What with the playground-like rivalry between neighbours Croatia and Slovenia still going on, however less loudly, one has to wonder just where Croatia might be going wrong in relation to its much smaller neighbour to the north. Slovenia's Koper Port made ten times more money than the not so far away Rijeka Port in Croatia did in 2018.

While Slovenia has indeed attracted more and more tourists over the last few years, Croatia still undoubtedly takes the cake when it comes to making huge income from tourism. Croatia's ports, especially in Dalmatia, can be hectic and chaotic places, with cruise ships coming and going on an almost constant basis and local people's lives disrupted heavily during the tourist season. Rijeka Port, however, while having seen a rise in the number of cruise ships arriving, seems to be losing out quite significantly to the far less ''touristy'' Koper Port.

As Morski writes on the 3rd of March, 2019, the Slovenian Port of Koper enjoyed some very handsome revenues of 226 million euros, equal to one billion and 695 million kuna last year, which is seven percent more than was recorded by the major Slovenian port back in 2017.

Koper Port's net profit rose by a massive 71 percent to an impressive sixty million euros, according to a report from SEEbiz.

At the same time, the largest Croatian port, Rijeka Port, doesn't seem to be doing all that well, at least when compared to Koper. In 2018, according to the available financial report(s), Rijeka Port concluded last year with a total revenue of 171 million kuna, or 22.8 million euros, which is a rather concerning ten times less than the Slovenian Port of Koper. When Rijeka Port deducts some of that amount from its expenditures, a profit of just 848,000 kuna remains.

Make sure to stay up to date by following our dedicated business page.

Investment in Croatia has stagnated in certain important areas, despite interest from domestic investors having been drawn to other more promising areas, such as the hotel sector. Foreign investment in Croatia, despite having occurred in some quite large projects, is still dwindling.

As Marija Crnjak/Poslovni Dnevnik writes on the 1st of March, 2019, the focus of investors last year was largely on shopping centres and of course the apparently eternal hotel sector, although figures didn't exceed those seen during the year before the crisis hit. The value of commercial real estate transactions last year was twice as high as it was during 2017, reaching about 810 million euros.

While, as stated, the main focus of investment in Croatia has been on shopping centres and the hotel sector recently, there has been considerably less movement in numerous other areas, the number of construction projects seeing investment in Croatia, for example, has not yet overtaken the position it held the year before the crisis. The market for industrial and logistics property is still easily the least developed of all, despite its enormous potential and demand, and the office space market is most lacking in large office space available, according to an annual review carried out by the Colliers International consultancy company.

"The growth in the number of transactions last year is a result of the positive sentiment of investors and attractive returns, given that Croatia has stabilised economically in relation to the markets in the environment, the investment risk has been reduced, as the rating agencies showed. However, there's still a lack of greenfield investments and major projects, as well as there is a large number of foreign investors missing from the picture,'' said Vedrana Likan, the director of the Colliers Croatian office.

Once again last year, domestic investors wanting to pursue investment in Croatia were the by far the most active on the market, accounting for 50 percent of all value transactions, while the most active foreign investors were property investment funds from South Africa, with a 40 percent stake in the volume of transactions in 2018. The top transactions were the entry of PND Strategy of Danko Čorić into Hotel Maestral, Immofinanz bought eight retail parks in Croatia, Slovenia and Serbia, while the Tower Property Fund purchased industrial property in Žitnjak.

This year, a similar number of transactions are expected, just like last year, with a boost of the presence of investors from the Middle and Far East, China, the United Arab Emirates, and Korea. Most transactions are expected in tourism and office property, while retail will have weaker growth due to the fact that the market is already quite saturated. In the retail segment, the potential risk in Colliers is reflected in negative demographic trends and ever-growing internet commerce.

The need is for larger office spaces of 1,500 square metres, and such spaces are almost unavailable on the Croatian market, there is also a dire need for office class A. Despite the low office vacancy rate (4.5 percent) this area has remained at the level of 2017 (12-13 euros per square metre). Colliers has seen stronger developer activity due to the high demand and the lack of modern storage and logistics space(s)available, they have also warned of unfavourable conditions for the construction of such buildings due to high communal fees, which are still charged in Croatia per cubic metre rather than per square metre.

