Invest in Croatia

INVEST

INCROATIA

Agency for Investments and Competitiveness June, 2016

REPUBLIC OF CROATIA

Land area: 56.594 sq km

Population: 4,3 million

Unemployment 15,9 %

GDP 51,288 € (2014)

GDP per capita 10.157 € (2014)

FDI (million €) 2.910,1 (2014)

Average monthly net salary 735,33 (2013)

Consumer price index: 0,1% monthly-1,7 % yearly

CATALONIA

Land area: 32.108 sq km

Population: 7,5 million

Unemployment 17,42 %

GDP 214,927 € (2015)

GDP per capita 27,833 € (2014)

FDI (million €) 3,031.6 (2014)

Average monthly net salary 1.009,25 € (2013)

Consumer price index: 0,7 monthly-0,8 yearly

ABOUT CROATIA

BASIC MACROECONOMIC INDICATORS

+2,7%Quarterly GDP for

first quarter 2016/2015

+3,2%Retail trade

turnover for April 2016/2015

+4,9%Industrial production

for April 2016/2015

-2%Unemployment

rate for April 2016/2015

ABOUT CROATIA

Source: Croatian National Bank, 2016

FOREIGN DIRECT INVESTMENTS

20%

19%

9%7%

7%

5%

5%

4%

4%

3%

17%

NetherlandsAustriaGermanyHungaryLuxemburgItalyFranceSloveniaUKSwitzerlandOther

23.29%

3.25%

15.52%

12.94%6.32

%0.40%

19.73%

0.15%

0.82%

17.59%

Financial Intermediation

Hotels and Restaurants

Trade

Real-estate and Construction

Post and Telecommu-nication

Computer and related activities

Manufacturing

R&D

Agriculture, hunting and forestry

Other

FDI – 29,557 billion € (1993 – 2015)

FDI BY COUNTRY FDI BY SECTOR

ABOUT CROATIA

INVESTMENT CLIMATE

Jump of 78 places in the last 11 years

shorter time for starting a business

shorter time for registering a property

ABOUT CROATIA

INVESTMENT CLIMATE

YEARS

DAYS

DAYS

DAYS

DAYS

ABOUT CROATIA

INVESTMENT CLIMATE

out of 189 countries

Serbia 59

Israel 53

Italy 45

Belgium 43

Spain 33

ALL THE BENEFITS OF EU COUNTRY

• Stability• Single Market• Acquis

Communautaire

WHY CROATIA

CONVENIENT LOCATION

BUT STILL CLOSE TO CEFTA MARKET

• Borders with 3 CEFTA countries

• No tariffs on industrial products to/from Serbia, BaH

and Montenegro

WHY CROATIA

CONVENIENT LOCATION

all of Europe within 3 hours

Pan-European Corridors (X, Vb, Vc) cross its territory

direct access to Rhine-Main-Danube waterway through four

main river ports

6 strategic sea ports

WHY CROATIA

CONVENIENT LOCATION – STRATEGIC PORTS

3 MOSTLY CARGO PORTS 3 MOSTLY TRAVEL PORTS

RIJEKA

PLOČE

ŠIBENIK

ZADAR

SPLIT

DUBROVNIK

Source: Eurostat, 2016

WHY CROATIA

COST COMPETATIVE

Croati

a

Hungary

Portugal

Czech Rep

ublic

Lithuan

iaGree

ce

Poland

Slove

nia

Slova

kiaSp

ainLat

via

Estonia

Cypru

sMalt

aIta

ly

Irelan

dEU

28

United Kingd

om

Belgium

Luxembourg

Netherl

ands

Austria

France

German

y

Finlan

dIce

land

Denmark

Swed

en

Switze

rland

Norway

68 68 71 75 76 79 79 79 80 81 81 82 86 88 89 90100 101 102 105 105 108 113 114

126 130 131 135 136149

Price level indices for investment, 2014, EU 28 = 100

WHY CROATIA

COST COMPETATIVE

Average labour costs per hour in 2015, EUR

Croatia EU 28

Business economy 9,3 25,0

Industry 8,5 25,8

Manufacturing 8,2 -

Construction 8,4 22,3

Information and communcation

13,9 -

Administrative and support service activies

5,6 18,3

ITALIAN 14% GERMAN 34%

ENGLISH 49%

Source: Eurobarometer: Europeans and their Languages, 2006

WHY CROATIA

MULTILINGUAL WORKFORCE

International Olympiads in Informatics:

11 gold, 30 silver, 31 bronze medals

International Mathematical Olympiads:

4 gold, 12 silver, 59 bronze medals

ACSL All-Star’s 2016 winners

• Manufacturing activities• Technology centers• Strategic business support services• Tourism (4 plus star hotels and resorts, sports and health centers,

etc)

