Tuesday, 5 July 2022

AmCham Proposes Further Tax Relief in Croatia

July the 5th, 2022 - The American Chamber of Commerce in Croatia (AmCham) organised a business breakfast called "Tax Policies during Challenging Times".

AmCham has been working for years and is actively involved in recommendations for the reform of the tax system. Through five rounds of tax changes, AmCham actively participated with proposals, a significant part of which was accepted.

At the event, the Deputy Prime Minister and Minister of Finance Zdravko Maric referred to the role of tax policies in contemporary economic events, the effects of the previous 5 rounds of tax reform and the Government's plans for further tax relief.

"After we implemented significant tax changes, the goal of which was to simplify the tax system and relieve both companies and citizens, we're now in the final phase of the process of introducing the euro in Croatia, so Croatia will, after a number of years, have numerous implemented measures and fulfilled obligations. On January the 1st, 2023, the country will become the twentieth member state in which the euro will be the official currency.

Conducting a responsible fiscal policy allowed us to start this entire process in the first place, and its finalisation, along with the further control of expenditures, the implementation of the National Recovery and Resilience Plan, which also includes numerous reforms of the public sector, efforts aimed at creating a positive business environment and, ultimately, an internationally competitive economy will make Croatia even more desirable for work, life and new business ventures," said Minister Maric.

Despite significant progress related to the tax relief of labour, in the Business Climate Survey presented by AmCham at the beginning of 2022, labour taxation is still among the three limiting factors of doing business in Croatia. Therefore, AmCham believes that there is still room for further tax relief for labour in order to make it more competitive compared to other countries in Central and Eastern Europe and aimed at retaining the workforce in Croatia.

This year, the American Chamber of Commerce in Croatia also published "Recommendations for the reform of the tax system in 2022", which was also presented at the event. The opinion proposes a series of recommendations for further tax relief aimed at even stronger investment attraction and the greater competitiveness of Croatian employers in attracting and retaining the domestic workforce.

AmCham proposes three key measures:

- An increase of non-taxable personal deduction to 4,900 kuna (650 euros);

- The reduction of the tax rate from 20% down to 10% for income tax and the tax rate from 30% down to 25%;

- The application of the maximum monthly and maximum annual base when calculating health insurance contributions

The aforementioned measures would ensure that with the same cost to employers, employees receive higher net incomes, which increases their economic power and consumption capacity, which increases the standard of living, and which indirectly has a positive impact on economic growth in Croatia.

In addition to three key measures, AmCham advocates the implementation of option plans in limited liability companies ('d.o.o.').

AmCham's proposal is an amendment to the Law on Income Tax, in which it would be prescribed that, in addition to the allocation or purchase of own shares, the allocation and acquisition of shares in a limited liability company would be considered income from capital. If the legal framework were to be adjusted in this sense, it would help the development of small and medium-sized companies, as well as start-ups in Croatia.

AmCham also proposes a non-taxable allowance for working from home of 360 kuna (50 euros) per month, as well as an increase in monetary benefits and awards, such as an increase in the non-taxable amount of compensation for the use of a private car for official purposes, per diems for business trips both within the country and abroad, occasional awards, a flat-rate allowance for a meal in money, a gift in kind, a gift for a child, benefits in case of death, etc.

AmCham's "Recommendations for the reform of the tax system in 2022" were presented by Hrvoje Jelic, partner, PwC Croatia (Tax authorities as partners of the business community), Paul Suchar, partner and Petra Megla, director, KPMG Croatia (How to retain and reward employees) and Kresimir Lipovscak, partner, Crowe Croatia (Added value for employees).

The presentation of AmCham's Recommendations was followed by a panel discussion attended by Bozidar Kutlesa, director of the Tax Administration; Josip Funda, Chief Economist, World Bank; Stanko Krslovic, member of the Management Board, Philip Morris Zagreb and Bojan Poljicak, director, Adcubum.

