Wednesday, 12 June 2019

Crobex at Highest Level Since April 2017

ZAGREB, June 12, 2019 - The main Zagreb Stock Exchange indices on Wednesday continued to grow, with the Crobex increasing by 1.1%, its highest level since April 2017, while the Crobex10 jumped by 1.6%, its highest level since September 2017.

The Crobex continued to increase for the fifth day running, increasing by 1.13% and closing the day at 1,910.46 points. That is its highest level since 26 April 2017 when it closed at 1,939 points.

The Crobex10 continued its positive streak for the third consecutive day, soaring by 1.64% to 1,121.87 points, its highest level since the start of September 2017.

Regular turnover amounted to 9.8 million kuna or 3 million more than on Monday and an additional 2.21 million kuna was generated in block trading of HT's stock.

The HT telecommunications company was the most liquid stock, trading 3.05 million kuna and recording a jump in the price of its shares of 3.25% to 159 kuna. Its share retained that same price in block trading.

The Podravka food manufacturer's shares closed the day at a price of 422 kuna, up 2.68% from Monday and generating a turnover of 1.8 million kuna.

The Valamar Riviera hotel group generated a turnover of 1.6 million kuna. The price of its shares rose by 0.25% and closed at 40.30 per share kuna.

More economy news can be found in the Business section.

Tuesday, 11 June 2019

HS Produkt Arms Manufacturer Wins Two Golden Balance Awards

ZAGREB, June 11, 2019 - The Karlovac-based HS Produkt arms manufacturer was given two Financial Agency (FINA) Golden Balance awards on Tuesday - for the most financially successful business and for the most successful manufacturer of 2018.

Of the 131,118 businesses which submitted financial statements, FINA shortlisted 3,930 - 208 micro-enterprises, 2,527 small enterprise, 978 medium-sized enterprises and 217 big companies.

Speaking at the award ceremony, Economy Minister Darko Horvat recalled that the economy grew 2.6% last year, and said the first quarter of 2019, when GDP rose 3.9% on the year, had opened "a new perspective" and that Q2 "will be similar."

"If we succeed and persist with the National Reform Plan, if we absorb the entire 10.7 billion euro allocated from the EU's structural funds, we will end with 5% growth in 2020," Horvat said.

He said the Economy Ministry and FINA cooperated on several projects, including a law that would make it possible to exchange e-invoices through the existing infrastructure as of next year. "We will be able to monitor businesses on a monthly basis and discover early on which ones are in trouble so as to avoid omissions which cost us 4.5 billion kuna in state budget funds this year and last."

Speaking of the Croatian Employers' Association's Score, Horvat said it interpreted the facts pertaining to 2018 with a different methodology.

We in the government are patient and waiting for the 2019 Score because there will be no enforced guarantees for the shipyards and budget funds won't be spent on unpromising industries, he added.

Economic analyst Velimir Šonje presented the business results of Croatian enterprises in 2018.

Last year 131,000 enterprises submitted financial statements, as against 120,000 in 2017. The number of employees increased 5.2% to 940,000 and two-thirds of the increase was generated by micro-enterprises.

Croatian enterprises' revenues in 2018 went up 8.6% to HRK 751.2 billion and the fastest growth was again recorded by micro-enterprises, whose revenues jumped 29% to HRK 102.1 billion.

Šonje said the number and share of big companies in Croatia's corporate pyramid remained unchanged, dominated by energy companies and retail chains.

Micro-businesses continue to growth fast, creating the highest number of jobs, and keeping this pace is important for preserving the development process and the structural changes that will happen in the long term, after years of growth, he added.

More news about Croatian economy can be found in the Business section.

Tuesday, 11 June 2019

Emigrating? Many Croatian, Foreign Companies Can't Find IT Pros; Send Your CV!

June 11, 2019 - Another paradox of life in Croatia, as IT companies are now hiring foreign IT professionals as locals are leaving. Are you an IT professional thinking of emigrating but want to stay?