Make sure to stay up to date with all you need to know about investments in Croatia and much more by following our dedicated business page.

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

As Index writes on the 26th of February, 2019, a panel discussion and a study on the restructuring of Agrokor organised by TMA Europe was held today in Zagreb. Its speakers were Agrokor's extraordinary commissioner Fabris Peruško, his deputy Irena Weber, as well as other most important people who were involved in restructuring the formerly ailing company which once threatened to collapse the Croatian economy almost entirely.

Alastair Beveridge from AlixPartners and Goran Horvat of KPMG Croatia also spoke, as N1 reports. Peruško stated that if this key Croatian company was in Germany, it would have had 650 billion euro impact on the budget.

In addition to describing the impact it would have had on the budget over in Germany, Peruško also added that if Agrokor existed in Germany, it would be able to employ a massive 900,000 people and the suppliers themselves would have five million employees.

He detailed the entire history of Agrokor's long and often agonising restructuring process, from its liquidity and its huge debt problems, all the way through to the development of a special law to the settlement process.

"The Agrokor administration tried to resolve the situation, and at the same time the government attempted to create Option B in case the management failed to come up with solutions with large banks and suppliers. The existing law didn't foresee a procedure for such a large company and the government issued a law on April the 6th based on the Italian case of Parmalat, and Agrokor's leadership resigned, after which the extraordinary administration entered [into the company] on April the 10th,'' stated Peruško.

The law protected 60,000 jobs in Agrokor and prevented spill overs to other suppliers, ultimately stopping the chance of bankruptcy of Agrokor's numerous affiliated companies.

''As I said at the beginning, we're talking about more than 3.5 percent of revenue in the Croatian budget, and we've prevented the spilling over of this to other countries because Agrokor is the largest employer in Slovenia and Bosnia and Herzegovina, and the second [largest] in Serbia, it all coincided with the tourist season and Agrokor is the largest supplier of tourism infrastructure. The economy has recovered from the recession and a new shock would have had a devastating effect on the economy,'' said Peruško, announcing the following steps in Agrokor's restructuring process, ie the transfer of operations to its mirror companies, as well as the business plan.

Alastair Beveridge from AlixPartners, a company which was a frequent target of ex Agrokor boss Ivica Todorić's accusatory blog posts, referred to Agrokor's restructuring as being unique in this region and said that one of the biggest problems (which is rather characteristic of administrative bodies in all sectors in Croatia in general) was the lack of information. He added that the amount of cash was shockingly mininal and that at one point, a mere ten kuna alone sat in the gigantic company's account. Beveridge's remarks are a terrifying reminder of what could have become of Agrokor, its many suppliers, jobs, and the Croatian economy.

"Many companies had ceased their production, so one of the issues was launching production, and that's what we needed to collect cash for. We had to look at each business well and set priorities. With nearly fifty assistants, we raised almost 400 million euros. I think it's a big step to borrow money to such a huge company. In the end, we had two offers, only one could manage to arrive in time, we managed, with the help the Croatian National Bank, to secure 540 million euro of fresh money which came in early June, which saved the company,'' Beveridge said.

For more on Agrokor and the business and investment climate in Croatia, follow our dedicated business page.

As Novac/Barbara Ban writes on the 26th of February, 2019, ''Dr. Martin Horvat'' Rovinj Hospital has proudly stated the fact that in 2019, it plans to invest heavily in the amount of 12 million kuna, and it ended 2018 in a surplus in regard to finance and the number of patients. They claimed that they had 500 patients more than one year earlier, that they provided 16,440 more medical services than they did last year, marking an increase of 26.5 percent.

Rovinj Hospital finished of the business year of 2018 with a financial gain of 623,000 kuna. This is the fifth year in a row that Rovinj Hospital has managed to conclude with some excellent financial results, with all of our employees being paid all of their salaries within the deadline, as well as regressions, Christmas bonuses, vouchers, jubilee awards, money for children for St. Nicholas, retirement benefits, sickness benefits, and assistance in accordance with our underlying collective agreement. I'm proud to show this positive change and an increase in the number of visits to our institution from year to year because better implementation means better addressing the needs of our citizens,'' says dr. sc. Marinko Rade, who was recently elected to the Working Group of the Ministry of Health for the drafting of the Ordinance on Health Tourism.

