The World Bank’s ‘Ease of Doing Business’ reports consistently rank Croatia mid-table, reflecting its traditionally mediocre economic performance. The political uncertainty of the previous decades has hindered its progress significantly. However, attempts at improving the social and political landscape in recent years could witness the recovery of Croatia as it attempts to equate itself with other EU member nations.
Though a relatively small market, Croatia nonetheless plays an important role in the economic and political atmosphere of South-East Europe. As its assimilation into the European Union continues, it is developing into an increasingly Westernised nation, though it has not yet fully completed the transition into a market economy. The economy is mainly dominated by service and industrial sectors, agriculture, and tourism, with roughly 10 million foreign visitors per annum, creating roughly 15% of its national GDP. Successes of the Croatian economy include a GDP per capita of over 15,000 USD and an improving economic freedom score. Yet it is clear that the Croatian economy is still weak, scoring below the regional and world averages.
Remaining risks of doing business in Croatia are a lack of clarity and transparency in tax administration, a high tax burden, an ineffective judicial system, and a penetrating level of corruption. However, the government’s attempts at reform often face strong resistance.
With regards to the business culture of the Croats, one should expect a relaxed attitude combined with a high degree of professionalism. Establishing a degree of trust is important, while punctuality is absolutely crucial. It is necessary to be aware of certain quirks when doing business in Croatia, such as the avoidance of scheduling meetings on Friday afternoons, as many Croatians will have gone to their country homes for the weekend.
For more helpful information about the dos and don’ts of the Croatian corporate world, the World Business Culture website is an insightful guide for those wishing to further their knowledge for business.