Why setup business in Croatia?
Situated in the Southeast Europe and bordered by Italy, Slovenia, Hungary, Serbia, Bosnia and Herzegovina and Montenegro, Croatia is currently the 128th largest country in the world. Home to a population of approximately 4.2 million, Croatia has the excellent geo-strategic position that is perfect for investors to reach out the EU market as well as the markets of Southeast Europe.
An Overview of Croatian Economy
The Croatian economy is one of the strongest in Southeast Europe. Despite the collapse of the socialist system, Croatian economy is performing better than some of the members of the European Union in terms of its gross domestic product (GDP). In fact, Croatia underwent transition to an open market economy, which especially related to industrial production, to revive its economy after the collapse of socialist system. The tertiary sector in Croatia that accounts for nearly 70% of GDP is one of the key drivers of Croatian service-based economy. Having become the 28th member state of the EU in 2013, the Croatian economy continued to grow. The continuous economic growth was mostly driven by the quick growing tourism sector.
Why Invest in Croatia
The skilled workforce and geographic advantage are among the reasons that make Croatia one of the countries that worth investing. Here are a few reasons to consider it.
- Geo-strategic Position
Three important Pan-European corridors run through Croatia, linking it to Western and Eastern Europe, and the Mediterranean. As such, the proximity of other EU capitals in the vicinity (Budapest, Vienna, and Ljubljana) makes Croatia easy for foreign investors to access large European markets and reach new clients.
- Appealing Investment Incentives
Croatian new Investment Promotion Act provides attractive incentives for investments starting from EUR 150,000 and creating a minimum of five new jobs, and for micro enterprises for investments starting from EUR 50,000 and creating a minimum of three new jobs. On top of that, certain incentives available are a profit tax deduction of up to 100% for investments above EUR 3 million, up to EUR 9,000 for each new job created and up to EUR 1 million for capital investments above EUR 5 million. Overall, Croatia’s tax incentives are very attractive to global investments.
- Skilled Workforce
Many agreed that Croatian workforce is highly skilled, talented, experienced, and multilingual. In fact, Croatia is one of the countries with the highest number of educated workforce aged from 20 to 24, and this is indeed an important criterion that keeps the productivity high.
- EU Member
As one of the members of the European Union, Croatia has access to the rest of the EU and the investment opportunities that it offers. Trading and business can be done easily within the EU without restrictions and that has opened up the opportunities for foreign investors to traipse the European market with little effort. Following its accession to the EU Croatia has become a beneficiary of EU funds and financing programs, much of which will be used to promote entrepreneurship. Foreign investors [who set up businesses] in Croatia will have equal access to those funds.
Thanks to its strategic location, the pro-business legislation, sound investment climate, as well as appealing tax incentives, Croatia is increasingly becoming attractive for global investments. If you are planning to tap the vast European markets, Croatia is one of the ideal gateways that have a lot to offer.