General Information

There are many investment opportunities in Croatia (EU member since 01/07/2013), especially in the services and tourism sector, although prices have already reached a certain level. Corporate taxation is still quite high compared to other countries in the zone (the rate varies between 12% and 18%). For individuals, income tax varies between 20% and 30%.

There is still exchange rate regulation, but it has been liberalised in accordance with the legal framework of the European Union and its status as a member of the Euro zone; dividends are repatriable without restriction but subject to a 10% withholding tax for companies. (This rate may be reduced depending on tax treaties between countries.)

Before moving to Croatia, it is strongly recommended to be assisted by a legal and tax advice well introduced in this country, where caution is recommended especially when certifying the origin of ownership of land or real estate, a remark that is also valid for the rest of the Central European countries. Some economic activities are still regulated and subject to prior authorisation. It is therefore essential to enquire from Invest Croatia (https://investcroatia.gov.hr/en/ ) and the Ministry of Economy (https://mingor.gov.hr/ ).

Payment Methods & Banking Specificities

Cash payment by SWIFT Credit Transfer before shipment is highly recommended. Bank checks or checks issued by businesses should be prohibited. They are not used in Croatia anyway, except by foreign banks which issue checks in foreign currency payable outside Croatia.

Zaduznica, a kind of Schuldschein, is a system specific to Croatia: it is a recognition of debt immediately payable with FINA (the former Yugoslav Payment Agency), on the assets available on all the issuer’s accounts and until the debt is exhausted. This allows

quickly recover funds without legal action, but remains limited to the amounts available on the accounts.

The judicial solution remains the last resort, as it has the notable disadvantage of the length of the procedure and the uncertainty of its outcome, with an average recovery of only 30%.

The European order for payment procedure (Regulation (EC) No 1896-2006 of 12 December 2006) - After being declared enforceable, the European order for payment is enforced directly in any EU Member State.

The creation of a Cofacé credit (within the limits of available government envelopes) or possibly an irrevocable and confirmed documentary credit should also be considered.

Confirmation of documentary credits for Croatia is possible depending on the counterparty, the duration of the commitment and the availability of country risk lines. The majority of transactions in Croatia are pre-paid, as advised above.