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Croatia has enjoyed steady growth in foreign investment over the last several years, buoyed by a growing economy, low inflation, a stable exchange rate and developed infrastructure. With progress towards membership of NATO and the European Union being in an advanced stage, Croatia has taken a leading position in the region and anticipate further stimulus for investment and growth. Croatia is open to foreign investment and many foreign investors are prospering in this growing market. The Croatian government has set a goal of increasing foreign investment and has undertaken incremental measures to improve the investment climate in the country, hoping to build on recent positive trends that include a stable macroeconomic environment and future NATO and EU membership.

The website of the Croatian Chamber of Economy (www.hgk.hr) provides a useful English-language guide, "How to start up an Enterprise in Croatia," as well as sector-specific and general reports. The Zagreb Stock Exchange's website (www.zse.hr) posts English-language translations of key laws in force.

Croatia is an open market without any limitations for foreign investors. The Croatian Government has committed itself to creating a favourable framework and environment for attracting foreign direct investments, which are indispensable for creating an entirely open, export-oriented and competitive economy. Foreign investments in Croatia are regulated by the Company Act, the Investment Promotion Act and other acts.

Foreign investors have the same rights, obligations and legal status within an enterprise as domestic investors, provided that the condition of reciprocity is met. The Croatian Government has prepared a package of investment incentives, according to which foreign investors can acquire rights to additional guarantees which are not given to domestic investors. The Croatian Constitution ensures free repatriation of profits and free repatriation of capital upon disinvestment.

In the year 2007 a record foreign investment amounting to 3.62 billion EUR was achieved. The investors were mostly European: Austria, Germany, Luxembourg, the Netherlands, Slovenia, Italy, Sweden etc., but some were also American. They invested most in the telecommunications sector (24.36%), banking transactions (21.24%), the pharmaceutical industry (9.71%), the oil and gas industry (7.28%), the cement industry (3.05%), etc.

Foreign legal entities in Croatia are allowed to:
> invest capital on a contractual basis
> invest capital in a company
> invest capital in a bank or insurance company
> start up as a craftsman or sole trader
> establish a co-operative
> acquire the right to exploit natural resources or other assets of interest to Croatia
> take part in Build-Operate-Transfer (B.O.T.) deals and in Build-Own-Operate-Transfer (B.O.O.T.) deals

There are large differences regarding economic development in specific regions of Croatia. The NW Region has the greatest competitive advantage because Zagreb, the capital city and business centre of Croatia is situated here, and in addition the demographic, health and cultural indicators are very favorable. The other two regions are Central and Eastern Croatia and the Adriatic coast. The CE region offers good investment opportunities in agriculture, and the coast possesses opportunities for tourism and real-estate business.

Industry in Croatia generates around 20% of GDP and employs 25% of the total Croatian work force. The most significant players in GDP generation are the food and beverages industry, oil industry, chemicals, building materials, electrical equipment, paper industry, and shipbuilding. The leading export industries are shipbuilding, oil and gas, chemicals, food and beverages etc. Industrial products represent 97% of Croatian export.

Other advantages that Croatia offers to foreign investors are a well educated workforce, the geo-transitional position (important Pan-European corridors are passing through Croatia), natural resources, a stable political and macroeconomic environment, developed financial services and high-quality telecommunications infrastructure. What limits the development of entrepreneurial sector in Croatia is the administrative system (in government and some private institutions and organizations), and poor access to information. 

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