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flag Croatia Croatia: Investing

In this page: FDI in Figures | Why You Should Choose to Invest in Croatia | Procedures Relative to Foreign Investment | Investment Opportunities

 

FDI in Figures

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).

 

Country Comparison For the Protection of Investors

  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 201120122013
FDI Inward Flow (million USD) 1,5171,356580
FDI Stock (million USD) 30,87431,75532,484
Performance Index*, Ranking on 181 Economies 84--
Potential Index**, Ranking on 177 Economies 63--
Number of Greenfield Investments*** 524135
FDI Inwards (in % of GFCF****) 12.112.55.2
FDI Stock (in % of GDP) 50.056.356.0

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.

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Why You Should Choose to Invest in Croatia

Strong Points
Croatia has a number of strong points:
- An advantageous geographical location along the Adriatic Sea;
- A skilled multilingual workforce;
- Good quality infrastructures: Croatia continues to invest heavily in transportation, telecommunications and energy infrastructures.
Weak Points
Croatia still has to face a number of challenges in order to become competitive:
- the country suffers from certain structural weaknesses amongst which are the current account imbalance, a significant private foreign debt and a trade deficit;
- the country also has an image problem. It is more known for tourism than as and investment opportunity. Croatia is also suffering from a backlash of years of war; and
- the legal and administrative systems are slow and could use some improvement.
Government Measures to Motivate or Restrict FDI
Croatia is open to foreign investment. The government has committed itself to increasing foreign investment and has taken measures to improve the investment climate in the country, for example, depending on the type of activity (manufacturing, technology centers, supporting services), through tax reductions and employment incentives. Amongst the main measures established by the government, we can name in particular:
- Equal treatment of nationals and foreigners;
- Low company administrative fees; and
- Laws protecting intellectual property.

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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Procedures Relative to Foreign Investment

Acquisition of Holdings
A foreign investor can hold 100% interest in the shares of a Croatian company, except in some cases specified by the government.
Obligation to Declare
Only for the acquisition of public joint stock companies.
Competent Organization For the Declaration
Croatian Financial Services Supervisory Agency

Learn more about Foreign Investment in Croatia on Globaltrade.net, the Directory for International Trade Service Providers.

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Investment Opportunities

Investment Aid Agency
Trade and Investment Promotion Office
Tenders, Projects and Public Procurement
Tenders Info, Tenders in Croatia
Ted - Tenders Electronic daily, Business opportunities in EU 27
Globaltenders, Tenders & Projects from Croatia
DgMarket, Tenders Worldwide
Other Useful Resources
Investment Promotion Directorate at the Ministry of Economy
Croatian Economic Diplomacy portal
 
 

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Learn more about Investing in Croatia on Globaltrade.net, the Directory for International Trade Service Providers.

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Last Updates: February 2015