ZAGREB, October 25, 2019 - Finance Minister Zdravko Marić and Croatian National Bank (HNB) Governor Boris Vujčić said that the progress made by Croatia in the latest Doing Business report was good news and that it should be taken as an encouragement for further reform.

Croatia has continued to improve its business regulations and is catching up with global regulatory best practices, the World Bank said on Thursday. Croatia placed 51st among 190 countries in the ease of doing business ranking, moving up from 58th spot last year.

Marić told reporters that the report provided a good picture and a good comparison with other countries in terms of where Croatia stands and in what direction it should be going. He said that all should be done to ease the conditions for doing business as a prerequisite for economic growth.

The minister said that the progress made was due to methodological adjustments and reforms that had been made in the last year, primarily with regard to starting a business, the transfer of ownership and obtaining a building permit.

"This improvement is good news and should encourage us all to continue in this direction. We should not be satisfied now and say, this is good, we have improved our rating, but should look forward," Marić said, adding that further progress should be made in structural reform.

Marić recently led a Croatian delegation to the annual meetings of the World Bank and the International Monetary Fund in Washington. He said that Croatia would continue to use World Bank loans for projects such as modernisation of land registries and further development of the judiciary for the purposes of the economy.

Vujčić said that the Doing Business report was a very important indicator of competitiveness and business climate. "I don't think we should be satisfied with 51st place, but should move on and make the economy even more competitive and further improve the business environment," the central bank governor said.

More news about doing business in Croatia can be found in the Business section.

ZAGREB, October 24, 2019 - The latest Doing Business study, issued by the World Bank on Wednesday, shows that Croatia has continued to improve its business regulations and now ranks 51 on the ease of doing business ranking, moving up seven spots since its previous ranking.

The World Bank says that Croatia "is catching up with global regulatory best practices."

This year when the study covers 190 countries, Croatia ranks 51 on the ease of doing business, compared to 58 last year.

"The country’s ease of doing business score went up from 73.0 in the Doing Business 2019, to 73.6 in this year Doing Business 2020," the bank says.

"The European Union’s top performer in the Doing Business report is Denmark, with a score of 85.3. This year Croatia ranks closer to other EU countries such as Belgium, Slovak Republic, Netherlands and Poland."

The bank says that "Croatia implemented three reforms."

The country is praised for having made starting a business easier "by abolishing the requirements to reserve the company name and obtain director signatures for company registration, and by reducing the paid-in minimum capital requirement."

"Dealing with construction permits has become less costly by reducing the water contribution for building a warehouse. Transfer of property has become easier by decreasing the real estate transfer tax and reducing the time to register property title transfers. But Croatia also made accessing credit information more difficult by ending the distribution of individual credit data."

“We are encouraged to see Croatia improving its business regulations and narrowing the gap with the global regulatory frontier," Elisabetta Capannelli, World Bank Country Manager for Croatia, was quoted as saying.

"The Government chose to focus on easing doing business as one of its top priorities by establishing a working group under the Prime Minister’s watch and efforts made during the past year are reflected in this year’s improved ranking," Capannelli said.

"We expect to see even stronger commitment this year in areas such as starting a company and the implementation in Zagreb and at local level, of the recently launched reforms in construction permits. The World Bank’s Justice for Business Project currently under preparation with the authorities will help support the government’s reform agenda to improve the business climate," she said.

Croatia has the best score in the category of cross-border trade, maximum 100 points.

Its worst performance is in the category of issuing construction permits.

The ease of doing business ranking is topped by New Zealand, and is followed by Singapore and Hong Kong.

Denmark, South Korea, USA, Georgia, the UK, Norway and Sweden are also in the top ten performers.

More news about doing business in Croatia can be found in the Business section.

Provided it is more successful than Croatian in reforms, Bulgaria could overtake Croatia in the World Bank’s Doing Business Rankings, warns the most recent analysis of business climate prepared by the Croatian Chamber of Commerce (HGK), reports Jutarnji List on January 8, 2019.

The HGK analysis is based on international competitiveness and business conditions research, especially the World Bank’s Doing Business. The Chamber is particularly concerned about the slow and costly administrative procedures encountered by entrepreneurs in Croatia.

