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CROATIA

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Croatia INTRODUCTION • Dynamic Economy at Crossroads between Central Europe and Mediterranean • Croatia’s Fact File

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DOING BUSINESS IN CROATIA • Ideal Base for Business

Director: Lieve Luyten

Editorial: Emily Emerson-Le Moing

Regional Manager: Samira Darghal

Production Coordinator: Katrien Delamotte

Project Coordinators: Ellen Breemans Corey Yanez Antonio Honorio Hiske Terpstra Michael Frisbie

Design: Martine Vandervoort Carine Thaens Johny Verstegen Walter Vranken Dirk Van Bun

TRADE & INDUSTRY • Eko-Flor: Croatia’s First Global Waste Management Firm Continues to Expand

TRANSPORT & LOGISTICS • Port of Rijeka Authority: Significant Modernisation of Port Facilities through ‘Rijeka Gateway Project’

The European Times is a trading name of United International Press Ltd

TOURISM • Unspoiled Mediterranean Charm in the Heart of Europe

• Budget Rent a Car: Tailor-Made Car Hire Services

• Uni Rent: “Yes I Can”Attitude and Personalised Service • Useful addresses

The European Times 90 Vasall Road, London SW9 6JA United Kingdom Phone: +44 (0)208 371 2356 Fax: +44 (0)208 371 2410 info@european-times.com www.european-times.com

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Introduction

Dynamic Economy at Crossroads between Central Europe and Mediterranean At the crossroads of the Mediterranean region and Central Europe, Croatia has become one of Europe’s most dynamic transitional economies. The Croatian government is actively working to achieve EU membership for Croatia, and the pre-accession process has created even more opportunities for investors.

Once one of the wealthiest of the Yugoslav republics, Croatia’s economy suffered badly during the 1991-95 war when much of its production was halted and when war turned away investors who targeted Central and Eastern Europe following the fall of the Berlin wall. Since 2000, however, Croatia’s economy has been achieving moderate but steady GDP growth of between 4% and 6% per year, led by a rebound in tourism and credit-driven consumer spending. GDP growth in 2008 reached 4.8%.

Croatia has a very long history as one of Europe’s leading economic and cultural centres. The land that is now Croatia was part of the powerful Austro-Hungarian Empire until the close of World War I. In 1918, Croats, Serbs and Slovenes formed a kingdom known after 1929 as Yugoslavia, which, after World War II, became a federal independent Communist state under Marshal Tito.

Over the past eight years, Croatia has also held inﬂation in check and has kept its currency (the kuna) stable. It has achieved macroeconomic stabilisation and has successfully made the transition to a free market economy. Its private sector is becoming increasingly dynamic, and its commitment to democracy has been proven. In addition, Croatia has put in place a sound regulatory environment that provides security for investors.

Croatia declared its independence from Yugoslavia in 1991, but it took four years before occupying Serbian troops left Croatian lands. Under United Nations supervision, the last Serb-held enclave in eastern Slavonia was returned to Croatia in 1998. Since then, Croatia has been actively pursing a policy of integration into the EU and into the global economy. In January 2008, Croatia assumed a non-permanent seat on the UN Security Council for the 2008-09 term, and in April 2008 it joined NATO.

The government’s focus on making Croatia an EU member should accelerate fiscal and structural reforms as the country works to meet EU accession criteria. EU funding is helping many companies develop competitiveness, while the government’s drive to promote exports has created even more incentives for investors in export oriented enterprises. In spite of the challenges of the global financial crisis, Croatia’s long-term prospects remain strong.

CROATIA

Croatia’s Fact File Telephone code: +385 Time zone:

GMT plus one hour in winter and GMT plus two in summer.

Government type: Presidential –Parliamentary democracy Independence:

25 June 1991

GDP:

US$47.05 billion

GDP growth:

4.3%

Inﬂation rate:

1.8%

Labour Force:

1.69 million – agriculture 13.2%, industry 25.4%, services 46.4%

Export – products: Country name:

Geographical position: Croatia extends from the foothills of the Julian Alps in the north-west and the Pannonian Plain in the east, over the Dinara mountain range in its central region, to the Adriatic coast in the south. Area:

542 km2, with an additional 31,067 km2 of territorial waters.