"In the short term, it's difficult to expect any additional tax relief, especially if we take into account the growing uncertainty surrounding economic developments towards the end of the year. In the medium term, however, we should go in the direction of more uniform taxation of income from different sources, the reduction of the tax burden on labour, especially higher incomes, and the stronger tax stimulation of investment in research and in the development and innovation of companies," concluded Josip Funda, Chief Economist, World Bank.

For more, check out our politics and business sections.

Wednesday, 6 April 2022

Croatian Companies to Find American Market Much Easier to Enter

April the 6th, 2022 - Croatian companies are set to have much easier access to the much desired and very demanding American market.

As Poslovni Dnevnik/Ana Blaskovic writes, in the shadow of the current war in Ukraine following the Russian invasion and potential threats to Europe, security dominated the topics of the recently held Croatian-American Business Forum, which began in the City of Zagreb on Monday, on the anniversary of the founding of NATO. Opening the meeting, President Zoran Milanovic pointed out that Croatia joined the North Atlantic Alliance because of the United States.

"Only because of American help and protection, Croatia is in NATO, not because of London, not even because of the constructive and friendly Berlin, but exclusively because of the United States," he said, thanking the United States for being the ''only country in the 1990s as a state to have provided support to Croatia''. Speaking on video, US Secretary of State Anthony Blinken sent a strong message that "an attack on you is an attack on us", adding that the United States will "always have Croatia's back''.

Commenting on the recent NATO meeting, President Milanovic said that it didn't mention countries "that have a problem with their own identity, affiliations, and awareness of who is their friend and who is their enemy", especially emphasising the commonly problematic neighbouring Serbia as a country that Croatia wants as a "good neighbour". He told Belgrade to ask itself if it was a part of the West or not, and to declare where it felt it belonged and not to cause continued confusion. He criticised NATO for not talking about the Western Balkans, while discussing countries such as Georgia and Moldova. "Is now the time to root out the malignant Russian influence (in the region, op. cit.) that we've been hearing about for years?" Milanovic asked.

The security aspect is a key precondition for the development of business ties, and the abolition of the visa regime and the finalisation of agreements on the avoidance of double taxation will contribute to the strengthening of economic cooperation, providing a spring in the step of many Croatian companies. The head of the American Chamber of Commerce (AmCham) Andrea Doko Jelusic said that the agreement was "in process and that the Ministries of Finance in both nations are negotiating the terms of the agreement", but that it should happen "very soon" after which it must be confirmed by the Parliament and the Senate.

It is difficult to say exactly how many American companies operate in Croatia because many operate through European subsidiaries.

"I think at least a third of our chamber operates like that. If you look in the court register you'll see that the country of origin is the Netherlands or the United Kingdom. We've calculated that the volume of trade between companies connected to Croatia and the United States is approximately 9 percent of Croatia's GDP,'' said Doko Jelusic, noting that companies on both sides of the Atlantic employ about 20,000 workers. "With the entry into force of this contract, it will be much easier, especially for smaller Croatian companies. American companies usually work through large European headquarters, so it may not be so critical for them. It's to be expected that Croatian companies will be able to enter the American market in a much more easy way,'' she said.

How much can Croatia, a small European country with a chronic problem of non-competitiveness, provide to the huge American market with about 326 million inhabitants?

"Ireland is small, too. However, it's a question of focusing on certain industries, high added value where you can be competitive, where you can sell expensively, have expertise, so why wouldn't it have something to offer?'' asked Doko Jelusic.

Mihael Furjan, the leader of Pliva and HUP (Croatian Employers' Association) pointed out at the panel discussion that it is impossible to be a global player in business without a focus on the American market.

"It's crucial for the investor to be safe, so it's important that Croatia is part of NATO and the EU, and soon Schengen. It's important that investors see that there is a secure business climate, legal system and framework, otherwise they just won't come. There are many wonderful places around the world where a much better yield can be made than in Croatia, so it's important that as a small country we're part of a secure system,'' said Furjan, adding that he thinks Croatia could learn a lot from the United States.

“When it comes to where the US is best when compared to others, it's definitely in terms of innovation and education. We can debate a lot about education, but the fact is that the best business schools are in the US. We need to ''copy-paste'' that,'' added Furjan, emphasising that there needs to be a ''critical mass'' in order to penetrate the American market, and he sees the potential for strengthening economic ties in the IT segment, in energy, and in the pharmaceutical industry.

"Croatia is home to less than 1 percent of the EU's population, we can't export large volumes to the United States because we can't meet their demand. We have to find a niche to be a big player because we can't go to the US market with small volumes, which is important to be efficient,'' he said.

Koncar CEO Gordan Kolak agrees that security is paramount. 

"Many investors when asked about investing in Croatia mention the safrty aspect,'' said Kolak, adding that in the last two years, Koncar has been forced to withdraw teams from Africa and Scandinavia and to stop talks with partners in Ukraine. "Without security, you can't count on business prosperity," he said. Koncar concentrates on renewable energy sources and digital solutions in the energy sector, counting on several decades of experience in hydro and wind energy. "We have the knowledge and the technology, we're counting on that when we talk about expanding our business in the American market, where we have several projects," noted the head of Koncar.

Silvio Kutic from Vodnjan's Infobip, the first Croatian unicorn, commented on the fact that his company, which today employs 2,600 workers, is in the acquisition phase. He said that with a good idea, a company can cause a disruption in the market, especially emphasising the advantage of the American market in the form of abundant capital available for financing innovative ideas.

"Everything that can facilitate the mobility of companies to the United States is important, I urge everyone, especially in the IT sector, not to look at it (the absence of a double taxation agreement, opa.a.) as an obstacle. We're counting on it to make the situation easier for us in the future,'' stated Kutic.

Ruza Tomic Fontana, President of the Management Board of Coca-Cola HBC Adria, pointed out that Croatia as a country should strengthen its education system according to the needs of the business environment, but that employers must also contribute.

“We need more dialogue between the business and private sectors about the business environment, anything that can help when it comes to creating a more stable environment. I would focus on the amount of the total tax burden and solve the problem of labour shortages,'' she said.

For more on Croatian companies, check out our business section.

Tuesday, 22 February 2022

Tramišak: There'll Be Wide Range of Business Opportunities in New Financing Period

ZAGREB, 22 Feb 2022 - Croatian businesses will have a wide range of opportunities in the new financing period, Minister for Regional Development and EU Funds Nataša Tramišak said on Tuesday while presenting the new Multiannual Financial Framework under which Croatia will have access to €14.4 billion.

Tramišak attended a business breakfast hosted by the American Chamber of Commerce in Croatia, which focused on the opportunities of the business community to use funds from the Multiannual Financial Framework (MFF) 2021-2027.

She said that of the €14.4 billion made available to Croatia under the MFF, about €9 billion concerns cohesion policy which is coordinated by her ministry.

"A large portion of funding will go towards targeted public calls for our businesses, for investment in tangible and non-tangible assets and the green and digital transition of the economy, which includes productive investment in research, development and innovation. We will also embark on a new direction regarding plans for the industrial transition of regions, because we want to strengthen the regional economies of Pannonian, Adriatic and Northern Croatia," Tramišak said.

She said that calls had already been issued last year as part of the Next Generation EU instrument and the Recovery Assistance for Cohesion and the Territories of Europe (REACT-EU) programme for investment in the manufacturing industry for the green and digital transition, and more than HRK 1 billion worth of projects had been agreed for Croatian enterprises.

New calls are expected before the end of this year, after the MFF is approved by the European Commission, she added.

Tramišak recalled that the value of the entire allocation for Croatia over the next nine years is €25 billion, while Croatian businesses will have direct access to about €5 billion from the entire package, which includes the MFF and the National Recovery and Resilience Plan.

She also noted the possibility for investment through the common agricultural policy, where the allocation for Croatia amounts to about €5 billion, and this process will be coordinated by the Ministry of Agriculture.

Monday, 2 November 2020

AmCham Gives Its Recommendations for Tax Reform in Croatia

ZAGREB, November 2, 2020 -  The American Chamber of Commerce (AmCham) in Croatia on Monday welcomed the four tax reform rounds to date as well as tax changes announced for 2021, presenting its recommendations for tax reforms with a series of tax exemption measures, including more significant income tax cuts.

AmCham appreciates the government's efforts in tax relief for the economy and entrepreneurs doing business in Croatia and welcomes the measures thus far through four rounds of tax reforms as well as those announced which are expected to enter into force at the start of 2021, AmCham Executive Director Andrea Doko Jelusic said.

According to Doko Jelusic, AmCham works on proposals for further tax relief aimed at attracting investments and boosting the competitiveness of Croatian employers in attracting and keeping workers.

AmCham has recently presented "Recommendations for Tax Reform in 2020" which contain a number of measures to improve the functionality of the taxation system, including measures for income tax reliefs and other types of income. 

AmCham says that it has new proposals regarding changes to the tax treatment of "remuneration in kind" and option plans.


AmCham for increase in non-taxable part of income

AmCham suggests that the non-taxable income amount should be increased from HRK 4,000 to HRK 4,800 and that the 24% income tax rate should be reduced to 12% while the 36% tax rate should see a more significant reduction. That would lead to greater purchasing power, increased consumption and greater economic activity, AmCham said.

Reducing the 24% income tax rate to 12% would further relieve the tax burden on "middle" income earners, while the reduction of the 36% tax rate would boost investments, attract regional corporate headquarters and increase the share of higher-income professions. The 36% tax rate should significantly be reduced or applied only to gross monthly earnings of more than HRK 75,000, said AmCham.

It also recommends changes to the tax treatment of "remuneration in kind" so that the market value of remuneration in kind be considered as its gross value for the purpose of tax and contribution payment.

AmCham further suggests that the amount of non-taxable bonuses and reward be increased from HRK 5,000 to HRK 12,000.


Non-taxable allowance for work from home

AmCham also took into consideration allowances for workers' health as well as the need to introduce a non-taxable allowance for work from home.

Considering the additional costs that workers have working from home and where it is not possible to necessarily separate certain business costs from household costs such as electricity, central heating and the like, AmCham suggests the introduction of a non-taxable fixed amount to cover these costs.

AmCham notes the example of Slovenia where the non-taxable allowance for work from home is 5% of the wage but no more than 5% of the average wage (which now is more than €90 a month).

AmCham also gives a dozen general recommendations, including on the extension of deadlines for filing income and profit tax returns, stressing that current regulations allowing the transfer of tax losses for the next five years do not stimulate long-term investments, particularly for high technology, and that this period should be extended to 10 years.

Sunday, 31 May 2020

Croatian Economy: AmCham Seeks Abolition of Certain Parafiscal Levies

As Darko Bicak/Poslovni Dnevnik writes on the 29th of May, 2020, measures to help businesses and entrepreneurs in Croatia should be extended, AmCham warns as it discusses the Croatian economy.

The American Chamber of Commerce in Croatia (AmCham) welcomes the recent Action Plan to reduce non-tax and parafiscal levies to help the Croatian economy recover and get back on its feet during the coronavirus crisis.

In a set of recommendations to help the Croatian economy, AmCham has, among other things, announced measures to further reduce and eliminate parafiscal levies and indirect taxes. As Andrea Doko Jelusic, Executive Director of AmCham Croatia, points out, entrepreneurs in the Republic of Croatia pay around 440 parafiscal fees, which makes doing business significantly more difficult and trying for them.

"Certain levies have a general purpose, so their abolition would create a budget deficit that should be financed from other sources, and there are also a number of levies that aren't financially burdensome, but the purpose of their actual payment is non-transparent.

