The Fortenova restructuring, legislative updates impacting labor, the gig economy, and immigration, and the fallout of the judicial strike are all high on the agenda in Croatia, according to BDV Legal Partner Marko Bohacek, who – despite the weather outside – maintains a sunny outlook of Croatia's economy.
“We're currently in the midst of Fortenova being restructured, which is primarily interesting due to the sanctions imposed on Russia which impact some of the shareholdings,” Bohacek begins. “Russian shareholders with a majority stake are exiting, paving the way for the control of Fortenova to be concentrated.” This conglomerate, one of Croatia's top five corporations, spans the retail, agricultural production, beverage production, and dairy production sectors. “The situation is heating up, with a crucial shareholder assembly scheduled for the end of December, to discuss taking over shares from Russian entities which are currently under sanctions imposed by the EU,” he says.
Then, Bohacek highlights some interesting legislative updates. “From January 1, 2024, significant changes will impact the gig economy, affecting platforms like Uber, Wolt, and Glovo. The new legislation offers greater legal protection to gig workers, especially regarding salaries,” he explains. “It's a result of extensive debate and negotiation, addressing loopholes and the obligations of digital companies. Additionally, aggregator companies employing these workers are now under scrutiny, as they often operate transiently without ensuring proper salary claims for their workers,” he stresses.
Additionally, Bohacek reports that Croatia has liberalized its visa policies significantly, particularly for non-EU workers, resulting in a more positive immigration balance. “We're seeing an influx from countries like Nepal, India, Bangladesh, and parts of Africa. The focus is on further liberalizing these policies, as the current system can be slow,” he says. “We've also introduced digital nomad visas for high-skilled workers, although the process isn't as efficient as we'd like, with some nomads waiting months for approval.”
Shifting focus for a minute, Bohacek reports that the Croatian “commercial courts haven't fully recovered yet from this year's strike of the judiciary. There's a huge backlog, impacting business processes like company incorporations, which now take several months,” he says. “This delay is problematic for local entrepreneurs, especially those awaiting VAT numbers – essentially, the backlog is slowing down economic activities and initiatives.”
Finally, Bohacek notes that “private equity activity remains robust, but venture capital investments in web3 have slowed, partly due to the cryptocurrency fallout and rising bank interest rates, making people more cautious about investing in risky start-ups.” He says that “despite global trends, Croatia's market economy is thriving, with no significant signs of economic slowdown. We had a very successful tourist season, positively impacting our GDP; although we're experiencing high inflation, one of the highest in the EU, the economy is maintaining a steady growth pace,” he concludes.