpska were published for consultation (OECD, 2025[5]). Consultations with the private sector are conducted primarily online and through the direct circulation of draft legislation to business organisations, while in Republika Srpska public hearings are occasionally organised for regulations deemed to be of “public interest”. However, these processes remain largely decentralised, with ministries mostly relying on their individual websites and ad hoc outreach. A central e-consultation portal exists at the state level, where it has proven to be used inconsistently, and was recently established in Republika Srpska. Both the Federation of Bosnia and Herzegovina and the Brčko District currently lack operational e-consultation portals, as the previously established FBiH platform is no longer in use. Moreover, the publication of impact assessments and explanatory memoranda alongside draft laws is also inconsistent, thereby limiting stakeholders’ ability to provide evidence-based input. As observed in the previous assessment, quality control remains largely absent or procedural, with oversight bodies checking only whether a consultation statement or report was submitted, rather than whether consultations met legal standards or whether feedback was used (Table 1.8).

Table 1.8. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 3, Sub-dimension 3.3

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Introduce regular reporting on public-private consultations and encourage stakeholder engagement	At the state level, a new obligation to produce and publish a consultation report was introduced in 2023. However, this requirement does not apply across entities, and even at the state level, compliance is inconsistent. Moreover, consultation reports are not subject to quality review, do not systematically summarise stakeholder input or explain how comments were addressed. Participation data are not disaggregated by stakeholder type, making it impossible to track SME engagement. While the establishment of an e-consultation portal in Republika Srpska represents an important step towards improving accessibility to stakeholders, no measures have been taken to proactively solicit feedback.	Limited	See Cluster 1: “Creating an enabling environment for SMEs and entrepreneurs”

Dimension 4: Operational environment for SMEs in Bosnia and Herzegovina

Overview of Bosnia and Herzegovina’s performance on Dimension 4

Bosnia and Herzegovina scored 3.05 on Dimension 4 (Figure 1.5), up from 2.49 in the previous cycle. Despite progress, however, Bosnia and Herzegovina still lags the Western Balkan and Türkiye (WBT) regional average of 3.75 Compared to other policy dimensions of Bosnia and Herzegovina’s assessment profile, Dimension 4 scores moderately higher than the average.

Bosnia and Herzegovina’s improved performance in this dimension primarily reflects advancements in the strategic and legal framework for digital government solutions. While progress has been made in adopting new policy and regulatory measures, the effective digitalisation of business services continues to lag regional benchmarks, and company registration and licensing frameworks remain characterised by significant disparities across entity-based systems.

Figure 1.5. Overview of Bosnia and Herzegovina’s score on Dimension 4 and evolution since 2019

Statlink

Sub-dimension 4.1: Digital government services for SMEs

Bosnia and Herzegovina’s score on Sub-dimension 4.1 on digital government services increased from 1.99 in 2022 to 2.91 in 2026, reflecting some progress in policy planning and implementation efforts. Improvements have been driven mainly by renewed strategic initiatives and legal developments at different levels of government. However, mechanisms to monitor the use of e-government services by small and medium-sized enterprises (SMEs) and to systematically use evidence to evaluate and improve existing services remain limited.

At the state level, the Strategic Framework for Public Administration Reform and its Action Plan serve as the primary reference for the digitalisation of public services, although implementation has so far been limited. A revised Action Plan for the period up to 2027 was adopted in September 2025 by the Federation of Bosnia and Herzegovina and the Brcko District, representing a positive step forward; however, it has not yet been adopted by the Council of Ministers of Bosnia and Herzegovina or by the Government of Republika Srpska (RS), limiting its coverage and constraining its impact in practice. (Table 1.9). Further progress has been made through the adoption of a new Open Government Partnership (OGP) Action Plan 2025-2027, which aims to establish an institutional framework for the OGP portal and promote the publication of pilot datasets, with the aim of encouraging uptake across administrative levels. In May 2025, the Council of Ministers adopted amendments to the Law on Administrative Procedure to facilitate the application of the once-only principle, and an Open Data Portal was created in accordance with EU standards. In addition, the Law on Free Access to Information at the level of Bosnia and Herzegovina institutions (Official Gazette No. 61/23) has been harmonised with EU Directive 2019/1024 on open data and the re-use of public sector documents, further strengthening the legal framework for open data in line with EU standards. In the Federation of Bosnia and Herzegovina, the government adopted priority measures for e‑government development in 2024 and tasked the Federal Ministry of Justice with preparing an e‑Government Development Strategy and an e-Government Law. A draft strategy has been prepared but not yet formally adopted, and institutional leadership for digital government remains unclear. In Republika Srpska, the former E-government Strategy 2019-2022 has not been renewed, and digital government objectives are now mainly embedded in the Strategy for Development of Science and Technology 2023-2029 and the Tax Administration Strategy 2022-2026.

Implementation of e-government services for businesses remains uneven across levels of government. In the Federation of Bosnia and Herzegovina, businesses can access limited digital services through the e‑Register portal and the Indirect Taxation Authority’s e-service portal, while the Financial and Information Agency enables electronic submission of financial statements. However, there is no comprehensive government platform serving businesses, and most services continue to be provided through separate platforms and administrative systems. In Republika Srpska, a business registration and services portal operates as a single point of contact, providing information on registration procedures, permits and licences, alongside a separate tax portal. Progress has been made on data sharing through the Law on Sole Proprietors, which enables interconnection between registration authorities and the Tax Administration for the issuance of identification numbers, with further links to population and fines registers planned. Open data use remains limited in both entities, with Republika Srpska planning to address this through the forthcoming Law on Electronic Administration and the development of the eSrpska portal. Two externally financed initiatives are now supporting progress in this area. The DIGI BiH project, financed through IPA funds, is providing technical assistance to institutions in Bosnia and Herzegovina on the e-governance framework, supporting the development of strategic and legal documents for digital transformation, including in areas such as interoperability, e-government, e-services and digital identity. A complementary multi-donor initiative, EU4 Digital Transformation in Bosnia and Herzegovina (EU4DT), co-financed by the EU and BMZ and running until 2028, aims to improve institutional preconditions for digital transformation and strengthen the enabling environment for e-government and e-services for citizens and entrepreneurs. In addition, Bosnia and Herzegovina signed an agreement to join the EU Digital Europe Programme in June 2024, opening access to capacity-building support for SME digitalisation and marking an important step toward closer alignment with EU digital standards.

Monitoring and evaluation frameworks for digital government services remain underdeveloped across Bosnia and Herzegovina. There is little evidence of systematic tracking of SME usage of e-services, structured business feedback mechanisms or performance indicators linked to service quality and uptake. Open data publication is monitored mainly at the state level through the OGP process, but there is no comprehensive framework to assess how digital public services are used by firms or how they affect administrative burdens. As a result, while strategic and legal activities have increased since 2022, weak monitoring and evaluation limit the evidence-based improvement of e-government services for SMEs.

Table 1.9. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 4, Sub-dimension 4.1

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Operationalise the Strategic Framework for Public Administration Reform	A revised Action Plan for the Strategic Framework for Public Administration Reform, covering the period up to 2027, was adopted in September 2025 by the Federation of Bosnia and Herzegovina and the Brcko District, representing a renewed commitment to advancing digitalisation of public services. However, it has not yet been adopted by the Government of Republika Srpska or the Council of Ministers of Bosnia and Herzegovina, limiting its scope and overall coherence at state level. Implementation has so far remained weak: according to progress reports, about 17.28% of activities under the Action Plan had been fully implemented by mid-2025, with the annual report for 2025 still ongoing at the time of writing. Concrete effects on service delivery are therefore not yet observable.	Moderate	See Cluster 1: “Creating an enabling environment for SMEs and entrepreneurs”
Develop a comprehensive and aligned framework on open data	Progress has been achieved through the adoption of the Open Government Partnership Action Plan 2025-2027 and the establishment of a state-level Open Data Portal in line with EU standards. These steps lay the groundwork for more systematic publication of datasets and for institutionalising open data practices. However, implementation remains uneven across administrative levels, and entity-level frameworks for open data remain underdeveloped.	Moderate	See Cluster 1: “Creating an enabling environment for SMEs and entrepreneurs”
Ensure the implementation of key enablers of digital government services	Initial steps have been taken to strengthen key enablers of digital government services, notably through amendments to the Law on Administrative Procedure that introduce elements of the once-only principle and through progress in the interconnection of registries in the Republika Srpska. However, implementation remains partial and uneven across levels of government. There is no fully operational, state-level e-government platform for businesses, and institutional interoperability remains at an early stage, particularly in the Federation of Bosnia and Herzegovina. Two externally financed initiatives, the IPA-funded DIGI BiH project and the EU4 Digital Transformation in Bosnia and Herzegovina (EU4DT) programme, are now providing technical assistance to support the development of the strategic and legal environment for e-government, interoperability and digital identity, and BiH joined the EU Digital Europe Programme in June 2024, opening access to further capacity-building support.	Limited	See Cluster 1: “Creating an enabling environment for SMEs and entrepreneurs”

Sub-dimension 4.2: Company registration

Bosnia and Herzegovina’s score of 3.20 in this sub-dimension remains the lowest among WBT economies, despite a marginal increase from 2.96 in the previous cycle. While some legal and technical progress has been made since 2022, uneven implementation and incomplete institutional integration continue to constrain the impact of reforms on SME entry and to generate significant disparities across the economy.

Institutionally, company registration is organised through separate institutional arrangements across the two entities and the Brčko District. Republika Srpska continues to operate a physical one-stop-shop managed by the Agency for Intermediary, Information Technology and Financial Services across 11 locations, integrating court registration, tax identification and statistical registration. This model has reduced direct registration costs to approximately BAM 200 (Bosnia and Herzegovina convertible markas) (approximately EUR 100), compared to up to BAM 1 870 (~EUR 950) in the Federation of Bosnia and Herzegovina and BAM 1 380 (~EUR 700) in the Brčko District. In the Federation of Bosnia and Herzegovina, the long-announced physical one-stop-shop remains unimplemented, and business registration continues to rely on decentralised municipal courts and cantonal procedures.

Digitalisation has advanced in legal and technical terms since 2022, but has not yet resulted in fully electronic registration (Table 1.10). Republika Srpska launched its e-registration platform in 2021, and the Federation of Bosnia and Herzegovina adopted enabling bylaws in 2023 and developed an entity-wide portal with donor support (Box 1.2). The Brčko District has digitised its archives and enabled online submissions. However, while Bosnia and Herzegovina provides a legally and technically valid e-signature system in line with the eIDAS framework, its practical uptake and integration into business registration processes remain limited, resulting in firms that, in practice, still appear in person to submit paper documents.

Table 1.10. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 4, Sub-dimension 4.2

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Continue to digitalise company registration processes	All registration courts in the Federation of Bosnia and Herzegovina have digitised their archives, and electronic registration portals now exist across jurisdictions. However, end-to-end digitalisation has not been achieved as electronic signatures are not operational in any jurisdiction, and online payment of registration fees remains unavailable.	Moderate	See Cluster 1: “Creating an enabling environment for SMEs and entrepreneurs”

Box 1.2. Spotlight: The BizReg digital pilot in Sarajevo and Travnik

BizReg (bizreg.ba) is the Federation of Bosnia and Herzegovina’s main instrument for introducing digital company registration and one-stop-shop procedures. It was launched following the adoption of enabling bylaws in 2023 and the digitisation of court registration archives, thereby enabling registration courts, the Tax Administration, and the Federal Bureau of Statistics to exchange data electronically.

The system is currently being piloted in two municipal courts (Sarajevo and Travnik), enabling the online submission of registration applications for limited liability companies and standardised electronic workflows between institutions. In principle, this allows company registration to be completed within three days, in line with statutory deadlines and represents the first operational example of inter-institutional digital integration in business registration in the Federation of Bosnia and Herzegovina. However, its impact remains limited by its restricted territorial coverage and the absence of key functionalities, notably e-signatures and in-platform payment options.

Nevertheless, BizReg demonstrates the technical and legal feasibility of a digital one-stop-shop model in Bosnia and Herzegovina and provides a scalable foundation for economy-wide roll-out once these missing features are introduced.

Source: Government input into the SME Policy Index 2026.

By contrast, several regional peers already offer full online incorporation, contributing to faster firm entry. Although official deadlines are three days in Republika Srpska and five days in the Federation of Bosnia and Herzegovina, surveys indicate that in the Federation of Bosnia and Herzegovina, the full pre- and registration process can take up to one month. Delays in obtaining value-added tax (VAT) and customs numbers from the Indirect Taxation Authority remain a major bottleneck, frequently adding several weeks to the post-registration phase. Cost and capital requirements also continue to differ substantially across the economy. The minimum paid-in capital for an LLC is set at BAM 1 (~EUR 0.5) in Republika Srpska, but BAM 1 000 (~EUR 500) in the Federation of Bosnia and Herzegovina, creating unequal entry barriers and reinforcing incentives to incorporate in Republika Srpska or operate as sole proprietors.

Sub-dimension 4.3: Business licensing

Bosnia and Herzegovina scored 3.36 in this sub-dimension on business licensing, down from 3.54 in 2022. While initial steps have been taken to map, simplify and digitalise licensing procedures, implementation remains inconsistent, and monitoring mechanisms are not in place. Limited data exchange and weak mutual recognition of licences continue to make the system complex and costly for SMEs.

The licensing and permitting system in Bosnia and Herzegovina is characterised by a multi-level administrative structure spanning state, entity, cantonal and municipal levels, requiring SMEs to navigate a large number of authorities. Businesses may need to comply with more than 1 000 permits and licences across the economy, and over one-third of firms identify these requirements as a major or moderate obstacle to growth. While framework legislation is broadly harmonised, bylaws and sector-specific requirements diverge significantly, and the lack of mutual recognition between the two entities forces many firms to reapply for licences in order to operate throughout the economy.

Some progress has been made in mapping and rationalising licensing procedures. In Republika Srpska, the Optimisation of Administrative Procedures and Formalities project, launched in 2021, created a central register of permits, approvals and licences and led to an action plan proposing the abolition of 42 formalities (4.4%) and the simplification of 243 (25.5%). However, no comparable system-wide review mechanism exists in the Federation of Bosnia and Herzegovina. Republika Srpska operates a Single Point of Contact for Businesses that provides consolidated information on licensing requirements, responsible authorities, fees, and documentation. In the Federation of Bosnia and Herzegovina, the 2018 Decision on e-Administration mandated the creation of a central register of administrative procedures, but this has not been fully implemented aside from in a few cantons. Across the economy, businesses generally must apply for licensing in person and interact with multiple institutions (Table 1.11).

Table 1.11. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 4, Sub-dimension 4.3

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Consider digitalising the business licensing application process	While authorities have improved digital access to information, end-to-end online applications remain confined to a few isolated pilots, such as construction permit submissions via one-stop-shop arrangements in Banja Luka and Gradiška, which still cannot be completed fully digitally. The Federation of Bosnia and Herzegovina’s 2018 e‑Administration decision to establish a comprehensive register of procedures has not been realised in practice, and Brčko District still lacks a centralised e-licensing platform.	Limited	See Cluster 1: “Creating an enabling environment for SMEs and entrepreneurs”

Licensing and permit fees continue to represent a significant cost burden. Businesses describe these charges as high and non-transparent, and their cumulative effect is substantial. To improve transparency, all jurisdictions have created registers of tax and non-tax payments: Republika Srpska lists 594 charges, Brčko District 252, and the Federation of Bosnia and Herzegovina over 1 000. However, these registers are not always fully updated and rarely provide sufficient detail to assess whether fees reflect cost-recovery principles, such as whether charges are fixed or turnover-based. While some rationalisation has occurred, most para-fiscal charges remain in place, reflecting subnational governments’ strong reliance on these revenues.

Sub-dimension 4.4: Tax compliance procedures for SMEs

A recurring challenge for SMEs in Bosnia and Herzegovina is the complex multi-level structure of the tax administration system, which operates across different levels of jurisdiction. Direct taxes are designed, collected and administered separately by the two entities, as well as the Brčko District, while indirect taxes, including VAT, are managed at the state level by the Indirect Taxation Authority. In the absence of strong co-ordination mechanisms between administrations, this creates substantial complexity in compliance and enforcement, particularly for SMEs operating across jurisdictions, and represents a major structural source of administrative burden.

At the state level, Bosnia and Herzegovina continues to apply a standard VAT rate of 17% and a flat corporate income tax (CIT) rate of 10%, providing some predictability for SMEs. In 2023, amendments to the VAT law (Article 57, paragraph 1) increased the VAT registration threshold from BAM 50 000 (~EUR 25 500) to BAM 100 000 (~EUR 51 000), expanding the group of SMEs not required to register for VAT and reducing compliance obligations for low-turnover businesses (Official Gazette No. 80/23). While the personal income tax (PIT) rate remains relatively low (10%) in both the Federation of Bosnia and Herzegovina and Republika Srpska, it continues to impose a high tax burden on labour income due to elevated social security contributions.

Although the Tax Administration of the Federation of Bosnia and Herzegovina has enabled electronic filing, its functionality is not fully developed for all types of tax returns (Table 1.12). At the same time, SMEs themselves often lack the capacity to use these digital tools. Slow administrative processes and insufficient implementation of digital tools make tax compliance more demanding and more expensive for SMEs, hindering business planning and increasing the administrative burden (Bajic, Damjanovic and Pastrovic, 2024[5]). The Tax Administration of Republika Srpska has also expanded the use of e-filing, although digitalisation remains uneven across different tax types. Under the Law on Fiscalisation (Republika Srpska, Official Gazette No. 15/22), Republika Srpska has been successfully issuing electronic fiscal devices to businesses and registering a growing number of taxpayers under the new system previously exempt under the old fiscal law. With digitalisation efforts ongoing, many SMEs still need to submit documentation in person, and system downtime can disrupt timely compliance.

Table 1.12. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 4, Sub-dimension 4.4

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Evaluate the taxes paid by businesses and the tax simplification procedures that aim to facilitate tax compliance; also evaluate to which extent stamp duties can be reduced, especially for SMEs	There is no evidence of a comprehensive evaluation of the overall tax burden and compliance costs faced by businesses. While several recent reforms in Bosnia and Herzegovina have focused on procedural simplification and digitalisation (including e-invoicing initiatives, fiscalisation reforms, electronic filing and VAT threshold adjustments), it is not evident that these measures are grounded in a prior structured assessment of business tax burdens or compliance costs, as would be required to consider the recommendation as implemented.	Limited	See Cluster 1: “Creating an enabling environment for SMEs and entrepreneurs”
Enhance co-ordination, co-operation and data exchange among the economy’s different tax administrations	The Indirect Taxation Authority’s Strategy for the Improvement of Regulatory Compliance 2022-2024 and its Action Plan include a “Programme for compliance with regulations” that integrates internal databases with data from entity-level tax administrations. However, it is not evident to what extent these initiatives have translated into improved co‑ordination, co-operation and reduced compliance burdens for SMEs.	Limited	See Cluster 1: “Creating an enabling environment for SMEs and entrepreneurs”
Both entities could consider introducing mandatory e-filing under the personal income tax and the corporate income tax and simplifying tax e‑payment procedures	In the Federation of Bosnia and Herzegovina, Rule No. 36/24 (2024) introduced mandatory use of qualified e-signatures for key PIT and CIT filings, effectively establishing compulsory digital submission for core tax obligations. In Republika Srpska, the updated fiscalisation system has digitalised business registration and fiscalisation procedures through electronic services. However, e-payment procedures remain decentralised and have not yet been simplified into unified digital payment systems.	Moderate	See Cluster 1: “Creating an enabling environment for SMEs and entrepreneurs”

Note: VAT: Value-added tax; PIT: Personal income tax; CIT: Corporate income tax.

