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Foreign Direct Investment in Central Europe: Croatia

Foreign Direct Investment in Central Europe: Croatia

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The global pandemic has impacted all markets, with subsequent ramifications for M&A. Investors are now seeking greater protection against general lock-downs and supply-chain disruptions, while governments aim to protect critical supplies and services by imposing new regulations on foreign investment in crucial or strategic industries.

If you are considering investment opportunities in Croatia, take a look at this overview to get insight into the regulations on foreign investment in strategic industries.

​The following overview is an extract from the Foreign Direct Investment in Central Europe publication, which gives insight into the regulations on foreign investment in strategic industries in the region.

Have FDI screening rules been implemented (or will they be implemented) in the country?

Croatia is planning to implement FDI screening rules, but has not yet brought any relevant national legislative act.

Namely, the Act on the implementation of Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union (,,Act on implementation’’) was provided for in the Plan for harmonizing the legislation of Republic of Croatia with EU acquis communautaire in 2020. The respective Act should have entered the legislative procedure by July this year, however, the legislative procedure has not yet begun.

Furthermore, according to unofficial information from the Ministry of European and foreign affairs, the Act on implementation will not enter the legislative procedure at all. Instead of the primarily planed Act on implementation, a short Regulation on the implementation of Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union (,,Regulation on implementation’’) shall be adopted. The Regulation on implementation will designate the Ministry of Economy and Sustainable Development national contact point for FDI screening rules and should be made available for the public consultation later in August. Moreover, the Critical Infrastructure Act shall also be amended according to the Regulation 2019/452.

Currently, FDIs are regulated by the Foreign Exchange Act (Official gazette 96/2003, 140/2005, 132/2006, 150/2008, 92/2009, 153/2009, 133/2009, 145/2010, 76/2013) and the accompanying Decision on data collection for the purposes of compiling the balance of payments, the state of external debt and the state of international investments. The reporting obligation under those acts in not connected with the implementation of the Regulation 2019/452, since they are in force from 2013(7).

By Tarja Krehic, Partner, Krehic & Partners in cooperation with Deloitte Legal

Croatian Knowledge Partner

Čipčić-Bragadin Mesić & Associates is one of the leading law firms in Croatia that serve companies, credit & financial institutions and public entities. We have been recommended and recognized as the legal experts and service leaders by many leading international legal guides for more than 15 consecutive years. With roots dating from 1928. we now probably have more tradition, experience and market presence than almost any other law firm in Croatia. We work closely with the leading international law firms and consultants so we’re able to manage complex, cross-border projects and deals seamlessly and successfully. Around 85% of our clients are international enterprises doing business in Croatia. List of our clients include some of the world-renowned companies such as Amazon Europe Core, China Machinery Engineering Corporation, Tate & Lyle, Nafta a.s., Unilever Croatia, Unilever Hungary, Lenovo, Innoenergy CE, Flixmobility, Flixbus CEE South, Okoenergie Group, CTC Holding, Bunge Limited, Chipita, Rolls-Royce, Canvas Holidays, Vacalianselect, Redgate Software, Red gate Investment, Yahoo!, Aston Martin Lagonda, Domino Printing UK, Domino Printing Sciences, Goldman Sachs, Deutsche Bank, Barclays Bank, HSBC, State Street Bank, Citigroup Global Markets, Credit Suisse, Bank of America Merill Lynch, Standard Chartered, Och-Ziff Capital Management, Amundi Asset Management, Altima International, Red Arc Global Investments, SMBC Nikko Capital Partners, Royal Bank of Scotland, Morgan Stanley International, J.P. Morgan group, Allianz Global Investors, Schroders, Macquarie Bank, Digital Finance International, Winton Capital Management, Citibank, Invesco Asset Management Österreich, Croatian Pension Investment Company, Unicredit Bank AG etc. We enjoy learning about our clients’ businesses and want to understand them completely so we can provide the best possible and complete service.

All News about, and Legal Analysis by, Čipčić-Bragadin Mesić & Associates can be found here.

Firm's website: cipcic-bragadin.com

 

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