The highly successful Croatian company ''Include'' recently celebrated its fifth birthday, and today this remarkable company has had its worth valued by an independent auditing house, and that worth has been estimated at more than 110 million kuna.

As Poslovni Dnevnik writes on the 15th of May, 2019, Solin's Include, a Croatian company which produces smart benches headed by young entrepreneur Ivan Mrvoš, is continuing to go from strength to strength. Mrvoš recently confirmed the first direct investor in a new investment round. That investor is no less than Stjepan Talan, the director of the Varaždin-based company Solvis. Solvis currently employs 180 people, and back in 2017, this company recorded more than 600 million kuna in revenue. In addition, the company has been listed on the London Stock Exchange for the past two years among the 1000 companies that inspire Europe.

"For the last ten years, my company, Solvis, has been successfully doing business and selling its solar panels on global markets. I'm looking at the company Include with perspective, and, considering the fact that it works in the same industrial sector, I think this investment can contribute to the betterment of overall business, primarily synergy between Solvis and Include,'' stated Solvis' Stjepan Talan.

Cooperation between Include and Solvis started back in 2015, and otherwise, Include launched a new investment round twenty days ago, via the Funderbeam platform, and up until now, an impressive eleven million kuna has been raised by 450 investors from Croatia and across the world. In addition to the money raised by Include through the platform, negotiations with several private investors such as Stjepan Talan and the total investment amount (private investors and the Funderbeam platform) that sum could reach up to thirty million kuna.

Include exports eleven products to 43 global markets, and are present in 260 cities around the world. The company's worth was estimated at 110 million kuna this year by an independent auditing firm. Owing to its innovative, smart urban furnishings, the Croatian company has already won several much deserved awards and recognitions, such as Deloitte's Technology Fast 50 and Forbes' 30 under 30 award for its founder, Ivan Mrvoš.

"We're exceptionally pleased that this cooperation with Solvis has given us a new dimension,'' said Include's Ivan Mrvoš.

Make sure to follow our dedicated business and Made in Croatia pages for much more.

Data continues to show that beautiful Međimurje County is the most developed county of continental Croatia after the City of Zagreb, the only one over 50 percent more developed than the EU average.

As Poslovni Dnevnik writes on the 12th of March, 2019, this year, Međimurje is among the winners in the category of creating a favourable entrepreneurial environment, the efficiency of the public administration, incentives and investment in infrastructure through EU funds.

The award was presented by one of the most prestigious and highly respected business media outlets in the world, the Financial Times, as part of its fDI Magazine, a publication that analyses global business activities across the world.

To briefly recall, last year, Međimurje was recognised as one of the top ten regions in the European Union. This new award was based on the analysis of the European Statistical Office (EUROSTAT), the Central Bureau of Statistics and other competent public authorities. According to the Economic Power Index, Međimurje is one of just two counties that recorded a two-place shift, and the only county in continental Croatia which GDP was higher in 2014 than it was back in 2008, resulting in GDP growth of 2.8 percent.

According to some of the measured criteria of the role of public administration, Međimurje County has, among other things, the lowest public sector expenditure in Croatia, and according to the data of the Institute of Public Administration and the European Commission (EC), it also boasts the highest grade according to the criteria for transparency of Croatian local and regional self-government units.

Furthermore, the official statistics for the second year distinguish Međimurje County as the region which invested the most in education, and the high degree of use of EU funds in creating quality health care conditions, investment in infrastructure, culture, and the protection of natural values (resources) ​​has enabled Međimurje's transition to a group of above-average developed counties compared to the average in the Republic of Croatia.

In addition to all of the above, Međimurje's economy recorded an unemployment rate of five percent, the largest amount of exports in when compared to imports, export growth of 14 percent, employment growth of five percent, total income growth of 11.8 percent, while gross profit of the economy was higher by 9.2 percent, net profit was 13.2 percent higher, which in turn increased revenues by 11.8 percent.

The efficiency of Međimurje's public administration was assessed through the speed of issuing building permits, rational budget management, the role of the regional development agency, the county energy agency and the technology innovation centre. Investment in the knowledge centre was created by creating the prerequisites for start ups by building new premises worth 12 million kuna, withdrawing EU funds for the construction of the "Metalska jezgra" research centre (32 million kuna) and the centre for competence in nechanical engineering with a total value of 50 million kuna.

The award ceremony was held in France, and the following warm words were said about Međimurje:

"The key to your success is in the synergy of public administration, the private sector and the [local] population. Međimurje County has once more, in this way and with the obtaining of a new prestigious award, justified its title and its image as the most entrepreneurial county in Croatia. All this is a result of systematic work, a clear strategy and the proactive promotion of investment opportunities. For this year's choice, fDi Magazine has analysed data on economic potential, the working environment, cost efficiency, infrastructure and positive business environment(s) in as many as 112 locations,'' said the director of fDi Magazine, adding that, at this point, the most important economic and social issue is Brexit, where the Financial Times devotes a lot of attention to the analysis of the future of the European Union after Great Britain leaves (if it ever actually does, that is).

Sarah Russis, head of fDi Intelligence and GIS Planning, emphasised the role of digitalisation as an important link to the region's economic development and planned investment.

"We're aware that investors, entrepreneurs and public administration officials are doing demanding jobs, and therefore it's important to recognise and support every innovation, result, and effort invested in creating a positive entrepreneurial environment, and the incentives that facilitate the ease of day-to-day business."