The Federation of Bosnia and Herzegovina has been implementing tax reforms to address the tax burden faced by SMEs, including measures to reduce it. In 2025, a new Law on Contributions entered into force, reducing the total social security contribution rate in the Federation of Bosnia and Herzegovina from 41.5% to 36%. The 5.5 percentage-point decrease affects employer contributions to retirement, disability and health insurance. The reduction can meaningfully lower monthly cash outflows for business owners and increase the Federation of Bosnia and Herzegovina’s competitiveness. At the same time, the Federation of Bosnia and Herzegovina increased the minimum wage from BAM 619 (~EUR 316) to BAM 1 000 (~EUR 511), a nearly EUR 195 increase, thereby raising the contribution base for many SMEs that rely on low-wage workers. The new policy should be supported by strengthened monitoring of the informal economy to ensure that employers do not shift employees into the shadow economy in responseIn Republika Srpska, authorities raised the small-entrepreneur threshold from EUR 25 500 to EUR 50 988, a measure intended to reduce compliance obligations for more micro firms. For businesses under the lump-sum/self-employed entrepreneur regime, small entrepreneurs may opt to be taxed at a rate of 2% on total income, subject to a minimum annual tax of BAM 1 200 (or BAM 600 for income below BAM 50 000), provided they meet the eligibility criteria set out in the Income Tax Law.

Dimension 5a: Business support services for SMEs in Bosnia and Herzegovina

Overview of Bosnia and Herzegovina’s performance on Dimension 5a

Bosnia and Herzegovina received an overall score of 3.40 on Dimension 5a on business support services (BSS) (Figure 1.6), reflecting a moderate decline since the previous assessment when it scored 3.65. This places Bosnia and Herzegovina among the lower ranking economies within the Western Balkans and Türkiye (WBT) region, below the regional average of 4.07. Despite this decline, Dimension 5a remains one of Bosnia and Herzegovina’s better performing areas. This decrease reflects diverging trends across sub-dimensions: modest improvements in public BSS provision were outweighed by a significant deterioration in initiatives to stimulate private BSS markets, driven by the absence of demand-side instruments and limited market-shaping mechanisms.

Figure 1.6. Overview of Bosnia and Herzegovina’s score on Dimension 5a and evolution since 2019

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Sub-dimension 5a.1: Business support services provided by the government

Performance on Sub-dimension 5a.1 has improved modestly, increasing from 3.49 in the previous assessment cycle to 3.62 in 2026. This limited progress was primarily driven by a strengthening of planning and design arrangements and incremental improvements in reporting and administrative monitoring practices. Implementation performance has declined slightly since the last assessment. The improvement reflects more structured entity-level strategic frameworks and programming practices for BSS. However institutionally differentiated delivery arrangements across the entities continue to limit the coherence, comparability and consistency of public BSS provision across Bosnia and Herzegovina (Figure 1.6).

Planning and design arrangements for public BSS provision have been strengthened at the entity level. In the Federation of Bosnia and Herzegovina, public BSS are anchored in the Small Business Development Strategy 2022-20275 and operationalised through annual programmes and public calls implemented by the Federal Ministry of Development, Entrepreneurship and Crafts, with the participation of cantonal institutions. Recent legal developments6 have further clarified institutional roles and the scope of public support infrastructure, reinforcing the strategic framework. In Republika Srpska, planning and design are structured through the SME Development Strategy 2021-2027 and rolling action plans, supported by thematic strategies aligned with innovation, digitalisation and competitiveness priorities. A relatively well‑defined institutional set-up7 provides a clear basis for prioritising BSS measures across the SME life cycle, although co-ordination and consistent translation of strategic priorities into delivery models remain ongoing challenges.

Implementation in both entities continues to rely primarily on call-based delivery models, with programmes varying in scope, scale and predictability across institutions. In the Federation of Bosnia and Herzegovina, delivery is supported by consolidated administrative and financial data (Box 1.3), while in Republika Srpska, implementation is structured through rolling action plans and annual reporting.8 Despite substantial programme-level execution9 and continuity of public support, public BSS provision in Bosnia and Herzegovina is organised through separate entity-level and institutional frameworks, without a harmonised programme architecture across jurisdictions. Consequently, programme design, eligibility criteria and delivery models vary across implementing bodies, and BSS provision remains predominantly programme-based rather than systematised across instruments (Table 1.13).

Monitoring and evaluation practices remain centred on reporting and administrative tracking rather than systematic outcome/impact evaluation. In Republika Srpska, monitoring relies on the established strategic planning cycle,10 with no reported change since the previous assessment and no independent review of BSS impacts. In the Federation of Bosnia and Herzegovina, monitoring has increasingly drawn on consolidated administrative and financial data,11 supported by audit practices, but it remains largely focused on financial execution and programme delivery. Across both entities, the systematic use of outcome indicators and routine demand- and supply-side assessments remains limited, constraining evidence-based programme adjustment (Table 1.13).

Box 1.3. Spotlight: Multiannual programming and budget execution for SME support in the Federation of Bosnia and Herzegovina

As part of efforts to improve the analytical foundation for small and medium-sized enterprise (SME) policy design and delivery, the Federation of Bosnia and Herzegovina has continued to develop the Information System of the SME Register, managed by the Federal Ministry of Development, Entrepreneurship and Crafts. The system serves as a central repository of administrative and financial data on SMEs, aligned with the European Union’s SME definitions, and is intended to support evidence-based planning and monitoring of public business support services.

The system integrates data from multiple institutions, including cantonal ministries, the Financial Information Agency, the Tax Administration of the Federation of Bosnia and Herzegovina, and other federal bodies, enabling the consolidation of firm-level indicators relevant for formulating SME policy. In 2023, data for the 2022 financial year were imported into the system through a formal data-exchange arrangement with the Financial Information Agency, strengthening the availability of comparable SME statistics for programme planning and reporting.

While the system represents an important step toward more structured monitoring of the SME sector, its use for assessing the performance of individual business support programmes remains limited. Data gaps persist due to delays in data updates and uneven inputs from lower administrative levels, constraining the system’s potential to support systematic outcome-level evaluation of public business support services interventions.

Source: Federation of Bosnia and Herzegovina Ministry of Development, Entrepreneurship and Craft (2023[7]).

Table 1.13. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 5a, Sub-dimension 5a.1

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Reduce reliance on international development co-operation partners and external funding and prioritise entity-level development of business support services for SMEs	Entity-level programmes for the provision of public business support services (BSS) continue to operate through regular public calls and incentives in both entities, supporting continuity in selected areas of SME support. However, specialised and advanced BSS – including innovation-oriented support, advanced advisory services and elements of internationalisation support – continue to be implemented largely through project-based or externally financed initiatives. Public BSS provision is organised through separate entity-level and institutional frameworks, without a harmonised programme architecture across jurisdictions, resulting in differences in programme design, eligibility criteria and delivery models. As a result, support remains predominantly programme-based rather than systematised across instruments.	Limited	See Cluster 1: Creating an enabling environment for SMEs and entrepreneurs
Strengthen the monitoring and evaluation mechanisms for public and private business support services provision	Reporting, financial oversight and audit practices for publicly funded BSS programmes are in place in both entities, primarily focusing on financial execution and implementation outputs. However, evaluation of BSS effectiveness remains limited, with no systematic integration of impact assessments or firm-level outcome tracking into programme design or management across entities.	Moderate	See Cluster 1: Creating an enabling environment for SMEs and entrepreneurs
Conduct effective, regular analysis of the demand and supply of business support services to fill the gaps in BSS provision to provide more targeted and customised support for SMEs	Programme design reflects broad policy priorities and sectoral objectives, but there is limited evidence of routine, structured assessments of SME demand and BSS supply. As a result, BSS offerings remain largely standardised, with limited differentiation by firm size, development stage or growth potential, constraining the ability to tailor support to SMEs’ needs.	Limited	See Cluster 1: Creating an enabling environment for SMEs and entrepreneurs

Sub-dimension 5a.2: Government initiatives to stimulate private business support services

Performance on Sub-dimension 5a.2 has declined sharply, from 3.82 in 2022 to 3.18 in 2026, reflecting a loss of reform momentum. While public funding and programme activity have expanded in both entities, ad hoc and project-based initiatives have not translated into institutionalised demand-side mechanisms or stronger private BSS markets, with an impact on planning and implementation performance (Figure 1.6).

While planning and design arrangements for stimulating private BSS have strengthened on paper, particularly in the Federation of Bosnia and Herzegovina through the adoption of a new strategic framework, they remain weakly operationalised. While the strategic framework in the Federation of Bosnia and Herzegovina recognises private BSS providers and envisages future accreditation mechanisms (Federation of Bosnia and Herzegovina Federal Ministry of Development, Entrepreneurship and Crafts, 2022[8]), these measures remain prospective, with quality controls limited to programme-specific requirements,12 and no operational demand-side instruments in place. Pilot demand-side approaches implemented under internationally funded programmes have not been integrated into the regular SME support framework. In Republika Srpska, planning continues to rely on incentives and publicly designed programmes, with only incremental adjustments since 2022,13 and no market-based, demand-driven instruments or quality assurance mechanisms have been introduced. As a result, planning arrangements in both entities continue to prioritise programme-managed delivery over the development of competitive private BSS markets, indicating weaker operational preparedness than in the previous assessment.

Implementation performance in stimulating private BSS has deteriorated, as delivery in both entities remains predominantly supply-side. In Republika Srpska, private providers are engaged mainly as external experts within publicly managed programmes14 (Government of Republika Srpska, 2024[9]; 2025[10]), with support concentrated on incentive schemes, particularly promotion-related activities,15 and no system-wide accreditation or quality assurance framework in place (Table 1.14). In the Federation of Bosnia and Herzegovina, implementation follows a similar model, with private providers participating primarily as contractors under public calls and incentive programmes (Federation of Bosnia and Herzegovina Federal Ministry of Development, Entrepreneurship and Crafts, 2022[8]), alongside uneven budget execution.16 Although internationally funded programmes have supported capacity building, these approaches have not been institutionalised. As a result, SMEs have limited choice among service providers, and quality assurance remains embedded in individual programme requirements rather than governed by a consistent or system-level framework. Moreover, no scalable demand-driven or performance-based mechanisms have been introduced, underpinning the decline in implementation performance.

Monitoring and evaluation practices have improved procedurally since the previous assessment, with more systematic reporting, audits and transparency around incentive schemes in both entities. However, monitoring remains focused on financial execution and outputs, with limited use of outcome indicators or independent evaluations. As a result, monitoring systems remain weakly linked to policy learning and private BSS market development, limiting their contribution to demand-side reform.

Table 1.14. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 5a, Sub-dimension 5a.2

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Increase efforts to introduce a quality assurance mechanism	Quality assurance arrangements for private business support services providers remain underdeveloped in both entities. While strategic documents in the Federation of Bosnia and Herzegovina envisage the future introduction of an accreditation system, these measures have not yet been operationalised. In Republika Srpska, quality-related requirements remain confined to narrowly defined, incentive-specific conditions and do not amount to a system-wide quality assurance or accreditation framework.	Limited	See Cluster 1: Creating an enabling environment for SMEs and entrepreneurs

Dimension 5b: Public procurement in Bosnia and Herzegovina

Overview of Bosnia and Herzegovina’s performance on Dimension 5b

Bosnia and Herzegovina scored 3.84 on Dimension 5b, a significant improvement over its score of 3.49 in the previous cycle. This improvement is driven by progress in planning and design and in implementation, while performance in monitoring and evaluation has declined over the same period (Figure 1.7).

In particular, the increase in the overall score since 2022 reflects efforts to strengthen the public procurement policy framework and its implementation, notably through the consolidation of existing legislation and the adoption of new programmes. However, Dimension 5b remains a mid-performing policy area for Bosnia and Herzegovina, reflecting a public procurement system that is still characterised by structural bottlenecks and administrative complexity. While the upward trend in scoring broadly aligns with the overall rate of improvement across the Western Balkans and Türkiye region, Bosnia and Herzegovina continues to lag behind the regional average of 4.05, underscoring the need to strengthen policy implementation and monitoring mechanisms further. Additionally, variation in scoring outcomes can be partly attributed to methodological revisions, including the reallocation of weights across thematic blocks and the inclusion of additional assessment elements (see Methodology).

Figure 1.7. Overview of Bosnia and Herzegovina’s score on Dimension 5b and evolution since 2019

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Developments since 2022

The size of the public procurement market in Bosnia and Herzegovina remained broadly stable in 2024, accounting for 9.8% of gross domestic product, compared with 10.6% in 2022. The share of negotiated procedures without prior publication decreased from 6.7% in 2022 to 5.1% in 2024. The average number of bids per tender decreased significantly to 1.75, compared with 2.14 in 2022 (Figure 1.8), with over half of tenders receiving only one bid (55.62% in 2023; 51% in 2022). The use of the lowest price criterion remained prevalent, at 75.2% (70.4% in 2022) (European Commission, 2025[11]; Public Procurement Agency, 2022-2024[12]). In 2024, small and medium-sized enterprises (SMEs) accounted for 52.22% of the total value of awarded public contracts, while their share in public tenders was 38.67% (Public Procurement Agency, 2025[13]). Many economic operators refrain from participating due to perceived favouritism or pre-arranged outcomes, according to the latest OECD Support for Improvement in Governance and Management (SIGMA) Assessment (OECD, 2025[14]). Despite amendments to the Public Procurement Law (PPL), and new amendments currently under government review, the qualification requirements for economic operators remain stringent. The lack of electronic verification of qualifications compels bidders to submit original or certified documents for each procedure, incurring additional costs. Moreover, while self-declarations are intended to simplify participation, they often increase the bureaucratic burden by requiring certification by public notaries or other competent authorities. Tender submissions are still conducted on paper, further contributing to procedural complexity (OECD, 2025[14]).

Figure 1.8. Public procurement market and competition levels in Bosnia and Herzegovina and WBT economies, 2024

Source: Public Procurement Agency (2022-2024[12]).

Bosnia and Herzegovina recorded substantial progress in planning and design, scoring 4.57, up from 3.76 in 2022, owing to the introduction of a new comprehensive programme for public procurement and amendments to its legal framework. The adoption in 2024 of the Public Procurement Strategy 2024-2028 marked a positive development, with the programme promoting the simplification of medium-value procurement procedures and encouraging SME participation. Additional positive developments were noted through amendments to the 2004 PPL adopted at the end of 2022 and in 2024, and new planned amendments currently under review (Parliament of Bosnia and Herzegovina, 2004[15]). As a result, the PPL now stands largely aligned with the EU acquis and incorporates the key elements of the 2014 EU Directives. However, the legal framework still lacks full transposition of certain EU provisions, including those on dynamic purchasing systems, which are particularly relevant to SMEs (Table 1.15).

Table 1.15. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 5b

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Complete the implementation of the 2014 EU Procurement Directives	The Public Procurement Law was amended in 2022 and 2024, and is currently undergoing further review, but the transposition of the EU Procurement Directives has not yet been completed.	Moderate	Complete the harmonisation of the legal framework with EU Directives
Complete the establishment of electronic public procurement	The Public Procurement Portal is in place. However, communication and information exchange are not yet fully electronic, as tender submissions remain paper-based.	Limited	Introduce electronic communication at all stages of procurement processes
Reduce the administrative burden of participating in public procurement	There are efforts to reduce administrative burdens and over-formalism, but the results remain limited.	Limited	Strengthen efforts to reduce formalism and administrative burdens

Despite the Public Procurement Portal being in place, communication and information exchange are not yet fully electronic, as tender submissions continue to be paper-based. Formalism and low competition continue to characterise Bosnia and Herzegovina’s public procurement system (OECD, 2025[14]). Legal protection of economic operators is ensured by the Procurement Review Body (PRB), in accordance with the PPL. The submission of appeals to the PRB is conducted exclusively in paper form. During 2024, the PRB did not adhere to statutory 30-day time limits in 10.5% of cases (Procurement Review Body, 2025[16]).

Bosnia and Herzegovina has also shown substantial progress in implementation, increasing its score from 3.36 in 2022 to 3.94, owing to the Public Procurement Agency (PPA) maintaining a strong implementation record and active private-sector engagement. The PPA provides professional advisory and support services to all interested parties, including SMEs and has been active in preparing manuals, guidelines and other supporting materials for professional development, as well as providing training in procurement procedures. However, there is no regular or structured training for economic operators, including SMEs (Public Procurement Agency, 2025[17]). The private sector actively participates in broad consultations on the development of strategic and legal frameworks. Nevertheless, further improvement is needed in engaging stakeholders during the preparation of more targeted policy instruments, such as training curricula and implementation guidelines.

In monitoring and evaluation, Bosnia and Herzegovina scored 2.92, a significant decrease from 3.40 in 2022, underscoring the need for stronger monitoring efforts. The PPA collects and analyses data on public procurement procedures; however, some important information, such as the share of SMEs in public procurement, is missing from the annual reports. Furthermore, there are no available data on the proportion of public contracts paid on time, nor on the use of sustainable criteria. While the PPA collects general data on obstacles faced by economic operators across various activities, it provides no analytical overview specifically addressing the challenges SMEs encounter in accessing public procurement procedures.

Dimension 6: Access to finance for SMEs in Bosnia and Herzegovina

Overview of Bosnia and Herzegovina’s performance on Dimension 6

Bosnia and Herzegovina scored 2.96 for Dimension 617 (Figure 1.9), a performance broadly stable since 2022 (3.0118). The economy lags behind in the Western Balkans and Türkiye (WBT) region, while performing only slightly below the regional average (3.21). Overall, Dimension 6 represents a moderate performance area for the economy, suggesting scope to further strengthen small and medium-sized enterprises’ (SMEs) access to finance.

