Economic Overview
Positive monetary patterns, supported by government activity on open budgetary administration, have made a situation where further changes can be effective.
However, while current conditions bolster potential development paces of around 2.5 percent over the medium term, this isn’t sufficient to reignite or quicken the pace of union with other EU nations.
Croatia can both increment returns on open venture—by more adequately utilizing EU award reserves—and pull in vital private speculation to make monetary chances. With the increase to the Euro Area on its motivation, Croatia is wanting to execute aspiring changes to support development, manufacture monetary flexibility, and amplify the advantages of Euro Area enrollment.
Basic change fields incorporate interests in human capital and common asset the executives to protect and use Croatia’s normal resources. In any case, the accomplishment of these changes will rely upon fortifying the nation’s foundations.
Main sectors of economy
The travel industry
The travel industry is deliberately one of the most significant ventures of the Croatian economy. The visitor potential depends fundamentally on the indented Adriatic coast which offers open doors for a wide range of the travel industry – nautical, family, top of the line, gourmet, wellbeing.
Given the way that travel industry is one of the segments that are on the bleeding edge of propelling the venture cycle in Croatia, the Croatian government has as per the arrangement of financial advancement worked out various models of re-actuating countless unused government offices to be placed being used for traveler purposes.
ICT
Croatia is an amazing area for speculators who need to extend their business in Central, Eastern and Southeast Europe. The Croatian market potential with a populace of just 4.1 million is generally little in worldwide terms, yet Croatian purchasers and organizations have effectively demonstrated that they can assimilate new advancements all around quickly. In this regard, Croatia can fill in as a perfect test-showcase for the improvement and use of new advances in the field of programming advancement.
Automotive
The improvement of the Croatian car industry depends on a long convention in related areas, for example, metal creation, welding, plastics assembling and designing. Croatian organizations managing the generation of car parts have a convention in high-exactness fabricating with zero resilience for breakdowns and the fundamental upper hand is the great nature of their items.
More than seventy five percent of the additional incentive in the car business is acknowledged in the generation of parts for establishment and exercises identified with the improvement of vehicles and related procedures.
On the Croatian market are organizations that have effectively incorporated into the arrangement of providing extra parts for the world’s top vehicle producers (PSA, GM, Fiat, BMW, Audi, Ford, Renault, Toyota, Volvo, and so on). About 90% of the income in the car business is created through fares.
Food industry
Compared to different parts of the assembling business in Croatia, the nourishment business (sustenance and drink) accomplishes the most noteworthy all out income and utilizes the vast majority. This area is the most created in the City of Zagreb and Zagreb County, in Northwest Croatia and Osijek-Baranja province.
Pharmaceutical industry
The pharmaceutical business in Croatia has a long convention. Due to its expertise and an accomplished workforce, an effective advancement of the business and related parts later on is guaranteed. Besides, the pharmaceutical business is one of the divisions of the Croatian economy where putting resources into innovative work is broad.
Logistics
Croatia is by its streets, air, rail and ocean courses splendidly associated with Eastern and Central Europe just as with the remainder of Europe and speaks to an extension by interfacing Western and Central Europe with the Black Sea and Eastern Europe and the Baltic Sea with the Mediterranean.
Given the brilliant geostrategic position, the division of transportation and capacity is one of the key components for the improvement of the Croatian economy.
Manufacture of Machinery and Equipment
Production of Machinery and Equipment is one of the most significant ventures in Croatia. Organizations managing in this industry are centered around fares, the presentation of new advancements, preparing proficient work force, quality framework confirmation, naturally neighborly creation and interfacing household and remote makers.
The generation program of the Manufacture of Machinery and Equipment in Croatia is exceptionally different and can address the issues of potential clients and accomplices. A portion of the real organizations working in Croatia are Alstom Hrvatska, DOK-ING, Tehnix, TMT, Harburg-Freudenberger Belišće and organizations from the Končar Group and Đuro Đaković Holding.
Textile Industry
The material and garments industry holds a significant spot in the Croatian economy because of its long-standing custom, countless workers and organizations with European and worldwide organizations.
Creative and Cultural Industry
The imaginative and social industry is one of the quickest developing segments in the European Union, and this consistently expanding pattern is additionally obvious in Croatia.
The imaginative business incorporates a scope of exercises from music, distributing, plan, design, photography to film industry and computer games industry that hold the most noteworthy potential today.
Taxes for businesses in Croatia
Corporate income tax (CIT) is commonly paid at a pace of 18%. For citizens with incomes in the duty time frame lower than 3 million Croatian kuna (HRK), the rate of 12% is applied. This is pertinent for the duty years beginning from 1 January 2017 (beforehand, the CIT rate was a level 20%).
The CIT payers are ventures occupied with autonomous exercises on a long haul reason to infer benefit, parts of outside endeavors, undertakings that control partakes in capital (except if the object of speculation itself pays CIT), and characteristic people who pay CIT rather than individual annual expense (PIT).
The CIT base is decreased by the accompanying things:
– Income from profits and benefit sharing (for example profits and offers in capital that are paid by the organization that pays CIT that is indistinguishable from Croatian CIT, has a recommended authoritative document, and which the payer didn’t use as perceived expense [i.e. deduction] in one’s CIT return).
– Unrealised gains from worth alterations of offers (increment of money related resource esteem) on the off chance that they were incorporated as pay in the benefit and misfortune (P&L) account in the present year and balance recently perceived expense non-deductible unrealised misfortunes from the equivalent budgetary resource.
– Income from collected written-off claims that were incorporated into the assessment base in the past expense time frames however not prohibited from the duty base as recognised expenditure.
– The amount of depreciation not perceived in past expense periods, up to the sum recommended by the CIT Act.
– The measure of expense alleviation or duty exclusion in accordance with extraordinary guidelines (for example expenses of instruction, expenses of innovative work [R&D], and expenses of another worker’s pay).
Reasons to invest in Croatia
- Talented, affordable and multilingual workforce
- Modern Transportation Infrastructure
- Businesses can import and export goods within the EU without restrictions
- Up to 0% profit tax up to 10 years in designated free trade zones
- No customs for all EU member states
- Double taxation avoidance agreements with 55 countries