''This is award is proof of a systematic and thoughtful strategy. Our goal is to attract value-added investments that lead to better working conditions. It's important to emphasise that many existing foreign investors have decided to expand their capacities and have confirmed that Međimurje is a location for long-term business success. Key activities that Međimurje County conducts are post-investment care, attracting new investment in key sectors, a marketing strategy for attracting FDI investments to Medjimurje County, and education for small and medium entrepreneurship. The Redea institute for public development is also a kind of "one stop shop" institution that monitors entrepreneurs through all administration challenges,'' stated Darko Radanović.

"This award is, above all, a recognition to all those who create added value and contribute the most to economic results. The residents of Međimurje are productive, valuable and resourceful, entrepreneurs are struggling in very challenging business conditions, mayors are successfully attracting money from EU funds, all based on a clear vision, a quality strategy and set goals. That has to be valued and I'm glad it was recognised by magazines like the Financial Times. But we're not going to stop there, we understand this as a challenge to be even better because, after Brexit, many investments will be redirected to other EU countries and we intend to use [that opportunity]. This resettlement process [of investment] has already begun, the potential of Međimurje has been recognised, which has been proven by a reward for the second year in a row, so, I hope that Croatia will model itself on other countries and jump on the train, recognise that this is a new moment and take advantage of its chance,'' said Medjimurje County Prefect Matija Posavec.

Make sure to follow our dedicated business page for much more.

As Poslovni Dnevnik writes on the 7th of March, 2019, well known Split entrepreneur Jozo Parčina, perhaps best known to the wider public as the owner of the beautiful Luxe Hotel in Split, could soon become the owner of the "Kaštela Riviera".

Not even three full years after the launching of bankruptcy proceedings over the defunct Kaštela company, they acquired the conditions for the sale of their property, which is largely under a mortgage, among which the most prized is the hotel "Palace".

The interest in buying was confirmed to Slobodna Dalmacija by Parčina himself, who in the meantime redeemed the receivables of the Austrian HETA agency, a successor to Hypo Bank.

''I have redeemed the HETA receivables because I want to buy a complex in Kaštela, invest 40 million euros in its renovation and upgrading, put the hotel in order and employ 150 people,'' said Parčina when discussing the plans, adding that it would be a four or five-star hotel, and would boast up to 350 rooms.

The renovation refers to the only remaining building, the old "Palace" building with 230 rooms, protected as a cultural monument, and another new building. Since the surface areas of the complex in Kaštel Stari, located on the shore, is about 38,000 square metres in size, a building larger than the existing one will be permitted.

''I'm already in the hotel business. With "Luxe", which has been in operation for ten years, another hotel in Split is being prepared, where works are going to be finished soon, so I'd like to expand this activity by buying a complex in Kaštela,'' added Parčina, who in the meantime has invested in some real estate which he now rents out.

In earlier years, Jozo Parčina was known to the general public as the owner of a company which dealt with various gambling machines located across Dalmatia and Istria, this business was eventually shut down by tax collectors and by the Croatian Government in 2016.

If he succeeds in purchasing the "Kaštela Riviera" property, Parčina estimated that from the moment of everything being ready for work, it would take up to three years for the investment to be realised. Assets will be sold in bankruptcy proceedings through the Financial Agency (FINA) so it's clear that the real estate will go to whoever is willing to pay the most.

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

Last month, CEPOR held a round table conference in Zagreb, and invited different migrant business owners in Croatia to speak. The purpose of the roundtable was to understand the current status and potential of migrant entrepreneurship and migrant businesses in Croatia. We interviewed two CEPOR members, Ružica Šimić Banović and Mirela Alpeza to learn more.

Last month, CEPOR (Centre for Small and Medium Enterprises Development and Entrepreneurship) hosted a roundtable conference in Zagreb to learn more about the current migrant business climate; the barriers and changes needed to promote positive growth. The invited speakers were: Hermes Arriaga Sierra – co-founder of the Impact Hub in Zagreb, Prince Wale Soniyiki – owner of the African Restaurant & Bar in Zagreb, Sara Kekuš, Program Leader of Asylum, Integration and Human Security at the Centre for Peace Studies, Jan Brzozowski – Professor at the Faculty of Economics in Krakow, and Mirela Rus – co-owner of Breaktime Nautical Jewelry.

Left to Right: Prince Wale Soniyiki, Hermes Arriaga Sierra and Mirela Rus.

The discussion focused around the barriers and areas for improvement that these migrant business owners and entrepreneurs have faced in Croatia. We reached out to the organisers of the roundtable to learn more about their intentions and conclusions from the discussion.

Can you tell us a little about CEPOR, your work and objectives?

Mirela Alpeza: CEPOR – SMEs & Entrepreneurship Policy Centre is the first think tank in Croatia which deals with the problems of the SME sector. CEPOR is a non-profit organisation founded in 2001 based on the Agreement between the Republic of Croatia and the Open Society Institute Croatia. The founders of CEPOR are 10 institution leaders in their fields of work – from the academic community to business associations, development agencies and entrepreneurial centres.

The mission of CEPOR is to contribute to the shaping of entrepreneurial culture and stimulating institutional and regulatory framework for entrepreneurial activity in Croatia. Areas of work cover policy research, policy development and advocacy related to entrepreneurship and SME sector.

What was the main purpose of the roundtable for migrant business owners?

