Celebrated Croatian entrepreneur Mate Rimac discusses Rimac Automobili's new partnership with Hyundai and Kia Motors, how he plans to give a certain percentage of the company to its employees, revenue, the future, and more.

As Jutarnji list/Gordana Grgas writes on the 14th of May, 2019, after it was announced that the Hyundai and Kia Motors had decided to invest a massive 600 million kuna in capital into Rimac Automobili, Mate Rimac announced in an interview for Jutarnji list that he would give seven percent of the company to his employees, from the cleaners to the directors.

We're bringing you the English translation of that interview here.

Why has Rimac Automobili entered into a partnership with Hyundai?

"We've been in contact with them for a couple of years and have been cooperating with them for a few years. They sent a strong delegation to us and, as soon as they saw the company, as soon as they saw what we were doing, they decided to invest immediately. In October last year they gave us an offer and we entered into negotiations. To have a partnership with such a company is very important for us. When looking at comparisons, they have a revenue of 250 billion euros, which is four times more than the Croatian GDP, and we're also working directly with the administration. Euisun Chung, who was there upon signing the contract, is the executive vice president, the grandson of Hyundai's founder, who's now taking over the firm from his father.

We're quick, small and innovative, we see and create the future and that's very interesting to them, this is hugely important for us because, on the one hand, we've got the Volkswagen Group and Porsche, and then we've got Hyundai and Kia on the other, and we've been so busy with work with these companies that we don't know where we're going!

The best thing is that they're not just buyers of our products but also shareholders, therefore it's in their interest that the company succeeds. They will help us build faster in areas where we may have some weaknesses, for example in industrialisation, in the transition from small-scale to large serial production.

Today, we're dealing with very complex systems for large car manufacturers, power systems, batteries, electronics, etc., we've achieved all that very quickly, but we need strategic partnerships. It's very difficult, especially moving from small to large series. We need money to help the company achieve its goals. We invest a lot, we're constantly expanding our plants, we employ more than 500 people, more than 300 engineers... We're not like the others, we're not wired money from the state but we get our money on the international market, and there's nowhere better to find money than with a company that really understands what you're doing, which is a partner and also a buyer,'' stated Mate Rimac.

What's the ownership structure of Rimac Automobili like now? You said you wouldn't remain the majority owner...

"Now I have .. (looks at his phone) Just a second, I have all of that in a document..."

Do you not know what your share is now? Does that not matter to you?

''Well, that's not important to me. People don't really understand that. I'm killing myself with this job and I'd be the happiest man in the world if there was someone who could run the company better than me, so I could just do what I like doing, the technical part of things. Now I'm the executive and technical director, and now I hold 47.7 percent, the Chinese camel group holds 14 percent, Hyundai has 11 percent, Porsche has 10 percent, Kia has 2.7 percent, and the remaining shares belong to the investors from 2012 and 2013.''

Are the employees among the co-owners?

"No, but we're working on that now, all of the employees will get a share, up until now, the ESOP was not worth it for them because of the tax. They'll probably get seven percent, from the cleaners to the directors, but not everyone will get the same share.''

How much is Rimac Automobili worth now?

"More than 500 million euros."

Why did not you not get to capital through an IPO, on the stock market?

''A lot of technology companies are now doing IPOs and they're actually losing money, they still have no stable and profitable business. Let's say Lyft, Uber or Snapchat... I don't want that. I want to make an IPO when the company's numbers are at that level. The company's potential is huge, and we have now used a piece of it and it's a shame to go out out onto the stock market with this company's situation. In 3-4-5 years, it will be at a completely different level. Besides, we have good access to capital outside of the stock market, we've got that luxury.''

How much was Rimac Automobili's income last year?

''I wouldn't go into income, there are no final reports yet. That's not our focus either, but a long-term trend. Here's an example - the car that we're developing for Hyundai now goes into serial production in 2023 only. Those are the cycles of our projects and to us, as well as to our shareholders, it's really neither here nor there what the financial outcome will be for this year or for next year, we're building a long-term story.''

Are you making a profit or are you still in the minus?

''We were still in the minus last year because we invested a lot. It's important to note that this minus comes from shareholder money, and everyone agrees that it's the company's plan.''

What will you specifically use this 600 million kuna for?

''For many things. This is part of our C investment round, and we'll still have investors in this round for another 70 million euros, but we don't know who that will be for now, but they will probably be financial investors. One of the things we will invest in is building our campus, our development and research centre and our factory, and another company expansion, employing a lot of people and equipping the company. For the transition to serial production, it's necessary to equip our production plants, test our products, develop them right up to the end, certify them... It's a big thing.''

Where will the new campus be? And what will be there?

''We're planning a campus for 2000 people because we want to have a longer-term solution. The headquarters of the company will also be there, as well as the development and research centre, production, testing, there'll be a hotel for guests and employees coming from elsewhere, kindergartens for employees' kids, restaurants, food production, hairdressers, sports facilities... I want it all to be integrated there.''

