Foreign investors have reserved more than 3 billion euros for projects in Croatia over the next three years, but how much of that funding would actually materialise depends on the country's ability to improve its business climate.

According to analysts at Colliers, the global real estate consultancy, there is a great deal of interest for investing in the Croatian market. Although there is lots of funding available, and at low interest rates, the key obstacles include unresolved legal and property issues, cadastre, and red tape, which all combine to narrow down the space for capital, Večernji List reported on Wednesday (March 21).

Out of more than 50 projects which could potentially attract significant interest, Colliers says only a dozen are prepared for new investors.

“Croatia will be interesting (to investors) for two or three more years. If Croatia misses that chance, capital will move to other destinations,” warned managing partner at Colliers International, Vedrana Likan.

Croatia is perceived as a safe country, with a high tourism potential, but its development is stifled by a bad business climate, the numerous investment projects that fell through, an animosity towards foreign investors, and the unpredictability of projects’ development due to red tape.

This is one of the reasons why the country is slowly being overtaken even by some other former Yugoslav countries. Montenegro has already beaten Croatia in terms of attracting investments in high-end tourism, Serbia attracts manufacturing industries with incentives and inexpensive workforce, and Albania is positioning itself as a logistics hub.

In Croatia, 320 million euros were spent on transactions in business real estate in 2017, with the biggest investors being locally based companies, Colliers said.