Friday, 3 January 2020

More Than 91% of Legal Entities Have Registered Their Beneficial Owners

ZAGREB, January 3, 2020 - By the end of 2019, more than 91% of legal entities or 155,000 were registered in the Register of Beneficial Ownership and those who did not register will have to explain why they didn't, Finance Minister Zdravko Marić said on Friday.

He said that the purpose of the register is to create a database of beneficial ownership, which does not necessarily mean only business entities. Unlike court registers the beneficial ownership register is a lot more detailed and contains associations, foundations and a range of other institutions.

"The end of the year was the deadline to register (...) and more than 91% of entities entered their details, which means more than 155,000 entities," said Marić.

The deadline set by the EU for corporate and other legal entities to be registered is 10 January 2020 and for trusts and similar legal arrangements by 10 March, said Marić ahead of a cabinet meeting.

According to Marić, the purpose of the register is to further reduce the risk of money laundering or terrorist financing and other forms of tax fraud.

The register will be public and a certain level of information will be accessible to the public while government institutions and law enforcement institutions, particularly those involved in preventing money laundering and terrorism financing will have a complete insight in the register's details.

"We will determine why some, and there is about 8% of them, have not registered yet," added Marić.

The Register of Beneficial Ownership was established pursuant to the Prevention of Money Laundering or Terrorist Financing Act. The Registry is controlled by the Financial Agency (Fina) on behalf of the Ministry of Finance Office for Prevention of Money Laundering.

The register was established on 3 June 2019 for legal entities while associations were able to register as of 1 July.

Legal entities and trusts were obliged to enter the details of their beneficial owner in the register by 31 December 2019.

According to legal provisions, beneficial owners are any natural person(s) who is the beneficial owner of the legal entity, controls the entity or controls it in some other way, including a natural person(s) exercising an extremely effective control over the legal entity.

All companies, branch offices of foreign companies, associations, foundations, trusts, institutions of which the Republic of Croatia or the unit of local (regional) government is not the sole founder are obliged to join the register.

More business news can be found in the dedicated section.

Monday, 16 December 2019

Dm, Infinum, COBE Voted Best Employers of 2019 in Croatia

ZAGREB, December 16, 2019 - The dm-drogerie markt, Infinum and COBE companies are the best employers of 2019 in Croatia, according to the findings of a survey which the MojPortal job-seeking website conducted among 52 companies.

Dm-drogerie markt was awarded as the best employer among big companies, Infinitum among medium and COBE among small ones. The awards were presented at a conference organised by the U4HR association and the Lider business weekly earlier this week.

Among big companies, Rimac Automobili is the second-best employer of the year, followed by Zubak Grupa. Among medium companies, Degordian Hrvatska is second, followed by Nova Gratiam, while among small companies, the second-best employer of 2019 is Mediatoolkit, followed by Micro-link.

The anonymous survey was conducted among 4,500 employees.

The companies covered by the survey were given an overall grade of 2.88 out of 4.

Respondents gave the highest grades to dedication to work, challenging tasks, personal growth and development, while the lowest went to loyalty and inclusion in decision making.

The survey also measured employees' commitment and motivation to additionally contribute to their company's development and growth. The findings show that 29% were committed, 69% were not committed, while 5% were unmotivated.

More business news can be found in the dedicated section.

Sunday, 15 December 2019

Croatian Regulators Comply with European Recommendations on Suspicious Transactions

ZAGREB, December 15, 2019 - The Croatian Financial Services Supervisory Agency (HANFA) mostly complies with recommendations by European regulators regarding the prevention of suspicious transactions, an analysis by the European Securities and Markets Authority (ESMA) shows.

ESMA analysed the work of regulators in 30 European countries in the categories supervision of financial companies and the system of detection of suspicious transactions. Also analysed were the regulators' responses to poor-quality reporting or non-reporting of suspicious transactions.

ESMA also assessed the quality of regulatory analyses of suspicious transactions, cross-border data exchange, and supervision resources.

HANFA was assessed as mostly compliant in three of the six assessment areas, fully compliant in two areas and partially compliant in one.

In the area of supervision of financial companies, Croatia was assessed as mostly compliant, together with Belgium, the Czech Republic, Denmark, Greece, Luxembourg, Poland, Portugal, Slovakia, Finland, Sweden, Iceland and Norway.

An analysis of the supervision of systems for the detection of suspicious transactions put Croatia in a group of countries that are fully compliant with European regulations, together with Belgium, France, Italy, the Netherlands, Portugal and Great Britain.

HANFA's response to poor-quality reporting and non-reporting of suspicious transactions brought it an assessment of partial compliance with European recommendations. The same assessment was given to the regulators of Denmark, Greece, Poland, Estonia, Latvia, Lithuania, Malta, Romania, Iceland and Slovakia.

In the fourth area, the European regulator analysed suspiciuos transactions, describing Croatia as mostly compliant, together with 19 other countries.

In the fifth area, ESMA analysed cross-border data exchange on suspicious transactions, describing Croatia as mostly compliant with European recommendations, along with 15 other European countries.

In the area of national competent authorities' resources, Croatia is fully compliant with European recommendations, along with 16 other European countries.

More business news can be found in the dedicated section.

Tuesday, 10 December 2019

Corruption Perception Among Croatian Companies Higher Than EU Average

ZAGREB, December 10, 2019 - Six in ten companies in the EU believe that tax rates, swift changes of laws and policies, and complex administrative procedures are their main problems in doing business, according to the findings of a Eurobarometer survey of the business sector's corruption perception.

The findings, published on International Anti-Corruption Day, show a downward corruption trend but 63% of the companies polled consider corruption to be widespread. In 2013, 75% of companies said corruption was widespread.

The corruption survey has been carried out since 2013 every two years. The latest one was carried out by phone in October, covering 7,722 companies in the EU28, including 300 in Croatia.

In Croatia, 76% of respondents consider tax rates to be a problem while 22% think they are not. In the EU28, 63% of respondents believe tax rates are a problem while 35% think they are not.

In Croatia, swift changes of laws and policies are a problem for 80% of respondents (63% in EU28), while they are not for 19% (36% in EU28).

In Croatia, complex administrative procedures are a problem for 70% of respondents (62% in EU28), restrictive labour regulations for 59% (48% in EU28), and inadequate infrastructure for 57% (46% in EU 28).

Lack of means or debt collection procedures is a problem for 64% of Croatian companies (45% in EU28), sponsorship and nepotism for 51% (37% in EU28), corruption for 57% (37% in EU28), and access to financing for 38% (36% in EU28).

Asked how widespread corruption was in their country in their opinion, 91% of respondents in Croatia said it was widespread and 6% that it was rare (63% and 30% in the EU28 respectively).

The feeling that corruption is widespread in their country has dropped in relation to 2017 in companies in 17 member states, while increasing in 11.

More news about the corruption issue can be found in the Politics section.

Thursday, 5 December 2019

HUP Hosts Gathering of European Employers' Associations

ZAGREB, December 5, 2019 - The Croatian Employers' Association (HUP) is hosting a two-day conference of representatives of 40 employers' associations from 35 European countries, which started in Zagreb on Thursday, HUP said in a press release.

The gathering of "CoPres - Council of Presidents" has gathered 100 delegates, business people and executives of employers' associations who arrived in Zagreb for discussions on topics important for Europe's economy and trade relations with other economic powers, including the USA and China.

The gathering is taking place in the capital city of Croatia, the next chair of the European Union.

HUP is thus hosting representatives of BusinessEurope, including the president of this Brussels-headquartered organisation, Pierre Gattaz.

BusinessEurope introduces itself as "the leading advocate for growth and competitiveness at European level, standing up for companies across the continent and campaigning on the issues that most influence their performance." It also says that its speaks "for all-sized enterprises in 35 European countries whose national business federations are our direct members."

HUP joined this organisation in 1994.

HUP President Gordana Deranja was quoted as saying in the press release that HUP has over 6,000 members - small and medium sized enterprises and big companies - which employ over a half million workers in Croatia and account for over 70% of revenues in the private sector.

