The Chinese have founded hundreds of companies in FB&H, they owe millions of BAM in taxes!

 

The fact that China declared the market of Bosnia and Herzegovina as a sphere of interest not long ago is not only indicated by the data on the number of their state-owned companies engaged in a series of large road and energy projects in our country, but also by the information on how many business entities they managed to register in B&H all these years.  

 

Fokus.ba investigated how many Chinese companies, shops and other business entities are registered only in the territory of the Federation of Bosnia and Herzegovina, then what they do, whether they regularly pay taxes, how many have been liquidated in the meantime, and how the institutions treat them in general.

 

Data from the Registry

 

According to the information provided by the Court Registry of Business Entities in the FB&H area, as many as 190 Chinese business entities have been registered since 2007. For the record, this is the data we have established as of January 22nd, as it is deleted or added to from this database from time to time. On the other hand, only 12 business entities, whose founders are Chinese citizens, were deleted from the Register of Business Entities in the mentioned period.

 

Many of the business entities registered on the territory of the Federation of B&H, founded by Chinese citizens, have colorful names written in the Bosnian language, such as "Blue Bird", "Beautiful Eyes", "Red Sun", "Blue Dot", "Pearl of the Sea", "Chinese dragon" or "Chinese wall". The largest number, on the other hand, have Chinese words in their names, while we also found the names of entities that, despite all the good will, cannot be associated with China, such as "Ankica", "Dušan" or "Rambo".

 

The vast majority of Chinese business entities on this list are registered as trading and service companies. Some are registered in the field of production, and some are also registered in the field of goods transportation.

 

According to the FB&H Law on Business Companies, domestic and foreign physical and legal entities can establish a business company. The regulations that apply to legal entities whose founders are domestic persons are fully applied to the operations of legal entities in the Federation of Bosnia and Herzegovina, whose founder is a foreign legal entity or natural person.

 

Information from the Federal Administration for Inspection Affairs

 

Also, according to the latest amendments to the Law on the Registration of Business Entities of the FB&H from 2017, unhindered registration and branches of foreign business entities are enabled. Although there are a large number of Chinese business entities, the systems of federal institutions that deal with the control of these entities and the collection of public revenues do not in any way, unlike the Register of Business Entities, classify them as legal entities with foreign capital.

 

Therefore, based on this criterion, it was difficult to obtain data on the control of these entities in the Tax Administration (TA) of FB&H as well as in the Federal Administration for Inspection Affairs (FUZIP). While the Tax Administration did not receive the requested information about their business for the very reason mentioned, FUZIP made a lot of effort and after a few weeks we received certain information.

 

FUZIP stated for Fokus that, when it comes to Chinese economic entities, in the period from 2011 to 2023, various federal inspections carried out multidisciplinary and multiple, team and individual inspections of 59 entities, and in accordance with valid state and federal regulations.

 

They add that at least 189 inspection inspections were carried out at the aforementioned 59 inspection subjects in the period from March 21, 2011 (first inspection) to December 13, 2023 (last inspection), and according to risk assessments by the inspectorate and the need for intensive monitoring of the implementation of regulations, especially in the field of trade and consumer protection, when the mentioned entities are concerned.

 

- At least 189 inspection reports were drawn up and at least 156 misdemeanor orders were issued, of which 78 were for a legal entity and 78 were for a responsible person in a legal entity, as well as seven decisions on imposing an administrative measure on a legal entity and four decisions on eliminating deficiencies. In the case of four subjects of supervision, the business control ended with an orderly outcome, that is, a conclusion on the end of the inspection supervision - they point out from FUZIP.

 

As they state, the total number of inspections performed is dominated by inspections in the field of trade, consumer protection and fiscalization (about 80%) of the Federal Market Inspectorate, while the remaining part of business control refers to other types of inspections by the competent federal inspectorates (about 20%). In isolated cases, in the process of inspection, decisions were made on the donation of temporarily confiscated goods, and on the procedure and method of destruction of the products - they pointed out from FUZIP.

 

They note, however, that the data is incomplete due to the long-term processing of software data, and the fact that registry materials are destroyed after five years have passed. They also point out that in that period there were a number of legal changes, i.e. narrowing of jurisdiction, and that data is also available to the cantonal inspection bodies.

 

The biggest debtors

From the Administration for Inspection Affairs of the KS, they point out that they do not have a record of subjects in the KS, which is kept according to the category of nationality of the founder/owner, nor are they obliged to have one.

 

On the other hand, a number of Chinese business entities can be found on the list of tax debtors that was last updated by the FB&H Tax Administration on September 30, 2023. It is about millions of tax debts.

 

According to the available data, the largest debt to the Tax Administration was made by the company "Ming Hui - Better Tomorrow" from Zenica, amounting to BAM 642,625. Large debts were incurred by the companies "San Jia" from Kiseljak (322,403 BAM) and "Xin Sheng" from Sarajevo (303,945 BAM). The company "Lon Ten" from Sarajevo incurred 238,684 BAM in tax debt. The company "Bu Bu Xin" from Gračanica owes the Tax Administration 191,736 BAM, "Chang Fu Int. Co." from Sarajevo 153,296 BAM, "Dafa" d.o.o. Sarajevo 150,650 BAM, "Humako" from Velika Kladuša 85,052 BAM, and "Tešanjka" from Sarajevo 70,188 BAM.

 

Also, a number of Chinese companies that are registered in the territory of FB&H are tax debtors on the basis of VAT, which is confirmed by the list of debtors of the Administration for Indirect Taxation of B&H.

 

Among them is the mentioned company "Lon Ten" from Sarajevo, which has debts of 35,927 BAM. The debts of the company "Zhengshang" from Sarajevo for VAT amount to 265,349 BAM, and the company "XINYI & HOUJUN Export-Import" d.o.o. Sarajevo amount to 232,079 BAM. "Zhang" from Sarajevo owes 168,174 BAM in VAT, "Hao Yang" (Sarajevo) 233,878 BAM, and "Maxicom" from Zavidović 58,946 BAM.

 

The Chinese companies "Xing Wang" Sarajevo (47,708 BAM), "Kun Feng Mining" Sarajevo (53,203 BAM), and "Dafa" Sarajevo (255,581 BAM) also have debts to the IIOB&H.

 

Chinese economic influence

 

In a statement for Fokus, federal parliamentarian and economic expert Admir Čavalić says that in the 2000s, we had a fairly widespread network of Chinese trade facilities in the territory of Bosnia and Herzegovina.

 

- They died out over time. This also happened in other countries of the Balkans and Eastern Europe due to the fact that China then achieved exceptional rates of economic growth and that China's standard of living at that moment exceeded that of Bosnia and Herzegovina, as well as in some countries of Eastern Europe. Then there was no longer a need for those workers to go outside in order to earn a certain income or ensure their own existence - points out Čavalić.

 

When it comes to Chinese production, he says, it is then transferred to higher quality goods and then that price competitiveness is lost.

 

- China's economic influence is quite specific because it is characterized by geopolitical influence and overlaps, which is why it is difficult to see that line. China has a number of geopolitical interests that tie it to the economic sphere. This is also happening in Bosnia and Herzegovina. In contrast to the 2000s, when trade was in focus, it is now mostly shifted to large infrastructure projects, such as energy and road projects, etc. Certainly, not only in B&H but also in the region - says our interlocutor.