Could Croatia soften its laws on the acquisition of citizenship for foreign investors bringing money, jobs and other benefits with them to Croatia? It's a sensitive topic for many, but more and more people in business circles are beginning to believe that this could be one answer to Croatia's increasingly bleak demographic picture.

As Boris Oresic/Novac writes on the 17th of March, 2019, the value of a passport is measured by the number of countries to which its owner can travel without the need for a visa. On the World Passport Index, the Republic of Croatia holds a high ranking of sixteen because the owners of its travel documents enjoy visa-free travel to 169 countries across the world.

According to the latest research by the Swiss agency Henley & Partners, which helps individuals who want to acquire the nationality of a country, the most powerful passports are Japan and Singapore, which allows visa-free access to 189 countries, with Germany coming second with just one number less. Following that come Finland, France, Italy, South Korea, Spain, Sweden, and Denmark.

From year to year, more and more countries abolish visas for Croatian passport holders, making the blue passport with the Croatian coat of arms more and more sought after in general. However, unlike some European countries, the Croatian state has not yet decided on what is considered by many to be a controversial move - selling its citizenship to those who want to pay good money for it and don't pose a risk to national security.

Portugal, Austria, Malta, Spain, Latvia, Lithuania, Greece, Cyprus and Bulgaria are some of the EU countries which, under varying conditions, do offer such opportunities to foreigners. By selling their passports or permanent residence permits, these countries manage to earn significant income from East Asia, Russia and the Middle East who aren't lacking money and who want EU documents which automatically enable them to move freely and operate in 28 member states, some of which fall into the most powerful countries of the world.

The European Commission doesn't take such a bright view at such practices, and at the end of January it warned EU member states that third-country investors seeking such so-called ''golden passports'' and ''golden visas'' increase the security risk throughout the EU. This criticism is mostly related to Malta, Cyprus and Bulgaria, which have the most liberal laws on the matter. For example, Malta charges 650,000 euros for its passport, and the applicant must have possessed 350,000 euros worth of real estate on its territory for five years. Cyprus offers its citizenship to those who invest 2 million euros and have real estate worth more than 500,000 euros. As one of its arguments for deterring the practice of selling citizenship, the European Commission cites the potential problems of Russian capital of suspect origin.

The former government of SDP's Zoran Milanović discussed the idea of major investors being allowed to acquire citizenship back in 2015, but such notions appear to have been quickly given up on and there is no indication, at least at the moment, that these regulations could change significantly. In business circles however, there are plenty of people who think that it's high time that Croatia softens its rigid attitude, because by selling a certain number of passports, it would not have lost anything and could in turn gain many benefits. With the country's demographic image becoming more and more bleak, many believe a softened stance wouldn't hurt.

Globus's interlocutor, who is otherwise very well-versed in this topic, argues that when looking for security and business opportunities, the Croatian passport is most likely to be sought after by businessmen from Asia and Russia.

''The Agency conducts an investigation to make sure the applicant isn't a criminal, that he isn't in political asylum, that he doesn't abuse taxation... Then it's handed over to the country whose official services also do their part before deciding whether or not to comply with the request,'' says Globus's source, adding that this year alone, Croatia has raised its quota for the employment of foreign workers from non-EU countries to as high a figure as 65,000.

''How can we know that there are no criminals among these people? It's hard to believe that some rich man would come to Croatia with the intent of blowing it up with explosives. It's not known that anyone with a Maltese passport is linked to some terrorist attack. Security risks don't exist,'' explains a Croatian entrepreneur who is well acquainted with some very wealthy business people and others who would like to spread their wings, their work and their money into Croatia if they were to gain citizenship.

The number of people who can be granted citizenship can be limited by each country or by set quotas. Globus's source believes that a quota of the first thousand passports offered for sale would be completed within a year to a year and a half. This would mean that 300 million euros would be pumped directly into the state budget, which roughly covers the entire value of Pelješac bridge. Advocates of such ideas believe that several thousand wealthy foreigners would acquire all of the rights and obligations of all other Croatian citizens, and would not undermine the demographic picture of Croatia, which is already as grim as grim can be. Most of them, however, would probably not spend much time here in Croatia, and they would certainly not vote in national elections.