More business news can be found in the dedicated section.

Wednesday, 4 December 2019

Germany - Business Destination for Croatian Enterprises and Posted Workers

ZAGREB, December 4, 2019 - The Croatian Chamber of Commerce (HGK) and the German-Croatian Chamber of Industry and Commerce organised a conference in Zagreb on Wednesday on Germany as an important business destination and on posted workers and taxes in cross-border provision of services.

The head of the German-Croatian Chamber of Industry and Commerce, Thomas Sichla, informed the gathering that this institution represented more than 400 members and provided assistance to German and Croatian enterprises wishing to do business on the German market, as well as gave advice about taxes and regulations.

Considering the topic of posted workers - employees sent by their employers to carry out a service in another EU member state on a temporary basis - lawyer Ivan Matić of the Zagreb-based Kallay & Partners law firm informed the event of novelties in the latest EU directive on posted workers.

The EU law defines a set of mandatory rules regarding the terms and conditions of employment to be applied to posted workers, which includes remuneration, workers’ accommodation and allowances or reimbursement of expenses during the posting assignment.

The posting of workers can last 12 months, with a justified six-month extension.

In 2017, 417,000 workers were posted to work in Germany. Across the European Union, 0.4% of all employees were posted workers that year. Over 9,800 workers were posted to work in Croatia, whereas 47,000 Croatians left the country for temporary employment abroad. As many as 47% of workers cross the EU borders for employment in the construction sector.

The event also revolved around Croatia-Germany trade. In 2018, the export of commodities from Croatia to Germany totalled nearly two billion euros, while imports from that country totalled 3.6 billion euro, according to HGK data.

From the early 1990s to the mid-2019, German investors spent 3.3 billion euro on their projects in Croatia, and the biggest German investors in Croatia so far have been Deutsche Telekom, Siemens, Bayer and ThyssenKrupp.

More news about relations between Croatia and Germany can be found in the Politics section.

Wednesday, 27 November 2019

Croatia to USA and Back: Marin Bek Reflects on Success

Marin Bek, electrical engineer and co-founder of Ascalia and Kraken Systems, reflects on his life and success for Generacija NOW, a Hrvatski telekom project, in the form of a recent letter to his younger self. After graduating from FER (University of Zagreb, Faculty of Electrical Engineering and Computing), he moved to America and found a job there, but eventually returned to Čakovec, Croatia. Today, at age 33, he runs two very successful companies.

When he was a kid in elementary school, he was dismantling TVs and burning things. And it was obvious to everyone that he wouldn’t study history but something STEM-related (Science, Technology, Engineering, Mathematics). He often went cycling with his mom, and while they rode together, she tried to figure out what he wanted to do with his life. He entered eighth grade and he told her that he wanted to be a programmer and work in California. Then he completed his degree in electrical engineering and computer science and lived in California for a while. After a few years, he returned from America to Čakovec, Croatia and started an IT company and later a tech startup there. It might have seemed like an odd path to his peers, but he knew that he had made the right decision because it is not important where you work in IT, but the kind of work you do.

Computer Whiz

Everyone in elementary school was interested in technology, but when he chose a high school, he encountered prejudice for the first time. He didn’t want to enroll in high school and chose the technical middle school in Čakovec instead, and since that school was not at its best, his former professors slandered him. They also summoned his mom to school and recommended that she take him out of technical school and enroll him in high school. And then his cousin Siniša, who had graduated from FER and the technical school in Varaždin, advised Marin’s mother to allow Marin to study what he wanted. Fortunately, she understood and gave him that choice.

The technical middle school was too easy for him. He was 16 years old, and advanced to the second level. Everything went smoothly, even though he wasn’t learning anything, and that's how it remained until he enrolled in FER. However, he found math so difficult there that he nearly lost a year and almost dropped out of college; but he advanced (barely). It took him some time to get used to the fact that things were not as simple as they were in high school, and he would have to study harder.