Population:

4,437,460 Capital of Croatia is Zagreb (779,145 inhabitants - the administrative, cultural, academic and communication centre of the country).

Climate in Croatia: Northern Croatia has a continental climate; Central Croatia has a semi-highland and highland climate, while the Croatian coast has a Mediterranean climate. Winter temperatures range from -1 to 30°C in the continental region, -5 to 0°C in the mountain region and 5 to 10°C in the coastal region. Summer temperatures range from 22 to 26°C in the continental region, 15 to 20°C in the mountain region and 26 to 30°C in the coastal region. Ofﬁcial language: Croatian language and Latin alphabet. Currency:

Kuna (1 Kuna = 100 Lipa). There are 1, 2, 5, 10, 20, 50 Lipa coins, 1, 2, 5 and 25 Kuna coins and 5, 10, 20, 50, 100, 200, 500 and 1,000 Kuna banknotes.

Foreign currency: can be exchanged at banks, exchange offices, post offices and at most tourist agencies, hotels and camping grounds. Banking hours are 7 a.m. to 7 p.m. from Monday to Friday. On Saturdays banks are open until 1 p.m.

chemicals, foodstuffs, fuels, textiles, transport equipment

Republic of Croatia Export - countries:

chemicals, foodstuffs, fuels, textiles, transport equipment Import products: chemicals, foodstuffs, fuels and lubricants, machinery, transport and electrical equipment Import - countries: Italy 17.9%, Germany 15.7%, Slovenia 7.4%, Austria 6.6%, France 5.3%, Russia 4.7%

Doing Business in Croatia

Ideal Base for Business Croatia offers investors a very favourable environment for doing business. Along with its strategic location with access to a market of more than 650 million consumers, Croatia has a well-trained, motivated labour force; welldeveloped infrastructure which will include the biggest logistics centre in South-Eastern Europe; and a record of stable economic growth. Adding to all these advantages is Croatia’s status as an EU candidate country, which means even more opportunities for investors, as well as a strong commitment to maintaining EU standards. The government has targeted a number of sectors which offer particularly strong investment potential in Croatia. These include tourism, already a winner thanks to Croatia’s exceptional tourism attractions. Other growth sectors include information and communications technology; logistics; manufacturing of motor vehicle parts and equipment; manufacturing and repairs of sport and pleasure boats; cargo handling and storage; furniture manufacturing; and software development and supply, among others.

APIU: one-stop shop for investors Slobodan Mikac, Managing Director of Croatia’s Trade and Investment Promotion Agency (APIU), is working hard to enhance Croatia’s attractions for

investors, as well as to develop new opportunities for Croatian companies in international markets. “We make suggestions to the Croatian government concerning ways to improve the business climate, and, in partnership with major companies operating here, we are trying to establish institutions and set up projects to upgrade the business environment. We are trying to develop big projects and attract potential investors to those fields.” One APIU project is the “Business Angel Network” to connect potential sources of financing with innovative young talent. The APIU has set up a one-stop shop for potential investors. It includes a data base with all kinds of information, including details about more than 200 special industrial zones around the country. “Investors can find out everything they need to know. We are the only business information source to have Labour Market Monitor and we have recently developed E-Investment, which allows you to follow your investments through the Internet,” Slobodan Mikac explains. Croatia is positioning itself as an excellent base for production requiring skilled labour. Slobodan Mikac concludes, “Croatia is not oriented toward mass production. Rather, the skills our workers have, make Croatia a good choice for producing high-quality niche products. Our ICT sector is known for innovation, for example; the SMS parking system was developed here. Potential investors who can invest in products requiring skills and innovation are more than welcome to come to Croatia.”

CROATIA

Trade & Industry

Eko-Flor

Croatia’s First Global Waste Management Firm Continues to Expand Eko-Flor is an example of the power of private enterprise. The company was founded in 1997 by three brothers who bought a truck to handle garbage collection at a time when no other garbage collection service was available in the area. From this small operation using one truck, the brothers have expanded the business at the rate of 300% per year to become the biggest private waste-collection company in the former Yugoslavia. Eko-Flor now has branches in Macedonia and Serbia as well as its parent company in Croatia, and in 2006 it was named the fastest growing company in the Region Zagrebacka Zupanija.

