The American Chamber of Commerce in Croatia (AmCham) on Monday said they welcomed the signing of the double taxation agreement between Croatia and the United States, scheduled to be formally signed on Wednesday in Washington, D.C.

The agreement will mean lower financial and administrative burden for companies that do business directly between the two countries.

“This is a significant step for the business community in the US and in Croatia, which for many years have advocated for such a treaty. This step is particularly important for AmCham and its members, given that in 2018 it prepared preliminary arguments for signing the agreement, and that it brings together companies that are most involved in trade and investment flows between Croatia and the US”, the group’s press release cited executive director, Andrea Doko-Jelusic, as saying.

The treaty will reduce the cost for doing business, especially for Croatian companies with subsidiaries in the US and American companies with subsidiaries in Croatia. In Croatia, this will be especially interesting for the IT sector, as well as the food and pharmaceutical industries. “In the United States it will create room for cooperation to small and medium-sized companies that have not been represented in Croatia until now,” AmCham said in a press release.

The treaty will also reduce administrative burden and increase the transparency of business between the two countries. In addition to the clear effect of strengthening economic cooperation, it will enable the transfer of know-how, which is particularly important for small and medium-sized enterprises, especially in the IT sector, AmCham said.

Croatia is the only member of the EU27 that has not had such a treaty with the United States yet. “In this sense, it will be a sign of stability of relations and predictability of the business environment for potential investors,” AmCham said.  The treaty will also be good news for American nationals working in Croatia or receiving US pensions in Croatia, as well as Croatian nationals living and working in the US.