The Ministry of the Interior (MUP) is responsible for all issues related to the acquisition of Croatian citizenship, yet most member states do have rather vague legislation, however difficult it might be to come across, that points to discretionary procedures for naturalisation. In such proceedings, a state may freely grant nationality to a foreigner based on its national interests, that is typically related to outstanding achievements such as those in the field of culture, science or sport, but it can also be equated with economic interest.

There is a legal possibility for a foreign entrepreneur or an investor to acquire Croatian citizenship in a more privileged manner if the competent ministry feels that it is in the interest of the state to grant it. The Ministry of the Interior notes that the process of amendment to the Law on Croatian Citizenship is indeed in progress, but it does not foresee an amendment to Article 12 in order to facilitate the acquisition of citizenship for foreigners who want Croatian nationality purely for investing in Croatia.

Make sure to follow our dedicated business and politics pages for more information on doing business and the political and investment climate in Croatia.

Click here for the original article by Boris Oresic for Novac/Jutarnji

MUP has finally spoken!

Where do things stand for you as British citizens lawfully resident in the Republic of Croatia? 

* When this article was first written, it was a draft law. This law was fully adopted in July 2019 and will come into force in the case of a no deal Brexit*

If you see a little * and italic font at the end of or underneath a sentence written by MUP, that's our little comment to give you our advice on the matter, too.

RESIDENCE:

Residence registration is very important in the case of any scenario for future relations between the European Union and the UK.
 
Therefore, all UK citizens and their family members residing in the Republic of Croatia are strongly recommended to register their residence as a British/EU citizen/apply for a residence card as a family member of a British/EU citizen.

Please click here and click on the following links: Form 1b, (for EU citizens, this needs to be clicked on for British nationals too) Form 2b (for family members of EU/British citizens who are third country nationals), of Form 3b for both EU/British citizens and his/her family members who want to apply for permanent residence.

* Please note that permanent residence can be applied for only after five years of lawful, uninterrupted temporary stay in the Republic of Croatia, you can have changed your address as many times as you like, but you must have been registered as legally living on Croatian territory for five years on an uninterrupted basis. Lawful, uninterrupted residency can be shown when applying for permanent residence with every ID card you've held, as the dates on them will attest to the five year time period. Some MUP officials claim you cannot apply for permanent residence until your temporary residence expires, others say you must be in possession of a temporary residence card which is still valid at the time of application. We advise you go to MUP and ask about your case individually, as they seem to alter this rule depending on who you talk to.

* According to EU law, the right to permanent residence ''after five years'' actually means five years + one day, but once again, MUP can misinterpret this and assume you need to come and start the process before the temporary residence expires. Don't leave it up to fate. At least go and ask in person before your temporary residence card expires.

* If you were not given an automatic five year residence permit when you first applied for some reason or another, and when you've renewed your temporary residence the official has taken your old ID card from you, there is no need to worry. Present the ID card you have and your legal residence will show up when a case worker checks you out to approve your permanent residence application.
 
Once the applicants have completed the registration of a temporary residence in accordance with the provisions of the Aliens Act (OG 130/11, 74/13, 69/17 and 46/18), they will be immediately issued with a Registration Certificate registration of a temporary residence in paper form, free of charge. If they wish, they can apply for a residence card (for which the administrative fee is to be paid in the amount of HRK 79.50).

* We strongly recommend you pay for the residence card, the white sheet of paper is merely confirmation of your residence/address, the residence card has your photo and details on it and acts as ID in Croatia. It is also weatherproof and easier to carry around on your person, which, just like nationals, you must and can be fined for not being able to present a form of ID if asked to by the police.
 
UK citizens who apply for permanent residence will be issued with residence cards (for which the administrative fee is to be paid in the amount of HRK 79.50).
 
Family members of UK nationals, who are not nationals of an EU Member State, are required to apply for a residence card/permanent residence card as a family member (for which the administrative fee is to be paid in the same amount of HRK 79.50).
 
UK citizens and their family members can register their residence at a police administration/police station according to their place of residence (The list of police administrations/police stations is available here).
 