Bosnia and Herzegovina’s stable score since 2022 reflects steps to strengthen the legal and institutional framework for capital-market development, supported by the continued use of credit guarantee schemes (CGS) to support SMEs’ access to bank finance. However, access to bank finance remains constrained by structural bottlenecks, notably in asset registration and credit information systems, while several non-bank instruments, including crowdfunding and private equity, still lack dedicated legal frameworks.

Figure 1.9. Overview of Bosnia and Herzegovina’s score on Dimension 6 and evolution since 2019

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Sub-dimension 6.1: Bank finance

Bosnia and Herzegovina scored 3.22 in Sub-dimension 6.1, down from 3.5719 in the 2022 assessment cycle. Despite the continued use of policies that facilitate access to credit for SMEs, such as credit guarantee schemes and public credit lines, this decline stems from gaps in creditor rights, asset registration, collateralisation, and the credit information framework, alongside a greater emphasis on monitoring and evaluation in the scoring calculation.

Creditor rights in Bosnia and Herzegovina have experienced little change since 2022. Republika Srpska reports no changes to the legal framework governing creditor rights, leaving two gaps: debtors can initiate restructuring without creditors’ prior approval, and secured creditors cannot enforce collateral immediately after restructuring, as enforcement is automatically deferred. In the Federation of Bosnia and Herzegovina, creditors' rights were updated after the adoption of the Law on Executive Procedure in March 2025.20 However, while secured creditors still have priority repayment from the sale of pledged assets, a key caveat is that during reorganisation, existing owners and directors generally remain in control of the firm’s assets and operations, rather than being automatically replaced by an insolvency administrator, reducing creditors’ leverage over assets while the procedure is ongoing.

Asset registration and collateralisation in Bosnia and Herzegovina are constrained by the incomplete digitalisation of core asset registries and the lack of independent quality assessment. Regarding land assets, the cadastre is not yet fully digitalised in either entity, with around 20% of records in Republika Srpska remaining outside the digital system,21 and some of the Federation of Bosnia and Herzegovina’s municipalities, where parts of the cadastral record are still not available in fully digital form. For movable assets, security interests are recorded through state-level pledge registries, however, the registries do not systematically capture a collateral value field, which limits their use for consistent collateral valuation and monitoring. Moreover, updates are not automatic and depend on the pledgee’s actions, which can reduce transparency and mean the available information may not always reflect changes immediately. When it comes to intangible assets, they are recorded through the state-level Institute for Intellectual Property of Bosnia and Herzegovina, and banks may legally take security over certain intangible assets under the relevant pledge and IP frameworks. Finally, both entities report that no external assessment of the core asset registration systems has been conducted, leaving the data quality and their overall effectiveness in supporting asset-based lending unverified. Regarding credit information bureaux, the available information remains incomplete. In both the Federation of Bosnia and Herzegovina and Republika Srpska, the public credit register is the Central Registry of Credits of Business Entities and Individuals, maintained by the Central Bank of Bosnia and Herzegovina. The public credit registry is complemented by a private credit bureau operating in the Federation of Bosnia and Herzegovina, while Republika Srpska reports no operating private credit bureau.

Bosnia and Herzegovina’s main strength in fostering SMEs’ access to bank finance lies in the continued use of policies to facilitate credit access for SMEs, most notably credit guarantee schemes (CGS. However, their overall scale is modest, targeting is not consistently SME-specific across programmes, and effectiveness is not systematically evaluated (Table 1.16). Bosnia and Herzegovina exhibits a set of nine operating CGS, six in the Federation of Bosnia and Herzegovina, and three in Republika Srpska,22 in addition to two donor-funded scheme instruments- the European Investment Fund’s Guarantee Facility 4 SME Resilience and the European Bank for Reconstruction and Development’s Risk Sharing Facility. However, stakeholder consultations have raised concerns about the effectiveness of these schemes: businesses reported cumbersome, opaque application procedures, and some perceived that access may be influenced by political connections, raising potential concerns about the capacity of Bosnia and Herzegovina’s CGSs to improve SMEs’ access to bank finance (OECD, 2025[18]). As of the time of writing, no impact evaluations have been conducted, leaving their effectiveness unknown.

Table 1.16. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 6, Sub-dimension 6.1

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Strengthen the mandate and structure of the credit guarantee funds	Bosnia and Herzegovina’s credit guarantee funds have remained operational since 2022, but their design has not changed, and they have not undergone a systematic performance evaluation to assess existing bottlenecks.	Limited	See Cluster 1: “Creating an enabling environment for SMEs and entrepreneurs”

Sub-dimension 6.2: Non-bank finance

Bosnia and Herzegovina scored 2.61 on Sub-dimension 6.2, up from 2.3623 in the 2022 assessment cycle. Overall, the improvement in the score reflects steps taken to strengthen the legal frameworks for capital markets and private equity, while key instruments such as crowdfunding operate without a dedicated legal framework and proactive policy measures to stimulate the uptake of non-bank financing avenues are very limited.

Capital market development in Bosnia and Herzegovina remains constrained, although Republika Srpska has partly streamlined its legal frameworks in recent years.24 While the legal frameworks in both entities permit the issuance of various securities and require disclosure of key issuance terms, remaining compliance and disclosure obligations can still generate costs that may discourage smaller issuers. In Republika Srpska, amendments to the Law on the Securities Market adopted in 2021 introduced simplified conditions for listing debt securities on a regulated public market, including the possibility of listing without publishing a formal prospectus, provided that issuers make available to investors information equivalent to that normally contained in a prospectus. Although these amendments reduced some procedural barriers, capital-market access may still remain demanding for smaller firms. Trading is further restricted by rules that limit bond transactions to brokers, preventing institutional investors from trading directly and thereby reducing market liquidity (OECD, 2025[18]). An additional regulatory barrier preventing the development of capital markets, and especially their use by smaller firms, is that neither the Sarajevo nor the Banja Luka Stock Exchange operates a dedicated SME or small-capitalisation market segment. In Sarajevo, the Free Market ST2 segment still requires meaningful financial and operational history, such as audited statements, which may limit its accessibility for SMEs at an earlier stage of development. In Banja Luka, the Entry Market List C segment provides a simplified entry route, with lower thresholds for company size, shareholder base and free float than the main market segments. However, its admission criteria, including minimum requirements for operating history, capitalisation, free float and shareholder base, remain more demanding than those of some dedicated SME growth markets in OECD economies.25 Finally, as of the time of writing, no proactive policy measures or incentives have been introduced to encourage equity listings or corporate bond issuance in both entities, further limiting the incentives for SMEs to use capital markets to access finance.

Gaps in legal frameworks and limited proactive policies also hinder the development of private equity and venture capital funds. At the entity level, private equity is governed by a patchwork of laws,26 which can create inconsistencies and legal uncertainty for investors.27 In the Federation of Bosnia and Herzegovina, equity financing falls under the Law on Investment Funds, which does not explicitly cover venture capital activities. In contrast, Republika Srpska has made some progress in reforming its legal framework. In 2022, the entity amended its Law on Investment Funds to permit the creation of alternative investment funds (AIF), including private equity and venture capital funds, under private placement arrangements. By the end of 2025, two AIF management companies had been established, and three AIFs were operating in the market, with total assets under management of around BAM 10 million (Bosnia and Herzegovina convertible markas) (approximately EUR 5 million). Finally, Bosnia and Herzegovina still lacks domestic policy instruments that stimulate the development of the private equity and venture capital funds.

Bosnia and Herzegovina has not yet established a legal framework for crowdfunding, and no government strategy or policy initiative is currently in place to promote its development.

Leasing is the leading form of alternative finance in Bosnia and Herzegovina, although these instruments are used to a limited extent. In 2024, four leasing companies, all registered in the Federation of Bosnia and Herzegovina, were active and reported BAM 314 million (approximately EUR 160 million) in new leasing contracts (Banking Agency of the Federation of Bosnia and Herzegovina, 2025[19]), marking a 60% increase compared with 2019 (Banking Agency of the Federation of Bosnia and Herzegovina, 2020[20]). The leasing market’s expansion is constrained by several factors, including the imposition of a 17% value-added tax (VAT) on financial leases and the requirement for dual supervision of firms operating across both entities, which increases compliance costs and reduces competitiveness. Encouragingly, both Republika Srpska and the FBiH have proposed reforms to exempt interest calculated under financial leasing contracts from VAT to help stimulate market growth.

Factoring is also used marginally by Bosnian SMEs and has declined in recent years. Operated by six companies in Republika Srpska28 and three companies in the Federation of Bosnia and Herzegovina, factoring volumes have decreased from EUR 91 million in 2019 (0.5% of GDP) (FCI, 2020[21]) to EUR 69 million in 2024 (0.2% of GDP) (FCI, 2025[22]). Despite a legal framework increasingly aligned with the Acquis,29 the factoring market in Bosnia and Herzegovina faces legal inconsistencies limiting its development. In particular, although the factoring laws allow the financing of receivables with maturities of up to 180 days, broader payment-deadline rules appear to impose shorter limits in practice: In the Federation of Bosnia and Herzegovina, the Law on Financial Operations sets a 60-day limit, while Republika Srpska applies a similar 60-day rule for business-to-business transactions, under the Law on Deadlines for the Settlement of Monetary Obligations in Commercial Transactions. This contradiction restricts the scope of eligible receivables, constraining the uptake of factoring. Finally, the absence of active policy measures, such as tax incentives, promotional programmes, and dedicated training opportunities, constrains the further development of factoring, reflecting the lack of initiatives that encourage businesses to use this alternative financing avenue (Table 1.17).

Table 1.17. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 6, Sub-dimension 6.2

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Raise awareness about the opportunities of non-bank finance	There is no evidence of broad, dedicated awareness-raising campaigns in Bosnia and Herzegovina that explicitly promote alternative finance (e.g. crowdfunding, leasing, factoring) and showcase its benefits.	Limited	See Cluster 1: “Creating an enabling environment for SMEs and entrepreneurs”

Sub-dimension 6.3: Financial inclusion

Bosnia and Herzegovina’s score in Sub-dimension 6.3 stands at 3.05, slightly up from 2.8630 in 2022. Financial inclusion benefits from a relatively developed microfinance sector, but the policy framework for financial literacy remains nascent.

Bosnia and Herzegovina’s strategic framework for financial literacy remains weak, and policies remain at an early stage and are delivered through a limited number of stand-alone initiatives. Both entities include financial literacy in their SME development strategies, but it remains marginal and is typically not linked to dedicated outcome indicators (Table 1.18). In the Federation of Bosnia and Herzegovina, the Strategy for Development of the Small Economy 2022-2027 (Measure 2.1.3, “Ensure better access to capital”)31 foresees implementing training programmes to improve SMEs’ financial literacy, yet without a clear outcome indicator to track the related outcomes. In Republika Srpska, the Small and Medium Enterprises Development Strategy of Republika Srpska 2021-2027 also mentions training programmes for financial literacy (Measure 2.1.1 “Facilitating access to finance for growing and new SMEs”)32 but again without a dedicated outcome indicator. In practice, implementation is very limited in scale within the entities. In the Federation of Bosnia and Herzegovina, ongoing financial education outreach is led by the Federation of Bosnia and Herzegovina Banking Agency (e.g. financial literacy workshops in secondary schools and publicly available educational materials). In Republika Srpska, delivery is through business-support institutions, including the Chamber of Commerce’s financial literacy training programme and the Development Agency of the Republika Srpska’s integration of financial management content into entrepreneurship and accelerator training; however, these efforts remain unembedded within a comprehensive policy framework.

Bosnia and Herzegovina’s microfinance sector is relatively well-developed, but SME uptake has been low due to high interest rates and relatively low lending caps. A total of 27 microfinance institutions operate in Bosnia and Herzegovina, including both non-profit microcredit foundations and for-profit microcredit businesses. The sector is supported by a relatively robust legal framework, with harmonised legislation across both entities. Microfinance plays an important role in supporting individual entrepreneurs and micro-enterprises, but remains of limited relevance for SMEs beyond the micro segment. Businesses account for only 3% of microfinance clients (Kicic and Ribic, 2024[23]), and the lending cap of BAM 50 000 (~EUR 25 500) is often insufficient to meet the financing needs of most SMEs (OECD, 2024[24]). Moreover, interest rates remain prohibitively high: in 2023, the average effective interest rate in the microfinance sector reached 22.3% in Republika Srpska and 22.9% in the Federation of Bosnia and Herzegovina, more than five times higher than the average bank lending rate to the private sector (4.1%) (World Bank, 2025[25]; Blagovčanin, 2024[26]). This cost gap limits the attractiveness of microfinance for SMEs, underscoring the need for policy measures that reduce borrowing costs without undermining the sector’s financial sustainability.

Table 1.18. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 6, Sub-dimension 6.3

2022 recommendation	Main developments during the assessment period	Progress status
Develop a more comprehensive and coordinated approach to promote financial literacy, in collaboration with all stakeholders	Although entity SME strategies refer to financial literacy, they do so only briefly, without measurable targets or a monitoring framework; in practice, initiatives remain limited in scale.	Limited

Dimension 7: Standards and technical regulations in Bosnia and Herzegovina

Overview of Bosnia and Herzegovina’s performance on Dimension 7

Bosnia and Herzegovina received an overall score of 3.45 on Dimension 7 (Figure 1.10), marking a moderate improvement from its score of 3.22 in 2022, but below the Western Balkans and Türkiye regional average of 4.05. Nevertheless, Dimension 7 continues to rank among the economy’s highest scoring policy areas, reflecting solid elements of the quality infrastructure (QI) system despite uneven alignment with key elements of the EU acquis. Bosnia and Herzegovina’s performance reflects a QI framework where progress has been primarily driven by targeted improvements in small and medium-sized enterprise (SME)-targeted support, rather than by strengthened strategic steering or institutional co‑ordination. The overall similar score masks diverging developments across the three sub-dimensions. While SMEs’ access to standardisation (Sub-dimension 7.3) has improved markedly over the assessment period, overall co-ordination and general measures (Sub-dimension 7.1) have slightly declined, and harmonisation with the acquis (Sub-dimension 7.2) has remained largely the same (Figure 1.10).

Figure 1.10. Overview of Bosnia and Herzegovina’s score on Dimension 7 and evolution since 2019

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Sub-dimension 7.1: Overall co-ordination and general measures

Bosnia and Herzegovina’s performance in overall co-ordination and general measures slightly declined between assessment cycles, decreasing marginally from 3.77 in 2022 to 3.63 in 2026. This reflects persisting challenges in QI co-ordination across administrative levels, with no economy-wide strategic framework to systematise responsibilities and link state- and entity-level institutions.

Quality infrastructure co-ordination frameworks exist across all administrative levels, but their stage of maturity varies. The Ministry of Foreign Trade and Economic Relations continues to lead state-level co‑ordination and EU alignment, but there is no horizontal strategy or formal co-operation mechanism to systematically link entity institutions. The Federation of Bosnia and Herzegovina relies on sectoral strategies, such as the 2024-2033 Textile, Leather and Footwear Strategy and industrial development strategies, to define partial QI objectives without an overarching framework (Table 1.19). Conversely, Republika Srpska has maintained a functioning Coordination Body for Quality Infrastructure of Products and Services, which meets annually.

Co-ordination remains limited, with no unique SME portal implemented at state-level, and access to information on QI remains dispersed across institutional websites, limiting visibility for SMEs seeking to comply with EU product and safety requirements. In the Federation of Bosnia and Herzegovina, SME support is implemented mainly through the Competitiveness Enhancement Programme, which focuses on innovation and internationalisation but lacks dedicated QI instruments. By contrast, SMEs in Republika Srpska benefit from more structured institutional support, including the Development Agency, the Enterprise Europe Network and the Chamber of Commerce, which provide advisory and export-readiness services.

Table 1.19. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendation for Dimension 7, Sub-dimension 7.1

2022 recommendation	Main developments during the assessment period	Progress status
Develop a state-wide quality infrastructure strategy and improve co-ordination across different governmental institutions and levels	No state-level quality infrastructure strategy has been adopted. Co-ordination remains divided between the state, the Federation of Bosnia and Herzegovina’s, and Republika Srpska’s institutions. Formal co-ordination mechanisms are missing; co-operation remains ad hoc through donor-funded initiatives.	Limited

Sub-dimension 7.2: Harmonisation with the EU acquis

Bosnia and Herzegovina’s performance in harmonising with the acquis has moderately improved between assessment cycles, increasing from 3.20 in 2022 to 3.41 in 2026. This continues to be below the WBT regional average of 4.09. This slight improvement reflects diverging developments across the QI pillars. While performance has improved in areas such as standardisation, accreditation, and conformity assessment, it has decreased in technical regulations and market surveillance. Taken together, these mixed developments point to persistent structural weaknesses and uneven progress, while nonetheless signaling that targeted reforms in select pillars are beginning to yield results, underscoring the need for a coherent, economy-wide framework to guide legislative alignment and implementation.

Bosnia and Herzegovina’s performance in technical regulations has decreased. The economy’s legislative alignment with the EU and institutional framework for the production, distribution and marketing of industrial products remains incomplete and inconsistent. No consistent economy-wide approach or strategy for alignment exists, and conflicting regulations have not been repealed (Table 1.20). The legal bases and administrative structures for technical regulations, standardisation, conformity assessment, accreditation, metrology and market surveillance are not aligned with the acquis and remain unco-ordinated, while QI institutions are understaffed. Furthermore, competences on technical regulations remain distributed across entity and state levels, and state-level legislation is outdated with no contact points for SMEs. For smaller entreprises this institutional complexity translates into uncertainty over which technical rules apply and ensue higher compliance costs for cross-entity trade.

Standardisation in Bosnia and Herzegovina has improved substantially from a relatively low baseline, supported by the central role of the state-level Institute for Standardization of Bosnia and Herzegovina (ISBIH). To date, the ISBIH has adopted 93.6% of CEN and CENELEC standards, including 2343 European standards transposed as standards in Bosnia and Herzegovina over the 2024 – 2025 period, reflecting improved alignment with European standardisation practices (European Commission, 2025[27]) (European Commission, 2024[28]). At the same time, implementation capacity remains constrained, as ISBIH continues to face staff shortages, with 37 of 52 positions currently filled, alongside limited IT infrastructure (ISBIH, 2023[29]). While the stock of standards is expanding rapidly, the limited digital availability and translation of standards reduce their practical accessibility, particularly for SMEs located outside major industrial centres, which face greater challenges in applying technical norms in their day-to-day operations.

Accreditation performance in Bosnia and Herzegovina has strengthened from a relatively low baseline, underpinned by the stable functioning of the Institute for Accreditation of Bosnia and Herzegovina (BATA). The institute is a signatory to the EA Multilateral Agreement (EA-MLA) in key fields and is subject to regular peer reviews, granting it credibility and international recognition. At the operational level, capacity constraints continue to affect timeliness, as limited staffing, currently comprised of 20 employees, has contributed to slower accreditation processing and the accumulation of backlogs. These delays directly affect SMEs seeking certification and, in some cases, lead firms to rely on foreign accreditation bodies, often at a higher cost.