Investments of 12 million kuna are planned to be carried out over the next fifteen months, and alterations have already begun in the department where the patients from the AUVA insurance company stay during their time at Rovinj Hospital. The hospital's entire roof will be changed, the façade will be renewed, and works on the hospital's energy sources will be carried out, a new elevator will also be installed. The total value of these investments currently stands at five million kuna, with renovation of the main building also planned.

''Investments for a further seven million kuna will be issued shortly, including the renovation of the façade, the replacement of the entire roof, and works regarding the change of the energy [system] of the main building of the hospital, where there are clinics and departments in which our local patients are treated. We're investing the most in these departments. Reconstruction should start at the end of 2019,'' added Rade.

He added that so far, everything they invested has been covered by money from the hospital's significant profits, and now they are financially secure enough to safely borrow. In addition to all of the works Rovinj Hospital is set to undergo, a library will be opened soon in the department, and a new therapeutic park will be set up.

''So far, we've collected 6,000 books donated by citizens, which is a truly impressive and record-breaking number for a public action. At this time, we're separate the books by their categories and languages, and we're renewing the space where the library will be located at the department. Additionally, the placement of a therapeutic park is ongoing, which is being carried out within the Design/Build project in collaboration with the George Washington University from the USA. The project will be completed by April this year,'' noted Rade.

Rovinj Hospital isn't ''only'' planning to invest in buildings, but also in their much appreciated employees, in terms of their continued and additional education. This will amount to up to 250,000 kuna.

''This is the money that this institution allocates from its income, ie, from the income generated from the private market,'' Rade added that owing to several factors, Rovinj Hospital can't raise anyone's salary regardless of their position, and that's why the hospital's administration has been looking for more innovative ways to properly reward and thus hopefully retain such valued employees, and one way is to pay them in continued, additional education.

''Of course, doctors and healthcare staff are paid for their training and for congresses in order to become superior in their specialties, which means more access to patients. But we're also investing in the non-medical staff who work in our hospital, which I consider to be equally important links in the chain. This means that, let's say, chefs and cooks can receive paid education which then allows them to progress and provides them with technical education and training that can help them out more in their day-to-day work. That's why we've reserved a lot of money,'' concluded the director of Rovinj Hospital.

For more on investment in Croatia, healthcare, health tourism in Croatia and much, much more, give our business page a follow.

Click here for the original article by Barbara Ban for Novac/Jutarnji

As Croatia's increasingly alarming negative demographic trend tightens its grip over the country and its economy, there seems to be more people insured by the Croatian health system (HZZO) than actually live and work here...

As Index/Marko Repecki writes on the 26th of February, 2019, due to the negative demographic trends and a fairly low birth rate, Croatia has now worryingly fallen below four million residents, according to the estimates of demographers, but at the same time, there are miraculously 4,145,169 persons who have Croatian Health Insurance from HZZO.

This means that more people are apparently entitled to Croatian health insurance than are actually really living in Croatia. This phenomenon is not entirely new, because when we look at some of the data for the previous years, it can be seen that there are approximately between 90 and 120 thousand people who seem to be insured with HZZO, therefore using the services of the Croatian health system, than actually live here.

Who exactly are these people who have HZZO health insurance and don't live in Croatia?

Index readily asked HZZO to explain just how this difference of Croatian health system users came about, and they answered that there are persons who are still considered as insured persons in Croatia, although they don't actually live here.

"On the 31st of January, 2019. 4,145,169 insured persons were registered in the Croatian Health Insurance Institute (HZZO). Please note that in some cases the person is still considered to be an insured person, even though they don't live Croatia. As an example, we include: active Croatian insured persons with residence in another EU member state (such as an actively insured Croat who lives in Slovenia), beneficiaries of Croatian pensions who have moved to the territory of another [EU] member state, and our delegates doing temporary work in another member state (a worker whom a Croatian employer sent for temporary employment in, for example, Germany). In all these cases, it regards persons who remain insured persons of HZZO, but they also enjoy the right to health care in the territory of other member states, in accordance with EU regulations on the coordination of the social security system,'' HZZO's statement said.

Index also sought further clarification on who is actually considered an actively insured person, and they got the following answer:

"An active insured is a person who is employed and pays contributions for compulsory health insurance, which are paid by their employer. Such insured persons do not pay health insurance contributions in the country where they live, but their contributions are paid in the country where they work. A person can't be insured in two EU member states, but is insured in the country in which they work, and in the territory of the other [member] state in which they're living, they have the right to full healthcare, just like all of the other persons with health insurance in that [member] state, on the basis of having health insurance in their country of work. For example, an actively insured person works in Croatia and lives in Slovenia, he is then entitled to full health care on the territory of Slovenia, at the expense of the Croatian Health Insurance Institute,'' HZZO replied.

The head of the Lipa Association (Udruga Lipa): "We pay 23 billion kuna every year for healthcare, and the system is breaking down"

145,000 people seems a huge number if we're talking about people who live abroad, yet work in Croatia, or are retirees with a Croatian pension yet live in another EU member state. Index asked the Lipa Association for a comment:

''We at the Lipa Association don't know why HZZO has a higher number of insured persons than the population of Croatia according to DZS and to demographers,'' said Lipa's Zoran Löw, but he referred generally to the catastrophic state of healthcare. Although Croatian workers to pay out a sum of money for access to state healthcare, the Croatian Health Insurance Institute, Croatia's chief health system funder, spends around 23 billion kuna annually, in five years, that comes to a huge amount of 115 billion kuna. We're witnessing the complete disintegration of the system where people literally die on roads, and examinations are being waited for for months, and in some cases, for years.

Löw added that they forwarded an open letter to Milan Kujundžić, the Croatian Health Minister back in 2017, warning of the need to include private institutions in the state's health system.

"In many EU countries, private institutions providing health services are integrated into the system so that they compete equally for jobs funded from the public system. Let's just list some: the Netherlands, Sweden, Portugal, Germany... And this is not just about simpler institutions such as labs or family medicine, the're also serious clinics. In this way, it introduces some healthy market competition and the whole system becomes more agile and financially viable. Unfortunately, in Croatia, this approach is viewed as the privatisation of the healthcare system. This government and its health minister obviously don't have the courage to come out with such an initiative and stand behind it,'' they stated from Lipa.

Make sure to stay up to date with news on the Croatian health system and much, much more by following our dedicated lifestyle page.

Click here for the original article by Marko Repecki on Index.hr

By-products from Croatian slaughterhouses could potentially have some good buyers in China. What Croatia considers to be meat by-products are valued delicacies over in China, and exporting them could open up a potentially highly profitable door.

As Poslovni Dnevnik writes on the 26th of February, 2019, the Chinese are happy with what they've seen, and according to the Croatian Chamber of Commerce (HGK), ''we're now awaiting the final findings to sign a bilateral agreement.'' These comments come after Dukat and Vindija, as well as several farms and other competent Croatian institutions were recently visited by a Chinese deligation following the organisation of a visit by the Ministry of Agriculture and HGK.

As Vecernji list writes, the reason appears to be that milk and dairy products over in China are becoming more and more sought after and sell at a very good price, so along with the construction of Pelješac bridge, cooperation can now also be expected in terms of agriculture and food, such as via the potentially very profitable export of top quality Croatian cheeses and dairy products.

In addition to this potential wealth of profit, all eyes are currently also on the recent visit of the Deputy Prime Minister and Minister of Agriculture Tomislav Tolušić to China. Branko Bobetić, the director of Croatiastočar, says the total export of agricultural and food products in the EU from December 2017 to November 2018 stood at 115 billion euros, of which 11 billion was from China.

''Of that [amount] 2.2 billion euro is made up of meat and meat products from the EU, and 1.3 billion is from milk and dairy products, and as total imports of agricultural and food products from China into the EU amounted to 5.7 billion, EU exports are twice as big as imports are,'' stated Bobetić. The bulk of these meat exports are, of course, pork, and as China desires exactly the products Croatia considers to be by-products, there is a big chance there.