A large number of indirect taxes and levies also represent an administrative burden in terms of monitoring the obligations of the payments themselves and procedures which are too complex. Entrepreneurs point out certain things as the biggest problems: an excessive number of parafiscal charges, non-transparency, financial burdens, the complexity of these procedures and the administratively demanding monitoring of payment obligations.

We believe that it is necessary to focus on further reducing the total number of parafiscal levies and the financial burden they cause,'' explained Doko Jelusic.

Part of the recommendations also refers to the introduction of the possibility of transferring tax losses backwards, then deferral, ie, the exemption from paying income tax advances in 2020, offsetting mutual tax debts and the exemption from VAT payments on donations for earthquakes. They also point to the need to extend the deadline for the implementation of government measures to help the recovery of the already enfeebled Croatian economy.

''Following the end of the extraordinary circumstances caused by the coronavirus pandemic, it's to be expected that it will take some time to restart all of the activities that have been suspended, order raw materials, contact clients and establish a regular work cycle. Therefore, it's necessary to think about extending the measures to help the Croatian economy by three months, and in tourism by twelve months,'' concluded the executive director of AmCham Croatia, which brings together about 250 American, Croatian and other international companies that employ more than 88,000 people in Croatia.

For more, follow our business section.

Tuesday, 31 March 2020

American Chamber of Commerce in Croatia: 5 Economic Recommendations

As Poslovni Dnevnik writes on the 31st of March, 2020, with the aim of contributing to the economic stability of the Croatian economy, preserving jobs and ensuring the financial liquidity of businesses operating here, AmCham (the American Chamber of Commerce in Croatia) has announced a proposal for additional measures to assist the economy in the wake of the coronavirus epidemic.

"We believe that in this situation, it's necessary to focus the measures on maintaining the liquidity of businesses, maintaining employment and jobs, securing supply chains for businesses, stimulating consumption after the crisis and on tax relief," said Andrea Doko Jelusic, executive director of the American Chamber of Commerce in Croatia, adding that AmCham's measures have been prepared in accordance with the adopted measures of the Government of the Republic of Croatia and in accordance with the good practices of other countries.

To ensure liquidity, the American Chamber of Commerce in Croatia proposes, among other things, the establishment of HBOR government loans and guarantees (worth ~ 10 percent of GDP in line with the experience of other countries); the setting up of funds for industrial sectors which are the most severely affected by the crisis (such as Croatian tourism); the securing of funds for SMEs with impaired liquidity through the approval of credit lines with a two-year repayment obligation and a 0 percent interest rate (modelled on what is being done over in the Czech Republic).

Regarding the proposal for job retention measures, they refer to the introduction of part-time work models; the mandatory use of holidays during the coronavirus crisis; subsidies to workers in the private sector (based on the Austrian and Slovenian models) and through the write-off of income taxes and contributions during the crisis period due to the coronavirus pandemic.

"It's also extremely important to ensure the smooth flow of goods, raw materials and key raw materials needed for the production [capacities] of industries who are currently of strategic importance, as well as exporters, that is, we need to find a way to ensure that strategic enterprises don't end up lacking raw materials, repro materials, etc,'' Doko Jelusic stated, adding that the American Chamber of Commerce in Croatia is already working on an additional proposal for measures that could mitigate the negative effects of coronavirus on the economy and help businesses overcome hardships in the upcoming period.

"Given the current circumstances and the earthquakes that hit Zagreb, the American Chamber of Commerce in Croatia additionally proposes that a provision be made to make deliveries VAT free to hospitals and scientific/educational institutions, which would make it easier for businesses to donate to hospitals and scientific/educational institutions, and contribute to reconstruction and assistance during this crisis period,'' concluded Andrea Doko Jelusic.

AmCham's "Business Assistance Recommendations" are available in Croatian via this link.