Conformity assessment has seen a slight improvement, with noteworthy positive developments: the Institute for Accreditation of Bosnia and Herzegovina (BATA) has extended the EA MLA agreement to product certification (ISO 17065) and medical testing (ISO 15189), broadening domestic conformity assessment coverage, and regulatory procedures are subject to continuous review and alignment with international standards. However, the sector continues to be dispersed, with 184 conformity assessment bodies active but unevenly distributed, meaning SMEs are often required to seek certification abroad, incurring higher costs (European Commission, 2025[27]). Conformity assessment support also remains geographically uneven, with Republika Srpska offering limited support through incentives and information provided by the Chamber of Commerce, while no comparable measures exist in the Federation of Bosnia and Herzegovina.

Metrology remains relatively stronger than other areas and broadly stable. The Institute of Metrology of Bosnia and Herzegovina obtained new international recognitions and published 13 updated bylaws. Republika Srpska adopted a new Law on Metrology in 2022 and further amended it in 2025, though European Commission reporting cautions that entity-level legislative developments risk undermining legal certainty and compounding the uneven application of metrology rules across the economy (European Commission, 2023[30]). Still, entity-level disparities in staffing and outdated equipment persist. As a result, SMEs may face uneven access to calibration and testing services across entities, increasing compliance costs and creating uncertainty when placing products on domestic or EU markets.

Market surveillance performance has decreased and continues to be shaped by an outdated legislative framework and co-ordination arrangements that are in transition. Although amendments aimed at integrating the acquis were planned to be introduced in 2025, their adoption is still pending, and the existing framework has yet to be updated. At the operational level, enforcement remains active, with 430 inspections carried out in 2023-2024 and additional inspectors recruited (European Commission, 2025[27]). However, institutional capacity and co-ordination mechanisms have not yet fully met EU requirements, limiting the overall effectiveness of market surveillance despite sustained inspection efforts.

Table 1.20. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendation for Dimension 7, Sub-dimension 7.2

2022 recommendation	Main developments during the assessment period	Progress status
Create an action plan/strategy for harmonising with the EU acquis	Since 2022, no state-level action plan or strategy for harmonising technical regulations with the EU acquis has been adopted. Republika Srpska adopted a Quality Infrastructure Strategy with an Action Plan for transposing new acquis, but the Federation of Bosnia and Herzegovina and state institutions have not followed suit. According to the European Commission, Bosnia and Herzegovina still lacks a consistent economy-wide approach for alignment, and conflicting regulations remain in force (European Commission, 2024[28]).	Limited

Sub-dimension 7.3: SMEs’ access to standardisation

SMEs’ access to standardisation has improved significantly, scoring 3.26 in 2026 compared to 2.74 in 2022, thanks to sustained efforts to raise awareness and improve outreach. While this represents a significant step forward, performance remains below the WBT average of 3.91, indicating scope for further convergence.

Awareness raising and information performed the best within the sub-dimension, through the ISBIH’s organisation of 22 workshops between 2020 and 2024, supported by the RS Chamber of Commerce, which held 10 seminars on CE marking and ISO implementation. SME participation in standardisation has benefited from open calls to join technical committees (BAS/TCs); however, the non-systematic monitoring of their engagement makes it difficult to carry out an assessment of their influence over decision making. While Republika Srpska has maintained consistent co-operation between its Chamber of Commerce and the ISBIH, the Federation of Bosnia and Herzegovina has not developed an equivalent mechanism.

SME participation in standardisation has been supported through open calls to join technical committees (BAS/TCs) and the use of ad hoc working groups, which have broadened access to the standard-setting process, including the preparation, adoption and publication of BAS standards. Furthermore, since 2022, SME participation is regularly monitored by the ISBIH, with 94 SMEs directly involved in standardisation activities in 2024, accounting for 70% of businesses participating in committees (ISBIH, 2024[31]). While Republika Srpska has established consistent co-operation between its Chamber of Commerce and the ISBIH, no equivalent mechanism has been developed in the Federation of Bosnia and Herzegovina, resulting in uneven support for SME participation across entities.

Financial support has remained low, as there is no dedicated funding mechanism to help SMEs cover certification or implementation costs. At the state level, SMEs benefit from value-added tax exemptions on standard purchases. Republika Srpska offers limited co-financing grants through its SME Competitiveness Programme, whereas the Federation of Bosnia and Herzegovina provides indirect assistance via broader innovation and competitiveness schemes. However, these remain small in scale and not specific to standardisation. As a result, while awareness has increased, practical implementation remains relatively low. For SMEs, the absence of dedicated funding means that even those aware of the applicable standards often cannot afford to purchase or implement them, widening the gap between knowledge and application.

Table 1.21. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendation for Dimension 7, Sub-dimension 7.3

2022 recommendation	Main developments during the assessment period	Progress status
Improve access to regulations, standards and conformity-relevant information through a central web page and contact point	No unified small and medium-sized enterprise (SME) information portal or central contact point has been created. Information on technical regulations, standards and conformity assessment remains dispersed across institutional websites at state and entity levels (the Institute for Standardization of Bosnia and Herzegovina, the Institute for Accreditation of Bosnia and Herzegovina, the Institute of Metrology of Bosnia and Herzegovina, the Ministry of Foreign Trade and Economic Relations, RS and FBiH ministries). Republika Srpska and the state-level institutions have improved the availability of online materials, but there is no centralised system or one-stop platform for SMEs.	Limited

Dimension 8a: Enterprise skills in Bosnia and Herzegovina

Overview of Bosnia and Herzegovina’s performance on Dimension 8a

Bosnia and Herzegovina received an overall score of 2.86 on Dimension 8a (Figure 1.11), representing a slight increase from 2.72 in the previous assessment cycle. Despite this progress, the economy remains the weakest performer in the Western Balkans and Türkiye (WBT) region, far below the regional average of 3.44. Moreover, Dimension 8a stands as one of Bosnia and Herzegovina’s lowest scoring areas, underscoring the need for stronger, more sustained efforts.

The rise in Bosnia and Herzegovina’s overall score since 2022 was driven by improvements in the planning and design and monitoring and evaluation thematic blocks (Figure 1.11). Importantly, although the implementation score fell slightly, this does not necessarily signal policy backsliding. Rather, it reflects the expanded scope of the current assessment cycle, which places greater emphasis on emerging policy areas such as microcredentials and support for social enterprises, both of which remain at an early stage of development in Bosnia and Herzegovina.

Figure 1.11. Overview of Bosnia and Herzegovina’s score on Dimension 8a and evolution since 2019

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Developments since 2022

Bosnia and Herzegovina’s score for planning and design has notably increased since the previous assessment cycle. In terms of skills intelligence, entity-level strategies on small and medium-sized enterprises (SME) provide an initial framework for skills assessment mechanisms, such as training needs analyses, although these remain incomplete and lack forward-looking components for anticipating future skills demand. Co-ordination difficulties further pose a challenge: while competences lie primarily at the entity level, there are no institutionalised mechanisms to exchange information or align priorities across administrative levels. Consequently, skills intelligence is largely absent from overarching policy frameworks, including the Economic Reform Programme 2025-2027 and Reform Agenda. Even within entities, no ministry holds a clear mandate to gather, analyse and disseminate skills-related data across portfolios such as labour, education and finance (Table 1.22). Weak institutional collaboration therefore limits the use of skills evidence in policymaking and constrains efforts to align education and training systems with evolving labour market needs, despite widespread recognition of the need to address persistent skills mismatches.

Instead, the increase in this thematic block has been driven largely by advances in the legal and strategic framework for social entrepreneurship. Since the previous assessment cycle, the Federation of Bosnia and Herzegovina has incorporated social entrepreneurship into its SME Strategy and drafted a Law on Social Entrepreneurship (still pending adoption), while Republika Srpska adopted a dedicated Strategy for the Development of Social Entrepreneurship 2026-2032. This growing institutional recognition of social entrepreneurship as a distinct policy domain marks an important step towards embedding the social economy as an integral part of Bosnia and Herzegovina’s broader economic and social development agenda.

Conversely, Bosnia and Herzegovina’s implementation score has fallen. A continuing strength lies in SME training delivered by entities’ chambers of commerce as well as the Foreign Trade Chamber, covering a broad range of topics, including both skills for the green transition and digital skills, with artificial intelligence highlighted as a key area. Centralised web platforms and the widespread provision of free training enhance accessibility, removing direct costs for participants and SME employers. However, with the exception of broad digitalisation incentives, which can be applied to training but are not explicitly targeted at SME upskilling, there are few mechanisms in either entity to offset indirect costs or encourage broader participation, contributing to persistently low adult learning rates (Figure 1.12). This situation is compounded by the absence of microcredentials: neither entity has incorporated them into its education or development strategies, and no policy framework exists to govern or promote their uptake. Given the flexibility and short-cycle nature of microcredentials, their absence limits opportunities to make learning more accessible and responsive to SMEs’ needs.

Despite progress in digital and green skills provision, significant gaps persist in capacity building within the social economy, constraining performance on this thematic block. While social entrepreneurship is increasingly recognised in policy frameworks, translation of these commitments into comprehensive, systematic practical support remains at an early stage, indicating significant scope for further development and refinement. Dedicated mentoring or coaching programmes are largely absent, and training addressing sector-specific needs remains limited – with the exception of the new modules introduced in 2025 by the Development Agency of Republika Srpska, which cover foundational concepts of the social economy as well as practical guidance on marketing and financing (Development Agency of Republika Srpska, 2025[32]). Even support mechanisms explicitly highlighted in strategies, such as tax and customs exemptions, have yet to be realised. This policy-practice gap constrains the sector’s development, as reflected in the very low levels of registration and operation, which suggest that entrepreneurs see compliance burdens as outweighing the benefits.

Figure 1.12. Key statistic for Dimension 8a: Long-term unemployment and adult learning participation in Bosnia and Herzegovina, 2021-2024

Notes: The age range for long-term unemployment rates is 20-64 years.

Participation in adult learning refers to participation in the last 4 weeks.

Sources: Eurostat (2024[33]; 2025[34]).

Monitoring and evaluation continues to be the weakest area for both entities. In Republika Srpska, monitoring is realised through the “Annual Report for SMEs,” published annually since 2008 by the Ministry of Economy and Entrepreneurship and the Development Agency, with the most recent edition released in 2025 (Ministry of Economy and Entrepreneurship of Republika Srpska; Development Agency of Republika Srpska, 2025[35]). The report details the types of enterprise skills programmes offered across areas such as digital and green skills, including the number of trainings conducted and participants involved. However, it does not assess programme effectiveness, leaving the actual impact on SME performance unclear. In contrast, in the Federation of Bosnia and Herzegovina, no equivalent entity-level monitoring exists, severely limiting the ability to evaluate how trainings influence SME outcomes and inform policy improvements. Across both entities, while employer surveys capture some data on in-demand skills, these insights are not centralised in a comprehensive database, constraining accessibility and integration into evidence-based policymaking.

Table 1.22. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 8a

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Hold multi-stakeholder policy dialogue on the co-ordination and improvement of skills intelligence, placing priority on actors with competence for labour and employment and sector-based organisations	There is no evidence of ongoing policy dialogue, and no progress has been made toward establishing a lead agency to co-ordinate and oversee skills intelligence, limiting collaboration with both government and non-governmental stakeholders, including employers, academia and civil society.	None	See Cluster 4: “Understanding and anticipating skills needs”

Dimension 8b: Innovation policy for SMEs in Bosnia and Herzegovina

Overview of Bosnia and Herzegovina’s performance on Dimension 8b

Bosnia and Herzegovina received an overall score of 2.44 on Dimension 8b, a substantial progress since the 2022 assessment (1.97) (Figure 1.13). Bosnia and Herzegovina still lags behind in the Western Balkans and Türkiye (WBT) [region, significantly less than the regional average of 3.27. Dimension 8b is one of the economy’s comparatively lower-scoring areas, highlighting room for further progress in strengthening small and medium-sized enterprises’ (SMEs) innovation policy.

Bosnia and Herzegovina’s progress since 2022 mainly reflects updated innovation policy frameworks in the Federation of Bosnia and Herzegovina (FBiH) and in Republika Srpska (RS) and expanded innovation support services, particularly for incubators. However, substantial gaps persist across all sub-dimensions.

Figure 1.13. Overview of Bosnia and Herzegovina’s score on Dimension 8b and evolution since 2019

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Sub-dimension 8b.1: Policy framework for innovation

Performance in the policy framework for innovation has substantially improved, rising from 1.98 in 2022 to 2.51 in 2026, reflecting updates to entity-level strategies. The score, nevertheless, remains constrained by the absence of an operational economy-wide Smart Specialisation Strategy, an entity-based implementation set-up and limited formal co-ordination mechanisms.

Bosnia and Herzegovina’s strategic orientation for SME innovation remains primarily set at the entity level. In Republika Srpska, the overarching reference is the Strategy for the Development of Science and Technology, Higher Education and the Information Society 2023-2029. While the strategy does not treat SMEs as a standalone cross-cutting objective throughout, it explicitly anchors SME relevance through its strong digital innovation pillar, particularly Priority 3.3 on “creating an ecosystem for the digitalisation of the economy and the development of the ICT industry”. This STI strategy is complemented by the RS SME Development Strategy 2021-2027, which sets a clearer SME-facing innovation agenda through two dedicated priorities: Priority 3.2 “Innovation and digitalisation of business” and Priority 3.3 “Transition of SMEs towards a green economy”. To operationalise these strategic orientations, the Government of RS adopted the Second Action Plan for Innovation in SMEs for 2024-2027 in 2024, linking implementation measures to the SME Strategy (and aligning them with the STI strategy), including measures combining financial support with strengthening innovation and research infrastructure (e.g. the launch of the first Science and Technology Park in 2024). In the Federation of Bosnia and Herzegovina, where no standalone STI strategy is reported, the strategic framework for SME innovation is articulated through two complementary documents: the Small Business Development Strategy 2022-2027 provides the most explicit SME innovation structure, combining Priority 1.1 “Digitalisation of small business entities”, Priority 1.2 “Green transition of small business”, and Priority 3.1 “Innovation in small business operations”, which emphasizes collaboration and networking for innovation and on SMEs’ participation in European Union (EU) innovation programmes. The FBiH Development Strategy 2021-2027 reinforces this orientation with a focus on science-business collaboration (Priority 1.2 “Support technology transfer and development”) and digital innovation, under Priority 1.1 “Increase digitalisation of the economy”, including an explicit SME measure (1.1.2 “Accelerate the digital transformation of small and medium-sized enterprises”). However, Bosnia and Herzegovina remains at an early stage in developing an economy-wide Smart Specialisation Strategy, meaning that cross-entity priority-setting for innovation is not yet operational (Table 1.23). Recent commitments under Bosnia and Herzegovina’s Reform Agenda nevertheless foresee the development and adoption of a 2026-2031 comprehensive strategic framework for innovation and associated action plans, which, if delivered, could strengthen economy-wide priority-setting and co-ordination beyond the current entity-based frameworks.

The implementation of the strategic framework remains organised around a relatively small set of public actors and delivery structures, as neither entity operates a single and centralised SME innovation agency. In Republika Srpska, the Ministry of Scientific and Technological Development and Higher Education leads overall policy and strategy steering for innovation, while the Ministry of Economy and Entrepreneurship plays a central role in SME support programming. Operational delivery is channelled through multiple structures: the Innovation Centre Banja Luka (ICBL) still acts as the leading innovation intermediary providing business support services and developing links between SMEs and research institutions, and the RS Development Agency (RARS) also provides business support services. In the Federation of Bosnia and Herzegovina, implementation is more fragmented: the FBiH Ministry of Development, Entrepreneurship and Crafts is the leading institution for SME support programming (e.g. calls and incentives supporting innovation), while cantonal ministries and other local actors implement complementary initiatives for SME development, including innovation-oriented support.

Innovation policy falls under entity competence, yet each faces substantial co-ordination gaps (Table 1.23). There is no formal inter-ministerial co-ordination mechanism in Republika Srpska; instead, co-ordination takes place within the RS Government in co-operation with the business community, and is supported by the Council for SME Development, which brings together representatives from ministries, the business community, and SMEs. In the Federation of Bosnia and Herzegovina, the main formal co-ordination structure is the Coordination of Ministers of Education and Science, an advisory body for the education and science sector, and composed of the relevant FBiH and cantonal ministers. However, private stakeholders (including SMEs) are not represented, limiting feedback from firms on innovation-support policies.

Table 1.23. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendation for Dimension 8b, Sub-Dimension 8b.1

2022 recommendation	Main developments during the assessment period	Progress status
Harmonise strategic priorities and enhance the co-ordination of innovation policy	At the time of writing, the economy-wide Smart Specialisation Strategy was not yet finalised, and no progress had been achieved in co-ordinating the innovation policy framework for small and medium-sized enterprises.	Limited

Sub-dimension 8b.2: Government institutional support-services for innovative SMEs

Bosnia and Herzegovina achieved a score of 2.56 in Sub-dimension 8b.2, substantially up from 1.84 in 2022. Despite continuous expansion of the incubator network and its associated financial support, the innovation support services ecosystem remains very limited in accelerators and technology extension services, leaving firms at more advanced stages of innovation with few options for scale-up support.

The incubator and accelerator infrastructure is uneven across Bosnia and Herzegovina. In 2025, 19 business incubators are in operation, 15 in the Federation of Bosnia and Herzegovina and four in Republika Srpska, reflecting a modest expansion since 2022 following the establishment of three additional incubators in the Federation of Bosnia and Herzegovina. However, the network remains geographically concentrated, with a notable clustering in major urban centres (especially Sarajevo) and thinner coverage elsewhere. Moreover, despite the expanding incubator base, the accelerator landscape also remains limited, although it expanded in 2025: alongside the accelerator programme of the Development Agency of Republika Srpska,33 the Federation of Bosnia and Herzegovina launched a new international start-up accelerator initiative in Sarajevo in partnership with Techstars LLC,34 supported by EUR 520 000 from the Federal Ministry of Development, Entrepreneurship and Crafts under the Development of the Start-up Ecosystem grant scheme. Overall, the limited development of innovation-oriented business support services is driven by scarce and uneven funding. In the Federation of Bosnia and Herzegovina, the Law on Entrepreneurial Infrastructure provides a more structured basis for developing this support ecosystem by formally recognising accelerators and other support institutions and by establishing a Register of Entrepreneurial Infrastructure, which is expected to become operational by the end of 2026. The law also earmarks at least 0.3% of the entity budget for entrepreneurial infrastructure, complemented by canton-level allocations such as the planned BAM 3.4 million (EUR 1.7 million) for incubator infrastructure in Sarajevo Canton in 2025. In Republika Srpska, public funding is concentrated on the ICBL, which receives BAM 550 000 (EUR 281 000) annually from the Ministry of Scientific and Technological Development and Higher Education, plus BAM 10 000 (EUR 5 100) from the City of Banja Luka.