Ružica Šimić Banović: The aim of the Roundtable was to enhance the understanding of the specifics and potential of migrant entrepreneurship in Croatia. Namely, despite its current emigration wave and a growing need of workforce and entrepreneurial incentives in Croatia, only 40% of Croatian citizens believe that immigrants have an overall positive impact on the national economy and only 11% consider the immigration to be an opportunity for the society as a whole. This data refers to the perception of non-EU immigrants and is taken from the latest Eurobarometer survey. Moreover, when talking about immigration-related issues, Croatian citizens are the least informed in the EU – 81% of them consider themselves insufficiently informed on the immigration and integration related matters.

Our Roundtable raised much more interest than initially expected, in particular among media, scientists and in the business community. Our next step is a policy brief and further research aimed at advocacy.

Do you have solid statistics for the number of migrant business owners operating in Croatia?

Ružica Šimić Banović: Unfortunately, we still have major issues connected with a lack of reliable data on migrant entrepreneurship in Croatia. This matter has already been raised by colleagues from the Centre for Policy Studies who started their migrant entrepreneurship projects a few years ago.

Still, we have examples of decade-long' success of foreign entrepreneurs in Croatia, like the owners of Chinese restaurants, several clinics owned and run by doctors from all over the World, IT companies owned and co-owned by foreigners, music festivals brought to Croatia by foreign entrepreneurs etc. Croatian brands like Yasenka and Image Haddad are not to be missed on this list! And Slavoljub Penkala as a historic example as well.

Will this information be presented to the government, what is the follow-up from here?

Ružica Šimić Banović: Now we are writing a policy brief that will be distributed among all the relevant stakeholders. It is based on the available data and on very resourceful interviews with foreign entrepreneurs in Croatia. So far, there have been some incentives tackling the migrant entrepreneurship in Croatia, but the daily practice shows that their implementation is quite fragmented and consequently, the outcomes are somewhat questionable. The latest business executives survey done by The World Economic Forum for The Global Competitiveness Report places Croatia among the most unsuccessful countries in the World according to several immigration and business climate-related indicators. These include Ease of hiring foreign labour (139^th out of 140), Hiring and firing practices (135^th out of 140), Attitudes toward entrepreneurial risk (137^th out of 140) and Burden of government regulation (138^th out of 140). There are also indicators that place us among the top 20 countries in the World, these mostly tackle infrastructure, trade openness and low terrorism risk.

Regarding the incentives for returning heritage Croatians, there have been several targeting mostly potential investors and scientists. To my knowledge, there is no systemic approach to that issue. However, there is a huge potential in return and circular migrants, but pull factors need to be improved in the meantime.

Mirela Alpeza: We will also use the aforementioned policy brief in the advocacy activities. We strive for a more favourable business environment that should be supportive of the development of migrant entrepreneurship as well. We also hope that this issue will be recognised at a policy level and we expect appropriate measures to be undertaken. This would bring Croatia closer to countries representing good practices in this field.

Experiences and opinions from migrant business owners in Croatia

Mirela Rus and her husband Ionut Copoiu have just opened their fifth Nautical Jewelry store in Zagreb; Mirela shares some of her experience and thoughts on the matter of migrant business opportunities and policies.

 “Our story was quite easy in comparison, we didn’t face too many barriers or obstacles but we are aware that for citizens outside of the EU, it is quite difficult. Our conclusion at the end was that if they want to stay ahead of the declining population numbers, and support economic growth and general development of the country, then the government needs to start paying attention to migrants and adopt measures to actually encourage people to move to Croatia and open businesses.

The current state of play is discouraging for countries outside the EU to move, spend money and develop their business ideas here. The only measures we see to encourage people to come to Croatia are related to the deficit of the workforce in the summer season.

Increasing the quotas of third-country nationals allowed to come and work here is obviously a necessity, but of equal importance is the encouragement and support of people to move here, open a business or invest, and this needs to be lobbied effectively in order to see any legislative changes.

And talking about legislative changes, coming from a country where we could see and feel firsthand what the positive impact was from adopting a lower, flat VAT rate (16%) did to businesses and the economy. In general, I truly hope we will live to see a lower VAT rate in Croatia, or, at least a girl can dream…”

Migrant Business owners Mirela Rus and Ionut Copoiu at the opening of their Zagreb store.

Kekuš also agreed that “bureaucratic problems and barriers for third-country nationals (Non-EU countries) are numerous”.

Prince Wale Soniyiki spoke openly about facing many bureaucratic challenges, as well as prejudices. Prince came to Croatia as a refugee from Nigeria, while many of his friends moved on to the seemingly greener, less complicated pastures of Germany. So again, Prince reiterated the need for better systems and support. You can watch a full video interview with Prince, courtesy of Borna Sor below.

What was the overall conclusion from the roundtable?

Ružica Šimić Banović: The overall conclusion was that the potential of the migrant entrepreneurship in Croatia is underestimated and there is a consistent deficit of state strategies and public policies tackling it. In addition, there are prejudices among the stakeholders and general public, mostly related to immigrants from less-developed and war-affected countries. Previously mentioned ignorance combined with very limited openness towards other ethnic groups discourages their entrepreneurial initiatives and integration in the society. That insensitivity towards foreigners is in a way surprising because of the long emigration tradition for Croatians.

The surveys across EU countries show that respondents with personal immigration experience are more likely to have a positive attitude towards other immigrants.  However, this does not seem to be the case in Croatia, despite the obvious fact that we urgently need more entrepreneurial spirit and foreign workforce in many sectors.

