Business
Geography divides Croatia into two distinct markets.
The Dalmatian coastal region along the Adriatic Sea is oriented towards
tourism while the inland Slavonian region is oriented towards agricultural and
industrial activities. During the summer, Croatia is a popular
tourist destination for Europeans. The Croatian government wants to increase foreign investment and is currently working towards improving the investment climate. The largest foreign investors in Croatia are Germany, Italy, and Austria. Croatia's main trading partners are Italy, Bosnia and Herzegovina, Germany, Austria, Slovenia, and Russia. [RF 38] & [RF 27]
The Croatian government is working toward improving Croatia's investment climate by first identifying what the barriers to investment are and then working to eliminate them. For example Croatia is working to eliminate many non-tax fees on businesses and working towards consolidating government agencies that overlap. Croatia is expected to become a member of the European Union in July of 2013. This should help accelerate structural reform and should create many business opportunities for U.S. companies looking to enter the Croatian market. [RF 5]
The Croatian government is working toward improving Croatia's investment climate by first identifying what the barriers to investment are and then working to eliminate them. For example Croatia is working to eliminate many non-tax fees on businesses and working towards consolidating government agencies that overlap. Croatia is expected to become a member of the European Union in July of 2013. This should help accelerate structural reform and should create many business opportunities for U.S. companies looking to enter the Croatian market. [RF 5]
Key Industries [RF 7]
Some industries in Croatia include
- Chemicals and plastics
- Machine tools
- Fabricated metal
- Electronics
- Pig iron and rolled steel products
- Aluminum
- Paper
- Wood products
- Construction materials
- Textiles
- Shipbuilding
- Petroleum and petroleum refining
- Food and beverages
- Pharmaceuticals
Shipbuilding [RF 37]
Shipbuilding has been heavily subsidized by the government and as a result is inefficient. Several shipyards were state owned but have since been privatized. This was done as part of an effort by Croatia to join the European Union. This restructuring should help in the long term. Croatia’s shipbuilding industry has a strong reputation and accounts for a large portion of Croatia’s export earnings.
Tourism [RF 27] & [RF 37]
Tourism is one of the strongest sectors of the Croatian economy accounting for over 24% of Croatia’s GDP. Croatia is visited by more than 10 million tourists a year. The majority of tourists come from Germany, followed by Italy, Slovenia, Austria, and the Czech Republic. People come to Croatia because of its long beautiful coastline.
Pharmaceuticals [RF 37]
Croatia is the home to Pliva the largest pharmaceutical company in Central Europe. Pliva is based in Zagreb, Croatia but also has operations in France, the United Kingdom, and the Czech Republic. Pliva has a strong presence in Central Europe and is also expanding into West European markets.
Agriculture [RF 37] & [RF 7]
Vegeta, a famous brand of vegetable stock in Central Europe, comes from Croatia. Other agricultural products in Croatia include wheat, barley, sugar beet, sunflower, rapeseed, alfalfa, clover, potatoes, cabbage, onions, tomatoes, pepper, apples, plums, mandarins, olives, grapes, livestock, and dairy products.
Import/Export [RF 17] & [RF 18]
For 2011, Croatia's imports totaled $20.4 billion while exports totaled $12.28 billion. This creates a trade deficit of $8.12 billion. Import and export demand showed a slight increase from 2010 but overall is down because of a weak economy and the Eurozone crisis. Croatia's largest import partners are Italy-16.3%, Germany-12.8%, China-7.2%, Russia-7.2%, Slovenia-6.4%, and Austria-4.4%. Croatia's largest export partners are Italy-16.6%, Bosnia and Herzegovina-12.7%, Germany-10.4%, Slovenia-8.2%, Austria-5.8%, and Luxembourg-4.5%. [RF 7]
Business Etiquette [RF 16]
- Handshakes are appropriate but wait for a woman to extend her hand first.
- Make eye contact and smile when shaking hands.
- Greet people with the appropriate salutation for the time of day.
- Engage in small talk because jumping straight into business is seen as rude.
- At first building a relationship is more important than doing business.
- Meetings are not very rigid and will often be lengthy as time is not considered a reason to close a meeting.
Relations with the United States [RF 5]
President Ivo Josipović and Hillary Clinton
The relationship between the United States and Croatia is very strong. The United States has an embassy in Zagreb. Up until 2008 the U.S. Agency for International Development (USAID) provided assistance to Croatia in order to help with the restructuring of Croatia's financial sector. The United States has also given Croatia more than $27 million to help with demining the country. The Department of Defense also has a strong relationship with Croatia. The United States provides Croatia's military with training, equipment, and education in U.S. military schools. In Afghanistan, Croatia participates in a joint training team with U.S. troops. Croatia even has a state partnership with the Minnesota National Guard. Croatia along with the United States is a member of the North Atlantic Treaty Organization (NATO).
Foreign Relations [RF 5] & [RF 26]
Croatia joined the United Nations in 1992 and has contributed troops to UN operations. Croatia also contributes troops to NATO led operations such as the Kosovo Force and participates in the International Stabilization Assistance Force in Afghanistan. Croatia is a member of the World Trade Organization and the Central European Free Trade Organization. Croatia is to set to join the European Union on July 1, 2013 if all 27 EU members ratify the accession treaty. Prior attempts to join the EU were blocked by Slovenia because of a border dispute. This same issue also almost prevented Croatia from joining NATO. The dispute was over the bay of Piran in the Adriatic Sea. Croatia thought that the border should be drawn down the middle of the bay. Slovenia disagreed and felt that this would deny its ships direct passage to the high seas. Slovenia and Croatia were able to put their differences aside and come to an agreement in a referendum vote.