One of the best articles ever written on TCN was Goran Antonijevic's 25 Odd Facts About Croatia, a Land of Paradox, a brilliant look at many of the contradictions of this beautiful and yet troubled land. One of the 25 odd facts relates to employment/unemployment:

12. Large unemployment rate, but in need of working force

This is somewhat connected with paragraph four of this article; there are more than 238 thousand unemployed people enlisted in Croatia, and according to unofficial data, that number is actually higher than 300 thousand. Still, there is a number of employment ads being unanswered, more each day. Croatia is educating an increasing number of specialists that are already highly represented in the unemployed population. So, there are many Croatian economists working as cooks, law school graduates working in construction, philosophers working as IT managers, and quite a number of physicians working as politicians, even though there is a shortage in medical personnel all over Croatia.

With the opportunities in Ireland, Germany and elsewhere, it is not surprising that many younger people decided to emigrate in search of better economic opportunity and higher wages. A lot of people told me that most of the jobs available were very low-paid and seasonal with tourism, and they could earn a lot more abroad. It is an argument I could understand, of course, and yet there were some odd things as I noticed travelling around the country. 

A luxury small hotel on a Dalmatian island, for example, which had tried to hire Croatian staff for the season and spend a lot of money trying to attract staff via the usual employment portals. without success. The conditions for chambermaids, by Croatian standards, were reasonable. A six-month contract with food, accommodation and 6,000 kuna net a month, working 6 days a week. Too low, you cry? Perhaps, but the strange thing is that when the hotel could not find workers in Croatia, they ended up employing mostly from Portugal, as well as countries such as Ireland. 

But the more I travel around and talk to people, the more I see another strange tourism dynamic, and this one has nothing to do with seasonal work or low pay - the IT sector in Croatia. 

Croatia has a tradition of great IT skills, and while the big tech companies do not have offices in Zagreb, the contribution which Croatian technology is making is considerable. For every Mate Rimac, there are several more doing great things in the shadows. Economic reality is dictating that IT workers can earn a lot more in Germany and Ireland than they can in Croatia, which is an argument I can understand. 

My web guys in Varazdin do a fabulous job for me, and I am very happy with all they have done during our 6-year partnership But their efforts to maintain their well-priced and quality service is under constant strain, as finding high-quality developers in Croatia is increasingly difficult due to proximity of the border to higher paying countries in the EU. Again, that makes sense... 

But then... 

Over the last few weeks, I have been spending a lot more time with entrepreneurs, digital nomads and IT companies in Zagreb, working on various ideas and projects. And I have noticed something rather unusual... 

A little like the Portuguese chambermaids on the Dalmatian islands, there are a growing number of foreigners moving TO Croatia, take advantage of economic opportunity, at the same time as many of Croatia IT professionals are heading in the opposite direction.

One company, Oradian, for example, is a global leader in fintech software, with additional offices in Nigeria and the Philippines, as well as its head office in Zagreb. A Venezuelan software employee told me the other day that there were no less than 24 nationalities, including USA and several EU countries. 

They are not alone. There is an increasing number of foreigners moving to Croatia to work in the rapidly expanding IT sector. And I am assuming that people are not leaving good careers in more developed countries to work for significantly less money in Zagreb and elsewhere. 

There is, of course, the issue of foreign wages for foreign developers, and local wages for local developers, and I am sure that this has been a major issue over the years. But I also think that it is one which will even out very quickly out of necessity. Various IT company owners I have spoken in recent weeks all say that they simply cannot find enough quality employees within Croatia, as so many have left. 

I spent part of yesterday morning with a Swiss company whose headquarters are in Zagreb (TCN interview coming soon). A very successful startup and global leader in its field, the company currently employs 20 people and will be looking to take on another 20 within the next year. With so much competition for the skilled IT workers who have remained in Croatia, they are pessimistic about their chances of attracting the right quality personnel by simply advertising, and they are considering a campaign to raise their profile here to make them appear attractive and visible to potential future staff. 