Hence, the changes need to be both bottom-up and top-down, i.e. the incumbents implementing adequate policies, other stakeholders recognising the importance of the migrant entrepreneurship and integration of foreigners in general, and finally, ordinary people questioning and hopefully changing their attitudes on those matters.

Let me also stress that even the entrepreneurs coming from the EU countries continuously face the barriers when doing business in Croatia. Those include administrative burden, unpredictable tax regulations, high tax rates and overly strict employment regulations. Local entrepreneurs keep warning about the mentioned barriers for decades. In addition, there are obstacles specific to foreign entrepreneurs like the lack of clear instructions in English for doing business. Non-EU citizens keep facing the work permit and mandatory financial capital problems as well.

So, are there opportunities for migrant businesses and foreign investment in Croatia?

Are there business opportunities in Croatia? Yes. Are the current systems in place to support migrant businesses and investment conducive to growth, development and a flourishing entrepreneur scene? No, not as it currently stands.

The overwhelming conclusion on all sides was that Croatia is seriously lacking systemic structures and processes to support migrant business owners, entrepreneurs and foreign investment. Combine this with apparent prejudices, and lack of open-mindedness – especially related to third-country migrants, and it seems that Croatia has a way to go. Hopefully, the government pays attention to valuable discussions like these, and we see some changes in policy and structures to encourage migrant business owners and positive foreign investment.

Members from CEPOR are currently preparing a policy brief on immigrant entrepreneurship in Croatia which will be published soon, and we will be sure to follow-up with. For more business-related news in Croatia, you may want to read and follow our business page.

Many thanks to Ružica Šimić Banović and Mirela Alpeza for their in-depth responses on the subject. 

As Adriano Milovan/Novac.hr writes on the 4th of March, 2019, the situation on the Croatian labour market is all the more alarming: despite the significant number of registered unemployed people, there are numerous activities for which a labour force must be imported. With regard to the further trends on the labour market, as well as the challenges that Croatia is facing in terms of a digital revolution, Novac sat down and talked to the leading man of the consulting house of the EC in Croatia, Berislav Horvat. Berislav Horvat has good knowledge of the trends on the labour market, as well as on entrepreneurial scenes across Croatia.

We're approaching the 6th anniversary of EU membership and the 28th anniversary of independence. While we have achieved our main political goals as a country, it's a general belief that we've left it a bit late when coming up with an economic plan. How do you assess the current development of entrepreneurship in Croatia, especially compared to the countries we're usually compared to?

Unfortunately, we have not yet completed the transition process. On the other hand, our entrepreneurs don't yet enjoy the status in our society that they enjoy in other transition countries. In our country, entrepreneurs are still looked at with skepticism, they're still the black sheep in a way, and realistically, they don't deserve such a status. The EC has therefore launched the ''EC entrepreneur of the year'' program, through which we want to show that there are also successful entrepreneurial stories in Croatia.

I personally think that the situation in Croatia and the attitude towards entrepreneurs in the last five years has changed significantly. In that sense, it's enough to say that five years ago in Croatia, practically nobody spoke about startups, funding, and so on. Moreover, these terms weren't even being used. Nowadays, the situation is different: we're talking about that, we look at who started a startup, who invested what, what entrepreneurial incubator was used and the like... So, the focus of the public is slowly changing and turning towards entrepreneurship, but it's not as fast as we'd like it to be.

Exactly. We do have all this Croatia today, but there's still very little of it. Even the many start-up companies belong to ''emergency entrepreneurship'', ie, they're not a real statement of the desire to start a business in order to engage in entrepreneurship, but are driven for the sake of employment...

I think there's far more entrepreneurship in Croatia than we can see. Media attention loves to highlight the negatives and it's difficult for some of the entrepreneurs to become a star in such a situation.

In Estonia, for example, it's different. Their stars were also once football players, athletes, and starlets, but they systematically worked to change that. Today, after twenty or more years, Estonia's main stars are entrepreneurs, which, of course, doesn't mean that their media doesn't highlight lifestyle [sections] and that jet set type people aren't stars. There's enough space for everyone.

But we have not yet reached that level. In our public domain, the best still don't dominate [the scene], those who have created something from nothing and succeeded in life with their own work and effort. We've gone too deeply into the negativity and now we can't get out of it, even in the conditions that in recent years the situation with the economy is much better, as is evidenced by the growth in income and profit of companies. That's why we have the impression that everything is bad, and that's just not the case. You can be successful in Croatia.

When you talk to clients, especially those from overseas who want to invest and start a business here, what do they complain about most?

The main problem over the last few years is the lack of workforce. Mass emigration from Croatia resulted in a shortage of workers. Before that, you could feel a lack of workforce in tourism, hospitality and construction, and now that's the case in almost all sectors. This will surely be a major obstacle to the further development of Croatia. An example is the construction industry, which even for a secure job constructing something, you can no longer find people to do it.

Once, our main problem was unemployment, and now it's a shortage of workers. According to some estimates, even among those who are officially registered as unemployed, there are only actually 10,000 to 15,000 who really are unemployed, while others have remained registered as such for other reasons.

On the other hand, this year we've got a quota of 65,000 foreign workers we can import. This is the record for now, and it's quite certain that this quota, and thus the number of foreign workers in Croatia will grow in the next few years.

Apart from tourism and construction, which sectors lack a workforce the most?

Definitely the IT sector. Practically every IT company I know would hire 100 developers tomorrow because there's a lot of work. Most of them work on foreign markets, where the demand is higher than the supply.