Covering the entire waste collection process

Josip Spikic, co-founder and CEO

Josip Spikic, co-founder and CEO, explains, “We are here to make things better. We collect and transport garbage to dumps and recycling centres. We also manage garbage dumps. We cover the whole process.”

including one to help make children more aware of the need to protect the environment.

Eko-Flor works with all types of clients, from small households to companies, municipalities and other government and private-sector organisations. The company is active throughout Croatia. In Zagreb, Eko-Flor partners with another waste-management firm that has the same goals. Explaining Eko-Flor’s competitive edge, Josip Spikic says, “We deliver quality work and we are very efficient. We know how to do our work because of our experience. We have been involved in this work every step of the way.” Eko-Flor has gained many clients through wordof-mouth advertising but it is now stepping up its marketing and has a website with versions in English and German.

Eko-Flor welcomes the chance to work with foreign investors in Croatia, Macedonia and Serbia. “We continuously bid for new tenders,” Josip Spikic explains. He adds, “We are a stable company and we will continue to do well.” This year Eko-Flor is concentrating on restructuring to further upgrade its operations; it will also focus even more on training. “We love our business and do not mind working 14 hours a day, seven days a week. We want to work with the government, our clients and partners to make Croatia better,” Josip Spikic concludes.

Partnering with government and private sector Eko-Flor works with Croatia’s Ministry of the Environment concerning environmental measures and has joined a pilot program for collecting plastic bottles. It is also involved in community service projects,

EKO-FLOR plus d.o.o Gornjostupnicka 96 - 10255 Gornji Stupnik Tel.: +385 1 6281 640 - Fax: +385 1 6296 240 www.eko-ﬂor.hr

Transport & Logistics

Port of Rijeka Authority

Signiﬁcant Modernisation of Port Facilities through ‘Rijeka Gateway Project’ The Port of Rijeka Authority is helping to make Rijeka’s port a major international hub for shipping and passenger traffic. Rijeka has been a busy Adriatic port since the 18th century, and in 1913 was ranked one of Europe’s top ten ports in turnover. Severely damaged during the Second World War, the port was rebuilt and has been growing rapidly every since. Bojan Hlaca, Executive Director, reports that the port handled 2.3 million tonnes of general cargo in 2008, a 10% increase over 2007, and 3.3 million tonnes of dry bulk cargo, a 7% increase over the previous year. He says, “Handling of both timber and liquid bulk cargo showed a decrease in 2008, but the port achieved a 16% increase in container TEUs in 2008 compared to 2007.” The port’s thriving container terminal handles transhipment and warehousing of containers, RO-RO trailers and other vehicles, heavy

Rijeka Gateway Project

Bojan Hlaca, Executive Director

pallets and stone. It also provides repairs, loading and other services, and can handle 5,000 TEUs at one time and 170,000 TEUs per year. The port’s general cargo terminal has 11 berths and can handle ships up to 30,000 dead-weight tonnes. The passenger terminal serves ferry traffic and connections between Rijeka and Zadar, Split and Dubrovnik as well as cruise lines. The port also has special terminals for bulk and liquid cargo and for grains and livestock. In addition, the port features a wellequipped 1.2 million sq m free zone that offers significant advantages for trade-oriented enterprises.

The Port of Rijeka is currently being significantly modernised and expanded in the ‘Rijeka Gateway Project’, which is being supported by a 158.7 million loan from the World Bank. Bojan Hlaca says, “Of exceptional importance for the port in the Gateway Project are the modernisation of existing port facilities and the expansion of terminals, but for the town of Rijeka, the waterfront initiative is of primary importance. It will create new, attractive town spaces typical of Mediterranean towns.” The project includes the creation of a fishing port in the Torpedo area, a new passenger terminal, a new wharf (built through a build, operate transfer or public private partnership scheme), a nautical centre/marina, and extensive infrastructure improvements, including a new connecting road from the container terminal to the highway leading to Zagreb, Ljubljana and Dalmatia. Overall, the Rijeka Gateway Project will further enhance the Port of Rijeka’s role as a leading Adriatic shipping and passenger-traffic hub.

