'American companies still discovering Croatia,' says AmCham

NEWS 28.03.201814:59

Most companies members of the American Chamber of Commerce in Croatia (AmCham) had better business results and have added jobs in 2017 compared to the previous year, and 47 percent of them marked the overall business experience in the country as good or very good, according to a poll published by AmCham on Wednesday.

AmCham gathers more than 220 American, Croatian, and other international companies employing more than 70,000 people in Croatia, and the poll on business environment in the country was filled in by 140 members of management boards.

Some 65 percent of those polled said their companies had posted better business results in 2017 than the year before, while about 10 percent said that they had worsened. In addition, 64 percent of companies have added employees in 2017, 23.5 percent said the number of employees remained the same, and 12 percent said they cut jobs.

In terms of overall experience of doing business in Croatia, 37.5 percent described it as “good” and 9.3 percent as “very good”. While 11 percent called it “bad” or “very bad”, the largest group, some 42 percent, described it as “average”.

According to the poll, the main limiting factors for businesses in the period since Croatia’s 2013 accession to the EU have been the unstable regulatory framework, long and complex administrative procedures, and the taxation of labour. In the past year, however, these were joined by the lack of work force.

The biggest improvements in the period from 2013 to 2015 was detected in the demand for goods and services, and financing conditions, while the biggest worsening was in the implementation of legal rules and procedures, judiciary and the quality of the legal framework.

Croatia falling behind compared to other countries in the region

The poll also compared Croatia with other countries in central and eastern Europe, as 72 percent of companies who are members of AmCham also operate in other countries in those regions. Only 9 percent of those polled said the business environment in Croatia was superior in comparison, 44 percent said it was worse, and 47 percent described it as average or about the same.

The biggest drawbacks of Croatia compared to those countries are the slowness of its administration and high taxes, as well as a small market and lack of any long-term government strategy. The biggest advantages identified in the poll are Croatia’s tourist potential, EU membership, and its strategic location.

AmCham’s Executive Director, Andrea Doko Jelušić, said that all the trends pointed to Croatia falling behind other countries in the region throughout the years, especially compared to Bulgaria and Romania, which are currently experiencing strong economic growth.

“It’s a competition that has been going on for some time now, and although Croatia is moving forward, it is not moving as quickly as these two countries,” Jelušić said, and added that “American companies are still discovering Croatia.”

In spite of the progress made, and the optimism in the business community, Jelušić said, Croatia should be faster and more determined in implementing reforms which can directly improve Croatia’s main disadvantages compared to other countries. These include reforms in areas of public administration, easing of the tax burden, and reforms in the judiciary which could ensure predictability and stability.