Do you expect bigger waves of emigration from Croatia? Let us not forget that next year the doors of to the Austrian labour market, the last in the EU [to keep restrictions on Croatian workers] will open...

Emigration will still continue. True, Austria could attract a part of our workforce because it's close and workers will be able to come and go virtually from weekend to weekend. So, emigration will continue, but there will be returns, especially as salaries in Croatia are rising. Estimates for the future are difficult to give, but it's clear that the shortage of workforce will remain the number one issue for Croatia in the next few years.

How do we solve the problem of the lack of workforce?

We will have to turn to the import of labour, in the long term. But let's not forget that because of this shortage of labour in Croatia, there's a rise in wages, which means that some of the Croats who have left will come back in time. They will simply begin to calculate whether it's worth living abroad or here. Let's be realistic, many of our emigrants, especially those who are paid less, don't live in the best conditions in the countries they've moved to, so we already have cases where people are returning. The salary increase in Croatia will bring back some of those who left the country.

There is also the problem of education, the programs of which should be adapted to the needs of the labour market, just as enrollment quotas should be.

What could the state do to reduce emigration and boost returns?

The state could intervene in tax policy measures. Further reductions in personal income tax and the abolition of the highest tax rate would greatly help people increase their net salaries. This would lead to less people leaving and some former emigrants returning.

But, how usefeul are such efforts when taking into account the state of public finances, especially the pension and health system?

These measures can be implemented, but the only way to do that is to reduce the spending of the state, on both a central and a local level. This implies reforms. There is also a need to increase the base of people who pay taxes, or more people bring to the labour market.

Now the situation is almost ideal for some action to be taken: in the real sector there is a lack of people, and in the public there is a surplus of employees. The economy is growing, and the government is stable, so there should not be many problems and the solution is obvious. So, we just have to implement the reforms we're talking about. This is a historical moment that this government has and it must use it.

The world is undergoing a new digital revolution, but we're lagging behind. Moreover, we're still dealing with ''classic'' industries. What are the perspectives open to us?

Digitisation opens up a large area, and a large number of companies that are opening in Croatia are IT companies, so we can't say that we're not following trends in the digital world. Existing, already established Croatian companies invest heavily in digitisation. For many Croatian companies, the EC helps in the introduction of software robotisation. While, for example, Gideon Brothers produced real autonomous robots, which instead of forklifts drive pallets by warehouse, and our domestic companies, such as Atlantica, Orbica and Tokić, are already piloting projects with this new technology. Or, let's say, Mate Rimac, our EC entrepreneur of the year, who, besides producing cars, works hard on the development of the use of digital technologies, and all this is happening in Croatia.

You are in contact with investors. What is the current interest in Croatia from investors?

We are a world leader in auditing and consulting services. We have 270,000 employees worldwide, and in Croatia there are more than 220. Among our clients, we have a lot of investors who want to invest here, especially private equity funds. Still, the problem is that they are looking for big investments, those of 20 or 30 million euros, and there aren't many like that in Croatia. In the case of Croatia, it would probably have helped us to have venture capital funds, which would aid startups. Otherwise, HBOR and EIF have recently launched a venture capital program, which is good for entrepreneurship development in Croatia, but, it's also necessary to have a network of business angels, venture capital funds and private equity funds, so that the system can accommodate and enable funding at all stages of entrepreneurship development.

How does the digital revolution reflect on the EC?

The EC is doing a lot of work on digitalisation. We have digitised our internal talent management system and now we have ''click'' solutions. Numerous processes have been robotised. One digital marketing company joined us last year, so now we have a rounded service - from tips to accessing a buyer, to the performance of the app or website. Customers want less advice, they're now seeking complete solutions, and we can offer them that now. This also allows us to work on innovations. We're also investing hundreds of millions of dollars in audit tools and technology so we can carry out EC digital audits worldwide. I can say that a lot has changed since I started doing this job sixteen years ago!

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

Click here for the original article/interview by Adriano Milovan for Novac.hr/Jutarnji

Croatia has many issues, and rather surprisingly, a big one is with the proper withdrawal of EU funds. What exactly is the problem, and how can it be fixed? The topic of EU funds in Croatia and the upcoming financial period is explored by Ana Fresl.

As Lucija Spiljak/Poslovni Dnevnik writes on the 20th of February, 2019, Poslovni Dnevnik sat down with Ana Fresl, the director of the PJR consultancy group to discuss the EU's new seven-year financial period and expectations, Croatia's severe lack of EU project experts, common mistakes, how the country made the most of the last financial period and what awaits us as the ''How to prepare for the 2021-2027 financial period'' conference. Croatia is looking to learn from other EU member states and their own respective experiences when it comes to strategic development and implementation of EU projects on the 6th and 7th of March, 2019, in Trakošćan, Croatia. How can the problem with the withdrawal of EU funds in Croatia be rectified?

You've been the director of Croatia's largest companies for EU funds since the very beginning. How many people and companies have you consulted with and educated on EU projects?

When it comes to EU funds, it's correct to say that I've really been around since the very beginning, from the Ministry of Finance and the Central Financial and Contracting Agency, to EU programs and projects, after which I opened my own company in 2009 and I was recently re-elected as the president of HUP - Association for Professionals for EU Funds. I have offered consultation for over 350 EU projects, I've been a public advisory expert on 20 technical assistance projects. I have more than 500 days of education in Croatia and beyond behind me. The interest in EU funds is very high, as can be seen from the recent tenders for small and medium-sized entrepreneurs who were applying for available funds within mere seconds.