''Pigs' heads, bones, stomachs, ears, innards... they are delicaies there. So far, we've exported some of it to Hong Kong at an average price of 1.25 euro, while on the Chinese market, which is still closed for by-products from our slaughterhouses, such products have reached twice the price,'' said Bobetić, pointing out that based on the estimation of the amount of pigs which end up in Croatia's biggest slaughterhouses each year, there were about 5-6 thousand tons of pork by-products worth at least seven million euros in exports.

Make sure to follow our dedicated business page for more information on Croatian relations with China.

As Darko Bicak/Poslovni Dnevnik writes on the 22nd of February, 2019, defending the Croatian justice system today is mission impossible. Mario Vukelić, the president of the High Commercial Court, who took part in the panel entitled "Legal security - the guarantor of investment'' which was held in the framework of the InvestCro conference in Zagreb.

"And at this conference, we've heard the word perception many times, so how we perceive something, and not necessarily how things actually stand. The perception of an inefficient justice systemis a fact from which conclusions are drawn.

The theory that Croatia has the most unresolved cases in the EU, as well as the highest amount of judges, of course in both cases per capita, it's also a fact that Croatia is the first in the EU on inflow of new cases to the courts, but if we look at the duration of the average dispute, then we come in 12th place out of 28 EU member states,'' said Vukelić. He added that many long-standing disputes at commercial courts in the Republic of Croatia are actually caused by the economic crisis.

"Big and successful companies are seldom judged because that is costly and carries on for a long time, they simply agree and reconcile, either directly or through a mediator. The problem with us is that we have no money, companies are often aware of the facts on which they're being judged, but they don't given the fact that they have the money, they buy time through long-lasting court disputes,'' said Vukelić.

Tatjana Josipović, a professor at the Faculty of Law in Zagreb, emphasised the fact that the Croatian justice system is highly segmented and that there is a very large number of mutually overlapping legal regulations.

"Before adopting a new law, simulations should be carried out to see how it would actually function in reality. A concrete example is the new Enforcement law, about which it's hard to say whether it will work, and how it will work in reality. In terms of investment, it's imperative to sort out the land register as without that, we won't have bigger investments, we're making progress as the 800-day deadline is now 25 days, but the problem is the unresolved property and legal relationships. We have successfully completed the legalisation project, but legalisation doesn't mean that these ojects could be entered into the land registry because we don't have clear ownership relationships. We have to face these problems and solve them, and not just sweep the problems under the carpet, and then go on upgrading because we'll end up meeting back up with these problems sooner or later,'' said Josipović.

Mićo Ljubenko, a lawyer in the law firm Ljubenko & Partners, doesn't agree that the slowness of the Croatian courts is the biggest problem facing the Croatian justice system.

"Are there really any examples that serious companies operating in Slovenia and Hungary aren't also operating in Croatia? No, we don't. Serious investors approach their problems correctly, and they get their problems sorted out. Whether or not the deadline for registering a company is five days, as it is in Serbia, or 21 days as it is in Croatia is completely irrelevant to any investor, it's another thing if the papers aren't done properly and the situation isn't clear,'' concluded Ljubenko.

Make sure to stay up to date on news on the Croatian justice system and much more by following our dedicated politics and business pages.

Click here for the original article by Darko Bicak for Poslovni Dnevnik

As Goran Jungvirth/Poslovni Dnevnik writes on the 24th of February, 2019, just like in the case of many other industries and categories of workers across the Republic of Croatia, the student population also poses a major challenge to employers when it comes to hiring employees, which is why new web portals and applications are being launched with a view to better connecting the supply and demand markets.

At the end of October 2018, a new law on Student Affairs was finally adopted in Croatian Parliament, with the aim of introducing changes that should provide more ease and significantly better conditions for the country's many students.

The move foresaw that the payment of a contractual fee be guaranteed within fifteen days, the introduction of a digital system was introduced, minimum times and their various accompanying payments were introduced, with an increase for working on Sundays, as well as for working at night and during holidays, as well as some other more than welcome student benefits.