Where will this be located and when will you embark on construction?

''Near Zagreb. The location hasn't yet been agreed, we're look at a few of them, we're negotiating. Construction should start early next year.''

I guess the campus will be a little special in the aesthetic sense.

''Nine international and several Croatian architectural studies are currently working on suggestions for conceptual solutions for the campus. Among them was Lord Foster (British architect Norman Foster), we had a meeting the other day. He worked on Apple's campus and many other world-famous buildings. Everyone is so excited about this project and offering some great suggestions. They tell me that there's no such thing anywhere else, the combination I want - the campus being open to the public, the care for the employees and the connection with nature.''

The serial production of your C-Two has been announced for next year. Where are you going to do this?

''We got a hall in Veliko Trgovišće (Krapina-Zagorje County). The C-Two prototypes are still being done in Sveta Nedelja, and when we finish them, we'll move the manufacturing of the prototypes to Veliko Trgovišće. We already produce the batteries and the power systems there because we're out of space here. We're now there in five buildings and we were looking for something a bit closer to Sveta Nedelja, but there was just nothing there. Since there is no industry in Croatia, there's not much out there to rent. So now we're in Veliko Trgovišće, and we have centres in Split and in Osijek.''

Why did you open them there, so scattered apart?

''We grew so quickly over the last year. We now have fifteen engineers in Split, and about ten in Osijek, ane they're now our competence centres - in Split, we do our own automotive software development tool operation, and we deal with our high voltage chargers in Osijek.''

The prime minister has never been in your facility?

''No, never. To make it clearer, I don't ask for anything from the government. All I do is to urge the government to do the right thing to bring the car industry to Croatia. I have proved that it's possible.''

Make sure to follow our dedicated business and Made in Croatia pages for more information on Mate Rimac, Rimac Automobili, entrepreneurship, manufacturing, production and business in Croatia and much, much more.

Click here for the original interview/article by Gordana Grgas for Jutarnji list

As Jasmina Trstenjak/Filip Pavic/Novac writes on the 1st of May, 2019, the Republic of Croatia does have a chance in the car industry, and it can improve its investment portfolio with certain active and proactive measures, open up opportunities for the development of new industries, and not miss this third train, since it has already missed two. Rimac Automobili, the company of one of Croatia's most successful entrepreneurs, Mate Rimac, is more than ready to help if Croatia truly wants to attract the car industry to Croatia. With some work put in to it, it's possible.

The above is one of the key messages given by Mate Rimac, the founder and CEO of Rimac Automobili, which was part of the "Croatia E-mobility Forum", held recently at the Esplanade Hotel in Zagreb and organised by the American Chamber of Commerce (AmCham) and Jutarnji List, during which spoke about "How Croatia can attract the automotive industry".

In his presentation, among other things, analysed the countries that make up Central and Eastern Europe, what the automotive industry brought to them (growth, jobs, contribution to GDP...), which attracted investors, just how Croatia stands in this aspect. He also noted some key trends that are already transforming the car industry.

The automotive industry is completely changing, therefore the use of cars will eventually alter too. People will, at some point, no longer be car owners, they might not even bother to learn to drive, but all this will open up many new doors. Trends show that many cars will become autonomous by 2030, they will all be connected to the internet, more electrification will occur, and the car sharing will become more common. Mate Rimac discussed these points, full of experience as his own company, which has grown into a powerful technology company over the past decade and attracted more investment than all the technology companies in Croatia.

So far, Rimac Automobili has attracted more than 60 million euros in foreign investment, and that's not even counting the European Investment Bank (EIB), which has provided the company with a 30 million euro loan last year. The last investor in Rimac Automobili was no less than Porsche, and that was the very first time Porsche invested in another company.

''We don't want this to be the last investment, but we need to attract investments. Not only because of us, but also because of the state, so that the automotive industry invests in other things in Croatia. This year, a big investor will enter into the structure of our company. It's a 150 million euro investment, and the details on that will be known in a few weeks,'' revealed Rimac. He also emphasised the significance and the power of the branch in which he works - if the automotive industry was a country, it would be the fourth largest in the entire world!

However, rather unsurprisingly, Croatia is lagging behind quite significantly when compared to others, the automotive industry has spread very well across the whole of Europe and Croatia is almost the only exception. Two waves of investment in the region have already been and gone. The first was in the Czech Republic, Poland, Slovenia, the second was in Romania and Slovakia, and now a lot is being invested in neighbouring Serbia.

In the aforementioned countries, the automotive industry started practically from scratch and through the investments of other manufacturers, unassuming little Slovakia has become the largest car maker per capita in the world today. Therefore, in his extensive presentation, Rimac also commented on the way companies choose their sites, what their criteria are, and, when comparing Croatia with other countries, he found that Croatia is not one of the best candidates at all.