The Minister of Regional Development and EU Funds, Gabrijela Žalac, stated that we lack 2,700 experts for the implementation of EU projects. How can we attract and interest people, what are we doing in that regard, do we have any specific figures?

The figure of 2,700 experts was obtained by my own company, PJR, based on the extensive research that we carried out within the project of the Ministry of Regional Development and EU Funds.

We have investigated the absorption capacity of about 500 EU funded users, and that's the number of qualified experts which confirmed that we're missing that number at the Croatian (domestic/national) level. There's a lot involved, lots of education, training, seminars just for training. In PJR, we launched an EU mentorial program, EUment, which is aimed at educating students, all those looking for or changing jobs, or those who are juniors in organisations and want to learn to be better, and see a chance for that with EU funds.

The program lasts for six weeks and the person passes through each department in the company and meets and works with experts. There is a big interest in this, and I believe there is in other programs, too. Our oldest and most visited educational program is the PJR Academy - a simulation of EU project implementation through five days of education. After all the years that we've been doing this, we're seeing more and more interest because we have new enthusiasts who are interested in learning.

Who mostly uses and withdraws EU funds? How successful are we when it comes to withdrawing, and how much are we to use?

Most of the money is withdrawn by Finland, the least is withdrawn by Spain. There is enough time for improvement until the end of the funding period, and in parallel, Croatia has to prepare for the new (financial) period of 2021-2027, in which many rules will be changed, and higher financial capacities will be being expected from users, not just human. When it comes to witnessing the real effects of the EU funds on employment, the economy, the quality of public administration and various areas that have been invested in in the Republic of Croatia, we still have to wait, and in a couple of years, most of the projects will be over and their effects will start to affect society.

How should we then get going on the eve of a new era, and in what area are we usually making the most mistakes?

The biggest problem is undoubtedly the slow system and unrealistic goals. At the beginning of each year, indicative plans are published with the lists of all of the tenders that are planned to opened during that year and the date of the call for the tenders is always listed. All of these tenders are always late, some of them by five to six months.

At this point, for the European Social Fund, there are still no announcements for 2019, and it's already mid-February! Each tender is unique, requiring the special consideration of opportunities, some time of preparation, and the most important part - human and financial resources. Once a tender is opened and the project is sent, a wait for the results commences, which is known to have lasted for as long as one year, and that's too long for entrepreneurs and their markets.

Those who manage to succeed end up encountering new problems in project implementation, the most common mistakes lie in public procurement and the lack of project success indicators. What each consultant would say is that they need to be realistic. It's tempting to write that you'll hire ten workers because it does, for example, bring in the most points in project evaluation but you should be realistic because if you don't end up opening up the ten new jobs at the end of the project, then you haven't met the indicators, you need to take responsibility, and you have to return part of the EU funds awarded to you.

What will the 2021-2027 financial period bring us? What challenges lie ahead of us?

The new financial period brings with it a large number of changes. For Croatia, this is a very challenging period because this is the first time in which we'll be participating from the very beginning in the planning and the creating of a new seven-year financial framework.

This year and next year are set to bring changes within the current programs because there will be less money, and therefore, there will be less tenders, too. Some of the most important changes are that total allocation in ESI funds will be reduced due to the United Kingdoms's exit from the European Union; the plan is have money in the amount of 351.8 billion euros for all members, and the amount will be available through several different funds together.

The amount of 8.8 billion for Croatia for the period 2021-2028 can be seen as a significant reduction compared to the previous period if absolute allocations are being considered, but if we look at how much this is per capita, there is no relative reduction because of the fall in the number of residents in the Republic of Croatia. The biggest change is that the maximum funding rate for less developed regions, of 85 percent, in which Croatia falls, will be reduced to 70 percent.

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

Click here for the original article/interview by Lucija Spiljak for Poslovni Dnevnik

Most of Croatia's biggest entrepreneurs are located on the northern Adriatic islands, and Croatia's biggest employers are still in the tourism and trade industries.

As Poslovni Dnevnik/Darko Bicak writes on the 6th of February, 2019, according to the analysis of the Financial Agency (FINA), which included details on entrepreneurs operating in the Republic of Croatia, there are 4,322 of them across 51 cities and municipalities in total who work as classified entrepreneurs, and in 2017, the largest number of entrepreneurs were in the field of providing accommodation and food preparation and serving - 903 of them. This tourism sector has now achieved its highest total revenue (almost 2.7 billion kuna), which is 25.6 percent of total income of island entrepreneurs.

Following those in tourism are entrepreneurs in the field of wholesale and retail trade - 656 of them. 2.2 billion kuna or 21.3 percent of total revenues and entrepreneurs are in this field. Construction is ranked third with 472 entrepreneurs and 1.4 billion kuna in revenues, which is 13.7 percent of total income of entrepreneurs from island areas.

In the case of tourism entrepreneurs, these were the highest in terms of the number of employees, with 6,585 employees or 30.6 percent of the total number of employees in all activities. This group of entrepreneurs also earned the highest revenues, and among them, according to the criterion of total revenues, the best are the hotel and tourism companies from Mali Lošinj, Hvar and Rab, or Jadranka hotels, Sunčani Hvar, and Imperial.