Port of Rijeka Authority 51000 RIJEKA, Croatia, Riva 1 Tel.: +385 51 351 111 Fax: +385 51 213 112 rijeka.gateway@portauthority.hr www.portauthority.hr

Unspoiled Mediterranean Charm in the Heart of Europe As a tourism destination, Croatia has it all: a gorgeous coastline, a mild Mediterranean climate, picturesque cities, historic landmarks, a rich culture, some of the best bargains Europe has to offer, and unspoiled charm. As Croatia’s National Tourism Board puts it, Croatia offers visitors “the Mediterranean as it once was.” In addition, Croatia is within easy reach of all major European urban centres and is a popular stop on international cruise lines. International travellers are increasingly choosing Croatia as a tourism destination. In 2005, Croatia passed the ten million mark in the number of visitors it attracted over the year, and visitor numbers have continued to rise. The tourism sector has performed well even during the current global economic crisis. Croatia had around 1.8 million domestic and foreign tourists in the

first five months of 2009, fewer than the same period last year, but still better results than its competitors Spain, Italy, Montenegro, Greece and France achieved over the same period. Croatia offers a wide variety of tourism attractions, including eco-tourism and nature oriented tourism in the country’s eight national parks. Croatia is also filled with historic landmarks, many of them protected as UNESCO World Heritage Sites. Spas can be found throughout the country, and all kinds of opportunities for sports lovers are available year round. Croatia also has a thriving cultural scene, gourmet cuisine and fine wines. Shoppers can find everything from high fashion boutiques to traditional handicrafts.

Upscale facilities for leisure and business travellers With its long coastline, Croatia is particularly attractive for visitors coming by sea. Croatia has more than 50

marinas with more than 15,000 yacht berths and it is steadily improving its facilities for the cruise ship trade. More and more luxury hotels are coming onto the market. Currently, around 61% of Croatia’s hotels are three star with 15% in the four and five star categories. Existing hotels are being upgraded while smaller boutique hotels, often family run, are improving their facilities and services. Croatia’s meetings, incentives, conventions and events (MICE) tourism sector has been growing particularly rapidly. The Croatian Convention and Incentive Bureau (CCIB) provides potential organisers of meetings and incentives with all kinds of information about Croatia’s facilities for MICE visitors. With its exceptional attractions, unbeatable prices and strategic location in the heart of Europe, Croatia is well on the way to becoming one of Europe’s top tourism destinations.

Tourism

Budget Rent a Car

Tailor-Made Car Hire Services Global player Budget Rent a Car has been active in Croatia for 14 years and is one of the country’s leading car hire companies. Sasa Franic, Executive Manager of all Budget Rent a Car’s operations in Croatia, says that Budget has a particularly strong presence among local enterprises, including many of Croatia’s top companies. Around 35% of Budget’s business is with the corporate sector. Budget also works with a number of foreign embassies in Zagreb. “Domestically, Budget Rent a Car is a very well-established name. Now we are trying to attract more international business travellers who come to Croatia,” Sasa Franic explains. Budget is partnering with local and international travel agencies and tour operators to reach corporate clients worldwide, and Sasa Franic welcomes new partnership opportunities.

Customer comes first Budget Rent a Car offers a number of competitive advantages for its customers. It has more offices in Croatia than any other car hire company in the country, operating six offices at airports and 10 offices in city centres, in smaller cities as well as in major urban areas. Customers can pick up and drop off vehicles in any Budget office in Croatia. In addition to these attractions, Budget excels in providing tailor-made services. “We are very flexible concerning prices and we develop special offers for different types of clients. Especially now, during the global financial crisis, we find that our clients really appreciate our price flexibility. For us, the customer always comes first,” Sasa Franic points out. Budget operates an up-to-date fleet of vehicles in a wide range of models and prices, and customers can reserve their vehicles online.