''Croatia has thirteen billion dollars worth of exports, with four million people. Slovakia has a million residents and more than 78 billion dollars in exports, out of which, 20 billion dollars of exports are in cars and parts alone. Let's look at some closer neighbors. Slovenia, with more than two million inhabitants, is exporting more than Croatia, and once again, their main export products are cars, and for us, it's wood,'' said Rimac, adding that these countries attracted companies with their favourable labour costs, but also for their talents and good faculties, infrastructure and available capital.

He also noted that Croatia has less than a billion dollars of automotive revenue, while, let's say, the Czech Republic has 41 billion dollars, and it has a strong potential. Thus, Croatia has less than half a percent of GDP, and the Czech Republic accounts for more than five percent of its GDP directly from the automotive industry, which is indeed a very defeating comparison. In the CEE region, investments have occurred thanks to generally cheap labour, and although much of it has well and truly bypassed Croatia, Mate Rimac is certain that there is a way to attract this industry still. Not necessarily with cheaper labour, but also with new opportunities.

''Hundreds of e-car models are coming onto the market. They're developed during a period of four to seven years and what's going on in the labs today will be on the roads within several years. There is a tremendous opportunity since today's share of three percent in sales will jump to 60 percent in the coming decades. That's why there's a lot of investment going on in the automotive industry, in startups and in technology companies. So far, more than 25 billion dollars has been invested through investment ventures, and this is where that industry is heading. There are investments in the development of batteries, in companies that make sensors and the like. The portfolio is bigger than it used to be. Also, there's a lot of heavy investment in development, and budgets are larger,'' noted Rimac.

Rimac also added that not everything is so black, although Croatia is of course late ''to the party'', and is missing out on the opportunity to join the development of the automotive industry by modelling itself on the countries of the CEE region. That industry, he says, is growing steadily, and countries are committed to receiving investments and attracting firms.

''We don't want just any investment, but those that give maximum benefit. But it's not about how much the state will encourage these industries to come. The state must first determine in which direction it wants to go, which industries it has, and then work proactively. England has a great initiative and it does very well because it has a complex program for the automotive industry, it works proactively, runs research centres, test sites... Therefore, proactive measures and projects are needed if there's a desire to go in that direction,'' Rimac said.

The presentation outlined nineteen action measures that the Croatian state should take to accelerate the automotive industry's progress in Croatia.

He mentioned that employees should be allowed to enter into company ownership and there should be a reduction in income taxes on high salaries.

Universities should make sure their programs include more machine learning, artificial intelligence, and electrical engineering.

Universities should employ professors from the STEM sector with scientific reputations, Rimac believes, and invest in equipping faculties and linking universities with actual investors.

In addition, the state should implement tax incentives for R&D-oriented companies, as well as meet with relevant engineers, as well as take a more proactive role in industrial development in co-operation with potential foreign investors.

As far as infrastructure is concerned, it's very important to encourage international contacts with cities that have developed automotive and innovation hubs and additionally invest in the 5G network for all households.

When it comes to specific measures for the automotive industry, among the measures listed above, it's necessary for foreign automotive employees to have temporary housing and job search support provided to the employee's life partner.

Additionally, one of the measures implies the establishment of an international school, where teaching will be conducted in foreign languages.

As far as the infrastructure of the auto industry itself is concerned, Rimac says that the testing of autonomous vehicles on public roads should be legalised, there should be an institute for electric and autonomous vehicles established, as well as an institute for artificial intelligence, as well as centres of competence and innovation hubs.

Make sure to follow our dedicated business page for much more.

Click here for the original article by Jasmina Trstenjak/Filip Pavic for Novac/Jutarnji

There has been much talk, both positive and negative, about the potential for Chinese investment in Croatia. They're already building the long awaited Peljesac bridge down in Dalmatia and have since expressed great interest in the Port of Rijeka and in constructing a railway line linking Rijeka to Karlovac. 

Many believe that the apparently huge interest of the Chinese (and their money) is a bad omen, and that Croatia will end up trapped by yet more debt it can't pay off in the end. Others see it as a welcome move, despite their suspicions. Whatever the truth behind China's interest in Croatia is, the EU aren't too pleased with it, especially in the case of Peljesac bridge. Peljesac bridge is one of the most important strategic projects in the history of the country, and it has been financed mainly by European Union funds, the fact that a Chinese company has been chosen to construct it hasn't filled the European Union, nor the Commission, with much joy.

What will be the situation with one of Croatia's most pressing issues of late, its ailing shipyards? As Uljanik's dire situation continues to worsen, could the already suggested investment from China be its saviour at the eleventh hour? Maybe.

As Poslovni Dnevnik writes on the 29th of April, 2019, a delegation from China's largest shipbuilding company, China Shipbuilding Industry Corporation, headed by Hu Wenming, the head of the company, will arrive in Zagreb on Monday, as N1 reports.

The Chinese delegation will first be welcomed by Prime Minister Andrej Plenkovic and his government ministers at Banski dvori in the heart of the capital city. After exchanging all of the usual diplomatic pleasantries, they will discuss the burdensome issue of Uljanik (Pula) and 3 Maj (Rijeka), which the Chinese guests will visit on Tuesday.

At today's meeting between the Croatian premier and the Chinese delegation from CSIC, the bosses of Uljanik and 3 Maj, Emil Bulić and Edi Kučan, will present, as was confirmed to N1 by the Croatian Government.

Will the giant Chinese company actually agree to invest in Croatia's ailing shipyards, however? The answer to this question could be known definitively in as little as ten days, Economy Minister Darko Horvat announced last week.

Concerning the potential interest of the Chinese for the Uljanik and 3 Maj shipyards, Minister Tolušić said that this really is "probably the last chance to do something." If there is any possibility whatsoever that the Chinese will enter into some sort of investment arrangement to rescue the shipyards, they'll enter. If there's no possibility, they won't. We'll leave it up to them.'' stated Horvat.

Make sure to follow our dedicated business page for more information on Chinese-Croatian business relations, Chinese investments and projects in Croatia, doing business and investing in Croatia, working in Croatia, and much more.

Next week, a delegation of eighteen people from the largest Chinese shipyard, the China Shipbuilding Industry Corporation, are set to visit Croatia's ailing Uljanik.

As Poslovni Dnevnik writes on the 26th of April, 2019, this is the second day is the National Economy and Entrepreneurship Consulting conference, organised by the Ministry of Economy and Entrepreneurship in Vodice. Economy Minister Darko Horvat told N1 televizija that the Republic of Croatia ''wants to become a country of investment and development, even if it isn't there yet".

"What I do dare to say, and with full certainty, is that Croatia has an innovative network, we have to make every effort to create positive trends, but we can't expect a big boom in just one or two intensive years, but the trends are changing. What makes me happy is that our own accumulation which has been earned by entrepreneurs is slowly returning back into circulation, that this money is no longer sitting in banks, in accounts. This gives us the encouragement that we'll gain that momentum this year, too,'' Darko Horvat stated.

How much have the problems with Uljanik slowed the economy down?

"They stopped any acceleration. Given the fact that so far, we've spent nearly three and a half billion kuna on guarantees,'' Horvat said.

The Dredging and Maritime Management company, owned by the Jan De Nul Group, requires Uljanik to refund all advance payments plus interest on a dredger which is being built in the Pula shipyard, whereby a refund of part of the advance has been secured by state guarantees. Such an outcome could cost the Croatian state almost one billion kuna.

"The contracted period is seven days, but I'm not sure that will happen in that time because Uljanik has no liquid funds and we'll have to continue talks and negotiations with Jan De Nul. And Mr. De Nul is aware that these talks end up going nowhere if he decides on the forcible charging of advances, he's aware that the shipyard in Pula isn't ready to complete that vessel. 

If the Chinese do decide to invest in Uljanik, then there are two variants, Horvat said: "to enter as a strategic partner, or to buy one shipyard, and the other, and become the 100 percent owners."

The court decision in Pazin has, for the third time, postponed the bankruptcy hearing for Uljanik. 

"Regardless of the court's decision, we'll continue talking with the Chinese," Horvat said.

Make sure to follow our dedicated business page for more on Chinese investments in Croatia, Chinese-Croatian business relations, Chinese projects in Croatia and much more.

The Croatian capital city unfortunately has many worn facades and buildings, and the bid for Zagreb's Blok Badel will be opened in just one month and will run until May the 15th, and the selected investor should be known early on in June.

As Poslovni Dnevnik writes on the 22nd of April, 2019, the City of Zagreb issued a public call for potential investors in the realisation and development of the Blok Badel project. This is a space located near the very centre of the city, about 30,000 square metres bordered by Vlaška, Šubićeva, Martićeva and Derenčinova. The expected value of this investment is about 750 million kuna, according to Tocka na i.

Potential investors are required to have a total value of their realised projects of at least 1 billion euros, have adequate experience in the reconstruction and conversion of historical or protected facilities over the last ten years, and also have experience in the realisation of public-private partnership projects of a minimum value of 75 million kuna.

Bids which do not provide evidence on the development of similar projects over the last ten years and proof of their completed projects for the development of residential, office, hotel and multifunctional facilities will not be considered.

"The location has some great potential with regard to its position, it's very well connected with public transport, it's close to a car park (garage), the city centre, city squares and historical and cultural sights. The realisation of this project will involve the restoration, construction and redoing of the entire block as the only block in this part of the city that hasn't been completed and has no clearly defined urban structure and purpose.

Make sure to follow our dedicated lifestyle and business pages for much more. If it's just the Croatian capital you're interested in, give Total Zagreb a follow. Heading to Zagreb? Find out everything you need to know and more with Zagreb in a Page.

Just how important is Croatia on the Chinese investment map?

