U.S. Ambassador to Croatia Robert Kohorst said on Tuesday that although Croatia had made economic headway, there was still considerable room for boosting the growth.

Addressing a reception organised by the AmCham in Zagreb on Tuesday evening, the U.S diplomat, who was the keynote speaker at that event, said that in the past two and a half years of his ambassadorial term, he had seen progress made by the Croatian government in the context of the economic growth and boosting investment climate.

“In terms of economic growth and improving the investment climate, we’ve seen the Croatian government take some positive steps over the last couple of years – things like reduction of para-fiscal fees and taxes, the downward trajectory of government debt, and most recently, Croatia’s entry into the European Exchange Rate Mechanism.”

“I am encouraged by the government’s recent efforts to simplify procedures for opening a business and the formation of a cabinet-level working group focused on improving the business climate. I also applaud the government’s commitment to reducing bureaucracy. Less cities, less government – let’s hope,” he added.

However, the ambassador also underscored some issues such as the inefficient and unpredictable and unpredictable judiciary and a high number of state-owned enterprises which should be tackled.

Kohorst called on the government to continue pursuing reforms reforms in an aggressive manner.

“Such measures don’t only attract new companies and investment. They also help Croatia stem the significant number of workers, mostly young people, leaving the country each year to find higher paying jobs in other EU countries. Bringing these people back and keeping them here so they contribute to Croatia’s economic growth is the real goal.”

“Some difficult decisions will need to be made,” he said explaining that tough decisions would be necessary for the full transition to a market-based economy, and called for the reduction of the excessive bureaucracy and downsizing state-owned enterprises.

He also believes that those reforms can help Croatia to realise its economic potential and capitalise on its geographical position in central Europe and on its political and financial stability as well as on its educated and skilled labour force and entrepreneurial spirit.

“Now is the time for the government to act,” despite certain challenges imposed by the COVID pandemic, he added.

Double taxation agreement

Earlier this month, Kohorst presented Finance Minister Zdravko Maric with a draft double taxation agreement between the United States and Croatia.

He thanked the AmCham for its contribution and information that provided an additional impulse to the US Department of Treasury to draw up the draft. He said that after years of efforts on his part regarding the agreement, the US Department eventually recognised the partnership between the two countries and, thanks to his assurances, prepared the draft.

“The Croatian government’s commitment to continuing to implement economic and judicial reforms will go a long way to making Croatia a more attractive destination for American companies. For our part, the U.S. Embassy will continue to highlight opportunities for investment as best we can. And we will continue to seek ways to deepen the economic bonds between our two countries,” he said, underscoring the importance of concluding a treaty for the avoidance of double taxation.

He said that he “was thrilled to be able to hand over the draft treaty to Minister of Finance Maric on September 3.”

The ambassador said that the two ministries were working together on the draft, but that nothing would happen overnight. He said the document would have to pass the ratification process in the Senate and that this would take a longer period of time.

Commenting on tenders for the installation of 5G network infrastructure, Kohorst said he would continue to insist on establishing investment screening mechanisms to protect strategic infrastructure and assets and to ensure the use of reliable vendors for 5G networks.

“We believe these are critical steps that will allow Croatia to grow its economy without sacrificing its sovereignty or its security.”

Ambassador calls on those present to apply for US visa

Kohorst also talked about the visa regime for Croatian citizens travelling to the United States, saying that Croatia was very close to entering the Visa Waiver Program, which requires the number of refused applications to be below three percent and the calculation applies to the fiscal year, which ends on September 30.

We still have two weeks for the percentage to fall below three percent, and right now it is exactly three percent, the ambassador said, adding that they are working with the government to ensure as many positive applications as positive, calling on those present who do not have a holiday visa to apply for it.

Interior Minister Davor Bozinovic appealed to Croatian citizens to apply for a US visa and thus help reduce the number of refused applications in relation to the number of applications submitted to below three percent.

AmCham Executive Director Andrea Doko Jelusic said that they had achieved great cooperation with Kohorst, citing his efforts regarding the start of negotiations on the double taxation agreement. She said that great progress had been made in that regard and that she hoped the agreement would be signed soon.