Number of Croatian Entrepreneurs Doubles in Eighteen Years

By 14 April 2021

April the 14th, 2021 - It might be all doom and gloom when listening to stories about doing business here in Croatia, but it can't all be that bleak. The number of Croatian entrepreneurs has doubled in the last 18 years, which provides encouragement that things are improving.

As Poslovni Dnevnik/Suzana Varosanec writes, the total revenues of Croatian entrepreneurs generated back in pre-pandemic 2019 reached the impressive amount of 796.1 billion kuna, when compared to way back in 2002, these figures are higher by 403.9 billion kuna, stated the Financial Agency (Fina) in its analysis entitled: "The financial results of Croatian entrepreneurs since the establishment of the Register, from 2002 to 2019."

“According to laws and bylaws, companies and sole proprietors and business units of Croatian entrepreneurs based in a foreign country are required to submit their annual financial statements (AFS) to the Financial Agency, which maintains the Register of Annual Financial Statements, as of April 2003. Since back in 2008, companies have been required to submit their AFS for statistical and other purposes and for public disclosure, and other taxpayers have been asked to do so only for statistical and other purposes.

The register of annual financial reports was established on the model of such registers in European Union (EU) member states, as a central source of information on business performance and the financial position of legal and natural persons, including corporate taxpayers,'' they stated in the introduction.

According to Fina, over the last 18 years, Croatian entrepreneurs have operated positively and reported a net profit - the exception is 2010 when they operated negatively and reported a net loss of slightly less than 1.7 billion kuna, with 2019 being their best year in terms of their total financial results.

"Back in 2019, 31.3 billion kuna was realised in net profit, which is the highest net profit in the observed 18 years. The highest revenues in 2019 were generated by INA in the amount of 21.6 billion kuna (with a share of 2.7 percent in the total revenue generated by Croatian entrepreneurs), while the highest profit for the period, in the amount of 1.1 billion kuna was earned by HEP. Back in 2002, INA was also the best in terms of revenue, which then amounted to 14.1 billion kuna (holding a share in the total income of Croatian entrepreneurs of 3.6 percent),'' Fina stated.

Back in pre-pandemic 2019, the Register collected and processed 136,260 annual financial reports for statistical and other purposes, corporate taxpayers without financial institutions, which is twice as many Croatian entrepreneurs (114.4 percent) as in the initial observed year (2002). The number of Croatian entrepreneurs was higher from year to year throughout the observed period, except in 2012, when it was lower than it was in the previous year of 2011. The share of Croatian entrepreneurs operating from profit was the lowest in 2010 (57.4 percent), and the highest in 2002 (70.9 percent) and 2003 (71.0 percent).

The analysis of business results of Croatian entrepreneurs in recent years, they say, indicated the importance of a small number of entrepreneurs on the overall financial results of Croatian entrepreneurs. This was also the case in 2019, when the first 10 entrepreneurs generated 79.7 billion kuna or 10.0% of the 796.1 billion kuna in total revenues of 136,260 entrepreneurs, and the first 100 entrepreneurs generated 227.3 billion kuna of the total revenue.

Their analysis shows that INA, with a share of 2.7 percent in total revenues, is far ahead of everyone else, as it has been in previous years. HEP with 10.5 billion kuna and Konzum plus with 7.7 billion kuna are in second and third place, and together they hold a share of 2.3 percent in the total revenue earned by Croatian entrepreneurs, which means that the three first-ranked companies have a share in total income of such entrepreneurs of 5.0 percent.

"The first 100 entrepreneurs in terms of profit for that period generated 16.2 billion kuna or 33.2 percent of the profit of all Croatian entrepreneurs. Back in 2019, the largest profit for that period was generated by HEP in the amount of 1.1 billion kuna, followed by Pliva Hrvatska with a profit of 984.4 million kuna, and Hrvatski Telekom in third place with 717.1 million kuna,'' they stated.

The number of employees of Croatian entrepreneurs in the observed period was the highest in 2019 - a total of 969,776, and the lowest in 2002 when they had 754,186 employees. From 2002 to 2008, the number of employees increased, while from 2009 to 2014 it generally decreased, with the exception of 2013, in which it was slightly higher than it was back in 2012. However, since 2014, the number of employees has been growing continuously and period increased by 139,660. The average number of employees per entrepreneur in the observed period was the highest in 2002 - when it stood at 11.9 employees per entrepreneur, and since then it has been decreasing from year to year, and in 2019 the average was 7.1 employees per entrepreneur.

“The highest average monthly net salary of employees at the level of all Croatian entrepreneurs was calculated in 2019, when it amounted to 5,815 kuna, which is 80.6 percent more than in 2002, when the lowest average monthly net salary in the observed period was calculated (3,219 kuna),'' Fina's analysis showed.

For more on Croatian entrepreneurs, check out Made in Croatia.