Working Full-time in College

He started working full time at Bosch during his second semester of college so that he could stay in Zagreb. He skipped typical student life and extended his studies to six and a half years. After working at Bosch for a few years, he had had enough of small programming jobs and he quit. Then he started working for the Austrian company AVL, and stayed there until leaving for America.

In the summer before his third year of college, he took a bus from Zadar to Čakovec. Among the documentaries shown during the bus ride was one about underwater robots exploring the Titanic. Seeing this encouraged him to enroll in a seminar on electrical engineering and the design of autonomous robots. He enjoyed this seminar and his professors persuaded him to switch from computers to electronics.


Autonomous Underwater Diver

He remained at AVL and his seminar paper turned into a graduate thesis. Then he made his own autonomous underwater diver, which was like a small underwater drone. Shortly before graduation, FER gave a lecture on startups, which still seemed like an abstract term back then. After that lecture, he spoke to the lecturer and Vladimir de Franceschi, a startup lawyer who worked in Silicon Valley, and told them about his autonomous diver. The lawyer like what he heard and suggested that he apply for the Startup Accelerator Program at the US-based Founder Institute in Zagreb, and later helped him with his startup in San Francisco.

After graduation he continued working at AVL. He wanted to enroll in the Founder Institute's American Startup Accelerator Program but needed an investment of 3000 HRK, which he didn’t have. His grandmother had a stroke and he helped pay for her care. Then his mother became ill and he looked after her as well. After discussing options with friends, his cousin Siniša lent him the money which was a major turning point. In Zagreb, he became familiar with the startup culture through the accelerator program.


From Croatia to San Francisco

One afternoon in Čakovec in the winter of 2012, he cut off part of his thumb above the bone while splitting firewood for his mother. They saved his thumb and the three months of sick leave turned out to be a positive thing. During his time at home he realized that it was better to work alone than in an office, and started thinking about moving to San Francisco. He founded his first startup while still in Zagreb, and soon found a job online at the Nextuser startup so that he could pay rent, food and finance his own project. Many of his peers warned him of the risk of quitting a job at a well-off Austrian company to launch a startup with someone that he had met on the Internet, but he believed it would pay off in the end.

He enjoyed San Francisco, and like everyone else, he juggled several jobs while developing his startup. It was entirely commonplace there to be sitting in a cafe and have a waiter share an idea for a startup. He tried to get involved with marine technology and underwater drones but couldn’t obtain financing. Six and a half years later, he realizes that his idea was ahead of its time, and making it happen would have been extraordinarily expensive.

His project eventually failed, and he ran out of money, but quickly connected with people who would play a key role in his future. At Nextuser he had advanced from IT developer to CTO, and became involved with finding investors, which enhanced his knowledge and pool of acquaintances. However, he wanted to return to Croatia for his mom's sake and didn’t want to get stuck in America forever. In 2013, he and his friend and colleague Dean Strbad launched an IT company called Kraken Systems which dealt with big data in Čakovec. For a while he lived on the Čakovec-San Francisco route. After two and a half years, he left Silicon Valley and returned to Croatia.

Return to Croatia

When he set up Kraken Systems in Čakovec, his critics thought it strange that he had not chosen Zagreb. But his reasons were based on logic: Dean, who is also from Čakovec, worked alongside him. He also set up a home office so that he would not have to rent a space. Besides, he wanted to be closer to his mom because she was ill and needed his help. And, he didn’t allow himself to be influenced by peer pressure, because he had been shaped by American business culture, and knew that the location of his firm was completely irrelevant.

He didn’t plan on working with Croatian clients anyway, and it didn't matter to anyone in America whether the company is in Zagreb, Čakovec or Varaždin because they’d probably never heard of any of those cities. Also, in America, he never experienced prejudice regarding where he worked or where he came from. San Francisco is a melting pot, which is a positive aspect of life there. People arrive from all over the world and come from many different backgrounds.

However, after three and a half years, he decided to move the business to a more central location. His mother’s health didn't improve, and he moved to Zadar, where it became apparent that he would never return to Čakovec. As he continued to add staff; he decided to rent offices in Zagreb. However, he kept an office in Čakovec, where three people are currently working.

Kraken Systems is a now a company with close to 1 million EUR in revenue and they work with clients like Carrefour, Nestlé, Ferrer and Forbes. Four years after Kraken Systems began operations, he launched Ascalia, another tech startup, and now has over 20 employees in both companies.

He found investors from Canada and Croatia and his new startup focuses on industry and helping factories to modernize. They use the benefits of technology to reduce environmental impact and overall costs while optimizing operations. He created software and devices which allow industrial machines, made from 1979 to the present, to connect to the Internet. This allows clients to run a smart factory without a major investment. He has continued to develop this company, which is active in London, Paris and Germany. Everywhere except Croatia.

These days he travels all over the world: one day he’s in Paris, the next day in Munich or London. He also travels through America, Europe and China for work.


Advice to Young Entrepreneurs

His advice to young entrepreneurs? Don’t hesitate to take risks and follow your instincts without overthinking things. There will be tough times and obstacles, but be persistent and don't give up. Unfortunately, he no longer has any close relatives: mom, dad, or grandparents, so he doesn’t rule out living abroad again. Seven years ago, he was raising money for gas in Čakovec, and he never dreamed of achieving such success in his early thirties. He has no idea what his forties will bring. We’ll have to wait and see.

About Generacija NOW

Generacija NOW is a donor-sponsored program implemented by Hrvatski Telekom in partnership with the Institut za razvoj i inovativnost mladih (Institute for Youth Development and Innovation). In four years, more than HRK 4 million has been invested in preparing young people for jobs of the future, and the program works with more than 300 educational institutions across Croatia.

With the documentary “Generacija inspiracija” (Inspiration Generation), as well as a series of activities within the donation program, Hrvatski Telekom emphasizes the importance of investing in better education for all school age groups – so that they can successfully navigate life without missing out on opportunities provided by the latest technological advances. The importance of destroying preconceptions and prejudices must not be forgotten. And one of the more common preconceptions is that businesses cannot be started in smaller environments.

For more information on Croatian entrepreneurs and business in Croatia, follow our Business page here or our Made in Croatia page here.

Saturday, 23 November 2019

MI Braća Pivac Buys Kraš ESOP Shares, Holds Controlling Stock

ZAGREB, November 23, 2019 - The Braća Pivac meat industry (Pivac Brothers Meat Industry) and the Kraš-ESOP (Employee Stock Ownership Plan) on Saturday concluded a sales agreement on the transfer of ESOP shares in the largest Croatian manufacturer of confectionery products to the Braća Pivac, the Zagreb-based Kraš stated today.

Under the agreement. MI Braća Pivac company purchased 276,441 ordinary shares, that is 18.44% interest, from Kraš small shareholder, at the price of 861.20 kuna per share or 238.1 million kuna for the whole transaction.

The price corresponds to the weighted average price of the Kraš share on the Zagreb Stock Exchange (ZSE) in the last three months.

The deal was achieved after the Kraš ESOP held a general assembly on Saturday morning when it instructed the management on negotiations with potential buyers.

Apart from the agreement on the shares transaction, also an agreement on social partnership between the Braća Pivac company, Kraš workers and the trade union of workers in agricultural and food producing industries (PPDIV) was concluded defining the obligations of MI Braća Pivac for further investments in Kraš, protection of the rights of the Kraš employees and the maintenance of the existing production plants at the same locations.

MI Braća Pivac management board chair Ivica Pivac was quoted as saying that the group sees Kraš as one of the up-and-coming producing companies in Croatia and that the new owner would like to advance the production of this sweets manufacturer.

He said that he was glad that workers recognised the Pivac group as a steady partner for Kraš.

Today's acquisition makes the Pivac group one of the biggest food producing companies in southeast Europe and some 5,000 employees are on its payroll.

More news about Kraš can be found in the Business section.

Tuesday, 19 November 2019

AD Plastik, HiPP, Media Val and OiV Win Prizes for Corporate Social Responsibility

ZAGREB, November 19, 2019 - This year's laureates for prizes of corporate social responsibility (CSR), according to the results measured by the CSR index, are AD Plastik, HiPP Croatia, Media Val and OiV companies.

The AD Plastik car parts manufacturer was awarded in the large companies category, HiPP in the medium-sized businesses category, Media Val won in the small business category and the OiV - Transmission and Communications company is the best in the sector of public companies.

The awards were presented at a conference for socially responsible business, organised by the Croatian Business Council for Sustainable Development (HR PSOR) and the Croatian Chamber of Commerce (HGK).

Other companies were also awarded such as Heineken Croatia in the category of responsible business and practice in the working environment and Ericsson Nikola Tesla in the category of policies and practice in environment management.

The DVOKUT-ECRO environment management company was awarded for socially responsible relations with the community. The INA oil company was awarded for responsible policies of diversity and protection of human rights.

The Vinag flooring manufacturer was awarded for the biggest progress.

The main theme of this year's conference was climate change.

The director of the energy and environment protection sector at HGK, Marija Šćulac Domac underscored the importance of caring for the environment. She said that climate change has a much greater impact on the Mediterranean area than anywhere else in the world.

"During Croatia's presidency of the Council of the EU, we will continue working on strengthening the unique multilateral system and on promoting the 2030 Agenda within the EU and UN," Foreign and European Affairs Minister Gordan Grlić Radman said, calling on companies to be socially accountable.

More business news can be found in the dedicated section.

Tuesday, 19 November 2019

Proportion of Women in Ownership Structure of Companies in Croatia at 31.3%

ZAGREB, November 19, 2019 - The proportion of women in the ownership structure of companies in Croatia in 2018 was 31.3%, according to a study by the Financial Agency (FINA), released on Tuesday on the occasion of World Women Entrepreneurs' Day.

The study found that last year 26,676 companies or 22% were solely owned by women, while an additional 12,518 companies were co-owned by women with men and/or legal entities, which puts the total proportion of women entrepreneurs at 31.3%.

It also revealed that the proportion of women owners/founders of companies had gradually increased from 2010 to 2018, as the proportion of companies owned solely by women was 17.3% in 2010 and 22% in 2018.

Between 2014 and 2018, the proportion of women entrepreneurs in the total number of companies ranged from the lowest proportion of 27.7% in 2015 to the highest proportion of 31.8% in 2016.

"In 2018, the proportion of women entrepreneurs in the total number of companies was 31.3%, although according to an estimate by the National Bureau of Statistics (DZS), in mid-2018 Croatia had a population of 4,087,843 inhabitants, including 1,975,052 men (48.3%) and 2,112,791 women (51.7%)," Fina said.

Of the total of 121,034 companies, 57.9% were owned solely by men, 7% were owned by legal entities, 1.2% were co-owned by men and legal entities, while for 2.7% of companies it was not possible to determine which group they belonged to.

At 57.2%, women entrepreneurs dominated the "other services" sector. In this sector, 4,093 businesses employed 10,500 people, of whom 4,277 were employed in companies owned by women and 3,440 were employed by companies owned by men.

In nominal terms, the largest number of women entrepreneurs were involved in professional, scientific and technical activities, with 6,054 of them generating total revenues of HRK 3.3 billion. Of 19,565 companies in this sector, 30.9% were owned by women and an additional 2,330 were co-owned by women with men and/or legal entities as company founders.

The highest income per employee, of 961,200 kuna, and the highest profit per employee, of 88,100 kuna, were generated by women entrepreneurs in water supply, wastewater disposal, waste management and environmental remediation activities.

There is still a larger proportion of women in the ownership structure of companies in the services sector, meaning that there is a smaller difference in the ownership structure between women and men owners, while companies in other, mostly manufacturing activities are predominantly owned by men, FINA said.

Men-owned companies employ several times more people, generate higher revenues and hold more assets than those owned by women, which indicates greater involvement of male population in business, it added.

"The situation is changing, albeit slowly, despite incentives for the development of women's entrepreneurship, medium-term development strategies and efforts to include women, as much as possible, in the business sector, which for the greater part still belongs to men," FINA said.

More business news can be found in the dedicated section.

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