Sectors

• Tax incentives• Employment and education grants• Incentives for R&D activities• Incentives for capital expenses of the investment project• Incentives for labor intensive investment projects

Incentives

• Equipment and machinery and intangible assets: patent rights, licenses, know-how, or

• 2 year-gross salaries

Eligible investment costs

ELIGIBLE SECTORS AND COSTS

WHY CROATIA

INVESTMENT INCENTIVES

Incentives

Tax incentives Up to 0% profit tax rateEmployment incentives €3,000 – €18,000 per employee

Incentives for Innovation and Development

20% of the eligible cost of buying the equipment/machinery (up to € 0.5 million)

Incentives for Capital Expenses of the Investment Project

Cash grant in amount of 20% of the eligible costs (up to € 1 million)

Respective investment incentives are calculated on an individual basis.

Minimum investment: €150,000 - SME’s and large size companies

WHY CROATIA

INVESTMENT INCENTIVES

WHY CROATIA

INCENTIVES CALCULATOR

Source: National investment promotion agencies, 2016

CROATIA CZECH REPUBLIC BULGARIA SLOVAKIA

Tax incentives Up to 0% of profit tax rate up to 10 years

Full or partial corporate income tax relief

10% corporate tax (0% in areas with high unemployment)

A company may deduct 125% - 150 % of the actual research and

development (R&D) if located in specified regions

Employment incentives per

employee

Up to 18,000 € per employee or up to 60% of two year gross salary Up to 11,000 € per employee

Up to 1 year minimum salary and reimbursement of social/health

care security

From 5,000 up to 29,000 € per employee

Training incentives Up to 70% of total training costs Up to 50% of total training costs

Up to 25% for the vocational training for obtaining professional

qualifications-

Other incentives

Up to 1.0 mil. € for the equipment

Property tax exemption for a period of 5 years in special industrial zones

Transfer of ownership rights over real estate (private state or private

municipal property)

R&D project technical feasibility study 65% of the eligible costs for

large enterprisesExperimental development activities

40% of the eligible costs for large enterprises

0.5 million € for R&D + EU Structural and Investments funds

for Croatia

Maximum intensity for

large enterprises

Guaranteed 25% in the whole teritory of Croatia 25%, except Prague (0%) 25% in the Yugozapaden region

(50% in other regions)Depending of the region of

investment 25-35%, except Bratislava

WHY CROATIA

INVESTMENT INCENTIVES COMPARISSON

Contains information on more than 136 investment locations-business zones in Croatian and English Includes investment sites that are completely equipped with settled property rights

The Catalogue contains zones of all counties

The Catalogue contains more than 800 companies which are active in 103 business zones and their data were verified

Sale price starts from 1 €/ m2

Total area of the business zones: 6.192 ha

Available : 2.638 ha

WHY CROATIA

READY INVESTMENT SITES

Location (city/municipality) Šibenik

Size of the zone (m²) 5.500.000

Available land size (m²) 2.500.000

Construction purpose Manufacturing and services

Allowed construction density 0,4

Construction efficiency coefficient allowed

1,2

Allowed construction height (m)

13

Allowed noise level (at the border of the site, dB)

Not foreseen in physical plans

WHY CROATIA

READY INVESTMENT SITES BUSINESS ZONE PODI

Industrial park Nova Gradiška ltd.

Location (city/municipality) Nova GradiškaSize of the zone (m²) 820.000

Available land size (m²) 570.000




1,2

Allowed construction height (m) 14


80 dB

WHY CROATIA

READY INVESTMENT SITES INDUSTRIAL PARK NOVA GRADIŠKA

Location (city/municipality) BakarSize of the zone (m²) 5.000.000

Available land size (m²) 2.300.000




1,5

Allowed construction height (m) 12


Not foreseen in physical plans

WHY CROATIA

READY INVESTMENT SITES INDUSTRIAL ZONE LTD BAKAR

QUICK OBTAINMENT OF BUILDING LICENCES

Glass processing factory - Press glass SA 1 day

Hotel Valamar President 2 days

Factory for leather products - Wollsdorf components Ltd 5 days

Washroom hygiene, mats, workwear and textile solutions - Cws-Boco Ltd 8 days

Industrial plant for the production of energy bars - Atlantic Multipower Ltd 19 days

LEGAL DEADLINE: 30 days

WHY CROATIA

INVESTMENT SITES

Catalogue of Investment Opportunities: mutual publication of state institutions and agencies that provides relevant information about public and private projects on sale or in search for strategic partners.

Current number of projects: 67 projects, out of which 38 public projects and 29 private projects.

