Doing Business in Croatia
Croatia 2014 Country Commercial Guide – Market Overview
With Croatia’s EU Accession on July 1, 2013, the need for product double-testing and customs clearances when distributing goods and services between EU countries and Croatia has been eliminated. U.S. companies already exporting to the EU now have an additional market opportunity, accessible without any further administrative burden.
EU accession negotiations provided an additional impetus for the Croatian Government to undertake measures in recent years to address corruption and bureaucratic and judicial inefficiency. The current Croatian Government (elected in December 2011) has demonstrated its determination to further strengthen these reforms as well as find new and more effective ways to consolidate public spending, improve the business climate, and foster economic growth. The government has established a formal Working Group for Business Climate and Private Investments that consists of high-level representatives of 23 ministries and institutions. The group meets regularly to discuss commercial and investment disputes. The government has also established an Agency for Investments and Competitiveness to serve as the operational institution for the Working Group, and to assist investors with their projects. The Law on Strategic Investments was also enacted to fast-track major projects, stipulating almost $1,000 in fines to administrative institutions for every day of delay in the project approval process.
Croatia is a small but complex market. It is about the size of West Virginia, but its geography divides it into two distinct markets -- the more affluent and tourism-oriented Dalmatian costal region along the Adriatic Sea, and the rural inland Slavonian region, dominated by agricultural and industrial activities. The country’s population of roughly 4.5 million is largely homogenous in ethnicity, language and religion; but in the summer months its numbers double with tourists from throughout Europe and the world, making it a cosmopolitan market for products and services. Its ports and transportation infrastructure make Croatia a natural trade gateway into southeast Europe, but its largest trading partners are Italy, Germany, Slovenia and Austria. Croatia is a strong democracy with a market economy, but retains significant state control or involvement in a number of industries -- and has a considerable public financial burden from its social welfare policies. In brief, Croatia is a market of opportunity, but one that should be entered with due diligence. The U.S. Commercial Service is ready to help U.S. firms enter and succeed in this growing market.
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