When looking at the ''size'' of these entrepreneurs, the largest number of micro entrepreneurs with 92 percent of the share in the total number of entrepreneurs are registered in the observed island areas. In addition, the same group have the largest share in profits, 42.7 percent, and employ the largest number of workers, making up a significant 33.8 percent of the total number of employed people in island towns and municipalities.

There are nine big companies based on islands in the Republic of Croatia, one in the area of ​​trade, Trgovina Krk from Malinska on Krk, one in the field of construction, GP Krk from Krk, one in the processing industry, Sardina from Brač and one in the area of ​​passenger transport, Autotrans from the island of Cres, while the remaining six are in the area of the ​​provision of accommodation and food preparation and service.

Make sure to stay up to date with Croatia's economic, business and investment climate by following our dedicated business page.

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

''We need to give young people the ability to learn and improve, to be informed about the measures implemented by the EU through EU funds and self-employment,'' stated the mayor of Virovitica.

As PD i VL native tim/Poslovni Dnevnik writes on the 4th of February, 2019, Virovitica is the fourteenth Croatian city in which the Ministry of Regional Development and EU Funds organised an informative-educational event entitled Regional Days of EU Funds, with the aim of informing the general public about the possibilities of financing from EU funds and strengthening regional development, as well as the possibilities for overall social and economic growth of Croatia which derive from EU fund availability. The event was held at the Virovitica Cultural Centre, which, ironically with the help of the EU funds, is about to be reconstructed soon.

Since Virovitica is mainly made up of agricultural land, its projects are mostly reported by small and medium-sized entrepreneurs and farmers, and according to the latest statistical data, Virovitica-Podravina County is among the best in Slavonia and Baranja in terms of EU cash withdrawal for rural development funds and for micro and small enterprises - up to 3,400 kuna per capita. "EU funds concern everyone, we're working on public projects in the public sector to set standards, and it's important to utilise them and improve business," said Ivica Kirin, Virovitica's mayor.

National development strategy

Virovitica-Podravina County Prefect Igor Andrović presented some statistical data according to which the VIDRA Development Agency in 2018 carried out 194 projects for small and medium-sized entrepreneurs and farmers, totaling a massive 450 million kuna.

"We've started on projects which concern Slavonia, Baranja and Srijem, such as the renovation of the hospital, the construction of a network of entrepreneurial incubators, the construction of a technological innovation centre, the hall for the Viroexpo fair and the energetic renewal of the cultural centre.

This year, we expect the realisation of about 150 projects we submitted last year,'' Andrović said, pointing out that with the new division in the four statistical regions, small and medium entrepreneurs in their area as well as in Sisak-Moslavina and Karlovac County will receive up to 75 percent of support from the EU funds, as opposed to the previous 45 percent.

State Secretary at the Ministry of Regional Development and EU Funds, Velimir Žunac, reminded attendees that by the year 2020, the seven-year financial period during which Croatia learned, made mistakes and matured will end, and more opportunities in the next financial period of 2021-2027 will come.

"EU funds are our reality - this county and this city are a good example of how European Union money can be used, as statistics show. In January 2017, Croatia was [withdrawing] under 9 percent of the contracted funds and by the end of last year, that number was more than 62 percent, or 6.6 billion euros of contractuality, we've made a significant step forward. In Croatia, 80 percent of public investment comes from the EU and it's important to maximise its use," Žunac pointed out.

He announced that the Croatian Government is ready and that the budget is stable for the new cycle and financial period from 2021 to 2027, recalling that the National Development Strategy of the Republic of Croatia is under development up until 2030, with twelve thematic and working groups working intensively.

An interesting panel discussion was then held, entitled "The development of Virovitica through European Union funds", involving representatives of various institutions as well as local entrepreneurs with experience of using money provided by EU funds. At the very beginning, Mayor Ivica Kirin emphasised that in the near future they want to identify the strategies and priorities that Croatia needs to develop which will create faster and better economic growth.

"We need more staff, especially those who will write projects. At the same time, we must give young people the ability to learn and improve, to be informed of the measures that the state is implementing through EU funds and self-employment," Kirin said.

The results were presented by Tihana Harmund, Director of the VTA Development Agency, who works for all institutions in Virovitica, companies, institutions, as well as for entrepreneurs and farmers, to whom she offers advice and assistance in writing up and implementing EU projects.

"We have prepared the documentation for all projects, including Pejačević Castle worth 82 million kuna, the improvement of Virovitica's water and communal infrastructure of 150 million kuna, as well as the renovation of schools, kindergartens and other institutions. For smaller projects, we provided the necessary funds to farmers, entrepreneurs and civil society organisations,'' stated Harmund.

Cooperation between the city and the county

''Services and institutions were networked for the preparation of projects, and the cooperation between the City of Virovitica and Virovitica-Podravina County is excellent,'' said Neda Martić from the VIDRA Development Agency.

"An entrepreneur can now get a valid building permit in two days, and in addition to being a regional coordinator, our agency is working on strategy and writing up infrastructure projects. We currently have 245 projects related to the economy,'' Martić added.

Make sure to stay up to date by following our dedicated politics page for much more.

Click here for the original article by PD i VL native tim on Poslovni Dnevnik

Digital Croatia might seem a bit like a pipe dream for many, but could it be a closer possibility than we might think? Croatia has some plans to help out its entrepreneurs.

As Marija Brnic/Poslovni Dnevnik writes on the 3rd of January, 2019, at the initial time of this report, these were still the unofficial estimates of the Croatian Ministry of the Economy, which Minister Darko Horvat was set to turn into concrete measures and present at a government session.