The registration of residence and the relevant documents are a clear proof that their holder is a citizen of the United Kingdom or a family member [of said British national] who has already resided in the Republic of Croatia before the United Kingdom's departure from the European Union.
 
DRIVING LICENSES:
 
Starting from the day on which the United Kingdom of Great Britain and Northern Ireland leaves the European Union, UK driving licenses will be subject to regulations concerning foreign driving licenses.
 
UK driving licenses will be valid in the Republic of Croatia for up to one year from the day that the United Kingdom of Great Britain and Northern Ireland leaves the European Union. After that, they will have to be replaced with Croatian driving licenses and the applicant will have to submit a certificate of medical fitness to drive.
 
UK nationals and nationals of other countries who are holders of UK driving licenses are advised to apply for the replacement of their driving licenses with a Croatian driving license as soon as possible.

Applicants who submit their application before the date on which the United Kingdom of Great Britain and Northern Ireland leaves the European Union will be able to replace their UK driving licenses under the conditions set for the replacement of EEA driving licenses in which case it is not necessary to submit a certificate of medical fitness to drive.
 
Both the EU driving licenses and the former paper driving licenses are equally recognised.
 
UK driving licenses are replaced with Croatian driving licenses without any obligation to take a driving exam/test, regardless of the category of vehicle listed on the UK driving license.

Border checks on persons at the EU external border (This section does not apply for travel in the Common Travel Area between the United Kingdom and Ireland):

EU law on border checks at the EU external borders on persons distinguishes between the control of EU citizens and of third country nationals. As of the withdrawal date, the control of UK nationals on entry and exit from the Schengen area as well as to and from Member States for which the decision on lifting internal controls has not yet been taken, but which apply Schengen rules at their external borders, will follow the rules for third country nationals.

(Please note that UK nationals who are members of the family of an EU citizen exercising their right to free movement are subject to the rules set out in Article 5 of Directive 2004/38 / EC of the European Parliament and of the Council of OJ L 158, 30.4.2004, p. 77.) On 29 April 2004, the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States, OJ L 158, 30.4.2004, p. 77.)

This means that they will no longer enjoy facilitations at the borders provided for EU citizens, nationals of the contracting states of the European Economic Area, and Swiss nationals ("EU / EEA / CH citizens") related to the free movement rights. In particular, UK citizens will not be entitled to use the separate lanes provided for EU / EEA / CH citizens to carry out checks at border crossings and will be subject to thorough checks of all entry conditions for third country nationals upon entry.

The entry checks for UK citizens will include verification of:
 
The possession of a valid travel document for crossing the border; the document must have a validity of no more than ten years, and shall remain valid for three months after the intended departure from the Member States; (Please note that UK national passports issued before the withdrawal date remain valid travel documents).
 
The duration of the stay:

For short stays in the Schengen area, UK citizens will be subject to restrictions on the authorised duration of stay within the Schengen area (with a maximum of 90 days in 180 days); for long stays, they will in principle require a residence permit or a long-stay visa issued by national authorities, under the national rules; The identity and the nationality of the third country national and of the authenticity and validity of the travel document for crossing the border, and in particular, if an alert has been issued in the Schengen Information System (SIS) for the purpose of refusing entry and checking potential threats to public policy, internal security, public health and international relations; the purpose (eg tourism or work) and the conditions of the intended stay (eg accommodation, internal travels); the existence of sufficient means of subsistence (i.e. having sufficient means to pay for the intended stay and return travel). ("Schengen-visa"), when the transitional period for the stay in the United Kingdom is reduced by the amount of the short-stay visa ("Schengen-visa"), on 13 November 2018 the Schengen area is 90 days within a 180-day period and it is now up to the European Parliament and the Council to adopt this proposal. - visa requirements, following the visa reciprocity principle.)

Travelers are advised to confirm, prior to travel, the validity of travel documents and to ensure that they fulfill all the above conditions before they travel to the EU. The non-fulfillment of any of the entry conditions may result in refusal of entry issued in accordance with the procedure laid down in Union law with respect to third country nationals.

Checks on exit include verification of:

The possession of a valid travel document for crossing the external border; verification that the person did not exceed the maximum duration of stay in the territory of the Member States; relevant databases similarly as upon entry checks.