Main features of Catalogue: All projects are in high stage of readiness for potential investor Tourism, public infrastructure and industry projects prevail The project values ranges from 4 million EUR up to 1 billion EUR

The 8th Catalogue of Investment Opportunities is available for download at Publications section on Agency for Investments and Competitiveness website at www.aik-invest.hr

WHY CROATIA

READY MADE INVESTMENTS

http://www.aik-invest.hr/

Project holders: Republic of Croatia and City of Pula

Project description: • Developing a former military recruitment center of 170 hectares into a high quality multipurpose resort (hotels, golf course, 2 marinas and sports port, hot balloon airfield, residential area and a number of public facilities such as Military Navy Museum, cultural-congress center, multifunctional hall, tourist office, gallery, entertainment center and beach facilities). • Comprised of 6 separated zones out of which 3 are intended for tourism and residential purpose (Marie Louise zone, Utvrda Muzil and Smokvica) while the other 3 zones (Dolina suza, Fižela, Mali Plato) are intended for supporting infrastructure (beach complex, entertainment center and sailing club)

Transaction: Right to Build and Right to Use for a period of 99 years

WHY CROATIAREADY MADE INVESTMENTS – PROJECT MUZIL

Marie Louise Zone

Two land plots of total 69.192 m2 are planned for construction of minimum 4* hotels:


NUMBER IN THE PICTURE LAND AREA (m2) PURPOSE FLOOR AREA (m2) GROSS DEVELOPED AREA (m2)1 58,420 Hotel, 630 beds 13,700 37,800 Garage, 200 parking places 6,000 6,0002 10,772 Hotel, 120 beds 2,310 6,930

Muzil Fort Zone

Planned capacities on total land area of 850,468 m2


NUMBER IN THE PICTURE

LAND AREA (m2) PURPOSE FLOOR AREA

(m2)GROSS DEVELOPED

AREA (m2)

1 49,088 Tourism, settlement (T2), 250 beds 15,000 22,500

Garage, 100 parking places

2,3 56,307 Hotel (T1), 550 beds 21,900 33,000

14,607 Garage, 280 parking places 8,400 8,400

4 37,253 Residential area 7,400 14,800

5 65,263 Fort - golf house and public spaces 2,040 3,500

431,074 Golf course - -

189,065 Golf - green area - -

6 7,811 Business purpose 1,020 1,020

TOTAL 850,468 55,760 83,220

Smokvica Zone

The construction of multipurpose facilities on a total area of 94.485 m2, with possibilities for 2 marinas with up to 190 berths each.


NUMBER IN THE PICTURE

LAND AREA (m2) PURPOSE FLOOR AREA

(m2)GROSS DEVELOPED

AREA (m2)

1 67,215 Hotel Smokvica 550 beds 10,200 33,000

Residential Area 2 7,800 30,000

Residential Area 3 10,000 35,600

Aquapark 12,500 12,500

Garage, 400 parking places 12,000 12,000


2 27,270 Hotel Smokvica 400 beds 7,400 24,000

Aquarium 6,500 13,000

Shopping mall and a cinema 6,300 15,750


Project holder: Special Hospital for Medical Rehabilitation

Description: reconstruction and upgrade of existing capacities:• Hotel Minerva into 4* hotel (265 rooms, 4 suites, congress

sport and recreational facilities), construction of a polyclinic, therapy area and medical wellness with indoor and outdoor swimming pools

• Konstantinov Dom, into 3* hotel ( converting from a hospital to hotel accommodation facility with 64 beds).

• Lovrina Kupelj into 3** hotel including water and therapy facilities, a polyclinic with therapy area and a medical wellness centre.

Estimated value: 45,87 million EUR

Transaction: The project holder is looking for an investor.

WHY CROATIA

READY MADE INVESTMENTSRECONSTRUCTION OF VARAŽDINSKE TOPLICE SPA

WE PROVIDE YOUBusiness intelligence

Site selection

Operation costs analysis

After care service

WE CONNECT WITHGovernment bodies RDA

Local institutions

Utility companies

WE ASSIST WITHInvestment opportunities identification

Organizing site visits

Gaining all necessary permits

Gaining state incentives

WHY CROATIA

AGENCY FOR INVESTMENTS AND COMPETITIVENESS

Services17%

Real estate7% Other

2%

Pharmaceutics10%

Manufacturing23%

Tourism41%

SECTORS

AGENCY FOR INVESTMENTS AND COMPETITIVENESS

PORTFOLIO

More than 150ACTIVE INV. PROJECTS

More than 10BILLION EUR WORTH

More than 15,000NEW WORK PLACES WILL BE

CREATED

More than 300 INVESTMENT PROJECTS

AGENCY FOR INVESTMENTS AND COMPETITIVENESS HAS RECEIVED AN AWARD FOR THE BEST FDI PROJECT IN EASTERN EUROPE

TIMES IN A ROW

2014

1

2016

1

2015

1

3

WHY CROATIA

SUCESS STORIES

www.aik-invest.hr

We stand at your disposal for any additional questions:

THANK YOU!