Croatia is a market of about 4 million people with a GDP per capita in purchasing power standard at around 77% of the EU average. Since EU accession, hundreds of thousands of skilled, young, highly educated workers have left for better-paid jobs in more developed EU countries. This has caused the need for imported labor in many industries, especially tourism and construction.
Despite Croatia’s significant progress in economic and administrative reforms since its independence in 1991, problems remain. These include a judiciary plagued by case backlogs and a lack of expertise in commercial affairs, an overly complex and sometimes non-transparent bureaucracy, relatively high operating costs, and both real and perceived corruption. Employment taxes are high and there are often difficulties establishing property ownership due to a lack of good real estate title records. Companies that face court disputes in Croatia often wait many years to reach a final resolution. They also complain about a lack of enforcement and questionable court rulings. Croatia’s new Lobbying Law adopted in 2024 is intended to reduce both perceived and actual corruption, but has also created new bureaucratic hurdles in communication between businesspeople and government officials.
Overall, the business and investment climate in Croatia is still considered difficult, requiring caution and patience for success by foreign companies. U.S. firms entering this market must contend with a mature market and face competition from well established, mainly European, companies.
Market Challenges
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