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Obrt or d.o.o.: which one fits your business?
An obrt (sole trader) is quick and cheap to set up, but you are liable with your personal assets. A d.o.o. (limited liability company) costs more to set up and run, but limits your liability to the company's assets. Answer five questions to see which one fits you better.
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Obrt and d.o.o. side by side
| Topic | Obrt (sole trader) | d.o.o. (company) |
|---|---|---|
| Liability | You are liable with your personal assets. | Limited to the company's assets, except in cases of abuse. |
| Share capital | None required. | At least 1,000 KM. |
| Owners | You, as an individual. | One or more owners, who can change over time. |
| Taxes | Flat-rate: a fixed monthly tax set by the canton. Actual income: 10% on profit after contributions and a 300 KM monthly allowance. | 10% profit tax. Owners who work in the company are paid a salary with the usual contributions. |
| Bookkeeping | Flat-rate: no books. Actual income: business books and annual returns. | Full bookkeeping and annual financial statements. |
| Setting up | Roughly 100 to 300 KM. | Roughly 1,500 to 3,000 KM, including the 1,000 KM capital. |
Sources
- Zakon o privrednim društvima FBiH
- Zakon o obrtu i srodnim djelatnostima FBiH
- Porezna uprava FBiH
What this tool does not cover
- Other forms, such as a general partnership or a joint-stock company
- Regulated professions with their own registration rules
- Tax planning for your personal situation, which we are happy to do with you
For information only
This tool gives an estimate and is not tax advice. Rules and rates can change. For a binding calculation for your business, ask us.
We re-check the figures against the law and update this page when they change.
Common questions
What is the difference between an obrt and a d.o.o.?
The main difference is liability. An obrt owner is liable for business debts with personal assets, while in a d.o.o. liability is limited to the company's assets, except in cases of abuse. A d.o.o. needs at least 1,000 KM of share capital and full bookkeeping, while an obrt needs no capital.
Which one is cheaper to run?
An obrt is usually cheaper. A flat-rate obrt, available up to 50,000 KM turnover a year, pays a fixed monthly tax and keeps no books, while a d.o.o. pays 10% profit tax and must keep full books and file annual financial statements. Cost is only one factor, so weigh it against liability and your plans.
Is the flat-rate obrt open to every activity?
No. The flat-rate regime suits turnover up to 50,000 KM a year and is not available to liberal professions. Above that limit, or for those professions, the actual-income regime applies: 10% income tax on profit, after contributions and a personal allowance of 300 KM a month.
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