The outlook for global foreign direct investment (FDI) for 2025 is not positive.
According to data from the UN Conference on Trade and Development (UNCTAD), trade wars, growing economic and political uncertainty, and an increase in the volatility of the financial market contributed to a sharp drop in investment activity in the world at the beginning of the year, so a drop in foreign investment in BiH is also evident in the first half of 2025, Feni was told in the Agency for the Promotion of Foreign Investments in BiH (FIPA).
– It is very ungrateful to forecast expectations for DSI, given that financial activities in large multinational companies or in the banking sector can significantly affect the flows of DSI, both globally and in BiH. We can hope that the positive impact of nearshoring (strategic transfer of business processes to nearby countries) on the growth of DSI will continue, however, the perspectives of global foreign direct investments for 2025 are not positive – they said in FIPA.
In the first half of 2025, foreign investments will decrease by 12.5 percent
According to preliminary data of the Central Bank of Bosnia and Herzegovina, within the scope of DSI flows, with estimated retained earnings, for the period January – June 2025, direct foreign investments amounted to 780.1 million KM or 398.8 million euros. Therefore, foreign investments in BiH in the period I – VI 2025 are 12.5 percent less compared to the same period of the previous year and according to revised data in the period I – VI 2024, FDI amounted to 891.5 million KM.
– In addition to the reduction, it is necessary to take into account the DSI components. In the amount of DSI for the first half of 2025, ownership shares are 65.4 percent higher compared to the amount from the first half of 2024, retained earnings are estimated at the same amount as the previous year (a decrease of 0.8 percent), while a significant decrease, of 71.7 percent, was registered within other capital.
Although the reduction of DSI in the first half of 2025 is not a positive indicator, viewed by components, the increase in ownership shares is pleasing, which with 241.4 million KM participates in 30.9 percent of the half-year amount (it was 16.4 percent in 2024, and in earlier years even less). Estimated retained earnings participate with 58.8 percent, and with 458.7 million KM, as in previous years, they have the most significant participation, while other capital has a more modest participation of 10.3 percent and with 80 million KM it is significantly lower compared to previous years – FIPA says.
Also, as noted, the semi-annual amount of DSI in 2025 is higher than the ten-year average (the average semi-annual amount for the period 2016-2025 is 723 million KM), but also lower than the average of the previous five years (the average semi-annual amount for the period 2020-2024 is 895 million KM).
FIPA notes that the trend of DSI in BiH in the current year may be negatively affected by the announced takeover of companies with foreign capital from domestic companies.
Croatia, Germany and Serbia are the countries with the largest amounts of capital in Bosnia and Herzegovina
In the first six months of 2025, the countries with the largest registered amounts of capital in Bosnia and Herzegovina are: Croatia (203.5 million KM), Germany (174.2) and Serbia (108.3 million KM). Slovenia (KM 85.7 million), Austria (KM 52.6 million) and Italy (KM 49.3 million) also registered significant capital increases. In the first half of 2025, the most significant increase in ownership shares was registered from Germany (156.6 million KM) – Feni was told in FIPA.
In the same period, as they point out, significant negative amounts of capital were registered from the Netherlands (-30.2 million KM), Switzerland (also -30.2) and Great Britain (-25.2 million KM).
The activities in which the most DSIs were registered in BiH for the first six months of 2025 are: “Financial service activities, except insurance and pension funds” (204.6 million KM), “Retail trade, except trade in motor vehicles and motorcycles” (190.3) and “Wholesale trade, except trade in motor vehicles and motorcycles” (133.4 million KM). Significant increases were also registered for the activities: “Production and supply of electricity, gas, steam and air conditioning” (49 million KM) and “Production of food products” (45.9 million KM).
In 2026, FIPA is focusing on regions in certain countries where it has not been active so far
FIPA will, as they state, due to all of the above, focus its activities during 2026 predominantly on the European Union market, with a focus on the markets of Central Europe and foreign companies that face the growth of operating costs and labor shortages on those markets, as well as the markets of neighboring countries and the Arab countries of the Persian Gulf. Also, in cooperation with the diplomatic-consular network and other domestic and foreign partner organizations, it will organize business forums and “BiH Investment Days” in targeted markets, and will focus on regions in certain countries where it has not been active so far. FIPA plans to continue with the organization of “outreach missions” in EU countries, and continue with activities related to participation in investment fairs, forums and conferences and actively participate in the implementation of activities within the framework of projects that are agreed upon or have already been agreed with international organizations or institutions.
FIPA representatives have so far made 805 visits to companies as part of the Post-Investment Support Program or Aftercare Program.
Since 2007, FIPA has been implementing the Post-Investment Support for Investors program (hereinafter referred to as the Aftercare program) and the program has been improved with the aim of motivating existing investors to reinvest, while improving ties with the local economy and all levels of government in Bosnia and Herzegovina.
– Bearing in mind the necessity of cooperation between institutions, at various levels of government, when solving obstacles faced by investors in their business, as well as in order to create conditions for new investments, the Collaborative Network and joint visits to investors confirmed their justification. Helping investors to resolve open issues improves trust in institutions and directly contributes to new investments and the creation of new jobs. Open investor questions are followed through two methods of resolution. Part of the open questions refers to reform measures or recommendations for improving the business environment, while part refers to assistance and emergencies for solving problems in accordance with existing legislation or practice (ad hoc). FIPA has so far actively participated in 1,054 assistance or emergencies for ad hoc issues with the aim of helping foreign investors in solving problems and proposed 195 processed recommendations for improving business conditions (since 2014, i.e. since the formation of the Collaborative Network) – FIPA told Fena.