Technology-extension services remain scarce. The RS Chamber of Commerce, through its Centre for Digital Transformation, offers the only structured support of this kind, enabling firms to develop new products using 3D-scanning technologies in co-operation with the Faculty of Mechanical Engineering in Banja Luka.

Sub-dimension 8b.3: Government financial support for innovative SMEs

Bosnia and Herzegovina scored 2.47 in Sub-dimension 8b.3, a slight improvement compared to the previous assessment (2.24), reflecting the absence of substantial development across entities in developing a financing architecture to support SME innovation.

Few public schemes in Bosnia and Herzegovina provide dedicated direct financial support to SME innovation (Table 1.24). In Republika Srpska, authorities have been reporting plans for several years to establish an Innovation Fund to centralise and manage innovation financing. This objective is now underpinned by the Law on Innovation Activity, adopted in July 2025, which provides the legal basis for the fund and foresees its establishment by 2026. Until then, the ICBL helps bridge part of the gap through incubation and innovation-intermediation services and limited support, backed by an annual public grant and donor-funded projects. In the Federation of Bosnia and Herzegovina, the Development Strategy 2021-2027 envisages the creation of a Fund for Technology Development, Research and Innovation. Although the fund is not yet operational, a government-established working group has been drafting a Law on Innovation Activity since late 2023, including provisions to establish an Innovation Activity Fund with defined financing sources. Until then, dedicated innovation financing also remains limited and fragmented: support is mainly delivered via the FBiH Ministry of Development, Entrepreneurship and Crafts’ SME competitiveness programmes, canton-level schemes (notably in Sarajevo Canton); a significant share of innovation-related funding also comes via international projects. A recent exception is the 2024 BAM 1 million (EUR 510 000) Applied R&D call, co-financed equally by the FBiH Ministry of Education and Science and United Nations Development Programme, which is a collaborative grant designed to fund general applied research and development (R&D) projects.35

Bosnia and Herzegovina’s indirect financial support for business R&D is limited and delivered through corporate income tax deductibility. In Republika Srpska, the Profit Tax Law recognises R&D expenditure as tax-deductible in determining the corporate income tax base, meaning qualifying R&D costs reduce taxable profit. In the Federation of Bosnia and Herzegovina, the Corporate Income Tax Law goes a step further by explicitly allowing R&D costs to be deducted when incurred (immediate expensing). Although these corporate income tax provisions have been in place since 2016, neither entity has reported an impact evaluation, leaving limited evidence of their effects on innovation outcomes.

Table 1.24. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendation for Dimension 8b, Sub-Dimension 8b.3

2022 recommendation	Main developments during the assessment period	Progress status
Increase the scale of financial incentives to foster innovation	Financial support for innovation remains limited in both entities and is delivered through a fragmented mix of programmes, as neither entity operates a single, entity-level funding instrument dedicated to small and medium enterprises innovation.	Limited

Sub-dimension 8b.4: SME and research institution collaboration and technology transfer

Bosnia and Herzegovina scored 2.15 in Sub-dimension 8b.4, marking progress compared to the 2022 assessment (1.86). This increase reflects developments in the infrastructure for business-academia co-operation, but the absence of a domestic innovation voucher scheme, coupled with gaps in the intellectual property rights (IPR) framework, continues to hinder the economy’s performance.

Innovation vouchers are not institutionalised in Bosnia and Herzegovina; they are currently available through the donor-supported BOOST2 scheme,36 with the support of the EU and KfW through the Private Sector Development Initiative in Bosnia and Herzegovina (EU4PSD) and implemented by INTERA Technology Park.

Bosnia and Herzegovina has made some steps in developing its institutional infrastructure for business-academia co-operation, but it still remains at an early stage of development (Table 1.25). First, only the Federation of Bosnia and Herzegovina operates a competitive co-operative grant mechanism through the 2024 Applied R&D public call, which requires collaboration between research institutions and businesses to support applied innovation across a broad set of economic sectors. Second, only Republika Srpska reports a set of dedicated innovation intermediaries: while not fully operational, the Science and Technology Park of Republika Srpska, has been established to accelerate technology development and commercialisation, complemented by the ICBL, which provides incubation and innovation-intermediation services for knowledge-based firms. Third, the ecosystem remains significantly supported by donor-backed co-operation platforms, notably Digital Innovation Hubs (DIHs). In Republika Srpska, the digital innovation hub IDEMO offers “test before invest”, skills development, and networking, and the European Digital Innovation Hub ONEX, supported under the EU Digital Europe Programme, provides SMEs with practical support services, such as testing facilities, skills development, and networking. In the Federation of Bosnia and Herzegovina, the EU4DigitalSME initiative supports digital innovation hubs, such as Digital Storm (Sarajevo) and Industrial HUB (Tuzla), providing applied firm-facing services including prototyping and testing environments.

Finally, Bosnia and Herzegovina’s IPR framework is underpinned by a broad set of stand-alone IPR laws, but implementation remains uneven, particularly for IP generated through publicly funded research, where ownership, IP allocation and royalty-sharing arrangements are not sufficiently defined and are often left to individual research organisations. Regarding IPR promotion, the Institute for Intellectual Property of Bosnia and Herzegovina provides free support (a help desk, training, and an IP “pre-diagnosis” service) but does not offer dedicated SME-tailored guidance to help firms build IP strategies. On IPR enforcement, an interdepartmental co-ordination body exists, and a platform for electronic data exchange among IPR-enforcement bodies became operational in April 2024, but there is still no dedicated out-of-court mechanism specifically for IP disputes nor a specialised IP court body, leaving IPR enforcement potentially cumbersome for SMEs.

Table 1.25. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendation for Dimension 8b, Sub-Dimension 8b.4

2022 recommendation	Main developments during the assessment period	Progress status
Introduce measures to stimulate collaboration between the private sector and scientific research	Bosnia and Herzegovina has introduced measures to stimulate business-research collaboration, most notably an applied research and development co-operative call in the FBiH and the establishment of a science and technology park in Republika Srpska, but overall support remains limited, dispersed and largely donor-driven.	Moderate

Dimension 9: SMEs in a green economy in Bosnia and Herzegovina

Overview of Bosnia and Herzegovina’s performance on Dimension 9

Bosnia and Herzegovina scored 2.96 on Dimension 9 (Figure 1.14), relatively stable from 2.92 in the previous cycle and slightly below the 2026 regional average of 3.16. The stagnation points to some weakening in the strategic prioritisation of greening policies focussed on small and medium-sized enterprises (SMEs), underscoring the need for stronger policy commitment in this area. Dimension 9 is among Bosnia and Herzegovina’s average-performing areas.

While improvements were recorded in the planning and design, and implementation of SME-focused greening policies under Sub-dimension 9.1, this performance was not matched under Sub-dimension 9.2. Overall, however, the final score remains stable, as stronger results in monitoring and evaluation under Sub-dimension 9.2, which carried greater weight in this assessment cycle, helped offset a decline.

Figure 1.14. Overview of Bosnia and Herzegovina’s score on Dimension 9 and evolution since 2019

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Sub-dimension 9.1: Framework for greening policies targeting SMEs

Performance in this sub-dimension has increased slightly, to 2.93 in 2026 from 2.82 in 2022. Both planning and design, as well as implementation, improved, but monitoring and evaluation performance dropped due to ongoing difficulties in overseeing policy outcomes and collecting data to evaluate key progress indicators.

Both entities prioritise the green transition in their SME development strategies, aligning activities with broader environmental frameworks, such as their environmental protection strategies, the Energy Strategy in Republika Srpska, and various sectoral strategies in the Federation of Bosnia and Herzegovina.37 The Federation of Bosnia and Herzegovina also adopted its Green Transition Programme in 2024, targeting assistance to SMEs in light of the Carbon Border Adjustment Mechanism (CBAM).38 However, an economy-wide Energy and Climate Plan is lacking, leaving no overarching framework to guide industrial decarbonisation amid upcoming carbon pricing. Climate change adaptation policies also remain to be operationalised at the entity level.39

Implementation improved but remains restricted by limited transparency in the use of public funds, making it difficult to assess the support provided for SME greening. In Republika Srpska, implementation reports show uneven execution in 2022-2023, with only 34% of funds realised. Positively, spending more than doubled in 2024, supported by additional resources from the EU Single Market Programme and the Enterprise Europe Network. In the Federation of Bosnia and Herzegovina, no data on the implementation of the SME strategy is available, though the grant scheme, Strengthening the Competitiveness of SMEs, has supported SMEs (see Table 1.26). However, the share of its total budget allocated to greening-related projects in 2024 is unknown.

Finally, monitoring and evaluation remain uneven. Only Republika Srpska tracks SME greening policies, risking gaps in accountability and evidence-based planning across the whole of Bosnia and Herzegovina. Systematic evaluation, policy revisions, and impact assessments, including for grant schemes, are largely absent in both entities (Table 1.26).

Table 1.26. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 9, Sub-dimension 9.1

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Strengthen monitoring mechanisms and introduce evaluation tools to ensure efficient implementation of policies and support programmes	Implementation reports for the RS SME Development Strategy have been published regularly, detailing fund usage and measures undertaken since the last OECD assessment in 2022. The RS Government is also supported by the Council for the Development of SMEs and Entrepreneurship, which monitors the effects of government measures, advises on adjustments to regulations and financial incentives, and promotes public-private partnerships to enhance SME sustainability. However, systematic evaluation mechanisms remain absent in both entities, with no strategic assessment of impact across implemented activities and no monitoring system in place in the Federation of Bosnia and Herzegovina.	Limited	See Cluster 2: “Fostering SME sustainability and resilience”
Support SMEs’ transition to a circular economy by creating an appropriate policy framework and building on existing support programmes	Bosnia and Herzegovina has no state-level circular economy roadmap or strategic policies to advance circularity in industry in either entity. A draft roadmap developed with the support of the United Nations Development Programme (UNDP) remains pending, causing delays. While SME development strategies recognise circularity as part of the green transition, activities are not clearly linked to SME-level support for circular business models or production. Some programmes provide relevant support: the Federation of Bosnia and Herzegovina’s 2024 Strengthening the Competitiveness of SMEs offers grants for business process modernisation, adoption of quality standards, circular economy practices, and energy efficiency, while in 2025, Republika Srpska introduced regulations incentivising technological upgrades and the green and circular transition (see Table 1.27). However, disaggregated data on the number of projects specifically targeting circular economy practices is not yet available. Additionally, while the circular economy concept is integrated into Republika Srpska’s strategic documents, primarily the RS Waste Management Plan, which defines principles of waste generation prevention, increase of reuse and recycling, and more efficient use of resources, concrete support programmes are mostly implemented through donor initiatives only.	Limited	See Cluster 2: “Fostering SME sustainability and resilience”

Note: RS: Republika Srpska (used as an adjective).

Sub-dimension 9.2: Incentives and instruments for SME sustainability

Bosnia and Herzegovina scored 2.99 on Sub-dimension 9.2 on incentives and instruments for SME sustainability, stable from 3.01 in 2022. This stagnation reflects limited prioritisation of support tools in entity-level strategies since 2022, slow implementation, but some progress in strengthening monitoring and evaluation systems for existing measures.

Regarding green incentives and instruments for SME sustainability, Republika Srpska has established clear minimum performance standards, such as rulebooks for different waste streams,40 throughout 2023 to enhance circularity and resource efficiency, providing clearer policy direction for businesses.

Incentives exist in both entities: in 2024-2025, the RS Ministry of Economy and Entrepreneurship provided direct investments benefitting 43 environmental SMEs, and in the Federation of Bosnia and Herzegovina through the Strengthening the Competitiveness of SMEs programme in 2024 (see Table 1.27). Green public procurement, though, is not used; nor is SME participation in green tenders effectively promoted.41

Implementation of greening incentives needs further strengthening. Guidance on regulatory compliance is mainly provided by chambers of commerce, implementing ministries that manage SME grant funds, and, in Republika Srpska, the Development Agency.42 Progress on incentivising green certifications, which signal SME capacity to meet growing demand for sustainable products in key markets such as the European Union, is driven by the Foreign Trade Chamber of Bosnia and Herzegovina (see Box 1.4), and further activities are planned under the FBiH Tourism Strategy. Positively, the RS Chamber of Commerce is involved in developing an environmental management system and CBAM reporting standards for SMEs.43 However, economy-wide scaling of incentives through co-ordinated government action is largely absent, aside from public calls by both entities’ Environmental Protection Funds and broader financial programmes (see Table 1.27).

Box 1.4. Spotlight: Support for green certification by the Foreign Trade Chamber of Bosnia and Herzegovina

Policy context

Rising global demand for sustainable products is prompting SMEs in Bosnia and Herzegovina to adopt environmental practices, but their internal resources are often insufficient to proactively adopt green standards in production. Under the Green Recovery component of the EU4Business Recovery project, implemented with Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ), the Foreign Trade Chamber of Bosnia and Herzegovina has taken targeted actions to guide SMEs through certification and the practical application of green practices since 2023.

Operational aspects

In 2023, the Foreign Trade Chamber developed a Green Certification Guide for SMEs, presenting the advantages of standards and instruments for green certification. Beyond, it delivered over 65 trainings in the same year, providing short-term technical assistance to help businesses adopt measures that advance their green transition, extending support beyond certification to operational improvements.

Policy impact

By linking SME greening to expanding value chain integration, domestic and international trade-focused incentives are increasingly aligned with sustainable and circular practices. This approach has contributed to a slight increase in export initiatives linked to the green economy, rising from 12% in 2023 to 14% in 2024, according to the Bosnia and Herzegovina Export Promotion Agency (Government of BiH, 2025[36]), reflecting growing recognition of sustainability as a strategic factor in trade.

Source: Foreign Trade Chamber of Bosnia and Herzegovina (2024[37]).

Table 1.27. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 9, Sub-dimension 9.2

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Enhance financial support to SME greening, particularly in the context of the post-COVID‑19 recovery	In the Federation of Bosnia and Herzegovina, the Strengthening the Competitiveness of the Economy programme supports innovative, export-oriented SMEs through business process modernisation, the adoption of quality standards, circular economy practices, and energy efficiency. In 2024, BAM 26.2 million (Bosnia and Herzegovina convertible markas) (approximately EUR 13.4 million) was disbursed to more than 200 firms. In 2025, 158 SMEs received funding, and a further 224 signed co-financing agreements to upgrade equipment, modernise operations, improve product quality, and support trade activities. However, the specific share of funding dedicated to greening or resilience-related investments is not reported.	Limited	See Cluster 2: “Fostering SME sustainability and resilience”
	A total of 43 businesses received direct investment incentives of BAM 4.18 million (~EUR 2.14 million) in Republika Srpska during 2024. In 2025, the Government of Republika Srpska adopted the Regulation on the Grant of Investment Incentives, defining the conditions and procedures for supporting technological upgrading and the transition to a green and circular economy, in line with the SME strategy objectives. For 2025, the Ministry of Economy and Entrepreneurship of RS reports that 812 SMEs were supported with a budget of BAM 58 million (EUR 29.7 million) through direct incentives. However, there is no available data on the exact share of green/circular SME projects among supported projects.
	Both the FBiH Environmental Protection and the RS Environmental Protection and Energy Efficiency Fund regularly publish calls that support SMEs with co-financing for green projects, such as investments in energy efficiency or renewable energy installations.

Note: FBiH: Federation of Bosnia and Herzegovina; RS: Republika Srpska (both used as adjectives).

Lastly, monitoring and evaluation remain limited. While financial grant disbursements are tracked, outcome data are not broken down by SME relevance or greening impact. Regulatory instruments are rarely assessed for environmental effectiveness or to identify supportive government interventions to reduce SME compliance burdens. Chambers of commerce collect SME feedback through seminars and workshops, but systematic government and independent reviews are lacking, limiting the ability to adapt incentive programmes to business needs.

Dimension 10: Internationalisation of SMEs in Bosnia and Herzegovina

Overview of Bosnia and Herzegovina’s performance on Dimension 10

Bosnia and Herzegovina received an overall score of 2.90 on Dimension 10, indicating broadly stable performance compared to its previous score of 2.79. The result suggests incremental progress rather than a structural shift, with performance still remaining below the Western Balkans and Türkiye (WBT) regional average of 3.76 (Figure 1.15), and positioning Dimension 10 as a mid-ranking dimension for Bosnia and Herzegovina.

Overall, Bosnia and Herzegovina’s score reflects a mixed trajectory across the three sub-dimensions. Progress has been most visible in global value chain (GVC) integration and e-commerce, whose scores have increased, largely reflecting stronger strategic recognition and some incremental instrument development at the entity level. By contrast, export promotion has weakened compared with 2022, pointing to persistent gaps in translating strategic intent into coherent, sufficiently resourced, skills-oriented and well-monitored business support service portfolios. Across all sub-dimensions, the primary constraint remains weak monitoring and evaluation, compounded by limited internationalisation data collection and the absence of systematic outcome tracking at the programme level.

Figure 1.15. Overview of Bosnia and Herzegovina’s score on Dimension 10 and evolution since 2019

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Sub-dimension 10.1: Export promotion

Performance in this sub-dimension has declined significantly, from 3.96 in 2022 to 3.31 in 2026, reflecting a significant deterioration during the assessment cycle (Figure 1.15). This decline was driven primarily by a marked erosion of implementation performance, alongside a clear weakening in planning and design; monitoring and evaluation performance has remained broadly stable at a low level. Taken together, this indicates that although export promotion continues to feature prominently in policy discourse, the export support ecosystem has not translated strategic intent into a coherent, small and medium-sized enterprise (SME)-focused export readiness and competitiveness framework.

Export promotion remains weakly institutionalised at the state level and only partially operationalised at the entity level. At the state level, there is no dedicated SME strategy or export promotion framework, and support is limited to largely ad hoc and activity-based interventions, such as grant support for trade fairs,44 without defined objectives, priority sectors, SME segmentation, digital export tools, resilience measures or mechanisms to support adaptation to international trade norms. At the entity level, Republika Srpska (RS) demonstrates a comparatively clearer operational link between export promotion and its SME and industrial policy frameworks. Export-related measures are anchored in entity strategies45 and implemented through defined incentive schemes, particularly for trade fair participation and digital transformation. However, these measures remain largely exposure-oriented and are not embedded within a comprehensive export-readiness or skills-upgrading pathway that systematically supports SMEs’ progression toward sustained exporting and upgrading (Table 1.28). In contrast, the Federation of Bosnia and Herzegovina (FBiH) embeds export promotion more diffusely within broad horizontal competitiveness, digitalisation and energy-efficiency programmes (Federal Ministry of Development, Entrepreneurship and Crafts, 2024[38]).46 While these frameworks mobilise substantial resources and reflect EU-aligned priorities (Parliament of the Federation of Bosnia and Herzegovina, 2021[39]), export promotion is not articulated as a distinct policy area with dedicated instruments, eligibility thresholds or sequencing mechanisms for SME export readiness. As a result, in both entities, export-related objectives remain present at the strategic level but are only partially translated into targeted planning and design arrangements, contributing to the marked decline in score observed in this block.