WHAT DOES THIS JARGON ACTUALLY MEAN?

In short, this is nothing we haven't advised before and we applaud MUP for confirming things.

Make sure you're registered and in possession of a residence card which acts as proof of your lawful residence in the Republic of Croatia before the United Kingdom's withdrawal (if it ever happens) from the EU. In other words, these act as your acquired rights that you were entitled to before a law change, ie, your EU treaty rights.

Apply for permanent residence when you hit the magic five year mark.

Switch your driving license over to a Croatian one now, even though you don't need to right away, why bother with the headache?

You won't be able to use the EU lanes when arriving in an EU country using a British passport anymore.

Croatia is not in Schengen, but when travelling to and from Schengen, you might be subjected to more questions than you're used to.

If your passport is nearing its end, apply for a new one now to save you the bother.

We'd like to thank MUP, all sarcasm aside, for setting out some guidelines. This means that all Brits who have legally resided in Croatia, still live here, and have proof of that, will be fine even in the event of a No Deal Brexit. If May's Withdrawal Agreement manages to pass, then that will come into force. Click here to read that. If Brexit is delayed (likely), or Article 50 is revoked (unlikely, but possible), keep up with us for info.

Make sure to follow our dedicated politics page for much more on Brexit. Sign up to email alerts from the British Embassy in Zagreb for any alterations. Click here for MUP's post.

''Croats should be more concerned with the economy, and with the future too, rather than with topics that have failed to be solved over the past twenty years,'' stated Mladen Fogec.

As Ana Blaskovic/Poslovni Dnevnik writes on the 10th of March, 2019, you could enter the Olympics and break your own personal record in running, but if you're slower than the others, you'll still come last, this is the creative way in which Mladen Fogec, president of the Association of Foreign Investors in Croatia, described the country's huge problems with its current investment climate.

After a highly successful career in business, Fogec still believes that the biggest problem in Croatia is the mentality of the Croats: the tendency to moan and the reluctance to actually work to change anything.

Mladen Fogec talked about just how it has happened that even today, it still doesn't ''sit'' well with many Croats for investors to make a profit, and just why Uljanik is a notorious example of market economy rejection. Fogec spoke in an interview before the InvestCro investment conference, which is set to be held on March the 18th in Zagreb.

For years, you've been working on the white book of business climate recommendations, but you recently announced that you'll just stick a 2018 sticker on it?

It was a statement through which I wanted to reinforce an impression, but it didn't change the fact that there still weren't enough significant changes in the business environment to need to write a new book. Whoever needs it can get the 2017 issue, we'll just put a 2018 sticker on it.

The government is bragging about tax reductions, less barriers and faster procedures. Do you actually see that out in the field?

We do see it, but nothing is quick enough and it isn't to a great enough extent. If we look at Croatia alone, then yes, they're good moves. However, you could go to the Olympics and run faster than you've ever done before, but if your competition is progressing faster, then it's irrelevant that you've topped your personal record - you're still among the last. It's not a question of whether or not reforms work, the question is whether or not they're efficient. You have to look at the other side of the medal - the situation as it's seen by the entrepreneurs. We should be taking into account when changes are being made more. I believe that in life and politics, there is an important compromise in which sides need to come together, otherwise there will be no progress.

You said the problem is the mentality. Jako Andabak, let's say, says that it isn't uncommon in Dalmatia to have problems with permits for hotels because some local responsible for the permits is wanting to make sure that situation doesn't negatively affect his apartments...

I said the same thing a year ago on a radio show and that wasn't exactly welcomed with sympathies. I'm glad it was repeated by Mr. Andabak because he is Dalmatian and he's doing business there. Looking back at my 30-year career, I think it is a general problem in the state of mind of Croats. We're heavily burdened with the former system, with socialism, to be more specific. It's difficult to accept the market economy, it carries a lot of good but some bad stuff. We'd prefer to take everything that's good from the market economy and at the same time keep everything that's good from socialism as well. Unfortunately, such a utopia doesn't exist. The legacy of the old system is still very present, especially in the part of the state-owned economy, and that isn't small.