Abolishing, or at best reducing some of the administrative procedures which continue to needlessly hinder domestic entrepreneurs should result in 626 million kuna's worth of relief for the Croatian economy.

This so-called government "rescue package" was first rather unexpectedly unveiled as part of a New Year congratulations post on Facebook, of all places. The measures proposed are designed primarily to "attack" a total of 314 different (and mentally draining) administrative processes which entrepreneurs, both would-be and established, need to go through, these often include an incredible amount of red tape, needing to pay for things nobody quite understands several times, waiting in lines for hours, or having to deliver a variety of paper reports to various institutions.

In essence, the desire behind the rescue package ties in with the deeply desired digital Croatia as well as with the wish to keep Croatia's brimming talent within the country's borders by reducing the truly unfathomable amount of bureaucracy that faces everyone in Croatia who simply desires to create something of their own, from start ups to companies and businesses.

Among Minister Darko Horvat's list of remedies regarding the process of the registration of a company in the court registry are savings of about 173 million kuna in this field alone. Entrepreneurs should also see the scope of their need to report to the tax administration reduced, too. When speaking about his action plan, the Minister of Economy says that it was all based on good inter-ordination coordination and a high degree of consensus between the lines.

"Certain processes have been defined within the nine ministries successively, and as amendments to the laws or regulations, they'll come into effect in 2019. I expect that the vast majority of these 314 implementation measures will be implemented during the first half of 2019,'' he said. The major relief for Croatia's entrepreneurs will largely be owing to the digital Croatia aim, more specifically the digitisation of various administrative processes.

The first concrete moves of a digital Croatia should enable business start-up through the simple filling in of a single electronic form, which is a far cry from the current situation. Minister Horvat explained that this "action" will also include the banking sector, in order to ensure that entrepreneurs can manage to open a bank account in just a day or two to make their payment transactions easier. Such a system implies the use of digital Croatia once again, involving e-signatures, e-trademarks and other electronic services.

Make sure to stay up to date with our dedicated business page for more on digital Croatia, Croatian entrepreners, Croatian companies, products and services, as well as the general business and investment climate. Follow our politics pages to keep up with any measures being proposed or introducted in order to relieve the country's typically burdened entrepreners and businesspeople by the Croatian Government.

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

Many places in Croatia have been making good use of EU funds, but others need time to catch up. The opportunities provided by accessing the funding has been showcased in one excellent Croatian example, Zaprešić.

As Poslovni Dnevnik writes on the 27th of December, 2018, last Friday, Zaprešić was the final host of the Regional EU Funds seminar for this year. The seminars aim to inform the public about the funding opportunities provided by EU funds by the Ministry of Regional Development and EU funds.

Zaprešić is just one example of good EU funds practice, and this is also backed up somewhat symbolically by the fact that the education seminar about the use of EU funds was held in the Vršilnica building, which was rebuilt with the very welcome help of 4,855,637.50 euro, co-financed by European structural and investment funds.

EU funds are one of the key sources of funding for urban investments and large capital projects across the Republic of Croatia, without which the City of Zaprešić simply could not have realised many projects. As explained by Mayor Zeljko Turk, in the period from 2017 until now, nearly 33 million kuna of contracted funds outside of the city budget have been spent, which have helped to deal with large capital projects, raise the overall quality of life, and accelerate the development cycle of Zaprešić in general. The fact that EU funds are a huge part of Croatia's present and future, was emphasised by the state secretary at the Ministry of Regional Development and EU funds, Velimir Žunac.

"We're the youngest member of the European Union, so we're learning, growing and maturing at the same time, and this government has made significant gains. Back in January 2017 we contracted a mere 9 percent of EU funds, and this year, we'll be at 60 percent, that speak volumes about how successful we are,'' stated Žunac.

The 2017 economy analysis shows that the most prominent economic branches in Zaprešić are trade (23 percent), followed by service activities (16 percent) and professional scientific and technical, construction and manufacturing industries, holding a total of 33 percent.

"The city is doing a lot to improve the infrastructure and conditions for its entrepreneurs, and for this purpose, funds amounting to 6 million kuna have been secured, and this is 100 percent co-financed with European Union money in the entrepreneurial zone in Pojatno, where a completely new road will be built which will attract new businesses and create new jobs,'' said the head of the Zaprešić finance and economic development department, Miljenko Šoštarić.

Satisfied entrepreneurs are the souls of the city, and just how it is to actually be an entrepreneur in Zaprešić, with his own experience of using the EU contribution, is the owner of the Mihaliček company, which employs 50 people with a turnover growth of 10 to 15 percent per year.

"We applied for the tender because the appetities within our company grew, we developed new jobs and got more people. We applied for a crane and a laser machine for installing and processing concrete, and we received 300,000 kuna in non-refundable funds, which was 55 percent of our investment,'' said Stjepan Mihaliček, stating that such a form of contribution to them was relevant because renting or buying used machinery could be at the expense of safety in the workplace. 

''In order to encourage as many entrepreneurs as possible to use EU funds, entrepreneurs may submit their email addresses to receive a newsletter containing all the available information on various financing options, including funding opportunities from EU funds with the aim of developing new business ideas and boosting competitiveness on both domestic and foreign markets,'' explained Šoštarić.

Make sure to stay up to date with our business and politics pages for more information on EU funds, how Croatian companies can make use of them, and for everything going on in the political and business world in Croatia.

Click here for the original article by PD i VL native tim