There are other companies I have met who are looking to expand their operations around the country and the region, but they simply cannot find the people. The more I speak to insiders in the industry, the more I can see that it is expanding and the greater the need for skilled Croatian IT workers. And if more IT professionals were aware of the scale of the opportunity, perhaps some would find their perfect job and working conditions in Zagreb or even their home town. 

So if any IT professionals are interested in job opportunities within Croatia, send your CV and a brief covering letter introducing yourself and what you are looking for to This email address is being protected from spambots. You need JavaScript enabled to view it. and let's see if we can't find a couple of matches to make a small contribution to slow the crushing emigration. 




Thursday, 30 May 2019

Business Climate in Croatia Must Be Improved

ZAGREB, May 30, 2019 - President Kolinda Grabar-Kitarović on Wednesday attended a meeting of the Council for Economic Issues and underscored the importance of creating an attractive investment and business climate in Croatia, expressing hope the government would continue with active policies in that regard.

Attending the 39th regular meeting of the council, Grabar-Kitarović underscored that entrepreneurs often warn of the necessity to improve the investment climate. They complain about the red tape, legal insecurity, frequent changes to regulations and complicated legislation overall and point out the high costs of doing business and having to pay state surcharges, according to a press release issued by the Office of the President

Grabar-Kitarović expressed hope that the Croatian government would continue with active policies to improve the business and investment climate in Croatia.

The Minister of the Economy, Entrepreneurship and Crafts, Darko Horvat, presented measures for the improvement of the business climate, for increased investments and innovation, simplifying and abolishing administrative procedures and the digital transformation of small and medium-sized enterprises.

Horvat underlined the importance of further training aimed at gaining knew skills and know-how and motivating vocational professions as well as adapting the education system with the needs of the labour market.

More news about doing business in Croatia can be found in the Business section.

Wednesday, 29 May 2019

Conference Held on Differences in SMEs in Croatia and Germany

ZAGREB, May 29, 2019 - A conference on small and medium-sized enterprises (SMEs) in Croatia and Germany organised by the Konrad Adenauer Foundation in Zagreb on Tuesday discussed the differences and similarities in their success.

In Germany, SMEs are considered a pillar of the economy, accounting for 99.5% of all businesses in the country and employing 70.4% of the population in 2017, said Harald Seibel, permanent deputy German ambassador and head of the economic department.

He said many factors impacted the success of SMEs, such as demography and an increasingly old population, unqualified labour and a shortage of young people. "Our country wouldn't be as economically strong without small and medium-sized enterprises."

Croatian Economy Minister Darko Horvat said microenterprises and SMEs accounted for 99.3% of all businesses in Croatia, employing over 60% of all workers and generating 60% of added value. "However, there's a difference," he said, asking translators and listeners "not to understand this literally."

"We are creating a quality workforce for German enterprises and we are neither ashamed nor afraid of it," he said, mentioning east-to-west legal economic migration. He said "those who start working here in Croatia at one point recognise their opportunity and... look for a better paid job."

Horvat said the present-day emigration from Croatia was quite different from the one in the past because then people went to Germany to work on a temporary basis, whereas nowadays they took their families with them and stayed there.

The minister said he would "like computers to do the administrative part in my ministry so we can focus only on... recognising good ideas. Now we do 80% of the work mechanically, not thinking strategically to answer the question of what we want of Croatia in ten years."

He said "the German state secretary has the answer to that question, as she has a vision of what it means to draw up strategic documents systematically, so that it doesn't happen that when one political elite replaces another... everything that was done before is set on fire because nothing's good."

Horvat said the digitisation of the whole system would reduce the possibility of corruption. "If what I'm talking about doesn't happen, in October we won't be 56th, we'll be 68th. We'll fall for the sixth year in a row and won't recover easily," he said, adding that the goal was to convince the World Bank that Croatia was ready for change in order to stop dropping on the Doing Business rankings.

More news about doing business in Croatia can be found in the Business section.

Thursday, 23 May 2019

Government to Invest More in Business Zones

ZAGREB, May 23, 2019 - The government on Thursday adopted a conclusion on increasing an allocation for the development of business zones, and gave its consent for the Rijeka Port Authority to borrow 108.5 million kuna to upgrade a container terminal.