Tuesday, 3 March 2020

AmCham: Innovations in Health Important for Finding Vaccine Against Coronavirus

ZAGREB, March 3, 2020 - The threat that the coronavirus outbreak brings is a good example of how innovations in health, in this case finding a new vaccine, can contribute to the efficiency of the health system, it was said on Tuesday at a meeting of the American Chamber of Commerce in Croatia (AmCham).

*Follow this article for live updates and this page for updates from Total Croatia News on the coronavirus in Croatia. An archive of updates can be found hereContact numbers for epidemiologists, travel advisories and measures for preventing the spread of the coronavirus can be found here.

Assistant Health Minister Vera Katalinić-Janković underlined that viruses were still two steps ahead of us however the objective would be to obtain an efficient vaccine against coronavirus and that, on the most part depends on the pharmaceutical industry and its possibilities for innovations.

"Apart from what innovations in the pharmaceutical industry bring to patients and the health system today, and the possibilities of cooperation between the health system and IT industry in the field of artificial intelligence and robotics in the health system, we will also talk about how to contribute to treating new threats like coronavirus," AmCham executive director Andrea Doko Jelušić said.

Today's conference was organised on the occasion of Croatia's presidency of the Council of the EU in an effort to establish dialogue between all the relevant stakeholders on the role of an innovative health industry as a generator of Europe's economic growth, future health innovations in the EU and the importance of Europe's innovative capacities.

The Foreign and European Affairs Ministry's State-Secretary, Nikolina Brnjac, underlined that during Croatia's presidency there would be talks on a series of important topics such as organ donors and transplants, lifelong health care and an analysis of the effect of new medicines and health technology.

Chairwoman of the parliamentary health and social policy committee, Ines Strenja, said that Croatia had the second highest rate of patients suffering from cancer in Europe and assessed that in addition to innovative medicines the country needed an innovative approach because of poor performance in prevention and late diagnoses of malignant diseases, while at the same time the country was investing huge amounts of money in particularly expensive medicines.

More coronavirus news can be found in the Lifestyle section.

*Follow this article for live updates and this page for updates from Total Croatia News on the coronavirus in Croatia. An archive of updates can be found hereContact numbers for epidemiologists, travel advisories and measures for preventing the spread of the coronavirus can be found here.

Wednesday, 26 February 2020

AmCham: Croatia Lags Behind Other Countries in Region

ZAGREB, February 26, 2020 - Business conditions in Croatia are better compared to last year, but Croatia lags behind other countries in the region, show the results of an American Chamber (AmCham) Croatia survey on the business environment in Croatia, presented on Wednesday.

"Although a significant number of respondents rated their business experience in Croatia as average (43%), when compared to 2018, there is an increase of positive business experience in Croatia, which was 49% in 2019, as well as a decrease of the negative experience. Also, 52% of the respondents have noticed improvement of business conditions in the last five years," AmCham Croatia Executive Director Andrea Doko Jelušić said while presenting the survey, which was conducted on a sample of 111 board members of domestic and international companies in Croatia, from 16 December 2019 to 13 February 2020.

The survey shows that 67% of the respondents assessed their business results in 2019 as positive, while 55% reported an increase in the number of employees.

"Indications for the future are also positive. Around 80% of the companies plan to expand their business in Croatia, while only 2% plan a possible reduction of business," said Doko Jelušić, adding that around 71% of the companies planned to hire new employees in the next three years.

However, the survey shows that, despite progress, Croatia is lagging behind other countries in the region.

"Despite certain improvements in the assessment of the business environment, comparison with other countries in Central and Eastern Europe shows that half of the respondents rated business conditions in Croatia as worse than in other countries of Central and Eastern Europe, and only 13% considered them better," said the AmCham Board of Governors President Ruža Tomić Fontana.

The respondents highlighted taxation of labour, lack of adequate workforce and high business taxes as the three main limiting factors for their business in 2019.

