Why expand to Croatia?

There has never been a better moment to invest in Croatia. Croatia market per se is quite small, having a population of only 4 million people. However, starting up a business in Croatia means connecting with a good hub for Central Europe, with good prospects for a foreseeable future of political stability and economic growth in the Balcanic area.

Croatia stands also at the crossroads of the Pannonian Plain, the Balkans, and the Mediterranean Sea. It is a country of striking natural beauty with a stunning Adriatic coastline, which makes it very popular as a tourist destination. The country borders Slovenia and Hungary to the north, Bosnia and Herzegovina to the southeast, and Serbia and Montenegro to the east.

As a candidate for European Union membership, the country redefined its policy towards foreign investment. Therefore, people licensing, incorporating or registering a business in Croatia are not only much needed, but also provided with good incentives. In fact, foreign direct investment is certain to increase significantly, led at first by tourism and followed by privatization opportunities and new industrial investment.

Croatia is classified as an emerging and developing economy by the International Monetary Fund and a high-income economy by the World Bank. Many analysts define Croatia a hidden secret. Commercial property development, especially for office space and retail zones, is well underway in the large urban centers and has resulted in a building boom. Incorporating a business in Croatia in these sectors can turn into a great investment.

Free trade or industrial zones are showing early results as European manufacturers seek to profit from a skilled work force, geographic links and tax incentives. EU pre-accession funds, coupled with World Bank financing, are enabling significant infrastructure improvements, notably in waste water management, transportation and education.

Attraction for UK business

Before the credit crunch, UK exports to Croatia were increasing at a rate of 20-25% per year (27% in 2007-2008). Croatia is a relative young market for UK business, which is gradually gaining a good reputation for the quality of products and the reliability of the companies.

Besides, attracting investors from abroad is now a priority in this country, where the Government has to demonstrate the ability to provide a friendly business environment for who is registering a business in Croatia. As they say, the early bird gets the worm.

Business opportunities

Commercial property development, especially for office space and retail zones, is well underway in the large urban centers and has resulted in a building boom. Free trade or industrial zones are showing early results as European manufacturers seek to profit from a skilled work force, geographic links and tax incentives. The warehousing and distribution sectors are next. EU pre-accession funds, coupled with World Bank financing, will enable significant infrastructure improvements, notably in waste water management, transportation and education. Within the health care sector, reform must be balanced with access to innovative products and medicines.

According to the UK Trade and Investment agency, opportunities for UK companies expanding a business in Croatia exist also in other sectors, such as:

With continuing highway construction and increased air links, Croatia's distribution network is among the best in the region and more and more companies registering a business in Croatia are selecting Zagreb, Croatia's capital, as their sales and marketing hub.

Challenges

Starting a business in Croatia may face obstacles: