“The business sector is definitely calming down in Croatia after the Agrokor scandal shocked the whole region last year,” says Partner Mario Krka of Divjak, Topic & Bahtijarevic. “Investors are regaining their confidence and the market is getting back to its old self, while the economy is being boosted by infrastructural and tourism investments already ongoing or planned for this year.”
“The restructuring and the ongoing insolvency procedures around Agrokor are still in the pipelines of the legal and the business sectors, but this is no longer the dominant topic.” says Krka. “Right now everybody is anxious to see where this huge bridge infrastructure project involving the Peljesac Bridge will go, which is the largest ongoing bridge project in Croatia. It is an EU-funded project that won’t need a lot of legal work immediately, but as with any big infrastructure project, at some point it will need lawyers on one side of the table, for it will bring many other related work,” he said. “The bridge is considered a big deal now in Croatia. The winning client was actually a Chinese corporation, whose bid beat out several European competitors, but the appeal process is ongoing. The value of the construction — their offer — was a bit under 300 million euros, and it will probably start this year,” he adds.
Another sector that is facing great investments this year in Croatia is the tourism sector. “A couple of days ago the Minister of Tourism announced that around 40 new hotels would open up this year,” Krka says. “I think it’s a lot, but last year we had really good numbers, in certain terms it was a record breaking season. Thanks to the tourism blooming and, according to our Minister of Finance, to the improved tax collection, there was a surplus in the Croatian national budget for the first time in the country’s history since our independence. The surplus I think, is just a bit under 1%, but still, it is a big step forward.”
According to Krka, “tourism, as a sector, depends a lot on the international situation, and right now, Croatia benefits from what has been happening in North Africa, the Middle East, Turkey, and even the Mediterranean. Because of the stability of this region, many tourists have chosen Croatia over the other competing destinations.” As a result, he says, there is a real need for high-end — five star, luxury, or even boutique — hotels in his country, which can offer something specific for their customers. “This is the sector where investments are probably going to continue,” he believes.
In terms of new legislation that might affect the work of lawyers in Croatia, Krka says that there is some buzz about the restructuring of the commercial registry, but nothing concrete yet. “I wouldn’t call it a reform, but there seems to be an attempt to combine and simplify the procedures for setting up new companies,” he says. Still, the results of that issue are hardly critical. "Even without new legislation, we have quite a lot of work these days. I don’t think we were this busy at any time last year, and I assume this is true for many other Croatian firms as well. Many investors were reserved last year, given the uncertainty about how the Agrokor situation would be resolved, and more importantly, how much it will affect the economy, GDP figures, etc. In the end, it wasn’t as dramatic as some were expecting, so the market is definitely getting back on its feet, people are ready to invest, to finance, and refinance.”