The most critical point of doing business in Croatia is the issuing of building permits. Croatia is the weakest member of the EU on this indicator, and at the global level, there are just 31 countries worse than Croatia. The progress that has been achieved over the years in this area is slow, and in some years, according to the HGK, there has even been deterioration. The number of procedures needed (22) has not changed since 2011, while the number of days required to be issued a building permit (146) has remained the same since 2015. It should be noted that the time needed to receive a building permit differs from town to town, and the Doing Business rankings are based on Zagreb.

“Obviously, here the most critical issue is cost, although we need to reduce the number of procedures as well. In Croatia, there are costs connected with 14 out of 22 procedures, while in Malta there are costs for 6 out of 14 procedures. The utility fee represents close to 70 percent of all the costs associated with obtaining a building permit,” said the Croatian Chamber of Commerce. In Malta, the cost of issuing building permits is two percent of the investment value, while in Croatia it reaches 10.9 percent.

The area of issuing building permits is one of those which substantially affect the ease of doing business, and many countries have implemented reforms during the last year. Their efforts involved speeding up procedures, shortening the time needed to collect documents, reducing costs, and digitalisation. On the other hand, Croatia is still waiting for the real reforms in this area.

Another critical point is paying taxes. The tax payment procedures and the time it takes to pay taxes in Croatia are still among the longest and most complicated among comparable countries. For example, businesses in Croatia pay taxes 34 times a year, which takes 206 hours. In comparison, in Hong Kong, which is ranked the best in the world by this indicator, tax payments are made just three times a year, and businesses spend only 34.5 hours. In Riga, the capital of Latvia, which is the best rated among the new EU members, taxes are paid seven times a year.

Croatia is lagging when it comes to starting a business as well. For example, to establish a company in Zagreb, it is necessary to perform eight procedures in 22.5 days. On the other hand, in Auckland, New Zealand, which is the best in the world by this indicator, just one step is needed. In Tallinn, the capital of Estonia, people spend only three and a half days executing the three procedures required to start a business.

These are all areas where there is the most significant room for improvement and which should see accelerated reforms that will improve the business climate in the country and strengthen the competitiveness of the Croatian economy, concluded the HGK analysis.

More news on doing business in Croatia can be found in our Business section.

Translated from Jutarnji List (reported by Adriano Milovan).

Doing business in Croatia is always tricky, it's a long road often filled with an insane amount of paperwork and this bizarre requirement for you to physically go to multiple locations in order to get things done. Let's not forget the dreaded and archaic stamps, and the typical utter lack of desire on the faces of those apparently employed to help you. Is all that about to change with the country's gradual formation into a digital Croatia?

As Marija Brnic/Poslovni Dnevnik writes on the 29th of November, 2018, as of April the 1st next year, all those who want to start their own business in Croatia would be able to complete the process for registration and start doing business within just 48 hours. No, it isn't just an April Fools' trick.

A new business start-up system called Start will enable those who want to start their own businesses in the country to do just that, in a move which has been a deeply desired pipe dream up until now. With digital Croatia now finally on the horizon, getting your business off the ground is about to get a lot easier.

The service, which has been prepared by the Finance Agency (FINA), was finally given the green light following a government decision since last week. By the end of March next year, this system will be available to all those operating from within Croatia who own companies, including d.o.o and j.d.o.o's, while those abroad will see the service enabled for them by the end of 2019.

While start is an incredibly welcome news, it isn't the only player on the field, since 2005, Hitro.hr has been active, and is also a service from Fina. However, the Ministry of Economy, which is overseeing this project, clarified that there are some big differences between Hitro.hr and Start.

"Hitro.hr allows only the establishment of an Association or a company (obrt), or entry into the court or company register, while Start also enables the start-up of a business, which includes registration with the court and the company register, as well as entry into the register of business entities at the Central Bureau of Statistics, the filing of the beginning of the business and the beginning of the insurance with the Croatian Health Insurance Institute and the Croatian Pension Insurance Institute,the  registration of the taxpayers' register with the Tax Administration, registration in the VAT system, the opening of a bank account, and the electronic payment of any fees incurred during the process of all this,'' they explained from the Ministry of the Economy.