A good example is Uljanik, which is largely owned by its workers. They're actually striking against themselves, de facto. There are subsidies which exist in all countries, but if you take up to 30 billion kuna in the shipbuilding industry, each employer has given 23,000 kuna from his pocket, the question is whether [it's wise] to continue subsidising something that creates losses for years? Croatia should be more concerned with the economy, as well as with the future, rather than with topics that have failed to be solved over the past twenty years. I think we should invest in modern technology and industries related to digitisation and information technology, and not shipbuilding which has a very low level of added value.

What would trigger an investment wave?

I think it would help us to begin to change, especially our mentality. Croats like to complain a lot, to latch onto problems that are largely pushed by the media. Good news is just bad news, there's no optimism. One foreign ambassador who recently came to Croatia told me that people came to him with various issues and just complained, complained, and complained some more. It's impossible for everything to be so bad. Surveys from Doing Business or rating agency reports are based largely on perception, similar to the corruption index. The same applies to others, but in more developed countries, society fights for it to be a rule rather than an exception. It's the easiest thing in the world to be loud when being critical, we should turn to optimism in order for foreign investors to see that, too.

Have you noticed a change of attitude towards investors?

Unfortunately, I've got to say no. Indeed, and I have to repeat the words of one of our members saying that it isn't a question of whether foreign investors want to come and invest in Croatia, but whether Croatia actually wants foreign investors. It's still a big problem for us to accept a foreigner who comes here with capital, wants to buy land, build a production plant, and hire a workforce because inevitably we come to those [types of conclusions such as] "he will profit and make money on us." We haven't felt that it's normal and expected that someone who invests earns a profit, naturally, in a transparent manner and in accordance with the laws.

Should politics be focused on the growth of companies, and not on EU funds which only fund 20 percent of investments?

This is the core of the problem: to deter entrepreneurs from all hidden, parafiscal impositions. Their number has been reduced over the past ten years but they're so concentrated so instead of four, you have one, but the load is almost the same. This would have made a significant contribution to the growth of the economy. When things start going that way, someone always says that it's beneficial to large foreign capital. It doesn't matter whether the capital is domestic or foreign; If a company operates in Croatia and pays all of its taxes then it's a Croatian company and whoever actually owns it is of nobody's interest.

The owners of Volvo are Chinese and still we all think that Volvo is a Swedish car, not a Chinese one. That was also the case with the change in personal income tax when the criticism was about [the change] going hand in hand with those with higher wages, and not those who earn less. This is turning that thesis around. Those with low wages have so far not been included in the payment of income tax, nor will they be in the future. Those who have higher incomes and pay relatively more taxes will now pay less, but this isn't giving anything to them, they'll just have to pay less. Then we return to the beginning of the story of the traces of socialism because the wages must be viewed as gross, and tax is an individual category.

What do you say about Minister Horvat's plan to compile a list of the most desirable investors who will visit and have the benefits of investing in the Republic of Croatia presented to them?

There are countless potential investors, but I think this is a good move purely because of the reason that it's proactive. The government shouldn't sit around and wait for someone to come and knock at the door, but go to the investors and say: we're offering you this, that is, come to Croatia. I think that's a good idea.

Why is Croatia so far behind other countries, what is it that they're doing better?

It's because as a society, we're not changing, the capacity for change is not at a sufficient level. I'm not just thinking about the economy [when I say this], that's just a consequence. Recently, in the German-Croatian Chamber of Commerce, we had conversations with companies that had apostrophed (especially those who have production in Croatia) that they don't have enough qualified skilled labour, and that they need longer than a year to teach the students who have completed their secondary vocational education. We're returning to the beginning, back to education and the lack of a dual education system. These students should spend at least half of their education in practice so that they can start work immediately when they come to the real sector. We still have the problem of not changing anything in our curriculum. Now we're talking about history instead of turning to STEM areas, computing and digitisation, the things that are pulling society forward. If we had any chance for... let's say, the auto industry with a large factory to come to us, I'm not sure we'd have 5,000 skilled workers for it. We must start to change in all segments, from education onwards, which once again calls for much greater investment, research and development.

