The American Chamber of Commerce (AmCham) in Croatia presented a survey on Monday which showed that its members consider the business environment in Croatia similar to that in other southeast European countries, and there was some improvement in that sense in 2021.

These are some of the highlights of the latest AmCham survey of the business environment in Croatia, which involved 149 senior managers from companies which are members of AmCham. The survey was carried out in the period from 16 December 2021 to 2 February 2022 – so it ended three weeks before the Russian military invasion of Ukraine.

Three in five describe business experience in Croatia as ‘good or very good’

Some 61 percent of managers polled described their experience of doing business in Croatia as “good” or “very good.” However, compared to other countries in the region, only 11 percent said Croatia was better, 35 percent considered it worse, and 54 percent “comparable,” i.e. the same. Around 73 percent said that their business had improved in 2021 compared to 2020, and 48 percent said they began hiring more people in 2021.

“Last year was also good because of the effects of the tourism industry, which were better in Croatia than in its peers, and hospitality channels have recovered as a result of the easing of the Covid-19 pandemic, President of the AmCham Board of Governors, Ruza Tomic-Fontana, said. “However, we are all concerned about uncertainty over the Ukraine war and increased prices of all production inputs, which will inevitably lead to increased costs for distribution partners,” she added.

AmCham Executive Director, Andrea Doko-Jelusic, said that 44 percent of respondents reported seeing improvements in the business environment in Croatia over the last five years, but also persistent problems relating to the lack of adequate labor, labor taxation, and the slow judiciary and administration. On the upside, she said 82 percent of businesses noted that they were planning expansion over the next three years, 69 percent said they were also planning new hiring, while 66 percent said they were considering some forms of flexible work after the pandemic, such as working from home.

“Businesses had not fully recovered in 2021, but they all achieved better results and entered 2022 with bigger expectations. However, their optimism has been dampened by the situation in Ukraine and increasing prices, in particular prices of energy,” Doko-Jelusic said.

The survey also revealed that Croatia’s main advantages for doing business cited were EU membership, the potential for tourism development, and also its geo-strategic position.

“There are a lot of question marks regarding the duration of the war in Ukraine and the security situation, said Tomic-Fontana, who is also the General Manager of Coca Cola HBC. “There are still no major indicators it would adversely affect the tourist season, which is important for Croatia and for Coca Cola, but if the war continues, it will make the situation difficult for everyone, and the question is what will happen to the purchasing power, supply and distribution chains and the like,” she added.