Implementation performance has deteriorated significantly, reflecting limited harmonisation and weak policy steering across levels of government compared to the previous assessment cycle. At the state level, there are no operational export promotion programmes targeting SMEs, and delivery relies largely on the activity of the Bosnia and Herzegovina Export Promotion Agency (BHEPA). The BHEPA demonstrates strong output performance – supporting over 1 100 firms in 2024 and exceeding its planned activity targets – but operates without a dedicated export promotion budget or a structured SME export-readiness framework (Foreign Trade Chamber of BiH/BHEPA, 2025[40]). At the entity level, Republika Srpska shows relatively stronger implementation through co‑financed incentives, allocating approximately BAM 0.48 million (around EUR 245 000) for fair participation and BAM 1.12 million (around EUR 572 000) for digital transformation support between 2022 and 2024, linked to entity-level SME and industrial strategies (Government of Republika Srpska, 2023[41]; 2024[42]; 2025[43]). In 2025, the Government of Republika Srpska further formalised these instruments through a decree regulating the procedure for granting SME promotion incentives, simplifying application requirements and introducing refund-based payments to strengthen accountability (Government of Republika Srpska, 2025[44]). However, they remain primarily exposure-oriented and do not constitute a comprehensive implementation pipeline. In contrast, the Federation of Bosnia and Herzegovina channels larger SME budgets through horizontal competitiveness,47 digitalisation and energy-efficiency programmes, but without dedicated export promotion instruments, earmarked export budgets or a structured export-readiness pathway, resulting in diffuse implementation and a limited focus on sustained export upgrading and weakening overall delivery coherence at the sub‑dimension level.

Monitoring and evaluation remain uneven and limited across governance levels, resulting in broadly stable but low performance. At the state level, there is no monitoring of export promotion programmes, and while the BHEPA publishes annual activity reports and is subject to financial audits, these do not assess programme effectiveness. In the Federation of Bosnia and Herzegovina, monitoring mechanisms are similarly weak, with audits largely limited to financial and procedural checks of incentive programmes. These do not constitute programmatic or performance audits, and such evaluations remain rare and conducted only on an ad hoc basis (with only a handful carried out in recent years). Republika Srpska applies more structured annual reporting and collects detailed SME export data (such as export revenues, growth and sectoral composition) (Government of Republika Srpska, 2025[43]), but these indicators are not systematically linked to the evaluation of export promotion measures and remain largely activity focused. Overall, the absence of outcome-based evaluation has constrained learning and policy adjustment (Table 1.28).

Sub-dimension 10.2: Integration of SMEs into global value chains

Performance on Sub-dimension 10.2 has improved from 1.91 in 2022 to 2.75 in 2026, reflecting substantial strengthening of planning and implementation, driven mainly by expanded entity-level instruments rather than a coherent, system-wide GVC policy framework (Figure 1.15). Despite this progress, performance remains constrained by weak monitoring and evaluation, limiting insight into outcomes and supplier upgrading effects.

Planning arrangements for SMEs’ integration into GVCs have been reinforced since the previous assessment across all levels of government, albeit unevenly. At the state level, there is no overarching strategic document specifically addressing SMEs’ integration into GVCs. Planning remains institution-driven rather than strategy-driven, with objectives related to internationalisation and market access dispersed across institutional mandates rather than consolidated within a coherent GVC policy framework. In the Federation of Bosnia and Herzegovina, the strategic framework for SME integration into GVCs is anchored in the FBiH Development Strategy 2021-2027 and was further consolidated in March 2024 with the adoption and publication of the Small Business Development Strategy 2022-2027, which specifies measures aimed at strengthening regional value chains and linking SMEs with international partners (Federal Ministry of Development, Entrepreneurship and Crafts, 2024[38]). Given the recent adoption of the SME strategy, strategic guidance on prioritisation, targeting and sequencing of SME upgrading along value chains remains at an early stage. In Republika Srpska, objectives relevant to integrating SMEs into GVCs are embedded across the SME strategy and its Action Plan, as well as in industrial and innovation support instruments, signalling greater policy attention to SME upgrading and internationalisation. However, these objectives are pursued through horizontal competitiveness and innovation measures rather than through an explicit GVC or supplier development strategy.

Implementation of measures supporting SMEs’ integration into GVCs has improved markedly since the previous assessment, driven primarily by the expansion and scaling up of entity-level instruments rather than by co-ordinated, system-wide delivery. At the state level, GVC-related support remains limited in scope and institution-driven, relying largely on export promotion and facilitation functions carried out by the BHEPA, which operates within the Foreign Trade Chamber of Bosnia and Herzegovina and by the Foreign Investment Promotion Agency. These measures focus on strengthening export capacities and facilitating market access – through trade missions, fairs, advisory services and modular digital tools – but provide limited leverage to steer SMEs’ progression from initial market entry toward deeper supplier integration and upgrading (Table 1.28). In Republika Srpska, implementation has been reinforced through substantial financial incentives for SME upgrading, provided by the Ministry of Economy and Entrepreneurship of Republika Srpska, including support for equipment procurement, new technologies and digital transformation.48 In the Federation of Bosnia and Herzegovina, implementation of SME support relevant to GVC integration is led by the Ministry of Development, Entrepreneurship and Crafts through recurring public calls focused on competitiveness, digitalisation, standardisation and technological upgrading. In 2024, 481 SMEs benefited from these programmes (Government of the Federation of Bosnia and Herzegovina, 2024[45]), including 193 SMEs supported under the measure most directly linked to GVC integration. In addition, structured support for SME internationalisation is delivered through the Enterprise Europe Network (EEN),49 implemented in Bosnia and Herzegovina through two separate consortia: BITNET in the Federation of Bosnia and Herzegovina and EUNORS in Republika Srpska. Donor-supported initiatives such as DigitalBIZ50 in BiH, further complement these efforts by supporting 200+ SMEs in adopting digital tools and energy-efficient equipment. While uptake is strong, implementation remains dispersed across instruments and not organised into a coherent supplier development pathway, limiting evidence of sustained upgrading outcomes.

Monitoring and evaluation remain Bosnia and Herzegovina’s weakest pillar and have deteriorated moderately since the previous assessment. At the state level, there is no system-wide or harmonised collection of data on SME participation in GVCs. At the entity level, data collection remains uneven, with limited consistency in tracking supplier linkages, contracts with multinational firms, productivity gains or sustained upgrading outcomes. Overall, monitoring remains largely administrative and input-focused, and the expansion of implementation instruments, particularly at the entity level, has not been matched by stronger learning, outcome tracking or public reporting frameworks (Table 1.28).

Table 1.28. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendations for Dimension 10, Sub-dimensions 10.1 and 10.2

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Introduce capacity-building activities and training to upgrade the skills of the labour force	There has been a limited expansion of skills-related support linked to export competitiveness, mainly through project-based training, advisory services and mentoring delivered to small and medium-sized enterprises (SMEs). Skills development is reflected in strategic documents, and some non-financial support related to productivity and quality standards has been provided, largely through donor-supported initiatives. However, skills upgrading is not embedded in a co-ordinated export-readiness framework and is not informed by systematic assessments of workforce or firm-level skills gaps.	Limited	See Cluster 1: “Creating an enabling environment for SMEs and entrepreneurs”
Reinforce investment facilitation and aftercare services	Some progress has been made in maintaining and expanding investment facilitation and export support services, notably through the continued operation and increased activity of the Bosnia and Herzegovina Export Promotion Agency and entity-level development agencies. Export promotion and matchmaking services have expanded, particularly for export-ready SMEs. However, progress remains largely operational. No comprehensive aftercare framework or whole-of-government investment facilitation approach has been introduced, inter-agency co‑ordination remains weak and structured mechanisms to promote SME-multinational enterprise linkages are absent.	Moderate	See Cluster 1: “Creating an enabling environment for SMEs and entrepreneurs”
Strengthen data collection processes across levels of government	Limited progress has been made in strengthening data collection systems relevant to SME internationalisation and integration into global value chains (GVCs). While administrative and programme-level data continue to be collected for reporting and budget execution purposes, Bosnia and Herzegovina does not systematically collect state-level data on SME export performance or GVC integration. At the entity level, data collection remains uneven and focused primarily on financial disbursements and beneficiary counts, with no consistent use of outcome or performance indicators across export promotion and supplier development programmes. Although project-based tools such as the Enterprise Europe Network provide access to international partner databases, these do not substitute for an integrated, publicly available system for monitoring domestic SME export and supplier performance.	Limited	See Cluster 1: “Creating an enabling environment for SMEs and entrepreneurs”

Sub-dimension 10.3: Promoting the use of e-commerce

Performance in this sub-dimension has improved significantly, rising from 1.61 in 2022 to 2.03 in 2026 (Figure 1.15), reflecting progress driven primarily by regulatory developments rather than by the expansion of dedicated support instruments for SMEs. Despite this improvement, e-commerce remains the weakest area of this dimension, as these gains have not been accompanied by the establishment of co-ordinated policy frameworks, targeted programmes or robust monitoring systems to support SME adoption of online business models.

At the state level, Bosnia and Herzegovina lacks a coherent planning framework for SME participation in e-commerce and digital trade, reflecting in part the fact that e-commerce policy competencies rest primarily at the entity level. Although digitalisation is referenced in strategic documents, this has not yet translated into dedicated e-commerce policies, clearly assigned institutional leadership or earmarked budget allocations. Planning arrangements do not treat e-commerce as a distinct policy objective within SME or trade strategies, nor do they articulate an intervention logic linking regulatory alignment, skills development and business adoption. At the entity level, planning remains uneven. At state level, the Law on Electronic Signature (2006) and the Law on Electronic Document (2014) provide the basis for electronic authentication and document validity, but remain only partially aligned with the EU eIDAS Regulation. A new Law on Electronic Identification and Trust Services, drafted to fully comply with eIDAS, has been prepared but its adoption remains stalled. In the Federation of Bosnia and Herzegovina, recent legislative initiatives, most notably the Law on Internal Trade (2024), a preliminary draft Consumer Protection Law aligned with EU legislation and incorporating a broad range of EU directives, and a new Law on Electronic Commerce currently in the final stages of drafting, which aims to address the shadow economy in the digital space and extend the regulatory framework to social media and courier services, have clarified certain aspects of the online commerce framework. In Republika Srpska, the adoption of a new Consumer Protection Law in 2025 represents a step towards strengthening the legal framework for online transactions. Across both entities, planning arrangements remain focused on regulatory compliance rather than on structured support for SME adoption and the scaling of e-commerce activities (Table 1.29).

Implementation has progressed modestly and remains largely regulation- and donor-driven. At the state level, there are no government-owned programmes providing SMEs with practical guidance, financial incentives or training to support the adoption of e-commerce or digital trade solutions. No centralised public portal exists to assist SMEs with information on online regulations, digital tools or compliance requirements, and there are not any publicly funded training programmes targeting digital business skills. As a result, implementation relies heavily on donor-funded initiatives and ad hoc advisory support. At the entity level, SMEs in the Federation of Bosnia and Herzegovina can access limited practical assistance through donor-supported projects and publicly available online resources, while in Republika Srpska, implementation is confined to general digitalisation measures without targeted e-commerce instruments. Some targeted initiatives have emerged, including the first E-Commerce Academy organised by the Association eComm in partnership with GIZ, offering structured training on online sales, digital marketing and e-business operations, and the first eCommerce EXPO in BiH, bringing together online retailers, logistics providers, payment service operators and technology partners. Moreover, the initiation of the ratification process for CEFTA Decision 2/2024 represents a potentially important step towards facilitating regional digital trade, but implementation remains at an early stage and its impact on SME uptake has yet to materialise.

Monitoring and evaluation practices remain limited, constraining evidence-based policy development in this area. Across governance levels, there is no systematic collection of data on SME adoption of e‑commerce, the use of online sales channels, cross-border digital trade or firm-level outcomes. Monitoring practices are limited and largely administrative in nature, with limited use of indicators to track adoption patterns, performance gains or the barriers faced by SMEs. The absence of harmonised indicators, baseline data and evaluation frameworks limits insight into policy effectiveness and learning over time, moderating the significance of the observed improvement and contributing to the continued low overall score for this sub-dimension.

Table 1.29. Bosnia and Herzegovina’s implementation of the SME Policy Index’s 2022 recommendation for Dimension 10, Sub-dimension 10.3

2022 recommendation	Main developments during the assessment period	Progress status	Way forward
Develop a comprehensive legal and strategic framework for e‑commerce and e-payments	Moderate progress has been made in strengthening the legal basis for small and medium-sized enterprises’ (SMEs) participation in e-commerce, supported by regulatory updates and donor-funded initiatives. Legislative developments in both entities have clarified aspects of online commerce, with the Federation of Bosnia and Herzegovina preparing a dedicated Law on E-Commerce and a Law on Consumer Protection, and with Republika Srpska adopting a new Consumer Protection Law in 2025. However, these frameworks target SMEs mostly indirectly, and monitoring mechanisms are yet to be developed.	Moderate	See Cluster 3: “Digital Transformation of SMEs”

Dimension 11: Digital transformation of SMEs in Bosnia and Herzegovina

Overview of Bosnia and Herzegovina’s performance on Dimension 11

Bosnia and Herzegovina (BiH) achieved an overall score of 2.33 on the new Dimension 11 (Figure 1.16), placing it below the Western Balkans and Türkiye (WBT) regional average of 3.00 and indicating that the ecosystem for small and medium-sized enterprise (SME) digital transformation remains uneven and underdeveloped. Performance across the three sub-dimensions points to limited support for SME digitalisation and digital transformation (Figure 1.16).

Sub-dimension 11.1 on digital policy foundations reflects growing recognition of the importance of SME digitalisation but also highlights dispersed efforts across levels of government and the absence of a coherent policy approach. Sub‑dimension 11.2 on digital safety shows progress in legal alignment, yet implementation capacity and SME-oriented support mechanisms remain weak. Sub-dimension 11.3 on the use of advanced technologies indicates a very early and largely project-driven stage of adoption, characterised by limited strategic guidance and scale. Taken together, these results point to an environment where policy ambition exists, but where weak co-ordination, dispersed delivery mechanisms, and underdeveloped monitoring and evaluation systems continue to constrain progress. As a result, Dimension 11 ranks among Bosnia and Herzegovina’s weaker policy areas in the 2026 assessment.

Figure 1.16. Overview of Bosnia and Herzegovina’s score on Dimension 11, 2026

Statlink

Sub-dimension 11.1: Digital policy foundations

Bosnia and Herzegovina scored 2.70 on Sub-dimension 11.1, indicating that while there are elements of policy support for SME digitalisation, they remain dispersed across levels of government. The result reflects the absence of a coherent strategy to align objectives, policy instruments and institutional responsibilities for SME digital transformation across entities, as well as limited monitoring and evaluation efforts.

Policy planning for SME digital transformation in Bosnia and Herzegovina reflects a clear strategic recognition of digitalisation, but remains decentralised and weakly co-ordinated, resulting in uneven ambition, scope and coherence across entity-level frameworks. Digital transformation is recognised as a strategic priority in the Reform Agenda endorsed under the European Union (EU) Growth and Reform Facility, with commitments to advance the green and digital transitions, strengthen private sector development and improve competitiveness, and align future policies with the EU Digital Compass and the Western Balkans Digital Agenda (European Commission, 2025[46]; BiH Council of Ministers, 2025[47]). However, these commitments have not yet translated into a unified, SME-focused policy architecture. As a result, strategic direction is driven primarily at the entity and district levels. In the Federation of Bosnia and Herzegovina, the Development Strategy 2021-2027 and the Small Business Development Strategy 2022-2027 explicitly prioritise SME digital transformation and innovation, supported by limited but earmarked grant funding. In Republika Srpska, the SME Development Strategy 2021-2027; the Industrial Development Strategy 2021-2027; and the Strategy for the Development of Science and Technology, Higher Education and Information Society 2023-2029 link digitalisation to productivity growth, export competitiveness and technological upgrading. Brcko District similarly embeds SME digitalisation within its Development Strategy 2021-2027 through targeted innovation measures. Together these frameworks indicate incremental progress, but they vary in ambition and scope and tend to interpret digitalisation narrowly, focusing on ICT uptake and connectivity rather than the organisational change, data-driven management and innovation processes that deeper digital transformation brings.

SME digital transformation policies are being implemented in Bosnia and Herzegovina but remain dependent on donor-funded and project-based support. Most structured assistance has been provided through externally financed initiatives, notably the EU4DigitalSME project implemented by GIZ until 2024, which strengthened digital innovation hubs and SME access to digital finance, and the European Bank for Reconstruction and Development’s Go Digital in Bosnia and Herzegovina pilot programme, which tested blended finance and advisory mechanisms through partner financial institutions (GIZ, 2020[48]; EBRD, 2025[49]). These efforts are now being followed by the regional EU4Digital programme and the European Bank for Reconstruction and Development’s broader Go Digital in the Western Balkans facility, under which SMEs in BiH are expected to benefit from a dedicated credit line (EBRD, 2025[50]). Entity-level instruments complement this landscape, including grant schemes in the Federation of Bosnia and Herzegovina and earlier incentive programmes and development bank credit lines in Republika Srpska. However, these instruments remain limited in scale, unevenly distributed across entities, and insufficiently co‑ordinated, preventing them from forming a predictable and sustained pathway for SME digital transformation across the economy.

Monitoring and evaluation of SME digital transformation policies in Bosnia and Herzegovina are limited and not fully harmonised across governance levels. While entity-level strategies include reporting obligations and output indicators, these mechanisms primarily track budget execution and activity delivery rather than outcomes related to SME digital maturity, productivity gains or technology upgrading. There is no state-level monitoring framework, shared indicator set or centralised data collection mechanism that would allow authorities to assess progress across entities or evaluate the effectiveness of different instruments.

Sub-dimension 11.2: Digital safety

Bosnia and Herzegovina scored 2.22 on Sub-dimension 11.2, indicating that the framework for digital safety remains underdeveloped, with identified gaps in cybersecurity governance, SME-specific implementation and institutional capacity. The result reflects a policy landscape in which progress on data protection legislation has outpaced the development of comprehensive cybersecurity strategies and operational support mechanisms for enterprises.