As Iva Grubisa/Novac writes on the 21st of April, 2019 China's investment in European Union countries has grown steadily over the past ten years, and the European Commission (EC) has recently referred quite openly to the Chinese as a "systemic rival" and "a strategic competitor," the BBC reports.

The European Union has thus introduced a new mechanism for the strict overseeing of foreign investment, in order to promptly react should they assess that foreign investment could harm the security of EU member states.

According to the EC's report, a third of total EU assets are in the hands of foreign companies and 9.5 percent of companies in the EU have owners based in China, Hong Kong or Macau. When compared with 2007, when this share was only 2.5 percent, it's a significant increase, although the share of European business in Chinese hands is still relatively small. By comparison, back at the end of 2016, 29 percent of EU companies were controlled by Americans and Canadians.

Chinese investment in Europe reached its peak back in 2016, when it amounted to an enormous 37.2 billion euros, followed by a visible slowdown.

"This is mainly a result of stricter control over Chinese capital, but also changes in the global political climate when it comes to China's investments,'' explained Agatha Kratz of the Rhodium Group for the BBC.

Just where are the Chinese investing the most? Although a recent visit by a large Chinese delegation has been accompanied the news of the growth of Chinese investment and ambitions here in Croatia, according to the Rhodium Group, the Republic of Croatia is not even in the top ten countries in which China is the biggest investor in terms of capital.

Between 2000 and 2018, most Chinese investments took place in the largest European economies, such as the United Kingdom, Germany, Italy, and France. The top ten were ranked in the Netherlands, Finland, Sweden, Portugal, Spain, and Ireland.

According to Bloomberg's survey last year, they have owned or used to own shares in four European airports, six naval ports, and as many as thirteen football clubs.

Nevertheless, one must not forget the new big Chinese project, the Silk Road, known as the "One Belt, One Way" Initiative, in which the Chinese plan large investments in European infrastructure to strengthen trade links between China and Europe. Croatia is along that ''road'', and therefore the Chinese are investing in Rijeka Port, the Rijeka-Karlovac railway, mentions of investments in Croatian airports have been floating around, and there's almost no need to mention the fact that the Chinese are building Peljesac bridge, although its cost is mostly paid for by European Union funds.

The Chinese are also investing in Croatia's neighbouring countries, building roads and railways in Serbia, Bosnia and Herzegovina, and even in Northern Macedonia. In addition, Montenegro, as Novac.hr reported earlier this week, provided part of its state territory as a guarantee for the repayment of credits for the construction of part of the Bar-Boljari motorway to the Chinese Exim bank.

Since Montenegro has less of a chance of repaying this loan, it's not an entirely unbelievable option to remain without part of the state's territory, as bizarre as it might sound at first, and in that context, it's possible to understand some Croatian fears about entering into partnerships with the Chinese. This example is often cited as a warning to European countries to be extremely cautious when concluding economic agreements with China, to make sure they don't eventually fall into becoming a slave to the debts.

Trump's administration is much more closed to Chinese investment activities in the United States, and the authorities of other non-EU countries are much more cautious in entering into such partnerships, especially in the areas of telecommunications and defense. In any case, positively or negatively, China is certainly an extremely important player in Europe.

Make sure to follow our dedicated business page for much more on Chinese presence in Croatia. Chinese investment in Croatia, Chinese projects in Croatia and more.

Click here for the original article by Iva Grubisa for Novac/Jutarnji

Croatia hasn't done the best job of showcasing itself in the investment world, with investors often referring to it as the ''Bermuda Triangle'' and with the phrase ''ABC'' having come to mean ''Anything but Croatia'', things aren't looking all too bright. Things can be altered, but as the old British saying goes; mud sticks.

As Ana Blaskovic/Poslovni Dnevnik writes on the 16th of April, 2019, when compared to 2018, the share of companies that would reinvest in the Republic of Croatia dropped from 68 down to 54 percent. If they were asked to do so again today, almost half of the German companies operating here would decide against investing here again, and over sixty percent of those investors have an extremely poor economic picture of the country.

This is the result of a survey by the German-Croatian Chamber of Commerce conducted between February and April of this year among 150 of its member companies. In almost six years since joining the European Union, investors first had high expectations which quickly fell, but that was apparently somewhat expected. Following Croatia's accession to the EU, there was a period of transition in which investors were waiting anxiously and looking forward to seeing European practices come to life here, but that wasn't quite the case here.

Unlike former new member states of the EU who were given the green light to join during previous wave of the EU's enlargement, Croatia stalled, at least that is the overall impression one gets when asking members of the German Chamber of Commerce, including huge names such as Allianz, Siemens, Bauerfeind, Knauf, Müller, Spar, RWE...

"The survey is a perception, but it speaks about the overall impression of companies doing business [in Croatia], and that's that nothing important is changing,'' said Thomas Sichla, president of the Chamber. As stated, when compared with the previous year, the share of companies that would reinvest in the country dropped from 68 percent to 54 percent, which speaks volumes about perception and just how mud really does stick.

The fact that this isn't just an isolated case of pessimism, but is the contour of very worrying trends is best illustrated by the fact that eighty percent of the respondents had already previously responded to the survey.

While in Croatia almost half of investors would say "Auf Wiedersehen" to investing here again, in other countries in Central and Eastern Europe where parallel research was conducted, only one fifth of the companies who responded would say the same, so it shouldn't come as any surprise whatsoever that investments and their investors simply bypass Croatia entirely. Things aren't changing in Croatia, and if they are, it isn't fast enough at all.

Out of twenty Central and Eastern European countries, Croatia is still "relatively attractive" in eighth place on the list. Siemens' leader Medeja Lončar says that "more flexibility and speed in Croatia for a better economic and investment climate are needed", adding that Siemens will continue to invest in Croatia, depending on the business environment. If one scratches the surface, the companies that make up the German-Croatian Chamber of Commerce are almost repeating some very well-known criticisms that many have about Croatia.

At the top of that ''criticism list'' lies an insufficient fight against corruption and crime, followed by the burden of high taxes and general dissatisfaction with the tax authorities and the system despite the three waves of ''tax relief'' under Finance Minister Zdravko Marić. The top five barriers are Croatia's below par public administration and lack of legal security.

On the other hand, as a business advantage, investors pointed out the fact that operating in Croatia opens the door to the EU's single market and to infrastructure. Despite the ever-burning workforce problem that is rapidly evolving into an enormous problem of epic proportions for Croatia, employee qualifications and the quality of higher education continue to be among the main benefits in Croatia, are are productivity and employee motivation. However, in Germany the Chamber notes that the Croatian state should engage and talk much more to the private sector about the demand for labour and adapt its education system to that need.

With Croatia's continually deteriorating growth prognosis, which without reform is falling more and more, more than sixty percent of the surveyed companies find Croatia's economic environment to be very poor, and only a third claim it to be satisfactory.

Make sure to stay up to date by following our dedicated business page for more information on doing business and investment in Croatia.

Click here for the original article by Ana Blaskovic for Poslovni Dnevnik

From the construction of Pelješac bridge to planning to build a car factory in southern Dalmatia's Neretva valley, to displaying interest in potentially rescuing the enfeebled Croatian shipyards Uljanik and 3 Maj, the Chinese are no strangers to showcasing their investment interest in Croatia.

Croatia has earned itself a less than positive reputation among foreign investors, alright, let's not be so politially correct and say that Croatia is a burning hot mess in the eyes of foreign investors. ABC has come to mean ''Anything but Croatia'' in foreign investment circles, and many are simply bypassing the country entirely. That's not to talk about local, Croatian investors who have been dragged through the proverbial mud twice or even thrice the amount. Given the somewhat depressing statistics, just why are the Chinese suddenly so deeply interested in investing such huge sums of money in Croatia?

While many have welcomed the money-laden offers of the Chinese, others have remained cautiously optimistic, and some have made no qualms about being vocal in their dismay at the thought of the Chinese coming and ''taking over'' by investing heavily in Croatia's many pressing strategic projects. The motives that push the Chinese towards closer and closer ties with Croatia tend to end up as mere hearsay and solacious gossip in the comment sections of various portals, but what do the experts believe?

As Novac/Marina Karlovic Sabolic writes on the 12th of April, 2019, the Chinese are truly incredible people. They come to Croatia every ten years, and the Croats immediately forget about all of the Chinese "bofl" goods they've spent their lives purchasing and throwing away. They suddenly become blissfully unaware of the dreaded "Made in China" mark that everyone gets so sick to the back teeth of seeing plastered all over basically anything. Instead, their innermost desires display blurry images of an ailing Uljanik, of Tito's rotting memorial complex in Kumrovec, of Rijeka's port, and even football stadiums, Slobodna Dalmacija writes.

Does anybody bother to ask in this country what the Chinese will ask for in return, however? Entering into the dubious and somewhat unpredictable world of Croatian shipbuilding, constructing a much needed railway line and maybe rescuing a port in Rijeka all before dinner time will come with a price tag, and likely a hefty one. The situation when that bill inevitably arrives is one that tends to be what fills the militant online naysayers with fuel, and dread.

''Don't be afraid, China will not demand that the Communist Party be established in Croatia or that it rules the country,'' prof. Dr. Vlatko Cvrtila, one of the most prominent Croatian geopolitical experts, stated. He also added that in its long-term strategic plans, China really doesn't have any sort of idea of ​​introducing a single-party system in the countries in which it invests its money. Their interest, claims Cvrtila, is of quite another nature.

''The Chinese don't invest because they have a lot of money and they want to go around giving it out. There's no philanthropy in international relations. All they invest in is related to their global strategy of creating influence and linking the Eurasian world in a continental way. By investing in infrastructure, ports, roads and railways, they enable their goods to reach their customers more easily,'' says Cvrtila.