The beginnings of a digital Croatia will see that in the future, company owners will not physically have to go to all of the mentioned institutions as they currently need to, and all of the applications involved in this paperwork ridden and tiresome process will be able to be exported in one place by filling out a single digital form.

The establishment of this system amounts to 5 million kuna, as foreseen in the Ministry of Economy's budget, and in a year's time, it intends to back the project up with yet another half a million kuna.

Start requires automated communication and the exchange of data and documents between the ministries of economy, justice, finance, the tax administration, DZS, HZMO, HZZO, and credit institutions. Hitro.hr will not be harmed or otherwise threatened by the more than welcome launch of the Start system, as was confirmed by the Ministry of Economy, this service fulfills the objectives for which it was founded - better informing future entrepreneurs and providing better communication between people and the state administration, as well as offering far more ease and saving precious time when establishing a company.

"Hitro.hr will continue to provide services to users who need that kind of help - information ''at the counter'' and help with name reservations, or just the mere establishment of a company," the Ministry pointed out.

Fina added that if a user wants to start a business from their own home, they will beed to use Start, and if they want to start a business by going to the Hitro.hr counter and taking all the other steps individually, they will still have that option as well. Therefore, for those who prefer the "classic" Croatian way of starting a business, characterised by their physical arrival at the dreaded counter, Fina intends to keep the Hitro.hr offices open.

However, due to the ever-increasing trend in the digitisation of public services and the inclusion of newer generations in their use, Fina has also estimated that the percentage of those who prefer to use Start will grow year-by-year. Since the establishment of Hitro.hr, a large number of entrepreneurs have used it during the first step, especially when establishing a j.d.o.o., where every other such form of company since the service's introduction back in 2012, was established through Hitro.hr.

Altogether, Hitro has helped to create more than 57,000 new companies, of which some 32,000 are d.o.o.'s and 25,000 are j.d.o.o.'s. Obrt owners, however, have rarely used this registration service, since their start-up process is different, and since 2015, e-Obrt services have been introduced, which has completely taken over the registration processes of such companies.

The introduction of the Start system will not automatically open new jobs according to Fina's information. Currently, the offices of Hitro.hr are located in 61 Fina offices throughout Croatia, and information and support services are provided to them by Fina's existing employees, while as far as Start is concerned, as an online service, part of Hitro.hr staff will be engaged in staffing it via Fina.

Among the recommendations the World Bank gave to Croatia, the pressing need to create a more digital Croatia in order to improve the entrepreneurial climate was among the most outstanding, and it is precisely the creation of a unique online procedure, as opposed to the archaic dragging of one feet to numerous different offices in which processes are slow, confusing and often delayed, that will help paint a better picture of doing business in Croatia the most.

Interesting data from the analysis of Doing Business shows that starting up a business in Croatia is the easiest in Split, and there in the popular Dalmatian city are the largest number of Hitro.hr users. Out of five large Croatian cities, the worst results have rather surprisingly been recorded in Zagreb. According to Doing Business's analysis, more than half of Split's newly established companies use Hitro.hr, and for starting a business there, it is necessary to complete six individual procedures and the process typically lasts six days on average.

In Zagreb things appear bizarrely different, in the capital, a would-be entrepreneur has to complete eight different procedures and it takes a ridiculous average of three weeks for all the paperwork to be dealt with.

The welcome electronic changes that April the 1st, 2019, is set to bring owing to Start will require these procedures to be reduced in all cities across Croatia to just one step, and thanks to digital Croatia's roots finally being planted, the duration of this previously insanely time consuming process will go on for an absolute maximum of two days.

Make sure to follow our dedicated lifestyle and business pages for more information on digital Croatia and much more.

Click here for the original article by Marija Brnic for Poslovni Dnevnik

ZAGREB, November 21, 2018 - This year's HUP Score, which measures the progress of reforms in 12 key areas for doing business in Croatia, is 37 out of 100 points, one point less than in 2017, the Croatian Employers' Association (HUP) said at a presentation of this index on Wednesday.

