Doing business in Croatia: Croatia trade and export guide
Updated 6 October 2015
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This publication is available at https://www.gov.uk/government/publications/exporting-to-croatia/doing-business-in-croatia-croatia-trade-and-export-guide
Brexit
Learn about changes for UK exporters to Croatia if the UK leaves the EU without a deal.
Managing risk
Find out how UK companies can control risks when doing business in Croatia.
Export opportunities and advice
Find more export advice and explore opportunities overseas on great.gov.uk.
1. Croatia export overview
Croatia is located at the heart of central and eastern Europe. Since independence in 1991 it’s made significant progress in overcoming transitional and legacy issues associated with the war.
Contact a Department for international Trade (DIT) Croatia export adviser for a free consultation if you’re interested in exporting to Croatia.
Contact UK Export Finance (UKEF) about trade finance and insurance cover for UK companies. You can also check the current UKEF cover position for Croatia.
Although Croatia’s traditional trading partners are Italy, Germany and Austria, there are opportunities for UK companies.
UK companies operating in Croatia include GlaxoSmithKline, British Airways, WYG, Vodafone, URS and Sunseeker.
Benefits for UK businesses exporting to Croatia include:
- about 50% of population speak English
- increasingly sophisticated consumers
- modern distribution channels
- equal rights for domestic and foreign private and legal entities
- guaranteed free transfer of capital and free profit repatriation to investors
- average gross wages are high in comparison with neighbouring counties
Strengths of the Croatian market include:
- good transport links
- highest Internet penetration in southeast Europe
- well educated workforce
- stable economy with a stable currency
Read the EU’s practical guide to doing business in Europe.
2. Challenges of doing business in Croatia
Croatia is ranked mid-table in the World Bank’s ‘Ease of Doing business’ report. The business climate in Croatia is improving, but challenges remain. They include:
- bureaucracy
- lack of clarity and transparency in tax administration
- tax burden
- corruption
- slowness of the Croatian judicial system
You should ensure you take the necessary steps to comply with the requirements of the UK Bribery Act.
3. Growth potential of Croatia
3.1 Economic growth in Croatia
The Croatian economy is one of the most developed in southeast Europe.
The structure of the Croatian economy is dominated by the service sector, which accounts for 70% of Gross Domestic Product (GDP). This is mostly due to a very well developed tourism industry.
Croatia’s GDP was USD 57.16 billion in 2014. The Croatian economy grew in the first half of 2015 after 6 years of recession. It’s expected to grow by 0.3% in 2015 and by 1.2% in 2016.
3.2 Croatia’s trade agreements
Croatia is a member of the European Union (EU) and the World Trade Organization (WTO).
Contact the SOLVIT team if you have market access issues relating to the operation of the Single Market.
3.3 EU funds in Croatia
Following its accession to the EU in 2013 Croatia has become a beneficiary of EU funds and financing programs. EUR 800 million became available to Croatia on accession.
There will be opportunities for UK companies via projects financed through these funds.
3.4 Emerging Europe
The Central and Eastern Europe (CEE) region offers considerable potential to British business. UK exports are worth over £16 billion, with goods exports doubling over the past decade, and services exports - over £4 billion - trebling.
Economic forecasts for CEE are very positive. GDP growth is expected to reach 4 to 5% per annum over the next 20 years. Croatia can act as a gateway into the other CEE markets.
The CEE region:
- is easily accessible from the UK
- offers a market of over 100 million consumers
- has widespread use of English as the business language
- is making major investments in energy, transport and other infrastructure as a result of billions in EU funding
- is an entry point into eastern Europe
High Growth Europe: Grow your business close to home
Watch our other videos on growing your business in CEE markets.
4. UK and Croatia trade
UK goods exports to Croatia were about £189.85 million in 2014. The UK is Croatia’s 18th largest supplier.
The top UK exports were:
- boilers/machinery
- vehicles
- electrical, electronic equipment
- pharmaceutical products
- essential oils, perfumes, cosmetics, toiletries
- plastics and articles thereof
- miscellaneous edible preparations
- ships, boats and other floating structures
- optical, photo, technical, medical, etc apparatus
- beverages, spirits and vinegar
5. Opportunities for UK businesses in Croatia
DIT provides free international export sales leads from its worldwide network. Search for export opportunities.
Access high value public procurement notices via Tenders Electronic Daily (TED). TED contains all procurement notices above a certain threshold from the EU and European Economic Area (EEA).
All major public projects in Croatia select their suppliers of products and services through public tenders published in the Official Gazette of the Republic of Croatia.
Read our publication ‘Emerging Europe - Central and Eastern Europe 2015/2016: The top 50 commercial opportunities’.
5.1 Ports and marine sector in Croatia
Croatian ports have benefited from an uprising trend regarding cargo and passenger traffic in recent years. There are a number of investment and construction projects in pipeline. Major projects include:
- development of port of Vukovar
- extension of Port of Zadar cargo terminal
- Phase II of Rijeka Gateway Project in the Port of Rijeka
- upgrade of infrastructure, ferry terminals and docks in the ports of Split, Sibenik and Zadar
The Croatian Tourism Development Strategy until 2020 outlines plans to develop 15,000 new berths in 10 new marinas. The strategy estimates:
- EUR 552 million investment in the development of nautical tourism
- EUR 475 million investment in construction of new berths in existing marinas
Contact Diana.Nimac@fco.gov.uk for more information on opportunities in the ports and marinas sector in Croatia.