Such an approach, he points out, is legitimate for a country that has boasts such great economic potential at this time like China does. Their mega-project, the Silk Road, which would increase the possibility of land transport, aims to reduce overall dependence on maritime traffic restrictions.

Cvrtila notes the US administration's estimates and warnings that China will one day turn its massive economic influence into strategic power as well. This is something that United States, which is already competing with Russia, doesn't think well of. However, China is now quietly placing all of its cards on the economic side of the story.

''In order to maintain its economic growth, China must have a market. In infrastructure projects, they actually make the market more widespread. China can't stop, while it's riding the bike it needs to rotate the pedals. The Chinese are present everywhere where they can create prerequisites for the distribution of goods. In Greece, they're in the ports, in Montenegro, they're dealing with the construction of a motorway, in Croatia, they're building Pelješac bridge. This is a win win situation for everyone, because in the long run, any investment in infrastructure can improve a country's economic performance,'' says Cvrtila.

China has, therefore, created the 1 + 16 formet in Southeastern Europe where its usually large-scale investments help countries that otherwise don't have a lot of foreign investment.

''Europe has survived a difficult financial crisis and there is no "free finance" which would enter JI Europe. China's investment is actually beneficial for Europe, because along with China, the European Union has developed non-competitive but increasingly strategic economic relations, realising in time that they [the Chinese] can contribute to its economic growth,'' emphasises Cvrtila.

Croatia, according to him, is fortunate because it is strategically quite well positioned: it is closer to the heart of Europe than it is to Northern Europe. And, de facto, it is located at the intersection of the roads between the East and the West.

Unfortunately, Croatia hasn't used its geostrategic advantage yet. LNG terminal stands, as do the new train lines. It's also important to revitalise the Port of Rijeka so that Croatia can profit in the fast transport of goods to European consumers. We don't have our own investments, Europe has no capacity anymore, which is why the Croatian Government is seriously considering deals from China,'' concludes Cvrtila.

Therefore, there's no need for Croatia to be afraid of the Chinese, but rather actually use them for its own interests.

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Click here for the original article by Marina Karlovic Sabolic for Novac/Jutarnji

As Poslovni Dnevnik writes on the 10th of April, 2019, Croatia's ACI has published its revised annual financial statements for 2018. The company's revenue growth trend thankfully continued in 2018, its total revenue grew by seven percent when compared to 2017, amounting to 216 million kuna, while the company's operating income increased by eleven percent to 211 million kuna.

Revenues have been growing in almost all of ACI's marinas, and the company's profit also grew by 54 percent to a massive 38.4 million kuna, while its EBITDA increased by 22 percent to 93.9 million kuna.

The largest single investment project in ACI's history was also completed. In March, a new license was issued for the new ACI marina in Rovinj. This is a project that in which over 150 million kuna has been invested and can be briefly described in just four words: beauty, luxury, innovative solutions and security. The new marina's categorisation is now underway.

The new ACI marina has 1,400 m2 of commercial space available, and special attention has been paid to providing high level services on the premises, including catering facilities, restaurants and café-lounge bars, grocery stores, wellness centres, world-renowned brands, reputable sales offices for luxury yachts, charter agencies, a service centre for boats, etc.

The Rovinj ACI marina is equipped with the latest generation of WiFi systems, and luxury boats are provided with the most advanced video surveillance and access control system available. Particular care was taken to protect the surrounding environment and maintain the purity of the marine environment, construction materials and energy systems that provide maximum energy efficiency were used during construction, and all the benefits of LED lighting technology and lighting management were properly and readily applied. The official opening of the marina will be at the end of April this year.

The modernisation of the business that ACI has been intensively pursuing over the last few years is primarily focused on raising the quality of its services, attracting new clients and exploring the market potential of the Adriatic region as a whole.

Back in 2018, the company first published its own ACI No1 magazine, both in print and in digital format. It is a magazine which combines an ACI marina catalog, information for boaters, exclusive reportages and lifestyle themes, and a 2019 issue is just been made available.

ACI also achieves excellent results in the area of ​​digital business with its own reservation system. From last season, boaters have also had ACI's mobile application that provides easy and quick access to information and booking links available to them. For the third year in a row, ACI has also been using a digital sailing system with the help of special applications and devices used by sailors.

Given ACI's steady growth, 2018 was also marked by market research and a look into the development potential of the company, following which, a decision was made to embark on the development of new products and services, which will contribute to the diversification of the company's business.

Business cooperation includes the purchase of six ClubSwan36 sailing boats, and a range of marketing activities aimed at creating a recognisable image, regatta organisation, promotion and the creation of a tourism product aimed at raising the quality of ACI's services and the overall image of the Republic of Croatia as the world's leading nautical destination.

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As Gordana Grgas/Novac writes on the 8th of April, 2019, if there was a European tender held solely to attract Chinese investment, the champion would certainly be Great Britain, followed by Germany, and then immediately by Italy and France. Croatia might not be anywhere near the top of China's European ''wish list'', but despite that, the Chinese interest just keeps on coming...