The initial business zone allocation was 76 million kuna but the acceptable project proposals that were submitted total 274.6 million kuna, so the allocation was increased by 110.7 million kuna, the state secretary at the Economy Ministry, Mario Antonić.

In cooperation with the Regional Development and EU Funds Ministry, the Economy Ministry will propose finding the remaining 87.8 million kuna necessary to fund all the applications by amending the Competitiveness and Cohesion Operational Programme, he said. If the European Commission does not approve the amendment, the money will come from the Economy Ministry.

The government also adopted a draft decision on the establishment of close cooperation between the Croatian National Bank (HNB) and the European Central Bank (ECB).

Finance Minister Zdravko Marić recalled that parliament passed a law ratifying the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, which he said was the first legal prerequisite for Croatia's integration with the euro area.

Marić said the draft decision authorised him and the HNB governor to sign a request for the establishment of close cooperation between the HNB and the ECB, adding that it was one of the steps in the introduction of the euro.

More news about doing business in Croatia can be found in the Business section.

Tuesday, 21 May 2019

Foreign-Owned Private Companies Most Desirable Employers in Croatia

ZAGREB, May 21, 2019 - Foreign-owned private companies are the most desirable employers in Croatia, a survey conducted by the MojPosao job search website shows.

The survey, carried out in 2018 and 2019 on a sample of nearly 20,000 people, revealed that 32 percent of respondents wanted to work in a foreign-owned private company, 19 percent would prefer working in a Croatian institution and 16 percent in a foreign institution, while 14 percent would opt for a state-owned company.

Broken down by gender, 35 percent of men and 31 percent of women would like to work in a foreign-owned private company, 15 percent of men and 20 percent of women would prefer working in a Croatian institution and 14 percent of men and 17 percent of women in a foreign institution, 19 percent of men and 15 percent of women would opt for a Croatian-owned private company, and 14 percent of women and 14 percent of women would choose a state-owned company.

Broken down by age, 33 percent of respondents aged under 32, 35 percent of those aged 33-43 and 28 percent of people aged above 44 would like to work in a foreign-owned private company.

More than other age groups, respondents aged above 44 would prefer working in domestic and foreign-owned companies and state-owned companies, while younger respondents would opt for Croatian-owned private companies (18 percent of respondents aged below 33, 15 percent of those aged 33-43, and 13 percent of those aged above 44).

The survey also revealed that 48 percent of those interviewed often think about changing their employer, 34 percent do so sometimes, while 18 percent never think about changing their employer. People above 44 think the most about changing their employer (48 percent).

Most of the respondents (38 percent) said they are not prepared to move to another country for work, while 62 percent are inclined to consider moving. Men (71 percent) are more inclined to moving to another country than women (58 percent).

Younger people are more inclined to move to another country, as indicated by 65 percent of respondents aged under 32, 58 percent of those aged 33-43 and 60 percent of those aged above 44.

Of those willing to relocate, most of them would go to Germany (23 percent), Austria (16 percent), Switzerland (11 percent) and the United Kingdom (10 percent).

More news about Croatian economy can be found in the Business section.

Thursday, 16 May 2019

Global Entrepreneurship Monitor Shows Dismal Results for Croatia

ZAGREB, May 16, 2019 - According to the latest Global Entrepreneurship Monitor survey on Croatia, which deals with the question of what makes Croatia an (anti-) entrepreneurial country, Croatia is still not an entrepreneurial country primarily because of the quality of the business environment - its regulatory framework is demanding and complex and there is lack of quality cooperation between the business and research sectors and of education for entrepreneurial competencies.

Presenting the survey, which refers to 2018, the head of the Croatian research team, Slavica Singer, said on Wednesday that almost the same type of problems had been reoccurring for years and that not enough was being done to eliminate them.

Explaining why Croatia is still not an entrepreneurial country, Singer said that it was generally because of the quality of the business climate. "Government policies regarding regulations are the biggest problem, they have been very demanding and complex for years instead of being simple and stimulating for entrepreneurs. Another problem is the lack of quality cooperation between the business and research sector and the lack of education for entrepreneurial competencies," said Singer.

