Croatia Country Profile

Snapshot of the Croatia Country Profile


Croatia has enjoyed steady growth in foreign investment over the last several years, encouraged by a growing economy, low inflation, a stable exchange rate and well-developed infrastructure. However, despite progress in economic and administrative reforms, problems remain, including a judiciary plagued by case backlogs, overly complex bureaucracy, and corruption.

Positive developments in relation to corruption and investment:

  • The past few years have witnessed a major anti-corruption crackdown, as several civil servants in the Croatian Privatization Fund, the Zagreb land registry and the Zagreb taxation headquarters, among others, were arrested on charges of bribery. Moreover, several high-level corruption cases have seen the light, including investigations of the former Defence Minister and the former deputy Prime Minister.
  • The government has made progress in reducing bureaucratic barriers, particularly through the development of its e-government initiatives, such as the hitro.hr Internet portal. The government portal has an online business registration component that reduces the time it takes to register a company to 4 days.
  • Recent reforms and the development of a digitalised land registry for direct Internet access to land and property registries have facilitated the acquisition of land records, while simultaneously reducing corruption risks.

Risks of corruption:

  • SMEs are of the perception that the majority of civil servants expect to be bribed when meeting with companies, but in most cases SMEs do not report bribery actually occurring.
  • Although the legal framework and regulatory system provide national treatment for foreign investors, Croatia's ineffective legal system and a lack of transparency within both private and public sectors have presented the greatest challenges to investors. Transparency in developing legislation and regulations is often hampered by an inefficient public administration and a lack of intra-governmental coordination.
  • Another problem for companies is the significant backlog of cases in the courts. Many cases have been pending for years, making dispute resolution via the courts an undesirable option for companies. As a result of the very long timeframes involved in obtaining judgments in court, companies often try to resolve disputes without seeking judicial remedy.