Bosnia and Herzegovina has strengthened the legal basis for digital safety, but policy design remains dispersed across levels of government, with limited adaptation to SME-specific needs and persistent gaps in the cybersecurity governance framework. The adoption of the Law on Protection of Personal Data (2025) marks a major step toward alignment with the EU General Data Protection Regulation, strengthening data‑subject rights, clarifying obligations for controllers and processors, and modernising breach notification and cross-border data-transfer rules (Law Firm Sajic, 2025[51]; StandardPrva, 2025[52]). However, the law does not include tailored provisions for SMEs, despite imposing extensive compliance requirements, such as data-mapping, contract revisions, data protection impact assessments and, where applicable, data protection officer appointments, that generate disproportionate financial and administrative burdens for smaller firms. Beyond data protection, cybersecurity governance remains underdeveloped: Bosnia and Herzegovina has not yet adopted a cybersecurity strategy, established a national computer emergency response team (CERT) or enacted a comprehensive cybersecurity law, leaving regulatory coverage dispersed and mainly focused on public institutions and critical infrastructure (European Commission, 2025[53]). While the Reform Agenda acknowledges these gaps, the absence of a unified strategic framework limits SMEs’ ability to manage growing cyber risks within a clear and predictable regulatory environment. At the entity level, Republika Srpska operated a functional CERT, while an Information Security Strategy is currently under preparation.

Implementation of data protection and cybersecurity policies is mainly reactive and donor-driven, offering limited structured support to SMEs. The Agency for Protection of Personal Data acts as the supervisory authority, but EU assessments highlight that its independence and human and financial resources have not improved, constraining its capacity to provide proactive guidance, enterprise-oriented outreach or sustained training for SMEs (European Commission, 2024[54]). As a result, enforcement remains modest in scale, and practical compliance support, such as SME toolkits, checklists or subsidised audits, is largely absent. In cybersecurity, institutional responsibilities are split between the Ministry of Communications and Transport and the Ministry of Security, while entity-level progress remains uneven: Republika Srpska operates a functional CERT that issues alerts and guidance, whereas comparable structures in the Federation of Bosnia and Herzegovina and Brcko District are largely absent (CERT RS, 2025[55]). In this context, SME support relies primarily on donor- and non-governmental organisation-led initiatives, including the United Nations Development Programme’s Digital Pulse BiH, the CyberFort regional project, training by the e-Transformation Association, Women4Cyber BiH (Box 1.5), NATO’s Defence Capacity Building programme, and private sector initiatives such as the Cyber Readiness Institute’s local chapter (UNDP, 2021[56]; IUS, 2025[57]; e-Transformation Association, 2025[58]; W4CBiH, 2025[59]; CRI, 2025[60]). While these initiatives build awareness and develop skills, they remain project‑based and insufficient to substitute for stable, government-led SME cybersecurity support.

Box 1.5. Women4Cyber BiH: A practical cybersecurity guide for SMEs

Women4Cyber BiH, as part of the European Women4Cyber Foundation, has developed Cyber Security: A Guide to Cyber Security for SMEs, a practical and accessible tool designed to help small and medium-sized enterprises (SMEs) strengthen their digital resilience. Created in collaboration with Cranfield University in the United Kingdom and supported by UK Government funding, the guide translates complex cybersecurity concepts into clear, actionable steps tailored to the needs and realities of smaller firms.

The guide, organised around 13 key recommendations, provides a structured overview of essential protections for SMEs, including secure password practices, data backup procedures, network security basics, incident response planning and staff awareness training. It also includes checklists, self‑assessment questions and practical examples to help businesses identify vulnerabilities and prioritise improvements without requiring specialised technical expertise. Women4Cyber BiH supports dissemination through awareness events, workshops and online resources, helping SMEs – particularly those with limited in-house IT capacity – to build foundational cybersecurity practices.

As one of the few locally developed SME-focused cybersecurity tools in Bosnia and Herzegovina, the guide fills a critical gap in practical, user-friendly support. Its focus on clarity, accessibility and capacity building makes it a valuable reference for SMEs beginning to develop cybersecurity routines, while also contributing to broader efforts to promote women’s engagement and leadership in the cybersecurity field.

Source: W4CBIH (2025[59]).

Monitoring and evaluation of digital safety policies in Bosnia and Herzegovina is weakly developed. There is no state-level monitoring framework tracking SME compliance with data protection requirements, cyber‑preparedness or exposure to incidents, nor are there harmonised indicators across entities. At entity level, the CERT of Republika Srpska collects incident-related data and issues security advisories, contributing to operational situational awareness, though this does not constitute a structured SME-focused monitoring framework. Reporting on data protection focuses mainly on legal transposition and enforcement statistics, while cybersecurity monitoring remains limited due to the absence of a national strategy and CERT. SME-level evidence is largely derived from ad hoc surveys and donor-supported assessments, which reveal significant awareness and detection gaps: while most SMEs report using basic cybersecurity measures, half are unsure whether they have ever experienced a cyberattack, indicating weak monitoring and incident-detection capacity (OECD, forthcoming[61]). The lack of systematic SME-focused data collection, outcome indicators and feedback mechanisms limits authorities’ ability to evaluate policy effectiveness, identify emerging risks and design proportionate, risk-based interventions. As digital threats intensify, these monitoring gaps undermine the credibility, deterrence and learning capacity of Bosnia and Herzegovina’s digital safety framework.

Sub-dimension 11.3: Use of advanced technologies

With a score of 1.57 on Sub-dimension 11.3, Bosnia and Herzegovina remains at an early stage in developing a policy framework to support SME uptake of ethical and sustainable advanced digital technologies. The result reflects the absence of a clear strategic direction at the state level, combined with project-based and uneven support for SME adoption of frontier technologies at the entity level.

Bosnia and Herzegovina remains at an early stage in developing a policy approach to advanced and emerging technologies, with limited strategic direction and weak translation of high-level commitments into SME-oriented measures. At the state level, no dedicated strategy or regulatory framework for artificial intelligence (AI) or other emerging technologies has yet to be adopted. Existing policy documents, such as the Policy for Information Society Development 2017-2021, only reference AI and advanced technologies in broad terms and do not define concrete measures, governance arrangements or implementation mechanisms (Interoperable Europe, 2024[62]). While the Ministry of Communications and Transport is formally recognised as the competent institution for advanced technologies and Bosnia and Herzegovina has joined the Council of Europe Committee on Artificial Intelligence, committing to adopt the forthcoming AI Convention and develop national ethical guidelines, the legal landscape still lacks provisions tailored to AI and machine-learning applications (IBA, 2024[63]; BiH Council of Ministers, 2025[47]). At the entity level, digitalisation and innovation are recognised as horizontal priorities across development strategies, yet none translate this recognition into targeted objectives, funding streams or delivery instruments for SME adoption of AI, automation or data-driven technologies.

On the implementation side, support for SME adoption of advanced digital technologies is largely driven by donor-funded or project-based initiatives, rather than by stable government programmes. There are no state-level incentives or instruments specifically designed to support SME experimentation with AI, the Internet of Things, automation or data analytics. In the Federation of Bosnia and Herzegovina, implementation relies mainly on innovation centres such as the INTERA Technology Park, SPARK Business Park, Industrial Hub Tuzla and Sarajevo Digital Storm Hub, which provide training, hackathons, accelerators and exposure to applied uses of advanced technologies, but operate on a limited scale and without formal integration into public policy frameworks (Industrial Hub Tuzla, 2025[64]; Digital Storm Hub, 2025[65]). In Republika Srpska, implementation is comparatively more advanced: through the IDEMO Digital Innovation Hub, co-ordinated by the Development Agency of Republika Srpska, the Innovation Centre Banja Luka, the Centre for Digital Transformation in the Chamber of Commerce of Republika Srpska, the Faculty of Electrical Engineering of the University of Banja Luka and EDA, SMEs can access test-before-invest services, advisory support and practical training in automation, robotics, AI applications and data analytics, with more than 60 SMEs already participating (IDEMO, 2025[66]; Government of RS, 2025[67]). Republika Srpska is also home to EDIH ONEX Banja Luka, supported under the EU Digital Europe Programme, which provides professional support for business development and digital transformation across sectors. The AI Forward project, launched in 2025 by the Innovation Centre Banja Luka with EU, BMZ and EU4PSD support, further offers SMEs a structured learning programme on AI adoption covering machine learning, AI for business optimisation and data analytics. However, even in Republika Srpska, these initiatives remain limited in reach and largely dependent on external funding cycles. Support for the sustainable use of advanced technologies is even more limited: digital and environmental upgrading in Bosnia and Herzegovina is rarely addressed jointly, leaving SMEs without guidance on how to align advanced digitalisation with rising EU sustainability and environmental, social and governance requirements.

Monitoring and evaluation of SMEs’ use of advanced and sustainably deployed technologies are largely absent across all levels of government. Bosnia and Herzegovina does not operate a dedicated SME-level monitoring framework to track the adoption, depth of use or sectoral distribution of AI, automation or other advanced technologies, nor to assess their environmental implications. Empirical insights primarily derive from ad hoc data collection and project-level monitoring. The absence of systematic indicators, feedback loops and outcome-based evaluation limits authorities’ ability to assess what works, identify sector-specific gaps and design targeted interventions.

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[50] EBRD (2025), “Go Digital in the Western Balkans”, web page, https://www.ebrd.com/home/what-we-do/focus-areas/digitalisation/go-digital-in-western-balkans.html.

[58] e-Transformation Association (2025), “Free cybersecurity training for companies”, https://e-transformacija.ba/besplatna-edukacija-u-oblasti-cyber-sigurnosti-za-kompanije.

[70] Euronext (2025), Regulation: Rules, https://www.euronext.com/en/regulation (accessed on 19 November 2025).

[11] European Commission (2025), “Bosnia and Herzegovina 2025 Report”, Commission Staff Working Document, https://enlargement.ec.europa.eu/document/download/5d8fc547-f8f8-456f-84e3-b38998acfafd_en?filename=bosnia-and-herzegovina-report-2025.pdf.

[53] European Commission (2025), Bosnia and Herzegovina 2025 Report, European Commission, Brussels, https://enlargement.ec.europa.eu/document/download/5d8fc547-f8f8-456f-84e3-b38998acfafd_en?filename=bosnia-and-herzegovina-report-2025.pdf&utm_source.

[27] European Commission (2025), Bosnia and Herzegovina Report 2025, https://enlargement.ec.europa.eu/document/download/5d8fc547-f8f8-456f-84e3-b38998acfafd_en?filename=bosnia-and-herzegovina-report-2025.pdf.

[46] European Commission (2025), Reform and Growth Facility for the Western Balkans: Reform Agenda for Bosnia and Herzegovina, European Commission, https://enlargement.ec.europa.eu/document/download/08927cfb-a165-4bba-adf5-f694d8ec123f_en?filename=BiH%203.0%20Reform%20Agenda.PDF.

[54] European Commission (2024), Bosnia and Herzegovina 2024 Report, European Commission, Brussels, https://enlargement.ec.europa.eu/document/download/451db011-6779-40ea-b34b-a0eeda451746_en?filename=Bosnia+and+Herzegovina+Report+2024.pdf&utm_source.

[28] European Commission (2024), Bosnia and Herzegovina Report 2024, https://enlargement.ec.europa.eu/document/download/451db011-6779-40ea-b34b-a0eeda451746_en?filename=Bosnia%.

[30] European Commission (2023), Bosnia and Herzegovina Report 2023, https://enlargement.ec.europa.eu/system/files/2023-11/SWD_2023_691%20Bosnia%20and%20Herzegovina%20report.pdf.

[34] Eurostat (2025), Participation rate in education and training (last 4 weeks), https://ec.europa.eu/eurostat/databrowser/view/trng_lfse_01/default/table?lang=en (accessed on 5 November 2025).

[33] Eurostat (2024), Long-term unemployment by sex - annual data, https://ec.europa.eu/eurostat/databrowser/view/une_ltu_a/default/table?lang=en&category=labour.employ.lfsi.une (accessed on 22 May 2024).

[22] FCI (2025), Annual Review 2025, https://fci.nl/en/annual-review (accessed on 18 November 2025).

[21] FCI (2020), Annual Review 2020, https://fci.nl/en/annual-review?language_content_entity=en.

[38] Federal Ministry of Development, Entrepreneurship and Crafts (2024), Small Business Development Strategy of the FBiH 2022-2027, Government of the Federation of Bosnia and Herzegovina, https://www.fmrpo.gov.ba/wp-content/uploads/2022/10/Strategija-razvoja-male-privrede-FBiH-2022-2027-Strateska-platforma-NACRT.pdf.

[75] Federal Ministry of Development, Entrepreneurship and Crafts (2021), Small Business Development Strategy of the Federation of Bosnia and Herzegovina 2022-2027, Federation of Bosnia and Herzegovina, https://fzzpr.gov.ba/files/Strategije/STRATEGIJA-RAZVOJA-MALE-PRIVREDE-FEDERACIJE-BiH-konacna-verzija.pdf.

[8] Federation of Bosnia and Herzegovina Federal Ministry of Development, Entrepreneurship and Crafts (2022), Small Business Development Strategy of the Federation of Bosnia and Herzegovina 2022-2027, Government of the Federation of Bosnia and Herzegovina, https://www.fmrpo.gov.ba/wp-content/uploads/2022/10/Strategija-razvoja-male-privrede-FBiH-2022-2027-Strateska-platforma-NACRT.pdf.

[7] Federation of Bosnia and Herzegovina Ministry of Development, Entrepreneurship and Craft (2023), Financial Audit Report, Government of the Federation of Bosnia and Herzegovina, https://www.vrifbih.ba/wp-content/uploads/2024/06/FR_2023_Federalno_ministarstvo_razvoja_poduzetnistva_i_obrta.pdf.

[40] Foreign Trade Chamber of BiH/BHEPA (2025), Information provided during 2026 assessment cycle.

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[48] GIZ (2020), Innovation and Digitization of Small and Medium-sized Enterprises in Bosnia and Herzegovina website, https://eu4digitalsme.ba/en/about-project.

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[78] Government of FBIH (2024), Public call for financing/co-financing of scientific research and research and development projects with applied application in the economy in the Federation of Bosnia and Herzegovina, in cooperation with the United Nations Development Programme (UNDP), https://fmon.gov.ba/Obavjest/Pregled/1231 (accessed on 24 December 2025).

[73] Government of Republika Sprska (2021), Small and Medium Enterprises Development Strategy of Republika Sprska for the Period 2021-2027, https://vladars.rs/eng/vlada/ministries/mee/strateg/PublishingImages/Pages/default/SMALL%20AND%20MEDIUM%20ENTERPRISES%20DEVELOPMENT%20STRATEGY%20OF%20THE%20REPUBLIC%20OF%20SRPSKA%20FOR%20THE%20PERIOD%202021%20-%202027.pdf.

[10] Government of Republika Srpska (2025), Annual report for the small and medium‑sized enterprises sector in Republika Srpska for 2024, Government of Republika Srpska, https://www.rars-msp.org/lat/dokumenti-lat/godisnji-izvjestaj-o-stanju-u-oblasti-msp-i-zpd-lat/.

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[44] Government of Republika Srpska (2025), Donesena uredba o postupku dodjele podsticaja za promociju MSP [Decree on the procedure for granting incentives for SME promotion adopted]., https://vladars.rs/sr-SP-Cyrl/Vlada/Ministarstva/mpp/media/vijesti/Pages/Donesena-uredba-o-postupku-dodjele-podsticaja-za-promociju-msp.aspx (accessed on 16 March 2026).

[9] Government of Republika Srpska (2024), Annual report for the small and medium‑sized enterprises sector in Republika Srpska for 2023, Government of Republika Srpska, https://www.rars-msp.org/lat/dokumenti-lat/godisnji-izvjestaj-o-stanju-u-oblasti-msp-i-zpd-lat/.

[42] Government of Republika Srpska (2024), Annual report for the SME sector in Republika Srpska for 2023, Government of Republika Srpska, https://www.rars-msp.org/lat/dokumenti-lat/godisnji-izvjestaj-o-stanju-u-oblasti-msp-i-zpd-lat/.

[41] Government of Republika Srpska (2023), Annual report for small and medium-sized enterprises in Republika Srpska for 2022, Government of Republika Srpska, https://www.rars-msp.org/lat/dokumenti-lat/godisnji-izvjestaj-o-stanju-u-oblasti-msp-i-zpd-lat/.

[67] Government of RS (2025), Information provided by Government of RS during the assessment period.

[77] Government of the FBIH (2025), Minister Mijatović: With the arrival of American Techstars, Sarajevo and BiH are becoming a regional center of the start-up community, https://fbihvlada.gov.ba/bs/ministar-mijatovic-dolaskom-americkog-techstarsa-sarajevo-i-bih-postaju-regionalni-centar-start-up-zajednice (accessed on 12 March 2026).

[74] Government of the Federation of Bosnia and Herzegovina (2025), 15. Law on Amendments to the Law on Executive Procedure, https://fbihvlada.gov.ba/hr/15-zakon-o-izmjenama-i-dopunama-zakona-o-izvrsnom-postupku (accessed on 5 January 2026).

[68] Government of the Federation of Bosnia and Herzegovina (2025), Decision of the Government of the Federation of Bosnia and Herzegovina, No. 20/25.

[45] Government of the Federation of Bosnia and Herzegovina (2024), “Approximately 26.2 million KM in grant funds from the FBiH budget for the development of entrepreneurship and crafts”, https://fbihvlada.gov.ba/bs/za-razvoj-poduzetnistva-i-obrta-skoro-26-miliona-km-grant-sredstava-iz-budzeta-fbih?utm.

[63] IBA (2024), BiH Report, International Bar Association, London, https://www.ibanet.org/medias/anlbs-ai-working-group-report-july-2024-4-bosnia-herzegovina.pdf?context=bWFzdGVyfFB1YmxpY2F0aW9uUmVwb3J0c3w1NTQ3OHxhcHBsaWNhdGlvbi9wZGZ8YURJeUwyaGlaQzg1TVRNNE1qQTJOREE0TnpNMEwyRnViR0p6TFdGcExYZHZjbXRwYm1jdFozSnZkWEF0Y21Wd2Iz.

[66] IDEMO (2025), “Project “AI FORWARD” has begun implementation: Artificial intelligence in the service of developing small and medium-sized enterprises in BiH”, https://dihidemo.org/projekat-ai-forward-zapoceo-sa-implementacijom-umjetna-inteligencija-u-sluzbi-razvoja-malih-i-srednjih-preduzeca-u-bih.

[64] Industrial Hub Tuzla (2025), “Training and education”, web page, https://industrialhub.ba/obuka-i-edukacija.

[79] INTERA Technology Park (2025), Supporting Dual Transformation of MESMEs Through Innovation Voucher Scheme, https://intera.ba/en/projekti/boost2/ (accessed on 23 December 2025).