5.2 Tourism and leisure sector in Croatia
Tourism is an important sector of Croatia’s economy generating EUR 6.82 billion annually.
Opportunities for investment in Croatian tourism include development of:
- new hotels and resorts
- renewal and reconstruction of existing hotels
- small floating hotels
- camp sites
- nautical tourism harbours
- convention centres
- 10 new theme parks
Contact Diana.Nimac@fco.gov.uk for more information on opportunities in the tourism and leisure sector in Croatia.
5.3 Education sector in Croatia
Opportunities for UK companies include:
- vocational training
- life-long learning
- specialised executive courses
- skills and management training in public sector
- distance learning and online courses
Contact Diana.Nimac@fco.gov.uk for more information on opportunities in the education and training sector in Croatia
5.4 Creative industries sector in Croatia
There are potential opportunities for UK creative companies in the promotion of Croatian cultural sites to expand their tourism offer.
Contact Diana.Nimac@fco.gov.uk for more information on opportunities in the creative sector in Croatia.
5.5 Security sector in Croatia
Implementation of around 30 public sector investment projects, covering a range of sectors, valued at EUR 13.85 billion will result in a requirement for new security products and services.
Improvements in security measures are also expected following a redefinition of critical infrastructure by the Croatian government. New opportunities will include:
- re-equipping emergency services with new technologies
- upgrading maritime security plans at harbours such as Rijeka, Šibenik, Split and Ploče
- supply of special training equipment, transportation, and equipment for border surveillance to facilitate integrated border management
- equipment to detect counterfeit documents to help align the National Visa System with the EU
Contact Diana.Nimac@fco.gov.uk for more information on opportunities in the security sector in Croatia.
5.6 Food and drink sector in Croatia
Opportunities for UK companies lie in specialised products not available in Croatia and include:
- ethnic food and drink
- organic and non-Genetically Modified Organisms (GMO)
- special diet products
Contact Diana.Nimac@fco.gov.uk for more information on opportunities in the food and drink sector in Croatia.
5.7 Energy sector in Croatia
Energy sector studies indicate Croatia will be importing 80% of its energy resources by 2025. Croatia will need to embark on new projects to satisfy demand, including construction of new power plants and supply facilities.
Opportunities for UK businesses will range from expertise to new power plants and supply of new technologies.
Contact Diana.Nimac@fco.gov.uk for more information on opportunities in the energy sector in Croatia.
6. Start-up considerations in Croatia
HITRO.HR provides information on setting up a company in Croatia.
7. Legal considerations in Croatia
The Croatian legal framework is based on the Austrian and German legal framework and and has been successfully reformed according to the Acquis Communautaire.
Contact the DIT team in Croatia to help find tax and legal advisers before entering into agreements.
7.1 Standards and technical regulations in Croatia
Products and packaging should meet EU standards.
The Croatian government permits multi-language labelling and stickers. However, one of the languages must be Croatian.
There are regulations around information that every label needs to contain, with additional information required for specific products.
The Croatian Chamber of Economy can provide more information on labelling and packaging.
7.2 Intellectual property in Croatia
Trademarks, designs, patents and copyright are the principal forms of Intellectual Property (IP) protection available to companies and individuals.
IP law, especially for patent protection, is not totally harmonised within the EU.
The State Intellectual Property Office is responsible for IP.
8. Tax and customs considerations in Croatia
The UK signed a double taxation convention with Yugoslavia which continues to apply to Croatia.
The Tax Administration within the Ministry of Economy oversees the Croatian taxation system.
The Agency for Investments and Competitiveness provides details of incentives available for companies setting up in Croatia’s free trade zones.
8.1 Value Added Tax (VAT) in Croatia
VAT (called PDV in Croatia) is charged at 25%.
Certain product categories are zero rated. A 10% rate is charged for tourism activities.
8.2 Corporate tax in Croatia
A profits tax is charged at 20%.
8.3 Income tax in Croatia
Income tax ranges between 0% and 45%.
8.4 Customs in Croatia
The internal market of the EU is a single market which allows the free movement of goods and services. Therefore, no import duties are applicable.
The Customs Administration of the Republic of Croatia (site in Croatian) provides more information on customs procedures.
8.5 Documentation for Croatia
Goods which are in free circulation within the EU, can move between member states without being subject to any documentation requirements.
Excise or controlled goods still need documentation.
9. Entry requirements for Croatia
You don’t need a visa to enter the Republic of Croatia.
9.1 Travel advice for Croatia
If you’re travelling to Croatia for business, check the Foreign and Commonwealth Office (FCO) travel advice first.
10. Contacts in Croatia
Contact the DIT team in Croatia for more information and advice on opportunities for doing business in Croatia.