Legislators made the changes justified by the desire to put an end to the exploitation of Croatia's students as little more than cheap labour for greedy employers in numerous different sectors.

Out of about 160,000 students in the Republic of Croatia, about thirty percent are extraordinary students, therefore it is expected that they will also work on student contracts, further strengthen the market for the country's potential student workforce, and more easily meet the needs of the demand market and of their respective employers.

However, it seems that such ''high-quality'' students are hard to come by and all but unavailable, because they're either simply not interested or they're already engaged in some sort of other work.

Labour market agents only noted the initial higher response of these so-called extraordinary students after they too were permitted to work through student contracts, but that situation, like many others, soon became a ''lethargic'' one.

"The problem is also a student's time and availability is limited to their university commitments, and employers of course want the same commitment as full-time employees, but students naturally don't want to lose their often beneficial student rights," stated Saša Jurković of Jazavac's management, an application which seeks to better connect students and their would-be employers.

"Jazavac was created to allow students to find work faster and for employers to reach students as quickly as possible through matching and merge apps," said Jurković when speaking about the project which has been co-financed by the European Union via the European Regional Development Fund.

In addition to increasing immigration and the concerning and accelerated departure of young people from Croatia seeking (among other things) better economic conditions elsewhere, statistics also show a worrying and fairly intensive decrease in the total number of people studying in Croatia at all.

Despite the increasing number of private faculties, polytechnics and colleges across the country, in the last five years alone, the number of students has decreased by more than fifteen percent. Additionally, according to the Central Bureau of Statistics for the academic year 2012/2013, there were 188,285 students actively studying in a facility in the Republic of Croatia, which is nearly 30,000 more than there are currently.

In order to maintain the dynamics of the market between students and employers, it's necessary for them to not only be better connected, but to be more informed in general.

"For now, we have over 900 undergraduate students and over 100 employers who use the search engine and periodically publish their ads. We're growing quickly but we need more students and companies and want to connect with the Student Center (SC) to help them be even more successful. As the oldest source of student affairs, SC has not achieved satisfactory results for a long time for those students who require employers, so employers are forced to use different social networks, portals and pages to find students,'' Jurković described the issue, giving an example of how to create a much better connection between students and their potential employers.

Make sure to stay up to date by following our dedicated business and politics pages for much more.

Click here for the original article by Goran Jungvirth for Poslovni Dnevnik

Amid the to all-too-frequent flow of unwelcome and typically uninspiring economic news from across the country, the Nike Factory Store has now closed its stores, offering no public explanation or concrete reason for the unfortunate move, as yet.

As Poslovni Dnevnik writes on the 23rd of February, 2019, Croatia's Nike Factory Store officially closed its doors over the last few days. Lider.hr received the official news of the hugely popular sport brand decision to close  its wholesale and retail trade in Croatia from Nike itself. The popular Nike Factory Store, which has been operating out of Roses Designer Outlet in the Croatian capital of Zagreb for ten years now, has been closed down.

While what appears to be a rather sudden move can easily spark questions and speculation as to what has been being going on behind closed doors from many, Nike has not yet publicly stated the reason(s) behind their departure from the Repubic of Croatia, but the giant brand made sure to emphasise the fact that their company's business operations on the Croatian market will continue to be pursued online, through websites and via mobile applications, as well as via existing distributors and retail partners.

Make sure to stay up to date with our dedicated business and news pages for more information on not only Nike Factory Outlet's closure, but on news from up and down the country, and for the latest information on doing business in Croatia and the country's current investment and business climate.

If it's just what's going on in the capital that interests you, give Total Zagreb a follow.

Investment in Croatia is at an all time low. With the phrase ''ABC'' having become the term for ''Anything But Croatia'' in investor circles, the country needs to do some serious work in order to redeem itself. In order for Croatia to become much more attractive to foreign strategic investors, more concrete and clear steps need to be taken, and high on the agenda lie the proper preparation of public finances and more legal security.