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

Click here for the original article/interview in its entirety by Ana Blaskovic for Poslovni Dnevnik

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

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

What can Croatia do to up its currently extremely poor investment game? With non-EU countries like Macedonia and Serbia, which are typically considered to be less developed than Croatia, making things far easier for entrepreneurs than Croatia, and our neighbour to the north, Slovenia, pulling huge sums of cash for investment from Europe, just where is Croatia going wrong?

As Poslovni Dnevnik/Darko Bicak writes on the 22nd of February, 2019, Croatia has one of the most incentive boosting legal frameworks for investment in Europe, which is openly recognised by everyone in the EU, but there is a problem in implementing these investments, as there is in the projected image of Croatia as a tourist destination rather than an investment destination. This was stated at the opening of the recent conference " InvestCro - Is Croatia Ready for New Investments'' which was organised in Zagreb, it is held as a year-round multimedia project jointly organised by Poslovni Dnevnik, Večernji list and 24sata.

Darko Horvat, Minister of Economy, addressed the conference:

"Everyone sitting here today has the same desire: If we can't make Croatia more desirable for investments, we at least should become aware that we're not that bad either. We have to work on our own confidence, because if we don't believe in ourselves, how will those who come here to invest feel when they encounter problems. It's especially important that people from the field - mayors and entrepreneurs, who can share the problems they encounter on a daily basis - also participate in the conference.

When you analyse today's renowned global and Croatian TV stations, portals, newspapers... you'll see that Croatia is a country offering the sun and the sea. To sum up how much Croatia has invested into being recognised as a tourist destination, it's clear why we're not seen as an investment Mecca. We don't have any marketing that would allow investors to see and recognise our country as being desirable for investment.

Our only "marketing" is a negative one through investors who did come to Croatia and haven't managed to succeed, and are talking about that abroad. Those who succeeded and didn't encounter any serious problems, and that's the majority, are generally silent and just do their work because nobody else asks them anything,'' Horvat said.

He added that the huge problem Croatia has is that during the accession period for EU membership, negotiations were carried out and the EU's laws were taken on without question, and they weren't "localised'' through the implementing of acts, which is why the bureaucracy and the judiciary system are so slow and dysfunctional today.

"Now that we're a full member [of the EU], we have to work harder to purge the regulatory framework that hampers us and prevents us from developing. With all the problems we have, Croatia has been growing steadily by 2-3 percent, but the problem is that those around us are growing 2-3 times faster than we are. Therefore, we must implement processes that will accelerate investment and the ease of doing business. When it comes to opening a company, we have seven steps and the whole process for the company to start doing business lasts longer than 30-40 days, although the registration itself lasts just fifteen minutes. We must take for example Estonia or Macedonia, which are at the top of the competitiveness ladder, and not be 150 places behind,'' noted Minister Horvat.

He also pointed out that the issue of the speed of issuing building permits is the biggest problem in big cities, primarily in Zagreb.

"Things are happening and they just need to be promoted. If the Slovenes have managed to attract 14 billion euros in investment from Western Europe, and we've only had 3.8 billion, then it's clear to see that we have some serious problems," said Minister Darko Horvat.

Zdenko Adrović, Director of the Croatian Association of Banks (HUB), highlighted the importance of public debate on the challenges of investing in Croatia.

"The aim of this project is to open up a series of investment issues in Croatia, and this year marks the 20th anniversary of HUB, and this year we want to stimulate the discussion about investments and the role of the banking sector in it. The IMF concluded that there is a need to alleviate bureaucratic obstacles and that would be very welcome, as would providing stronger legal certainty involving a fast and efficient justice system. Without a proper justice system there's little hope in expecting any sort of investment wave, we're not even among the top thirty [countries for investment]. A very well-known British business paper recently concluded that the sun and the sea  aren't enough,'' Adrović warned.

He also added that the establishment of a company in Croatia lasts several times longer than it does in our immediate neighborhood, including in countries like Serbia and Macedonia, both of which are outside of the EU, and which we usually consider to be considerably less developed than Croatia. Vladimir Nišević, editor-in-chief of Poslovni Dnevnik, stressed the importance of the media in promoting important social values, and Croatia's investment climate is certainly one of them.

