Croatia

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Investing in Croatia

FDI in figures | Why you should choose to invest in Croatia | Procedures relative to foreign investment | Finding assistance for further information

FDI in figures

The overall biggest foreign investor in Croatia is by far Austria (with a tottal of almost EUR 5.5 billions), followed by Netherlands and Germany on second and third place respectively investing both a bit less than Austria alone during the past 15 years. France with a total of 1.3 EUR billions of investment is by far on 4th place but only thanks to a record investment year in 2006 of more than one billion EUR alone when Société Generale bought a Splitska banka bank.

FDI to Croatia has been realtively poor in the first period until 1997 and after that it was quite stable from 1998-2004. After that it has began to florish and it has increased from 1.5 EUR billions in 2005 to almost 5 EUR billion today.

According to the World Economic Forum (WEF), Croatia occupies the 39th place among 121 countries regarding trade facilitation. The country is in a best position than other European countries like Italy, Greece, Poland, Slovakia, Romania and Bulgaria.

Foreign Direct Investment	2005	2006	2007
FDI inward flow (millions USD)	1,788	3,423	4,925
FDI stock (millions USD)	14,592	27,364	44,630
Performance Index*, ranking on 141 economies	40	36	22
Potential Index**, ranking on 141 economies	55	56	-
Number of Greenfield investments***	46	37	32
FDI inwards (in % of GFCF****)	15.8	25.9	32.1
FDI stock (in % of GDP)	37.5	63.7	87.0

Source:

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.

Why you should choose to invest in Croatia

Strong points: Geographical location: along the Adriatic Sea facing Italy on its other side.

Labor skills: multilingual and well educated workforce (mandatory secondary school) on the way to become a knowledge based society.

Infrastructure: Croatia continues to heavily invest into transportation, telecommunications and energy infrastructure to lower operational costs.

A gateway to the EU: Croatia is estimated to become a member of the EU in 2010.
Weak points: Slow legal and administration system, innefficient bureaucracy: amid a backlog of over 1 million pending cases even the simplest cases can take years to resolve.
Government measures to motivate or restrict FDI: Croatia is open to foreign investment. The government has set a goal of increasing foreign investment and has undertaken measures to improve the investment climate in the country such as tax and employment incentives depending also on the type of activity (manufacturing, technology centers, supporting services).
More details on FDI's incentives are available at the Agency for the promotion of trade and foreign investment and on the Chamber of Commerce's website.

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

Finding assistance for further information

Investment aid agency: Trade and Investment Promotion Office
Other useful resources: Investment Promotion Directorate at the Ministry of Economy
Croatian Economic Diplomacy portal

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