Croatia

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The fruits of reconstruction

With an economy that is displaying steady growth, a rapidly developing infrastructure, and a government that is determined to support foreign direct investment, Croatia is an attractive location for international investors looking for a location offering access to the Mediterranean and central and eastern Europe. In addition, Croatia is currently applying for membership of the EU, which will give it access to a vast integrated market to the west and north. International investment in Croatia currently comes mainly from its European neighbors, although no single country is dominant. Austria is the largest player, responsible for some 25% of total FDI in the country, followed by Slovenia, Germany, Italy and the US. As shown in the tables opposite, investment is diversified across a number of sectors, including tourism, light industry, food processing and business services. Recent investments have included a €75 million stone wool factory established by Danish company Rockwool in Pian, one of the government’s designated enterpreneurial zones.

Sectors to look at

• Croatia offers a cost-effective base for manufacturing companies, while easy access to road, rail and sea transport offers opportunities for logistics operations.
• Stunning natural scenery and a lengthy coastline have attracted considerable investor interest in the tourism sector. The Croatian government is selling its remaining stake in state-owned resorts.
• Mobile phone penetration is high, and the telecommunications sector is fully liberalized.
• Free trade and industrial zones, combined with a skilled workforce and relatively low cost base, are attracting an increasing number of investors to set up manufacturing facilities.

Setting Up

In a move to cut down on the complexity of establishing a business in Croatia, the government has set up a one-stop site, www.hitro.hr, which aims to give companies rapid access to the departments responsible for business administration. In particular, it includes a complete online guide to registering a limited liability company, including downloadable forms. Other options for investors include taking part in public-private partnerships (PPP), a business model that was approved by the government last June, and offers the opportunity to become involved in major infrastructure projects.

Financial incentives are available for companies that create jobs, or provide vocational training or retraining for employees. In addition, equipment that is imported as part of an investment is exempt from customs duty. Tax incentives are also available for companies establishing businesses in certain areas, in particular in the hills and mountains. Over 100 dedicated business parks have been set up across Croatia. In combination with one of the most modern transport systems in the region, they offer a welldeveloped and cost-effective solution for companies looking to benefit from a modern, established infrastructure.

Success Stories

Croatia is a natural location for leisure development

Good rates of growth, the chance to get established in what is still a fast-developing country, and the prospect of an expanding marketplace have all played their part in attracting investors to Croatia. However, according to investors quoted by Croatia’s own Trade and Investment Agency, it is above all the Croats themselves that have proved a major advantage to companies locating in the country. “We have employed a highly educated work force, with a very good knowledge of English language. Besides these business advantages that attracted Tele2 to invest in the country, Croatia is also a beautiful country to live in. The people are very warm and friendly and I can definitely recommend it,” said Mats Tilly, ceo of Tele2 d.o.o. Croatia. Maria Radtke, director finance & sourcing for Ericsson’s subsidiary in Croatia, put it even more simply. “Croats have a passion to win!”

AMCHAM Croatia

The American Chamber of Commerce in Croatia (AmCham Croatia) is the voice of US and other international businesses in Croatia and of Croatian businesses abroad. Amcham members employ some 38,000 people in Croatia, giving the organization a strong voice in representing members’ concerns at the regional, national and international level. AmCham aims to establish and maintain close communication among the foreign investors already present in Croatia, foreigners considering investing in Croatia, Croatian companies and the Croatian government.

Contact Information

American Chamber of Commerce in Croatia
Krsnjavoga 1
10000 Zagreb
Croatia
Tel: +385 1483 6777
E-mail: execdir@amcham.hr
Website: www.amcham.hr

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