In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), FDI flows to developing economies reached a new high of US$759 billion. However macroeconomic fragility and policy uncertainties are driving investors to caution.
It is only from 2005-2006 that FDI started to really develop in Croatia: its figures jumped from EUR 1.5 billion in 2005 to a record EUR 4.2 billion in 2008. Under the effect of the global financial crisis, the FDI literally collapsed, as in other parts of the region (-89% in 2010 compared to 2009 figures and then several years of decrease), especially in the tourism sector, which suffered from the drop in the number of foreign visitors. This trend was reversed only the following in 2011 and 2012. Still, according to the World Economic Forum (WEF), Croatia ranks before other European countries like Italy, Slovakia, Romania and Bulgaria in terms of ease of trade. In 2013 FDI only reached 1.251 billion USD, around 230 million less than the previous year
The biggest foreign investor in Croatia is historically and by far Austria, followed by the Netherlands, Germany and France.
Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).
|Croatia||Eastern Europe & Central Asia||United States||Germany|
|Index of Transaction Transparency*||1.0||7.0||7.0||5.0|
|Index of Manager’s Responsibility**||5.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||6.0||9.0||5.0|
|Index of Investor Protection****||4.0||5.9||8.3||5.0|
Source: Doing Business - Last Available Data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2011||2012||2013|
|FDI Inward Flow (million USD)||1,517||1,356||580|
|FDI Stock (million USD)||30,874||31,755||32,484|
|Performance Index*, Ranking on 181 Economies||84||-||-|
|Potential Index**, Ranking on 177 Economies||63||-||-|
|Number of Greenfield Investments***||52||41||35|
|FDI Inwards (in % of GFCF****)||12.1||12.5||5.2|
|FDI Stock (in % of GDP)||50.0||56.3||56.0|
Source: UNCTAD - Last Available Data.
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
All measures are established to create an attractive framework for investors and to make Croatia a valid foreign investment recipient.
For more details on FDI's incentives, refer to the Agency for the promotion of trade and foreign investment and to the Croatian Chamber of Economy website.
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Last Updates: February 2015