She stressed that in terms of technology, Croatia was around the EU average, but that in terms of the number of new products, it was at the bottom.

In terms of enterprise plans, which are limited by an unstimulating environment, and in terms of the entrepreneurial activity of corporate employees, which is not sufficiently recognised, Croatia is at the EU level or at the top, she said.

The survey shows that according to the value of the National Entrepreneurship Context Index, Croatia is at the bottom of a list of 18 EU countries, with a score of 3.83, the average score being 5.12.

Croatia scores the poorest in terms of government policies for the regulatory framework, market access barriers, research and development, education and social values.

The perception of opportunities in one's immediate surroundings is stagnating and the difference between Croatia (33.1%) and the EU (44.2%) is still very big.

In 2018, Croatia saw an increase in the intensity of early-stage entrepreneurial activity (9.6%) and that indicator puts the country above the EU average, however, this was again necessity-driven strengthening of entrepreneurial activity.

The motivational index in 2018 stayed at 1.9, which puts Croatia at the EU bottom. In the EU, there is an average 5.3 times more people who engage in enterprise because they see a business opportunity.

Croatia does not have enough 'adult' companies or companies older than 42 months. The number of such businesses is around 4.2%, which is only 62% of the EU average in 2018.

The most frequent reason for leaving a business activity is unprofitability (19.7%), the tax burden and red tape (19.2%) and a new business opportunity (18.5%).

Croatia still has few growing companies and it has much more companies that invest in the latest technologies than companies with new products.

The competitiveness indicator puts Croatia at 24.6%, which is slightly below the EU average of 27.7%.

In terms of employee entrepreneurial activity, Croatia is above the EU average with 9.6% of employees involved in an entrepreneurial activity in a company, the EU average being 7.6%.

The sector dispersion of new business ventures in Croatia shows an increase in the services sector but still much fewer ventures based on services for consumers.

The social attitude to entrepreneurs is still negative and the number of those who believe that entrepreneurs are people of a high social standing is declining.

Entrepreneurial activity growth is the most intensive in the regions of Dalmatia and Istria, Primorje and Gorski Kotar and the lowest in Lika and Banovina, which are nonetheless experiencing an improvement in the motivational index.

The survey includes recommendations for entrepreneurial activity such as cooperation, simpler regulations, stronger innovation capacity, financial strengthening of the existing programmes, launching of programmes of support for SMEs to use services of industrial designers, and formal training for students for entrepreneurial competencies.

The Global Entrepreneurship Monitor survey for Croatia has been conducted since 2002 by the SMEs Development Policy Centre, with the support of the Croatian Banking Association and the Ministry of Economy.

The 2018 survey covered 49 countries that account for 66% of the global population and 85.8% of the global GDP. In Croatia, the survey has covered 2,000 respondents every year.

More news about doing business in Croatia can be found in the Business section.

Friday, 10 May 2019

Croatian Companies to Use Services of German Chambers of Commerce

ZAGREB, May 10, 2019 - The Croatian Chamber of Commerce (HGK) on Friday signed an agreement with the Association of German Chambers of Industry and Commerce (DIHK) and the German Chambers of Commerce Abroad (AHK) under which Croatian companies operating abroad would be able to use the services of German foreign trade chambers under the same terms as German companies, the HGK said.

HGK president Luka Burilović said that only an export-oriented economy could guarantee sustainable long-term development to Croatia.

"The agreement means easier access to the markets where DIHK has foreign trade representations, and we are talking about more than 140 locations in 92 countries," Burilović said, calling on all HGK members to use that support on the ground in all markets where they have a business interest.

The services to be provided to the HGK by German foreign trade chambers include market research, support in the search for business partners and accounting services.

The HGK is a natural partner to the German network of chambers, which comprises 79 chambers of industry and commerce (IHK) in Germany, representations and foreign trade chambers (AHK) around the world and the DIHK, based in Berlin and Brussels, said DIHK deputy director Volker Treier.

