CMS Expert Guide to Crypto Regulation in Bosnia and Herzegovina

As of today, no law has been passed in Bosnia and Herzegovina which would specifically regulate crypto. Virtual currencies in BiH have only recently been recognized by the law and only in RS with the amendments of the Law on Securities Market which entered into force on 21 September 2022.

For clarification purposes, please note that Bosnia and Herzegovina (“BiH”) consists of two administrative entities (Federation of Bosnia and Herzegovina (“FBiH”) as well as Republika Srpska (“RS”) and a condominium – Brčko District. Considering this, legislation in certain matters is introduced at both the state (BiH) level which is applicable on the entire territory of the country and for certain matters at entity level. Depending on the subject, legislation may be adopted at several levels.

As of today, no law has been passed in Bosnia and Herzegovina which would specifically regulate crypto. Virtual currencies in BiH have only recently been recognized by the law and only in RS with the amendments of the Law on Securities Market which entered into force on 21 September 2022.

For clarification purposes, please note that Bosnia and Herzegovina (“BiH”) consists of two administrative entities (Federation of Bosnia and Herzegovina (“FBiH”) as well as Republika Srpska (“RS”) and a condominium – Brčko District. Considering this, legislation in certain matters is introduced at both the state (BiH) level which is applicable on the entire territory of the country and for certain matters at entity level. Depending on the subject, legislation may be adopted at several levels.

Provider of services related to virtual currencies is defined as a legal or natural person that provides one or more of the following services:

a) custody and management of virtual currencies on behalf of third parties (provider of wallet depository services),

b) organizing a platform for trading of virtual currencies,

c) exchange of virtual currencies for a currency which is the official means of payment,

d) exchange of virtual currencies for another virtual currency,

e) transfer of virtual currency, i.e., receiving and executing orders for virtual currency on behalf of third parties,

f) implementation/execution of offer, i.e., sale of virtual currencies.

Provider of services related to virtual currencies is defined as a legal or natural person that provides one or more of the following services:

a) custody and management of virtual currencies on behalf of third parties (provider of wallet depository services),

b) organizing a platform for trading of virtual currencies,

c) exchange of virtual currencies for a currency which is the official means of payment,

d) exchange of virtual currencies for another virtual currency,

e) transfer of virtual currency, i.e., receiving and executing orders for virtual currency on behalf of third parties,

f) implementation/execution of offer, i.e., sale of virtual currencies.

In general, the timeframe that needs to be taken into account is the time that it takes to:

1. establish a company, which takes approximately 2 – 5 weeks, depending on any specific client requests in terms of corporate governance and structure, and
2. registration / notification before the Securities Commission of RS, which takes approx. 30 days from the date of submission of the formal request for registration in the records.

Please note that the above estimates in practice mainly depend on the current workload of the acting authorities

In general, the timeframe that needs to be taken into account is the time that it takes to:

1. establish a company, which takes approximately 2 – 5 weeks, depending on any specific client requests in terms of corporate governance and structure, and
2. registration / notification before the Securities Commission of RS, which takes approx. 30 days from the date of submission of the formal request for registration in the records.

Please note that the above estimates in practice mainly depend on the current workload of the acting authorities.

Approx. 150-300 EUR for the establishment of company which does not include legal/advisory fees and approx. 500 EUR for the approval of registration and issuance of a certificate of registration in the records of service providers related to virtual currencies.

Costs of establishment depend on the shareholders country of origin, number of shareholders, management members etc., but could include (although are not limited to) translations, apostille verification, potential notary and court fees.

Approx. 150-300 EUR for the establishment of company which does not include legal/advisory fees and approx. 500 EUR for the approval of registration and issuance of a certificate of registration in the records of service providers related to virtual currencies.

Costs of establishment depend on the shareholders country of origin, number of shareholders, management members etc., but could include (although are not limited to) translations, apostille verification, potential notary and court fees.

Considering virtual currencies have only recently been introduced, it is difficult to currently provide an assessment and probability percentage of success of registration.

However, if the applicant has all formal requirements fulfilled, accompanied with a high-quality application, underlying documents, and experienced legal advisors, the probability of success of registration is high.

Considering virtual currencies have only recently been introduced, it is difficult to currently provide an assessment and probability percentage of success of registration.

However, if the applicant has all formal requirements fulfilled, accompanied with a high-quality application, underlying documents, and experienced legal advisors, the probability of success of registration is high.

Establishment of a legal presence is necessary along with a registration / notification with the Securities Commission of RS.

Legal presence in BiH is usually achieved through a limited liability company (in local: društvo sa ograničenom odgovornošću (d.o.o)) but may also be in form of a joint-stock company (in local: akcionarsko društvo (a.d.)) or by a natural person, i.e. entrepreneur (in local: preduzetnik).

Additionally, there are no regulatory licences that are specific to crypto as such, however, there is a notification process and entry into the register with the Securities Commission of RS as mentioned above.

Further requirements that apply concern the proscribed AML requirements and obligations, specific bank account requirements, as well as tax authorities registrations and certifications, inscription with relevant statistics authorities, etc.

Establishment of a legal presence is necessary along with a registration / notification with the Securities Commission of RS.

Legal presence in BiH is usually achieved through a limited liability company (in local: društvo sa ograničenom odgovornošću (d.o.o)) but may also be in form of a joint-stock company (in local: akcionarsko društvo (a.d.)) or by a natural person, i.e. entrepreneur (in local: preduzetnik).

Additionally, there are no regulatory licences that are specific to crypto as such, however, there is a notification process and entry into the register with the Securities Commission of RS as mentioned above.

Further requirements that apply concern the proscribed AML requirements and obligations, specific bank account requirements, as well as tax authorities registrations and certifications, inscription with relevant statistics authorities, etc.