"Without healthy investment and economic development there will be no other social advances such as curricular reform and the like, although the current Uljanik problem is one of the burning issues of the Croatian economy and society, it's much more important to look at how our country and our society will look in twenty years,'' Nišević rightly concluded.

Make sure to stay up to date with news on Croatia's investment and business climate and everything you need to know by following our dedicated business and politics pages.

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

The British Embassy in Zagreb has released a video for British citizens living and working in Croatia in which UK Ambassador to the Republic of Croatia answered a few common questions from Brits worried about their futures in Croatia after Brexit.

The video, aimed at answering the questions of worried British residents in Croatia in the case of an unwanted and disorderly but still possible No Deal Brexit, saw Andrew Dalgleish sit down and respond to a handful of concerns put to the embassy by Croatia's Brits, of which there are well under 1,000 legally registered.

If you're a British citizen living in Croatia and you're concerned about your rights after the United Kingdom withdraws from the European Union, which, if all goes to plan, will occur at the end of next month, make sure to follow us as we bring you all the information you need, as and when it happens.

If Theresa May's deal is passed, this article will tell you in detail what that means for you as a British national in Croatia.

If an unwanted No Deal Brexit occurs, MUP (Croatian Ministry of the Interior) has assured both Balkan Insight and TCN that British citizens with a biometric residence permit (temporary or permanent residence/privremeni ili stalni boravak) should be able to continue their lives broadly as they do now, and that the proper measures for that will be introduced. Although Croatia hasn't yet delivered any public assurances like several other EU countries have, in the spirit of reciprocity, Croatia will follow.

MUP's statement to me can be found here, along with the direct translation.

For information on how you can work to prepare and thus further safeguard your rights in the event of Britain crashing out of the bloc at the end of next month, read this article.

Make sure to stay up to date and/or sign up for email alerts from the British Government's Living in Croatia page in case any changes to your rights do occur.

In the meantime, make sure you're registered with the authorities in Croatia and are in possession of a valid biometric residence permit before the 29th of March, 2019.

For more on Brexit and on Croatian politics, give our dedicated politics page a follow.

More investment in Croatia and some very welcome news for fishing ports up and down the Croatian coast in several counties as valuable contracts worth a massive eighty million kuna are signed by Oleg Butković, the Minister of Maritime Affairs, Transport and Infrastructure.

As Morski writes on the 20th of February, 2019, on Wednesday the 20th of February, Croatia's Ministry of Maritime Affairs, Transport and Infrastructure signed binding agreements and contracts for the allocation of state budget funds for the construction, repair, and reconstruction of various facilities in ports which are open to public traffic, marking a praiseworthy investment in Croatia.

The ports, which are located in seven different coastal Croatian counties are considered to be of importance at both the county and local level, and their upcoming modernisation, reconstruction and construction will take place as part of the construction of fishing infrastructure this year.

The contracts will be signed by the Minister of Maritime Affairs, Transport and Infrastructure, Oleg Butković, and the directors of the port administrations Rabac, Crikvenica, Rab, Bakar-Kraljevica-Kostrena, Novi Vinodolski, Novalja, Senj, Zadar, Korčula and Vela Luka, as well as the port authorities of Šibenik-Knin County, Split-Dalmatia County, and Dalmatia's southernmost county - Dubrovnik-Neretva County.

Through the signing of these contracts and agreements, a huge total of eighty million kuna will be allocated to 25 infrastructure projects in as many as seven Adriatic counties in a massive investment in Croatia and its long and impressive coastline, not only in popular Dalmatia, which relies heavily on ports and their infrastructure.

With the allocation of these state budget funds, the Ministry of Maritime Affairs Transport and Infrastructure is continuing to go forward with its previously started investments in the field of the development and modernisation of port infrastructure on Croatian islands, as well as in coastal [mainland] areas, the competent ministry said in a statement on the matter.

Make sure to stay up to date with everything you need to know about investment in Croatia by following our dedicated lifestyle and business pages. If you've clicked on this article for sailing info, give our Total Croatia Sailing and travel pages a follow.

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

As Morski writes on the 5th of February, 2019, as the Ministry of Regional Development and EU Funds has stated, 39 contracts for Croatian island development will be signed on Wednesday, totaling an enormous 17,430,000.00 kuna, which is less than 450,000 kuna per individual project on average.