Working to promote Croatia’s ongoing development Most of Budget’s business in the summer months is with leisure travellers, and Budget has developed

Sasa Franic, Executive Manager Croatia

partnerships with European firms, including Budget Rent a Car’s operations in Germany and Austria, to attract even more tourists from Europe. Generalturist, Croatia’s leading travel specialist since 1923, is the owner of the Budget franchise in Croatia since 2004. Clients can reserve vehicles from Budget on the Generalturist web site. Through its services to the tourism and business sectors, Budget Rent a Car serves as a key player in promoting Croatia’s continuing economic development. To potential visitors to Croatia, whether for business or pleasure, Sasa Franic says, “Come to Budget and we will help you discover our country.”

Budget Rent a Car I Pile 1 • 1000 Zagreb Tel.: +385 5 12 12 507 Fax: +385 1 48 05 690 www.budget.hr

CROATIA

Uni Rent

‘Yes I Can’Attitude and Personalised Service Uni Rent offers world-class car rental services throughout Croatia. The company has offices in all the country’s urban centres, including Zagreb, Dubrovnik, Makarska, Split, Zadar, Slavonski Brod, Opatja, Rovinj and Osijek. In larger cities, Uni Rent has both downtown and airport offices.

Describing the reason behind Uni Rent’s success, Tomislav Racki, Area Manager says, “Our competitive edge is our excellent service. Our clients keep coming back to us because we offer tailor-made services to fit their individual needs. Our company’s motto is ‘Yes I Can!’ and this means that we can and will do everything possible to serve our customers.”

Serving growing number of multinationals Tomislav Racki adds that the company sees exceptional activity in the summer tourist season when it has a ﬂeet of 600 cars available.

With its strong track record, focus on service and extensive local network, Uni Rent is the ideal choice for multinationals and business travelers looking for top-quality car-rental services in Croatia. Uni Rent Vip Cars department provide excellent chauffeur service. We transport you in style to your destination in one of our luxurious limousines, premium SUV or people carriers to arrive refreshed and relaxed.

With its ‘Yes I Can!’ attitude, Uni Rent sets itself apart from the competition.

“We work with travel agencies all over the world, including many in Australia and in the US and some in Europe,” Tomislav Racki points out. UNI RENT Put Sv. Lucije 8, 21216 Kastel Stafilic, Croatia Tel.: +385 21 797 327 Fax: +385 21 797 329 uni-rent@uni-rent.hr www.uni-rent.net

Useful addresses APIU Partners - Regional Development Agencies 1 Bjelovar-Bilogora County 2 Brod-Posavina County 3 Dubrovnik-Neretva County 4 Istra County 5 Karlovac County 6 Koprivnica-Krizevci County 7 Krapina-Zagorje County 8 Lika-Senj County 9 Medimurje County 10 Osijek-Baranja County

RERA - www.rerabbz.hr CTR - www.ctr.hr DUNEA - www.dunea.hr IDA - www.ida.hr Business development centre - www.czpka.hr PORA - www.pora.com.hr ZARA - www.zara.hr Business development centre REDEA - www.redea.hr RDA - Slavonija www.slavonija.hr

Croatian Chamber of Commerce Rooseveltov trg 2, 10000 Zagreb Tel.: +385 1 45 61 555 Fax: +385 1 48 28 380 hgk@hgk.hr www.hgk.hr

11 Pozega-Slavonia County VALLIS AUREA - www.razvitakpsz.info 12 Primorje-Gorski Kotar County PORIN - www.porin.hr 13 Sisak-Moslavina County SIMORA - www.simora.hr 14 Split-Dalmatia County County Development Agency 15 Ĺ ibenik-Knin County RDA - www.rra-sibenik.hr 16 Varazdin County AZRA - www.azra.hr 17 Virovitica-Podravina County RDA - www.ravpz.com 18 Vukovar-Syrmia County HRAST - www.leda-es.hr 19 Zadar County ZADRA - www.zadra.hr 20 Zagreb County ZACORDA - www.zacorda.hr

Ministry of Finance

Croatian National Bank

Katanciceva 5 10000 Zagreb, Croatia Tel.: +385 1 4591 333 Fax: +385 1 4922 583 kabinet@mfin.hr www.mfin.hr

Trg hrvatskih velikana 3 10002 Zagreb Republic of Croatia Tel.: +385 1 45 64 555 Fax: + 385 1 46 10 551 www.hnb.hr

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