In the World Bank’s Doing Business 2015 report, Croatia ranked 65th, much higher than neighbouring Serbia and Bosnia Herzegovina, but what really stands out is the enormous progress the country has made over the last years. The 2015 position actually means a leap up by 23 places within two years and by 53 places within just a decade.
For example, between 2005 and 2015, the time spent on starting a business was shortened by 80 per cent, on registering a property by 92 per cent and on obtaining a construction permit by 51 per cent. It’s a great achievement but we’re doing our best to be even more competitive for investors.
In order to create an increasingly attractive legal framework and competitive business environment, the government has implemented a comprehensive set of measures and legislative amendments. Croatia now has one of the most attractive Investment Promotion Acts in the entire European continent. The country offers a wide range of incentives: direct support for creating new jobs of up to €18,000 per each new job created; support of up to €1 million for capital expenditure; support of up to €0.5 million grants for R&D activities and tax holidays for periods up to 10 years or until the maximum aid intensity of incentives is reached. The Strategic Investments Projects Act is also critical as it enables faster implementation of investment projects declared of national interest.
We are continuously working on encouraging and strengthening sectors in which domestic companies show competitive advantages with special emphasis on those with the highest growth potential. Our key sectors with opportunity for growth and investment are tourism, ICT, automotive, food, precision engineering and textile industries, as well as logistics and pharmaceutical industry.
Tourism and its subtypes — such as nautical, family, high-end, gourmet and health is Croatia’s largest sector, generating every seventh Croatian kuna (16.5 per cent of GDP) and employing almost 83,500 people.
The Croatian ICT industry ranks 45th out of 142 countries in the competitiveness ranking according to the Networked Readiness Index 2012 by the World Economic Forum and reaches an operating gross profit rate of 24.6 per cent, while the average for the EU27 is 20.9 per cent.
The pharmaceutical industry is one of the sectors of the Croatian economy where investment in research and development is remarkably extensive. About 90 per cent of revenues in the Croatian automotive industry is generated through exports. According to Eurostat, the operating gross profit rate is above the EU27 average — 8.9 per cent compared to 7.9 per cent in the EU.
There are many more investment opportunities in the aforementioned industries. Apart from its very convenient geographic position, natural resources and stable economy, Croatia has excellent infrastructure, equipped business zones and educated, creative and competitive human capital.
Attracting foreign direct investments is one of our most important strategic goals. Our primary focus is to attract FDI that will create new jobs, bring higher added value and stimulate development in less developed parts of our country. Also, it is of great importance for us to encourage new technology investments and those investing in research and development, with special emphasis on innovation, social responsibility and environmentally conscious investment projects.
The views expressed in this opinion editorial are the author’s own and do not necessarily reflect Emerging Europe’s editorial policy.