The Ministry argues that the goal of their Croatian island development program is to create the necessary preconditions for sustainable economic and social development by enhancing the quality of life on the islands by promoting the development of matters which are specific to Croatia's many inhabited islands.

The beneficiaries of the program are both local and regional self-government units which, within their respective administrative boundaries, include Croatia's inhabited islands and their associated periodically inhabited and uninhabited islands and islets, as well as the Pelješac peninsula.

The contracts that the ministry will conclude with local and regional self-government units in accordance with the decision for 2019 will fund 51 small capital projects in the area of ​​the islands and the Pelješac peninsula, for which the state budget provided a handsome 22.8 million kuna.

The Minister of Regional Development and EU Funds, Gabrijela Žalac, will sign contracts with the following units:

Municipality of Bol - Reconstruction of public utility building - Municipality building

Cres - Construction of the SU2 road in the area of ​​Melin - first phase

Dobrinj Municipality - Reconstruction of part of the administrative building of the Dobrinj Municipality - building 2

Hvar - Paving over the rock of an existing concrete public area on the bank of the waterfront (riva)

Municipality of Jelsa - Construction of a bridge on a unclassified road in the centre of Vrboska

Municipality of Kali - Construction of the coastal promenade of Kali - Rt. Artina (phase IV)

Komiža - Repairing the Zanchi house

Kukljica Municipality - Arranging and decorating a public building for the expansion of a kindergarten in Kukljica

Mali Lošinj - Reconstruction of the area near Studenac

Municipality of Murter-Kornati - Construction of a kindergarten and a nursery school in Murter

Municipality of Nerežišća - Completion of works on the construction of communal infrastructure of the Balun-Vrpovje business zone in Nerežišća

City of Novalja - Repairing the Samorašnji put (street) in Novalja

Okrug District - Construction of a kindergarten building in Okrug Gornji

Omišalj Municipality - Construction of a precipitation drainage system in the Rosulje settlement in Njivice

Pag - Repairing and redoing of pedestrian-cycling paths

Pakoštane Municipality - Concrete roads on Vrgadi island - III. phase

Pašman Municipality - Repairing of the breakwater in the Mrljane settlement

Municipality of Postira -  Redoing of the local park in Postira - II. phase

Municipality of Povljana - Carry out a project for the reduction of losses on the water supply system of the Povljana Municipality

Municipality of Preko - Reconstruction of the Lastavica kindergarten in Preko

Primorje-Gorski Kotar County - Medical rehabilitation park in Veli Lošinj

Pučišća Municipality - Doing up of the square in Gornji Humac - III. phase

Rab - A water supply and drainage system within the Mišnjak business zone

Municipality of Sali - Construction of the Orbulica Children's Hospital - Sali

Municipality of Selca - Construction of a playground in Selca

Split-Dalmatia County - The continuation of works on the upgrading of the Pučišć sculpting school

Stari Grad - Arranging the roof space of the city library and the reading rooms of Stari Grad

Municipality of Sućuraj - Unclassified road in the area of ​​Sućuraj Municipality

Supetar town - The transformation of the ground floor of the building in the street ''P. Jakšić 17'' in Supetar for the needs of DV "Mrvica"

Municipality of Sutivan - Asphalting of the street ''Put svetog Roka''

City of Šibenik - Continued repairing of the network of unclassified roads on the island of Žirje

City of Šibenik - Construction of an open-air sports park on the island of Zlarin

Municipality of Šolta - Construction of a coastal promenade with public lighting in Stomorska

Municipality of Tisno - Redoing of the park in front of the school in Betina - a sports court

City of Trogir - Modernisation of public lighting on Drvenik Mali, Drvenik Veli and Čiovo

City of Vis - Reconstruction of buildings in the Vis business zone, including energy renewal

City of Vodice - Doing up of the children's playground in Prvić Luka

Municipality of Vrbnik - Doing up of the sv. Ivan square

City of Zadar - Designing of cycling routes with all of the necessary infrastructure on Molat

Make sure to stay up to date with Croatian island development and much more by following our dedicated politics and lifestyle pages.