Foreign investments

The model of foreign investments – privatization is accepted through the privatization laws. This method enables primarily the use of certificates as a way of payment, purchase of the assets, stake or  total state capital of the enterprise. Each citizen was given certificates which were initial position for his realization of the private ownership share in the private property.

This model of the mass – privatization is used to change the existing state ownership structure, gives the possibility to all adult citizens that through various claims become owners of the capital, which so far  was social/state ownership.

As far as the privatiztion procedure method  and  issuing of the claims are concerned, the method of the Public Offering of Shares (POS) was prior to all other methods. Tender as the method of the large – scale privatization is to be used only and exceptionally for the sale of enterprises for which there is a great interest of the strategic partners.

However, as the method through Public Offering of Shares dos not produce the fresh capital flow, neccessary for the settlement of the liabilities, which burden the major part of enterprises to improve their financial situation, and does not lead to the restructuring of enterprises as the necessary condition for their future survival, the tender as a privaization method became one of the significant ways for the privatization of the state capital.

Privatization in FBiH is overall process, which on one side gives the possibility to all local and foreign physical and legal entities to participate in the purchase of the state capital. On the other side, privatization includes enterprises, banks and appartments with existing tenancy rights.

LAW ON OPENING BALANCE SHEET OF ENTERPRISES AND BANKS

I – BASIC PROVISIONS

This Law determines procedure and way of preparation of Opening Balance Sheets of enterprises from Art.1.of the Law on privatization of Enterprises (“Official Gazette of the Federation BiH”, No. 27/97) and Banks from Art 3.of the Law on privatization of Banks, for privatization and settlement of liabilities and claims between enterprises, banks and the Federartion of Bosnia and Herzegovina (further: Federation).

Opening Balance Sheet is a review of assets, rights, liabilities and capital of entrprises and banks (further: subjects) entering  privatization process.

Opening Balance Sheet consists of:

1. Passive Sub-Balance Sheet-is a value of assets and rights with belonging capital and liabilities, which is not in the ownership, respectively under subjects’ control, as well as a value of rights and liabilities, which is according to this Law under special treatment and obligations for preparations of Opening Balance Sheet, from Sect.1.of this Article.
2. Neutral Sub-Balance Sheet containing a value of apartments and assets with belonging capital, for which, by the Act of authorized body, is initiated a Restitution procedure.
3. Active Sub-Balance Sheet-contains a value of assets and rights with belonging capital and liabilities, not included in Sub-Balance Sheets from Sect.1.and 2.of this Article.

Subjects can, according to their needs, state assets and rights and capital and liabilities in analytical form, too (Sub-Balance Sheets), according to provisions of this Law.

In cases when two or more enterprises in their Opening Balance Sheets state the same rights, the same assets, the same liabilities and the same capital, they will not be privatized unless, according to special provisions, way of disposal of disputable property is defined.

Authorized body will initiate Auditing of company from Sect. 1.of this Article.

Special provision from Sect 1.of this Article, which will determine more closely a way and procedure of Auditing, will bring the Government of Federation during 30 days  after this Law comes into force.

Disposal right to real-estate on built constructed land, registered in Land Books for owner-subject’s sake, from Article 2.of this Law, becomes owned property by a day when it comes to force.

Assets, rights, capital and liabilities of enterprises are stated in Opening Balance Shets as to Book Value, on a day of preparing the Opening Balance Sheet, determined by this Law.

Assets, rights capital and liabilities of banks are stated in Opening Balance Sheet of  banks as to Book value, respectively determined in Auditing procedure of bank, according to Article 3. of the Law on privatization of Banks.

Book value as to Article 4. of this Law is a value determined on basis of  provisions in Accounting and fiscal system, valid on a day of preparing  Opening Balance Sheet.

Opening Balance Sheet of enterprises is a base of assessment of initial price of enterprises for privatization, and the same is prepared within deadline determined by Article 7. of the Law on privatization of enterprises.

Value of Opening Balance Sheet is expressed in convertible marks (KM).

Opening Balance Sheet expressed in KM, after being accepted by authorized body, becomes  Balance Sheet of  subject from Article 2.of  this Law, in which are expressed all changes in business activities.

If, since the day of preparing of Opening Balance Sheet have passed more than six months, subjects of privatization are due to submit corrected Opening Balance Sheets, with values expressed in KM.

Enterprises and banks from Article 1.of this Law prepare Opening-Balance Sheet, as to 31. 12. 1997.