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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

Deloitte Legal Law Firm at a Glance

Deloitte Legal Adriatic is a unique law firm consisting of teams of highly specialized lawyers, providing a vast range of legal services, and part of the commercially integrated Deloitte Legal Group. Deloitte Legal Adriatic has a team of 50 legal professionals, qualified in their jurisdictions, at offices across 8 countries: Albania, Bosnia, Croatia, Kosovo, Montenegro, North Macedonia, Serbia and Slovenia. Across the Adriatic region, our offices assist clients in this interlinked, highly complex, and dynamically developing region. We are among the largest law firms in our jurisdictions and have offices in each of the most important business centers. With a multi-lingual international team, all of whom are fluent in English, we can assist clients through our dedicated language desks including in Chinese, German, French, Russian, and many other languages, including all the Balkan languages.

Deloitte Legal Adriatic’s bundled, technology-enhanced, cross-border capable service array is a step ahead in providing clients with effective business solutions, and in these challenging times is even more important than ever before in our Adriatic Region. Our team has a collaborative orientation as well as the country specific and international legal and business savvy your business needs. Like our clients, we also know that sure success, in addition to everything else, usually requires winners to simply work both harder and smarter. We are here for our clients to do just that.

Across the Adriatic, we offer a full scope of legal services in the main commercial practice areas, including: 

  1. Banking & Finance – regulatory, real estate, syndicated projects, securitization, NPLs, restructuring, and insolvencies
  2. Business Integrity – investigations, compliance, privacy, GDPR, anti-trust, and competition
  3. Corporate – day-to-day operational, governance, and family protocols
  4. Digital – technology, media, and communications
  5. Employment – full spectrum services including mobility services
  6. Environmental – internal/external due diligence, and compliance advice
  7. GDPR – privacy issues, cyber-attacks, AI, legal, technical and organizational aspect of GDPR compliance
  8. Litigation – including tax, white collar, and discovery support services
  9. M&A – including due diligence, JVs/alliances, and post-transaction restructuring
  10. Real Estate & Construction – transactions of all types as well as development & planning
  11. Commercial – including full coverage supply-chain and distribution contractual coverage

Besides traditional legal fields, we are building prominence in growing fields such as Business Integrity, Legal Management Services, Tax Litigation & Controversy, E-commerce, and Fintech. We take pride in being able to pioneer in industries and practices ahead of many other law firms. We have the benefit of accessing cutting-edge data, technical aspects, and operational realities of various industries through our internal Deloitte collaboration with various service lines (Consulting, Financial Advisory, Tax, and others). This market intelligence is again unparalleled among  our competition and presents a wealth of opportunities for genuine insights to evolving trends.

Our client service resonates with an individual approach, genuine relationship building, dedication, availability, efficiency, and high-quality communication, on top of understanding our clients’ commercial, financial and tax needs and the requirements of the market.

Authentic synergies with our financial and tax teams, as well as our colleagues’ professional experience and education, make our firm one of the most experienced, effective and efficient firms in the Adriatic region, with expertise in a wide variety of legal fields. Our positioning on the legal markets has been noticed and recognized by both mainstream international attorneys-ranking agencies – Chambers & Partners, IFLR and the Legal 500, which distinguishes us across all significant legal areas and functions.

Local contacts:

1. Albania and Kosovo

Deloitte Legal Sh.p.k

Sabina Lalaj, Attorney-at-Law, Managing Partner

slalaj@deloitteCE.com

2. Bosnia and Herzegovina

Advokatsko društvo “Legal Partners” d.o.o.

Aida Hamur, Attorney-at-Law 

ahamur@deloittece.com

3. Croatia

Krehić & Partners in cooperation with Deloitte Legal

Tarja Krehić, LL.M. (DUKE)

Attorney-at-Law, Managing Partner

tkrehic@kip-legal.hr

4. Serbia, Montenegro and North Macedonia

Law Office Antonić

Stefan Antonić, independent attorney at law in cooperation with Deloitte Legal

santonic@deloittece.com