"This score shows that we remain at the tail of the European Union. We are its worst performing member," HUP president Gordana Deranja said.

Noting that the HUP had been insisting on reforms all along, Deranja said that reforms would not have a strong effect on the economy if they continued coming from the Ministry of Finance alone.

"Although the score for fiscal consolidation is much better, a strong decline in the score for investment and business barriers and chronic problems relating to the burden on the economy and the labour market have resulted in a fall of the overall score for 2018. In addition to fiscal consolidation, productivity and competitiveness and capital supply also have positive scores," HUP said.

Results show that the best progress has been made in fiscal consolidation (from 54 points in 2017 to 56 in 2018), productivity and competitiveness (from 34 to 45 points) and capital supply (from 36 to 42 points).

On the other hand, the sharpest fall in the score was observed in the score for investment and business barriers, from 35 points in 2017 to 23 points in 2018.

For more on doing business in Croatia, click here.

ZAGREB, October 31, 2018 - Croatia slid 7 places to 58th place in the World Bank's latest Doing Business report covering 190 countries, and while last year it ranked 51st with a score of 77.70 points out of 100, this year it earned 71.40 points.

According to the report entitled "Doing Business 2019: Training for Reform", which was published on Wednesday, Croatia has the poorest performance in "Dealing with Construction Permits", plunging from 126th place to 159th place. It also slid in the "Starting a Business" segment, from 87th place last year to 123rd this year.

Croatia has improved performance in "Registering Property", moving up eight places to rank 51st. It also moved up in the "Getting Electricity" segment, from last year's 75th place to 61st place this year. Croatia also made progress in "Paying Taxes", going up from 95th to 89th place.

Measured by the "Getting Credit" criterion, Croatia fell from 77th to 85th place. It also regressed in "Protecting Minority Investors", from 29th to 38th place and in "Enforcing Contracts", slipping two places down to rank 25th.

Croatia ranked best in "Trading Across the Borders", scoring the maximum 100 points and top position, just as it did last year.

The overall ranking was topped by New Zealand, Singapore and Denmark. Hong Kong moved upward by one notch to fourth place, and South Korea fell from fourth to fifth place. Macedonia returned to the top 10 this year, inching up one spot to 10th place and displacing Sweden to 12th position.

Economy Minister Darko Horvat said on Wednesday that the latest World Bank Doing Business report clearly showed what Croatia was bad at and what should be changed, adding that by introducing the possibility of starting a business electronically, on which his ministry was working, Croatia would go up 10 places in the World Bank ranking.

"We are aware of the sore spots of the national economy and of the fact that some countries, notably those in our neighbourhood, make more radical and faster changes. The Doing Business report also gives us a clear signal in terms of what we are bad at and what we need to change," Horvat told reporters.

Horvat said that for the past two months he had been working with the ministers of public administration and justice on a specific, radical measure to remove all administrative barriers when starting a business in Croatia electronically, which is the segment where Croatia dropped the most in the Doing Business ranking. "Starting a business electronically will include the opening of a bank account, electronic payment of the necessary taxes without any physical signature. Once this is introduced, I am confident that it will help Croatia go up 10 places in the ranking."

In a message to investors, Horvat said that at the moment his ministry, the Croatian Employers Association and all interested business entities were working on two action plans that should be implemented in 2019 and result in the removal of many administrative barriers and alleviating the tax burden on businesses by removing non-tax levies in the amount of around one billion kuna.

The Croatian Employers' Association (HUP) director-general Davor Majetić, commenting on Wednesday on the latest World Bank's Doing Business Report, said that changes are happening in the country but they were too slow and insufficient to trigger significant headway required to make the national economy more competitive.

It is evident that the countries in the neighbourhood are undergoing changes much faster than we are and it is more and more difficult for our companies to compete with peers from those countries, he said. "We expect the government to keep implementing the reforms it has launched and to intensify efforts in conducting all other reforms needed to enhance the country's business climate."

To read more about Croatian economy, click here.

For the second year in a row, Croatia’s ranking declines.

Conditions for doing business in Croatia are not getting any better.

Croatia is ranked 40th out of 189 countries