Croatia

Investing

FDI in figures

The overall biggest foreign investor in Croatia is by far Austria (with a tottal of almost EUR 5.5 billions), followed by Netherlands and Germany on second and third place respectively investing both a bit less than Austria alone during the past 15 years. France with a total of 1.3 EUR billions of investment is by far on 4th place but only thanks to a record investment year in 2006 of more than one billion EUR alone when Société Generale bought a Splitska banka bank. Nevertheless, FDI to Croatia has been realtively poor in the first period until 1997 and after that it was quite stable from 1998-2004. After that it has began to florish and it has increased from 1.5 EUR billions in 2005 to almost 3.6 EUR billion in 2007 cumulating a total of 18.3 EUR billions of foreign investments up to now (including 1st quarter of 2008).

Foreign Direct Investment	2004	2005	2006
FDI of inward flow (millions USD)	1,227	1,790	3,556
FDI inward stock (millions USD)	n.c.	n.c.	26,812.0
Performance Index*, world ranking	35	40	36
Potential Index**, world ranking	53	55	n.c.
Number of Greenfield investments	41	46	37
FDI inwards (in % of GFCF)	13.0	17.0	27.9
FDI stock (in % of GDP)	n.c.	n.c.	63.5

Source: UNCTAD, World Investment Report

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk.

Why you should choose Croatia

Strong points: Geographical location: along the Adriatic Sea facing Italy on its other side.

Labor skills: multilingual and well educated workforce (mandatory secondary school) on the way to become a knowledge based society.
Infrastructure: Croatia continues to heavily invest into transportation, telecommunications and energy infrastructure to lower operational costs.
A gateway to the EU: Croatia is estimated to become a member of the EU in 2010.
Natural beauty and diversity: National Geographic declared Croatia as one of the top destinations in the world in 2006.
Weak points: Slow legal and administration system, innefficient bureaucracy: amid a backlog of over 1 million pending cases even the simplest cases can take years to resolve.

Administrative procedures relative to foreign investment

Acquisition of holdings: A foreign investor can hold 100% interest in the shares of a Croatian company, except in some cases specified by the government.