As Ana Blaskovic/Poslovni Dnevnik writes on the 21st of February, 2019, despite dramatic headlines, the economy is growing and Croatia's level of public debt is falling. It is commonly forgotten that Croatia is growing at a pace below three percent - the slowest of all. Neighbouring Slovenia experienced 4.9 percent GDP growth, Hungary experienced growth of 4.1 percent, and Bulgaria saw 3.8 percent growth. There's no such great wisdom to be spoken of in Croatia's case here, the economy will grow as much as it has, or is given, the power to do so, and its momentum is the only thing that can make Croatia look much more friendly to investors, a move it desperately needs to make.

Even if there was a real willingness and the capacity for proper reforms existed, which are both evidently lacking, the key question is what moves should be made first to garner the fastest results in terms of investment in Croatia.

In that regard, there are no real dilemmas in the mind of respected economist Velimir Šonje, and what needs to be ensured are business climate reforms which include the Doing Business Report of the World Bank's recommendations for Croatia.

"By moving to around number 30 on the Doing Business Report, we've entered the club of countries like Poland, we're visible on the Eastern European map (which isn't the case today) and we have a marketing tool to attract investors," said Šonje, adding that these concrete measures would have a direct impact on Croatia's ability to properly facilitate business and investment, such as issuing building permits or reducing the number of steps required when paying taxes.

At the very top of the Croatian Government's priorities lies the transparent privatisation of state-owned companies through their listing on the stock market within the wider revitalisation plan of the capital market in order to better stimulate foreign investment in Croatia.

"It's no accident that investments are at a relatively low level since the capital market has died in Croatia. Without its revival through several major privatisations and listing and strengthening programs to attract medium-sized businesses in some of the simpler stock quotes, there will be no better investments, as capital market development has positive spill-over effects and attracts the interest of foreign investors,'' stated the esteemed economist.

Following the liberalisation of the internal market, the strengthening of the protection of equal market competition (so that there are no already protected existing players), the transparency of public procurement and the abolition of parafiscal charges and other obstacles to strengthening competition, especially in the service sectors where there are significant area of potential such as the health, education and IT industries,''

When it comes to better attracting investment in Croatia, the proper and decent handling of public finances also ranks very high on the list of consultant Andrej Grubišić from Grubišić and partners, with a very specific goal.

"It's necessary to reduce government spending, ie, a 30 billion kuna budget over a five-year period, and thus leave more money to a private initiative that will drive the development of small and medium-sized enterprises for their own economic interests (independently and without the help of the state),'' said Grubišić. This would become more attractive for investment by foreign strategic investors through takeovers and/or recapitalisations through which intensified internationalisation would continue.

The hope is that the state will cease their classic style of favouring particular sectors or industries, such as IT or renewable energy sources, as this approach almost always promotes unwanted crony capitalism. Moreover, treating everyone in the same way is a clear signal to a foreign investor that he does not have to fear that his industry will be considered less desirable tomorrow and lose his privileged status to someone else who is deemed closer to the wishes of the political elites and those who are better lobbied.

In this context, there is a real need for adequate judicial protection. In the Croatian Chamber of Commerce (HGK), the emphasis is placed on attracting investors to production and opening up an investment space that would be geared towards the design of high value added products, investments in research, and in development and exports.

"We need to create a business climate that will stimulate domestic entrepreneurs, thus creating the conditions for the stronger engagement of foreign entrepreneurs and investments in Croatia," stated HGK's Luka Burilović.

He added that entrepreneurs have the most objections in the area of ​​legal certainty, justice, taxation and public administration.

"Here we can take the appropriate concrete measures that could immediately show results. Investors are becoming more demanding, they're looking for solutions, not just locations. One of the options for a change of approach is to put the focus on Croatia's "portfolio", and not on the entire territory,'' Burilović stated.

When asked how Croatia will look in the eyes of an investor, the answer remains very the same according to Burilović: "We're relatively unknown to investors, we don't have a brand built, and we're mostly recognised as a tourist destination,''

Make sure to stay up to date with our dedicated business and politics pages for much more on investment in Croatia.

Click here for the original article by Ana Blaskovic for Poslovni Dnevnik