The countries which make up Central and Eastern Europe are low on the aforementioned European scale, even though with China, at least since the year 2012, they have enjoyed a special relationship through the China + 16 initiative, which, as a parallel diplomatic format, tends to irritate the larger, more powerful members of the European Union, as well as the European Commission itself. One of lowest on the list is Hungary with its Eurosceptic government led by Viktor Orban, and Croatia is at the very bottom, but the desire is to alter that.

This week, there is an official visit by Chinese Premier Li Keqianga to Croatia, and the eighth summit of sixteen countries of Central and Eastern Europe with China down in Dalmatia's southernmost city of Dubrovnik, and it might be the easiest thing to look at it all as part of a political show that could act as bait for investment. Whether or not this investment will really happen and what shape that might take, whether it will be done mainly through private projects, for example in tourism, or through major state projects in the rail and port sector, is not yet clear at all.

Croatia will sign nine general memoranda with China in the areas of trade, investment, agriculture, transport, science, technology and innovation, education, sport and tourism, and the most convenient customs administration protocol that will enable the export of Croatian dairy products, which are greatly loved in China. Croatia also intends to join the Asian development investment and infrastructure bank headquartered in Beijing, how much that will cost Croatia however, is not yet known.

How large European countries cooperate with China was demonstrated just ten days ago by the Italians and the French. For the visit of Chinese President Xi Jinping, Rome signed 20 agreements (and joined One Band, a one way system that connects China with the rest of Asia, Europe and Africa, and expands its trade and influence). In Paris, 15 such agreements were signed, where either contracted or announced transactions amounting to billions of euros were dealt with, covering a wide range of areas - from exports of Sicilian red oranges and French frozen chicken to the opening of Italian ports for Chinese investors, sales of 300 Airbus aircraft, energy projects, shipbuilding, etc.

After the construction of Croatia's much anticipated Pelješac bridge, which is funded primarily by European Union money, Croatia hopes for more Chinese investments in national transport projects. This regards the port of Rijeka and the entire Rijeka traffic route, including the line from Rijeka to Karlovac, as well as projects such as airports.

According to data which takes the whole of Europe into account, during the period from 2000 to 2018, almost 47 billion euros of direct investment from China was invested in Britain, Germany saw 22 billion euros, Italy saw 15.3 billion euros, and France saw 14.3 billion euros. Hungary saw a significantly smaller figure of 2.4 billion euros from the Chinese, Poland saw even less with 1.4 billion euros, Romania saw 900 million euros, and Croatia saw just 300 million euros. A stark contrast to the United Kingdom, which is by far one of Europe's most powerful nations.

In the region, the intensity is getting stronger, and in neighbouring Serbia, Chinese loans have come in handy when building transport infrastructure and energy projects and, but that medal, like any other, has two sides, and the takeover of companies hasn't always been met with welcome arms by the Serbs.

The aforementioned data report shows that the culmination of Chinese investment in the EU was reached back in 2016, largely through the take over of companies, and over the last two years, it has fallen, which is attributed to more stringent rules implemented by some EU member states, as well as increased capital controls conducted by Beijing.

For Zagreb, it was a bit uncomfortable to get closer to Communist China in the above mentioned period, as the common policy of overseeing and limiting the Chinese penetration of the ''Old Continent'', especially in strategic and technologically sensitive areas, was being undermined. That chapter however, appears to be well and truly over in Croatia's eyes.

While large investments and projects are anxiously anticipated here in Croatia (and the Chinese interest in Rijeka and the Rijeka-Karlovac line is at least nine years old), data on trade relations show that there is a deficit. State Secretary Nataša Mikuš Žigman notes that there has been a noticeable increase in the volume of trade between Croatia and China, but imports are growing more than exports are. Last year, exports of goods amounted to 133.4 million euros, an increase of 19 percent when compared to 2017, while imports amounted to 803 million euros, an increase of 15.6 percent.

Croatian companies might be able to export more to China in the future, and the business forum being held in Dubrovnik is an excellent chance to showcase some innovative Croatian export ideas, but for now, the main export products continue to be raw or semi-finished products such as stone, leather, untreated wood and polymers, while when it comes to imports, we can see the reign of traditional Chinese consumer goods, white electronics and telecommunications equipment, as well as a constantly increasing number of Chinese tourists visiting Croatia, too.

As the Chinese continue to ramp up their business in Croatia, from Pelješac bridge to Rijeka's port, more announcements continue to appear, and just recently we reported on the Chinese plan to open up a car factory tucked away among the citrus trees of southern Dalmatia's fertile Neretva valley, more precisely in the Nova sela business zone near Kula Norinska in Dubrovnik-Neretva County. While many remain concerned about Chinese influence in Croatia, many others are much more occupied and lured by the promise of an economic boost and employment opportunities.

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Click here for the original article by Gordana Grgas for Novac/Jutarnji