"During the last few years, we have seen four rounds of tax reform. It has somewhat surprised us that labour taxation is again high on the list of the limiting factors for business in Croatia," said Doko Jelušić.

One has to take into account the fact that other countries have also worked on their business environment, Doko Jelušić said, mentioning that Romania and Bulgaria have labour taxation of around 10%, the Czech Republic from 20% to 23%, and Slovakia from 19% to 25%. Those countries are considerably more competitive than Croatia, which at this moment has an initial personal income tax rate of 24%, as well as the higher personal income tax rate of 36% on annual incomes of more than €48,000, she noted.

The respondents said the greatest disadvantages of Croatia compared to other countries in Central and Eastern Europe were the small size of the market, level of taxation and slow administration.

AmCham Croatia represents the business interests of over 250 American, Croatian and other international companies which employ over 88,000 people in Croatia.

More business news can be found in the dedicated section.

Thursday, 15 November 2018

Foreign Chambers of Commerce Call on Croatia to Improve Business Climate

ZAGREB, November 15, 2018 - An inefficient public administration, legal insecurity, excessive taxes, lack of skilled labour force and the government's performance are the key obstacles to doing business in Croatia, it was said on Thursday at a presentation of a survey by six bilateral chambers of commerce, containing recommendations on how to improve the business climate.

The initiative to improve the business environment in Croatia and bilateral trade was launched by the American Chamber of Commerce (AmCham), the Association of Italian Entrepreneurs in Croatia Business Party, the Austrian Foreign Trade Office, the Canadian-Croatian Business Network (CCBN), the German-Croatian Chamber of Industry and Commerce, and the Nordic Chamber of Commerce in Croatia.

Addressing the press, CCBN president Joe Bašić explained that the six chambers currently comprised more than 1,200 companies in Croatia employing more than 150,000 people and accounting for more than 50% of foreign investments in Croatia.

The survey covered 473 companies and its combined results show that despite some significant changes for the better, companies and potential investors are still faced with numerous obstacles, and that the changes occurring in Croatia are too slow and insufficient in comparison to the rest of Europe.

Complex and time-consuming administrative procedures are among the main limiting factors to doing business. The implementation of legal regulations and procedures by authorities is the area where the greatest deterioration has occurred in the past five years. On the other hand, companies did not recognise improvements, where they did happen, as being directly connected to the government.

Some chambers said the unstable regulatory framework was the greatest problem while others considered the judiciary as the greatest problem. Some of the critical problems identified by the foreign chambers of commerce include the lack of legal security, labour taxation and the lack of the labour force.

Asked about the role of the government in improving the business climate, 42% of companies – members of the American, Canadian and Nordic chambers of commerce – considered the government's work as negative while 46% said that the government's work did not have any impact. As many as 56% of Italian companies assessed the government's work as poor, 33% said it was average and 6% assessed it as good.

In conclusion, only 13% of American, Canadian and Nordic companies consider that conditions for doing business in Croatia are among the best in central and eastern Europe while 36% consider them to be among the worst or worst.

The survey also shows that 27% of companies-members of the German and Italian chambers would not choose Croatia again as a preferred investment destination.

Some of the recommendations heard at the presentation include the introduction of penalties in situations when public servants do their job inefficiently, while employees whose work excels should be rewarded. Representatives of the foreign chambers called for digitisation of public institutions and services, which, they said, would result in faster and more transparent public services.

They underscored that the Agency for Investments and Competitiveness (AIK) should remain independent and consider it to be the key institution for investors who are considering doing business in Croatia.

For more on doing business in Croatia, click here.

Thursday, 26 July 2018

American Chamber of Commerce in Croatia Supports Further Tax Cuts

ZAGREB, July 26, 2018 - The American Chamber of Commerce in Croatia (AmCham) on Wednesday said that it strongly supported the idea of further tax breaks in the Croatian economy, underscoring that tax reliefs would in the short-term positively impact competitiveness and would retain the labour force.

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