October, 2014

INVESTMENT OPPORTUNITIES IN THE

REPUBLIC OF CROATIA

ABOUT CROATIAFOREIGN DIRECT INVESTMENTS (FDI)

FDI – 27,2 BILLION € (1993 – Q1/2014)

FDI by sector FDI by country

Financial intermediation, except insurance

and pension funding31,6%

Manufacturing18,1%Trade

14,9%

Other14,0%

Real estate & construction

12,0%

ICT7,0%

Hotels and restaurants

2,6%

AUSTRIA26%

NETHERLANDS16%

GERMANY9%

HUNGARY9%

LUXEMBOURG7%

ITALY5%

FRANCE5%

SLOVENIA4%

NETHERLANDS ANTILLES

3%

BELGIUM2%

SWEDEN2%

OTHER12%

Source: CNB, 2014

Strong Government commitment to attracting new FDI

New business-friendly regulatory environment

Act on Strategic Investment Projects of the Republic ofCroatia

New Industrial Strategy

Croatian Tourism Development Strategy

New legislation on construction and physical planning

Working group for business climate and private investments

Fast-track reforms(181 adopted measures, 90 implemented measures, 5 reforms recognised by Doing Business)

Attractive investment incentives

Free of charge support by the Agency for Investments and Competitiveness

WHY INVEST IN CROATIA?

Part of the EU

Gateway to the regional markets

Productive and cost competitive labor force

Competitive operating costs

COMPETITIVE INVESTMENTCOSTS

Favorable initial investment costs

Electricity prices for industrial users are among

the lowest in the EU

Source: Eurostat, 2012

0

0,02

0,04

0,06

0,08

0,1

0,12

0,14

0,16

PL HR HU SI CZ EU-27 SK DE

0,093 0,095 0,096 0,0970,102

0,1200,129

0,143Electricity prices for industrial consumers, €/kWh

*Annual consumption: 500 MWh < consumption < 2 000 MWh.

Source: Eurostat, 2014

FAVOURABLE LABOR COSTS

IndustryAverage labor cost

per hour, €Average monthly gross

salary, €

Manufacturing industry 5.9 905

Pharmaceutical industry 9.2 1,800

ICT 6.4/8.5 1,425

Tourism 5.1 866

Source: CBS, 2011

0,0 10,0 20,0 30,0 40,0 50,0 60,0

Mining & quarrying

Manufacturing

Electricity, gas, steam & air con. supply

Water supply, waste & remediation

Construction

Distrib. trades

Transport & storage

Accommodation & food services

Information & communication

Real estate activities

Professional, scientific & technical activities

Administrative & support services

Repair: computer, personal & h'hold goods

25,0

11,7

19,6

13,7

10,3

11,0

15,0

8,8

19,9

11,5

14,6

9,0

9,5

38,6

36,5

52,7

32,0

31,4

26,5

32,3

16,5

50,5

31,0

43,2

22,3

0

EU-28 Croatia

AVERAGE PERSONNEL COSTS, (1 000 EUR per employee), 2011

Source: Eurostat, 2014

Source: CBS

FAST TRACK INVESTMENT REALISATION

INDUSTRIAL PLANT FOR THE PRODUCTION OF ENERGY BARS Ltd

Great infrastructure

Strong commitment of public authorities at all levels to the project development

Fast approval process

FACTORY FOR LEATHER PRODUCTS WOLLSDORF COMPONENTS Ltd

GLASS PROCESSING FACTORYPRESS GLASS SA

WASHROOM HYGIENE, MATS, WORKWEAR AND TEXTILE

SOLUTIONSCWS BOCO Ltd

HOTELVALAMAR PRESIDENT

BUILDING PERMITS ISSUED IN:

19 Days

1 Day

1 Day

8 Days

2 Days

CATALOGUE OF BUSINESS ZONES

Contains information on more than 130 investment locations-business zones of all 20 counties

Includes investment sites that are completely equipped with settled property rights

Total area of the business zones : 5614 ha

Available : 2261 ha

The Catalogue contains more than 617 companies which are active in 103 business zones and their data were verified

All the data is available in English

AIK -PUBLICATIONS

Catalogue of Investment Opportunities:joint publication of state institutions andagencies that provides relevant informationabout public and private projects on sale orin search of strategic partners

Current number of projects: 45 projects, outof which 16 public projects, 24 privateprojects and 5 technology incubators

Sectors: Tourism Energy Food processing Manufacturing

INVESTMENT INCENTIVESELIGIBLE SECTORS AND COSTS

• 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 modernization of technology and R&D

• Incentives for initial and capital expenses of the investment

• 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

INVESTMENT INCENTIVES

Minimum investment: 150.000 € - SME’s and large size companies

INVESTMENT INCENTIVES*

Tax incentives 0% - 10% profit tax rate

Employment 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 Initial and Capital Expenses of the Investment Project

Cash grant in amount of 20% of the eligible costs (up to € 1.0 million)

*Respective investment incentives are calculated on an individual basis.

INVESTMENT INCENTIVESCALCULATOR

You can calculate your investment incentives in Croatia by using Investment Incentives Calculator available on AIK web pages

http://www.aik-invest.hr/en/investment-guide/incentives-calculator/

SUCCESS STORIES

„The quality of Croatian experts is well known – their knowledge, innovative spirit, enthusiasm and

dedication to excellence in all business processes have been

incorporates in our activities and initiative that started as a local idea and have become global products, or business models.“

M. Sc. Gordana Kovačević, President of Ericsson Nikola Tesla (2007)

“PLIVA in 2014 is finalizing one of the largest investment cycles in history. It is also important to

emphasize that PLIVA is enhancing investments in

Research & Development and we are also pleased that PLIVA has

opened Centre for Financial Activities in Zagreb that supports

many of the TEVA’s European locations. Our investment effort received international awards,

which proves that Croatia can be attractive to foreign investors. PLIVA’s and TEVA’s investments

are proof that Croatia has knowledge and skills to

successfully compete in the most demanding markets.”

Tihomir Orešković, CEO of PlivaCroatia Ltd. (2014)

AGENCY FOR INVESTMENTS AND COMPETITIVENESS

AIC WILL PROVIDE YOU WITH:

Business intelligence

Site selection

Operation costs

analysis

AIC WILL CONNECT YOU WITH:

Government bodies

Local and regional

institutions

Utility companies

AIC WILL ASSIST YOU WITH:

Organizing site visits

Gaining all necessary permits

Gaining state incentives

AIC PUBLICATIONS

CATALOGUE OF INVESTMENT OPPORTUNITIES

MADE IN CROATIA –INVESTORS GUIDES TO

MANUFACTURING AND LOGISTICS AND TOURISM

7 SECTORS PROFILES

INVESTMENT GUIDE

THANK YOU!

www.mingo.hrwww.aik-invest.hr