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

Thursday, 18 April 2019

National Reform Programme to Improve Business Environment?

ZAGREB, April 18, 2019 - The national reform programme aims to achieve three key objectives - a better business environment, connect the education system with the labour market and strengthen the consolidation of public finance, Prime Minister Andrej Plenković said at a regular cabinet meeting on Thursday.

The national reform programme, a 120-page document which the government adopted on Thursday, analyses the progress made in implementing the Council of the EU recommendations, reform priorities, economic policy measures and measures aimed at achieving the goals of the Europe 2020 strategy.

The main objective of the national reform programme is to strengthen the competitiveness of the Croatian economy, with a projected growth rate for 2019 of 2.5 percent, Plenković said.

The programme sets out three main goals - strengthening the competitiveness of the national economy, connecting the education system with the labour market and ensuring the sustainability of public finance - which should be achieved by implementing 30 economic policy measures divided into 10 reform priorities and 100 activities.

The government is required to send this document and the convergence programme to the European Commission by the end of April as part of the process of mandatory reporting and adjustment of EU member states’ economic policies to the jointly defined goals and regulations of the EU. Failure to comply results in sanctions, including "a freeze" on funding.

To improve the business environment, the government says in the programme that it will enable starting a business online and continue liberalisation of the services market and the regulatory reform by reducing the administrative burden on the business sector and cutting parafiscal charges.

The government plans to prepare a project for the construction of national next-generation broadband infrastructure, to be leased to all operators of electronic communications networks and services.

Most of the cohesion policy funding will go towards further development of the public drainage system, reducing losses in the public water supply system and ensuring that water is safe for human consumption.

The programme provides for new incentives to boost investment.

"Investment growth is a priority, the main lever for economic growth in Croatia, and new investment incentives will be introduced. The existing programme and incentives for investment in new technologies will be combined and the capacities of counties for investment attraction and promotion will be strengthened," Deputy Prime Minister for Economy and Minister of Agriculture Tomislav Tolušić said.

The reform programme provides for the adoption of a plan for the digital transformation of the economy and for establishing an independent body, the Committee on Productivity, to analyse, design and implement policies relating to productivity and competitiveness.

The government plans to improve the management and use of state property, including the business and financial restructuring of road and railway companies.

As part of the public administration reform, efforts will be made to ensure more efficient management of human resources by reviewing the wage setting system, digitising work processes, introducing quality control and further professionalisation.

The judicial system will be improved through further development of electronic communication between courts and other participants in court proceedings and by upgrading the eDelivery service and the eNoticeboard.

As for education and training in accordance with labour market needs, the focus will be on the further implementation of the curricular reform, life-long learning, and an effective and relevant higher education.

In strengthening public finance management and fiscal consolidation, the accent will be on establishing a more efficient system of financial and statistical planning and reporting on the part of extra-budgetary beneficiaries in the transport sector.

The stimulation of the demographic revival will continue with measures aimed at raising social security for families with children.

In order to encourage family leave for employed parents and improve the financial status of families with new-borns, the current 3,990 kuna family leave allowance will be increased.

The further enhancement of welfare envisages a transparent system of allowances with comprehensive records so as to better administer allowances and programmes, reduce territorial inequalities and create more effective welfare policies.

Ensuring the financial stability, viability and quality of healthcare is planned through enhanced management of human and other hospital resources, the use of IT to improve organisation, cost planning and control, and by increasing the availability and quality of health care.

Structural and organisational measures will be launched in the prevention, diagnosis and treatment of malignant diseases. According to Croatian Institute of Public Health data, 22,503 malignant diseases were recorded in 2015 and data on mortality from 2017 show that 13,638 people died of them.

The programme also contains 15 measures to achieve national goals in employment, research and development, climate and energy, education, and combating poverty and social exclusion, given that activities for achieving Europe 2020 strategy goals related to smart, sustainable and inclusive growth are implemented and overseen through the European Semester.

More economic news can be found in the Business section.

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