Starting a Business in Croatia
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Why Start A Business In Croatia?
Croatia is fast becoming one of Europe's worst kept secrets. People flock there to experience the 5000 kilometres of coastline, its cliffs, canyons and culture. It basks in one the sunniest coasts in Europe. Offshore, Croatia consists of over one thousand islands which all vary in size. Yes, one thousand, the largest being Cres and Krk, which are located in the Adriatic Sea. Europe's second longest river, the Danube, runs through the city of Vukovar. Consequently, a fair amount of investment is required in hotel infrastructure if Croatia is to attain its full tourist potential.
Croatia is a member of United Nations, the Organisation for Security and Co-operation in Europe and the Council of Europe. The currency has remained stable, and industrial production is steadily picking up. Following economic setbacks during the 1990s, Croatia is now a promising and fast developing market. The government is avidly encouraging foreign investment to strengthen trade and commercial relations between UK and Croatia. This can only spell good things for anyone thinking of starting a business in Croatia.
Altogether, Croatia remains an exciting prospect for anyone thinking of setting up a business.
Croatia proclaimed independence in 1991 and has made significant progress in overcoming the characteristic difficulties of a country in transition and legacy issues associated with the war, which ended in 1995. Croatia was given EU candidacy status in 2005. The accession negotiations were completed in June 2011 and Croatia officially joined the EU on 1 July 2013. Croatia has also been a NATO member since April 2009.
Croatia’s legal framework is based on Austrian and German models. Acquis Communitaire has been fully transposed into Croatia’s legal system. The Constitution of the Republic of Croatia guarantees free transfer of capital and free profit repatriation to investors and Croatian laws guarantee equal rights for domestic and foreign private and legal entities.
The political environment is stable. A centre-left led coalition government has been in power since December 2011, with the next elections due to be held by the end of this year or, by the latest early February 2016. The Croatian economy is amongst the most developed in Southeast Europe. The Croatian National Bank operates a fixed exchange rate regime pegged to €; the local currency is stable and the inflation rate has been low. Banking system remains stable and well capitalised. But Croatia has been badly hit by the global financial crisis. After 6 straight years of recession GDP growth has been positive for the last two Qs (0.4%) and the economy is now on the road to recovery albeit fragile and heavily dependant on external demand. Croatia still needs to undertake deep structural reforms which successive governments have been reluctant to undertake. The structure of its economy is dominated by the service sector, primarily through its well developed tourism industry which is the main economic driver. In 2014 Croatia’s tourism sector recorded 13.1 million visitors (11.5 million of which came from outside Croatia). Tourism receipts in 2014 were € 7.4 billion. Other key target sectors include Energy, Infrastructure, Pharmaceuticals and Life Sciences, Advanced Engineering, Security and Services, Marine.
What are the essentials to know?
Business Hours - Business hours are usually 8.30-4.30 from Monday to Friday.
Minimum Wage - There is no statutory minimum wage in Croatia but there is a lowest wage for full-time work.
Currently, there are no official funds or incentives available to foreign investors.
- The handshake is the usual form of greeting at business meetings
- Business in Croatia is usually formal and initially reserved
- Do not use first names without being invited to do so
- Business cards are normally exchanged at business meetings and it is polite to have them translated
- Direct and straightforward talk is appreciated
- Meetings are usually lengthy
Organisations that can assist with Starting a Business
Simplified Global Payroll Managing payroll in multiple countries is complicated with different systems, deadlines, and languages in each country, lack of reporting, and constantly changing laws and regulations. Trying to manage global payroll via fax and email with excel spreadsheets leads to data security issues, fines, and penalties for non-compliance. Blue Marble has solved global payroll challenges with cloud-based technology, customized aggregated monthly reporting, and a hybrid service model in 150+ countries around the world.
PEO Worldwide is an international PEO offering employer of record, payroll, employee benefits management, HR and compliance services throughout the world.