[62] Interoperable Europe (2024), Bosnia and Herzegovina: 2024 Digital Public Administration Factsheet – Supporting Document, European Commission, Brussels, https://interoperable-europe.ec.europa.eu/sites/default/files/inline-files/NIFO_2024_Supporting%20Document_Bosnia_and%20Herzegovina_vFinal_Final.pdf?utm_source.

[1] Interreg Europe (n.d.), GRANDIS - Green, digital, female-driven SMEs, https://www.interregeurope.eu/grandis (accessed on 20 February 2026).

[31] ISBIH (2024), Yearly Report 2024, Institute for Standardization of Bosnia and Herzegovina, https://isbih.gov.ba/uploads/isbih-godisnji-izvjestaj-2024v5.pdf.

[29] ISBIH (2023), Yearly Report 2023, https://isbih.gov.ba/uploads/izvjestaj-o-radu-isbih-za-2023-godinu.pdf.

[57] IUS (2025), “CyberFort Project”, https://news.ius.edu.ba/en/news/ius-life-collaborates-cyberfort-project-european-initiative-strengthen-cybersecurity-vet-and?utm_source.

[23] Kicic, D. and M. Ribic (2024), A System Analysis of the Financial Market in Bosnia and Herzegovina, International Labour Organization, Geneva, https://www.ilo.org/sites/default/files/2024-05/A%20system%20analysis%20of%20the%20financial%20market%20in%20Bosnia%20and%20Herzegovina.pdf.

[6] KPMG (2025), Bosnia and Herzegovina: Proposed amendments to rules for small entrepreneurs (Republika Srpska).

[51] Law Firm Sajic (2025), “BiH aligns with GDPR: New Law on Personal Data Protection”, https://ceelegalmatters.com/briefings/30833-bih-aligns-with-gdpr-new-law-on-personal-data-protection?utm_source.

[2] Ministry of Economy and Entrepreneurship of Republika Srpska; Development Agency of Republika Srpska (2025), Annual Report on the Small and Medium Enterprise Sector in the Republic of Srpska for 2024, https://www.rars-msp.org/wp-content/uploads/2025/12/%D0%93%D0%BE%D0%B4%D0%B8%D1%88%D1%9A%D0%B8-%D0%B8%D0%B7%D0%B2%D1%98%D0%B5%D1%88%D1%82%D0%B0%D1%98-%D0%B7%D0%B0-%D0%BE%D0%B1%D0%BB%D0%B0%D1%81%D1%82-%D0%9C%D0%A1%D0%9F-%D1%83-%D0%A0%D0%B5%D0%BF%D1%83%D0%B1%D0%BB%D0%B8%D1%86%D0%B8-%D0%A1%D1%80%D0%BF%D1%81%D0%BA%D0%BE%D1%98-%D0%B7%D0%B0-2024.pdf (accessed on 17 February 2026).

[35] Ministry of Economy and Entrepreneurship of Republika Srpska; Development Agency of Republika Srpska (2025), Annual Report on the Small and Medium Enterprise Sector in the Republic of Srpska for 2024, https://www.rars-msp.org/wp-content/uploads/2025/12/%D0%93%D0%BE%D0%B4%D0%B8%D1%88%D1%9A%D0%B8-%D0%B8%D0%B7%D0%B2%D1%98%D0%B5%D1%88%D1%82%D0%B0%D1%98-%D0%B7%D0%B0-%D0%BE%D0%B1%D0%BB%D0%B0%D1%81%D1%82-%D0%9C%D0%A1%D0%9F-%D1%83-%D0%A0%D0%B5%D0%BF%D1%83%D0%B1%D0%BB%D0%B8%D1%86%D0%B8-%D0%A1%D1%80%D0%BF%D1%81%D0%BA%D0%BE%D1%98-%D0%B7%D0%B0-2024.pdf (accessed on 17 February 2026).

[18] OECD (2025), Assessing Bosnia and Herzegovina’s Reform Agenda for Private Sector Development, OECD Publishing, Paris, https://doi.org/10.1787/12b64ce6-en.

[14] OECD (2025), Public Administration in Bosnia and Herzegovina 2024: Assessment against the Principles of Public Administration, SIGMA Monitoring Reports, OECD Publishing, Paris, https://doi.org/10.1787/969426b5-en.

[24] OECD (2024), Western Balkans Competitiveness Outlook 2024: Bosnia and Herzegovina, Competitiveness and Private Sector Development, OECD Publishing, Paris, https://doi.org/10.1787/82e0432e-en.

[61] OECD (forthcoming), OECD SME Digital and Green Transitions: Survey Results 2026, OECD Publishing, Paris, forthcoming.

[15] Parliament of Bosnia and Herzegovina (2004), “Law on Public Procurement for Bosnia and Herzegovina”, Official Gazette of Bosnia and Herzegovina, Vol. 49/November, http://www.sipa.gov.ba/assets/files/laws/en/jn49-04.pdf.

[39] Parliament of the Federation of Bosnia and Herzegovina (2021), Development Strategy of the Federation of Bosnia and Herzegovina 2021-2027, https://parlamentfbih.gov.ba/v2/userfiles/file/Materijali%20u%20proceduri_2021/Strategija%20razvoja%20FBiH%202021-2027_bos.pdf.

[16] Procurement Review Body (2025), PRB 2024 Annual Report, https://www.urz.gov.ba/izvjestaji/izvjestaj%20o%20radu/izvjestaj_o_radu_za_2024.pdf.

[17] Public Procurement Agency (2025), PPA professional assistance, https://www.javnenabavke.gov.ba/en (accessed on 1 August 2025).

[13] Public Procurement Agency (2025), Statistical data provided by the Statistical Institute of Bosnia and Herzegovina.

[12] Public Procurement Agency (2022-2024), Annual Reports 2022-2024, https://www.javnenabavke.gov.ba/hr/reports?page=1&rows=9&searchByTaxonomyValueIds=37.

[72] Republika Srpska Securities Commission (2025), Društva za faktoring, https://www.secrs.gov.ba/Ucesnici/Faktoring.aspx (accessed on 6 January 2026).

[69] SRNA (2025), Report on the Operations of the Guarantee Fund for 2024 Was Considered, https://www.srna.rs/sr/novost/1345158/razmotren-izvjestaj-o-poslovanju-garantnog-fonda-za-2024.-godinu (accessed on 18 November 2025).

[52] StandardPrva (2025), “AK Stevanović: The new Law on Personal Data Protection has entered into force: Read what it brings”, https://standardprva.ba/en/novost/ak-stevanovic-novi-zakon-o-zasititi-licnih-podataka-je-stupio-na-snagu-procitajte-sta-donosi?utm_source.

[56] UNDP (2021), “Support for digitalization of micro, small, and medium enterprises in BiH: Project DigitalBIZ presented free online tool “Digital Pulse””, news, https://www.undp.org/bosnia-herzegovina/news/support-digitalization-micro-small-and-medium-enterprises-bih-project-digitalbiz-presented-free-online-tool-digital-pulse.

[71] USAID (2024), Roadmap for the Development and Roll-out of Business Angel Investing in Bosnia and Herzegovina, https://f787.ba/Roadmap%20for%20Angel%20Investment%20in%20BiH.pdf (accessed on 27 February 2025).

[59] W4CBiH (2025), Cybersecurity Guide for SMEs, Women4Cyber Bosnia and Herzegovina, https://vodic.w4c.ba.

[3] World Bank (2025), Capital to Scale: Women Entrepreneurs as Job Creators, https://www.worldbank.org/en/news/feature/2025/10/22/capital-to-scale-women-entrepreneurs-as-job-creators (accessed on 7 November 2025).

[25] World Bank (2025), Lending interest rate (%) - Bosnia and Herzegovina, https://data.worldbank.org/indicator/FR.INR.LEND?locations=BA (accessed on 20 August 2025).

Notes

← 1.  Information provided by the government of the Federation of Bosnia and Herzegovina during the assessment period.

← 2.  Since the last OECD assessment in 2022, SMEs in Republika Srpska have had access to the Financial Business Self-Assessment Tool, developed under the Danube Chance 2.0 project, co-financed by the European Union through the Interreg Danube Transnational Programme and co-ordinated by the RS Development Agency. In the Federation of Bosnia and Herzegovina, support for struggling SMEs is available through the European Bank for Reconstruction and Development Life Platform and the EU4Business Recovery project, which ran from 2021 to 2023. However, precise data on the number of SMEs that benefited from these initiatives are not available.

← 3.  This law in Republika Srpska is the first law of this kind adopted in Bosnia and Herzegovina. The procedure for adopting the law began in 2015, but the law was adopted in 2022.

← 4.  Although a unified, publicly accessible economy-level bankruptcy register is still not in place, transparency has improved in practice. Key information, such as lists of licensed bankruptcy trustees, reorganisation plans, and the results of creditors’ votes, is publicly available through the websites of competent institutions, court notice boards, the Official Gazette of the Republika Srpska, and the Banja Luka Agency for Mediation, Information and Financial Services (APIF) portal. Together, these channels ensure broad access to relevant data for economic actors, strengthening legal certainty and the transparency of bankruptcy proceedings.

← 5.  Adopted and published in March 2025.

← 6.  Including the Law on Fostering Small Business Development and the Law on Entrepreneurial Infrastructure.

← 7.  With clear roles for the Ministry of Economy and Entrepreneurship, the Development Agency of Republika Srpska, and local development agencies, and regular consultation with the Chamber of Commerce of Republika Srpska.

← 8.  Reporting on implementation progress is prepared in line with the Law on Strategic Planning and Development Management.

← 9.  Over the 2022-2024 period, reported implementation volumes amounted to approximately BAM 336 million (EUR 171.8 million) (information provided by the Ministry of Economy and Entrepreneurship during the assessment process)

← 10.  Including annual reporting on action plan implementation and the Annual SME sector report.

← 11.  Including through the SME Register Information System.

← 12.  For example, certification requirements under selected schemes.

← 13.  Such as adjustments to incentive envelopes, clarification of eligible activities and the introduction of narrowly defined eligibility requirements under specific measures.

← 14.  Delivering training, mentoring and programme-based advisory services as external experts within public schemes.

← 15.  Such as the organisation of and participation in fairs and conferences.

← 16.  Alongside more uneven budget execution, including partial use of allocated funds in 2024 and BAM 1.6 million (EUR 818 000) earmarked across selected projects in 2025 (Government of the Federation of Bosnia and Herzegovina, 2025[68]).

← 17.  Dimension 6 has undergone significant structural and methodological changes to reflect the emergence of new policy instruments supporting access to bank finance, the diversification of financing instruments available to firms, and the increasing policy emphasis on monitoring, evaluation and effective implementation. These changes were also introduced to ensure closer alignment with the latest OECD and EU standards and good practices in assessing access to finance policies. As a result of these changes, scores from the 2022 and 2026 assessment cycles are not directly comparable. However, to preserve the benchmarking nature of the exercise and ensure analytical continuity, the 2022 scores for Dimension 6 and its sub-dimensions were recalculated using the 2026 assessment framework and structure. This enables an illustrative assessment of score evolution between the two cycles and allows the 2026 scores to serve as benchmarks, subject to the limitations arising from the revised structure and methodology of the dimension.

← 18.  The original 2022 Dimension 6 score calculated using the previous methodology was 3.34.

← 19.  The original 2022 bank finance score, calculated using the previous methodology and comprising the 2022 bank-finance thematic blocks, was 2.64.

← 20.  The law notably allows the enforcing creditor (typically the bank) to request a postponement of ongoing court enforcement for up to six months and simplifies collateral sales by reducing the number of court auctions from three to two. See Government of the Federation of Bosnia and Herzegovina (2025[74]) for more details

← 21.  Information provided by the Republika Srpska as part of the assessment.

← 22.  The largest instruments are the Guarantee Fund of Republika Srpska with a financial size of BAM 15.7 million (~EUR 8.0 million) in 2024 (SRNA, 2025[69]), and the Development Bank of the Federation of Bosnia and Herzegovina Guarantee Fund with a financial size of BAM 36.4 million (~EUR 18.6 million) in 2024 (OECD, 2025[18]).

← 23.  The original 2022 non-bank finance score, calculated using the previous methodology and comprising the 2022 non-bank finance thematic blocks, was 2.99.

← 24.  While little progress has been made in strengthening the capital market legal framework in the Federation of Bosnia and Herzegovina, Republika Srpska has initiated steps to improve its securities market. These include amendments to the Law on the Securities Market, aimed at simplifying the capital-raising process and increasing flexibility for companies issuing public securities. Additionally, the Republika Srpska Securities Commission is drafting a new Capital Market Act to further harmonise regulations with the acquis. If adopted, this could positively impact market activity and begin to address fundamental issues such as liquidity and investor confidence.

← 25.  Examples include the Euronext Growth segment, where no minimum market capitalisation is required, and the minimum free float is 2.5%. For more details, see: Euronext (2025[70]).

← 26.  These laws include, but are not limited to, the Laws on Investment Funds, Laws on Securities, Laws on Foreign Exchange Operations. For a more complete list, see: USAID (2024[71]).

← 27.  Another constraint across both entities is the absence of clear legal definitions tailored to the specific features of private equity. Key terms remain undefined in existing legislation, for instance, “start-ups” in the FBiH and “angel investing/investor” in both entities, leading to divergent interpretations among domestic and international investors (OECD, 2025[18]).

← 28.  See Republika Srpska Securities Commission (2025[72]) for the list of operating factoring companies.

← 29.  At the time of writing, the Federation of Bosnia and Herzegovina is preparing amendments to its factoring legislation.

← 30.  The thematic blocks “Financial literacy” and “Microfinance institutions” were part of different sub-dimensions in 2022. Their underlying scores remained unchanged; they were simply recalculated using the methodology of the 2026 edition.

← 31.  For more details, see Federal Ministry of Development, Entrepreneurship and Crafts (2021[75]).

← 32.  For more details, see Government of Republika Srpska (2021[73]).

← 33.  See Development Agency of Republika Srpska (2026[76]) for more details.

← 34.  See Government of FBIH (2025[77]) for more details.

← 35.  See Government of FBIH (2024[78]) for more details.

← 36.  See INTERA Technology Park (2025[79]) for more details.

← 37.  Both the Federation of Bosnia and Herzegovina’s Tourism Development Strategy (2022-2027) and its Agriculture and Rural Development Strategy (2021-2027) include SME-relevant greening measures.

← 38.  The UNDP-supported five-year Green Transition Programme (2024-2028) aims to provide tailored technical support to at least 100 companies in preparation for CBAM. However, no progress has yet been reported, raising concerns about the effectiveness of these preparatory measures ahead of CBAM’s 2026 implementation (OECD, 2025[18]).

← 39.  While a state-level National Adaptation Plan (NAP) for 2021-2030 is in place, it only indirectly addresses business-relevant climate adaptation issues. The NAP recognises the importance of tracking business losses from extreme weather events and promoting insurance uptake, but it does not provide concrete measures or dedicated budgets to advance these actions. As environmental policy falls under entity-level competencies, the absence of long-term adaptation measures tailored to SMEs risks leaving structurally vulnerable sectors without the support needed to strengthen resilience and recovery capacity.

← 40.  These include the Rulebook on limit values of noise intensity (Official Gazette of the Republika Srpska, No. 2/23), the Rulebook on the register of discharge and transfer of polluting substances (Official Gazette of the Republika Srpska, No. 55/23), the Rulebook on waste batteries and accumulators management (Official Gazette of the Republika Srpska, No. 66/22), the Rulebook on waste oils management (Official Gazette of the Republika Srpska, Nos. 9/22, 62/22), the Rulebook on waste tyres management (Official Gazette of the Republika Srpska, Nos. 16/22, 62/22), the Rulebook on the management of end-of-life vehicles (Official Gazette of the Republika Srpska, No. 44/23), and the Rulebook on electric and electronical waste management (Official Gazette of the Republika Srpska, No. 36/23).

← 41.  Bosnia and Herzegovina’s new Public Procurement Strategy 2024-2028 includes objectives to establish a green public procurement (GPP) framework and develop guidelines, including planned amendments to the Public Procurement Law. However, concrete activities to educate SMEs and ensure their participation in GPP are yet to be formulated.

← 42.  No equivalent structure exists in the Federation of Bosnia and Herzegovina.

← 43.  This is implemented in close partnership with the Association for Metallurgy and Metal Processing, Energy and Electrochemical Industries. In addition, the RS Chamber of Commerce has created a dedicated section on its InfoBiz platform with information for SMEs on CBAM-related requirements and challenges. Since 2022, it has also organised more than 20 trainings on the green economy, reaching over 660 participants, while more than ten SMEs have directly benefitted from related financial incentives.

← 44.  Such as Council of Ministers decisions: Official Gazette of BiH No. 1/23 and Official Gazette of BiH No. 4/24.

← 45.  The Strategy for the Development of Small and Medium-sized Enterprises of Republika Srpska 2021-2027 and the Industrial Development Strategy of Republika Srpska 2021-2027.

← 46.  Also based on information provided during the current assessment cycle.

← 47.  Including:

• BAM 16.4 million (EUR 8.38 million) allocated in 2024 under the programme Strengthening the Competitiveness of SMEs, supporting 193 beneficiaries and financing technological upgrading, quality certification, digitalisation, circular economy measures and energy-efficiency investments.

• BAM 12.9 million (EUR 6.59 million) allocated to the Energy Efficiency Programme for SMEs, aimed at reducing energy costs and supporting green investments across sectors.

• BAM 1.17 million (EUR 0.60 million) allocated in 2024 to Support for SMEs in the IT Sector, benefiting 16 firms and focused on innovation and digital transformation.

• BAM 28 million (EUR 14.32 million) adopted in 2025 under new SME incentive programmes, combining non‑repayable grants to enterprises with capital transfers to municipalities and cities for small business development.

← 48.  Between 2022 and 2025, the Ministry of Economy and Entrepreneurship approved BAM 61.4 million (EUR 31 394 624) for equipment and new technologies, complemented by BAM 2.83 million (EUR 1 447 016) for technical innovation and digitalisation benefiting 170 SMEs, and an additional BAM 1.12 million (EUR 572 670) for digital transformation for 66 SMEs in 2022-2024 (information provided by the Ministry of Economy and Entrepreneurship during the assessment cycle).

← 49.  Through digital cooperation platforms covering more than 60 countries, EEN supports SMEs in partner searches, technology transfer, business cooperation agreements and participation in international brokerage events. Within this framework, the BITNET consortium supported 958 SMEs in internationalisation activities between 2022 and 2025, of which 111 achieved concrete outcomes, including signed partnership agreements and verified cross-border cooperation contributing to supplier linkages and GVC integration.

← 50.  For more details, see: https://www.undp.org/bs/bosnia-herzegovina/news/digitalbiz-poziv-na-obuku-digitalna-transformacija-msp-iz-metalnog-drvnog-i-tekstilnog-sektora.