FOREIGN DIRECT INVESTMENT INCENTIVES AND BENIFITS

Foreign investments in Croatia are regulated by the Company Act - foreign investors have the same rights, obligations and legal status within an enterprise as domestic investors, provided the condition of reciprocity is met. The Croatian Constitution states that rights acquired through capital investments cannot be withdrawn by law or any other legal act. It also insures free repatriation of profits and free repatriation of capital on disinvestment.

The Investment Promotion Act regulates the promotion of investments of domestic and foreign legal or physical persons with the aim of stimulating the economic development of Croatia, its integration into international trade through the increase of exports and the competitiveness of the Croatian economy. Investment promotion comprises incentive measures, tax and customs benefits. Benefits may be given only to newly established companies, which are registered exclusively for the activities that they may be granted tax and customs benefits for.

Incentives measures involve:

Leasing, granting of construction rights and sale or usage of real estate or other infrastructure facilities owned by the Republic of Croatia, local government or self-government units under commercial or favourable conditions, including or without a fee.

Assistance granted for the creation of new jobs. The beneficiary of incentive measures may be granted an amount of up to

EUR 2.000 per employee for covering the cost of job creation and re-training on a one-time basis. The incentives can be used only for new job creation, provided that the number of new employees is not reduced during a period of at last three years.

Assistance granted for vocational training or re-training. If the investor invests in vocational training or re-training of his/her employees, he/she

TAX BENIFITS