Zagreb for business travellers

The Croatian economy has seen a marked upswing in the last few years, driven by the service sector. The most prosperous regions of the country are the capital Zagreb and the surrounding area and the tourist areas of Istria, Dalmatia and Dubrovnik.

 Many foreign companies have already set up branches there, including Abbott, AT & T, Apple Computer, BP Gas, British Airways, HVB, Deutsche Bank, Euronet, Ford Motor, IBM, Lufthansa, Mobilcom Austria, Raiffeisen, Shell, Siemens, Velux, Volksbank, Hypo Alpe Adria Bank and Erste Bank. Since 2000 Croatia can be said finally to have overcome the aftermath of the war (1991-95) and is now on a growth path. In 2006 its GDP was 4.8 per cent and in the first half of 2007 GDP growth was 6.6 per cent up on the previous year. Industrial production during the same period was also 7.4 per cent higher.

The budget deficit has decreased since 2001 by 0.2 per cent to 6.3 of the 2002 GDP. The anticipated budget deficit for 2007 is put at 4.3 per cent of the GDP. The number of tourists in the first half of 2007 rose by 12.4 per cent over the previous year and the number of overnight stays by 6.9 per cent. Of the 3,542,443 overnight stays 16 per cent were Croatian and 84 per cent foreign tourists. The economic situation continues to be hampered by unemployment (approx. 14 per cent), the extensive liquidity problems experienced by companies, lack of legal
security, deficient social security, productivity backlog and a relatively high proportion of state-owned businesses.



A transparent and comprehensive system of subsidy measures together with various tax and customs benefits to assist production, processing, research and development and the use of new technologies and to help create employment are offered by the new Investment Promotion Act, which entered into force at the end of 2006.

The capital Zagreb has around 1 million inhabitants (including the Zagreb ring) and is the most important economic region in the country. It has the highest buying power and the lowest unemployment. The main business sectors are pharmaceuticals, electrical engineering, commerce and tourism. Many companies, such as the oil and gas group INA, have their headquarters there. The pharmaceutical company Pliva and the electrical engineering firms Koncar and Ericsson-Tesla have their head offices in the west of the city.

Visitors from neighbouring EU countries are increasingly discovering the advantages of shopping in Zagreb: apart from large shopping centres on the eastern and western outskirts of the city, the city centre and in particular the main shopping street Ilica with its numerous traditional handicrafts shops is also attractive to shoppers. The most modern shopping centres are King Cross, City Center One and Avenue Mall, which opened at the end of August; various food supermarkets and retail chains such as Billa, Mercator, Spar- und Kaufland, Coop, Mercatone, Konzum, Bauhaus, Baumax, Gramat and Metro have also opened.

The Zagreb fair (Zagrebacki Velesajam) is the country's most important venue for national and international fairs. Through the development of the motorway network Zagreb is becoming an important transport link between Central Europe and the Adriatic. The Croatian capital can also be reached by rail, and air traffic is served by the international airport at Pleso, around 20 km south-east of the city.

More and more foreign investors are discovering Zagreb

Zagreb has opened up increasingly during the last few years to foreign investors. Croatian law provides for the following types of company: public limited company (Croatian: d.d., minimum capital 27,000 euros); private limited company (Croatian: d.o.o., minimum capital 2,700 euros), partnership (Croatian: j.t.d.), limited partnership (Croatian: k.d.), economic interest grouping (Croatian: g.u.i.) and branch (Croatian: podruznica). Foreign investors can also establish subsidiaries or agencies with up to 100 per cent participation, with only a few restrictions for certain strategically important sectors. They can acquire shares in privatised companies via the Croatian Privatisation Fund in the form of vouchers, auctions, tenders or direct purchase. The approval and start-up procedure calls for entry in the register of companies for all individuals, partnerships and subsidiaries.

Foreign agencies must register with the Ministry for Economic Affairs. Foreign investors can contribute cash in Croatian or foreign currency or material assets (machines, raw materials, patents, licences). Foreign legal and natural entities can acquire land and real estate and dispose of them freely subject to authorisation from the Ministry for Foreign Affairs. The ownership situation in Zagreb is unclear at present as the land registry system has not been fully updated.

The Croatian government also approves free zones on the basis of public tenders and auctions. Such zones exist in Zagreb, Buje, Krapina, Kukuljanovo, Obrovac, Osijek, Ploce, Pula (port), Ribnik, Rijeka (port), Šibenik, Slavonski Brod, Split (port), Varaždin and Vukovar (http://zone.mingorp.hr/slobodne/index.htm) and offer tax benefits for foreign investors, e.g. 50 per cent reduction in profit tax and complete exemption for five years for infrastructure projects worth 1 million kunas or more. State subsidies and tax benefits for manpower investments (creation of new jobs, training) are granted for amounts of 10 million kunas and upwards.

Zagreb offers numerous opportunities for leisure

Business travellers to the Croatian capital can stay at the three five-star hotels, the „Sheraton Zagreb“, „The Regent Esplanade“ and „The Westin“, „ARCOTEL Allegra“, „Dubrovnik“  or „Sheraton Panorama Hotel“. The city itself has animation 24 hours a day: theatre and concerts, discos, night clubs and casinos guarantee an interesting and entertaining stay. Information about the variety of restaurants, pubs, discos, night clubs and jazz clubs can be found on the Zagreb Tourist Board website.

Shopping bargains are to be found in Ilica, the main shopping street, and in the shopping centres, Importanne centres and Kaptol centre that have opened in the last few years. Authentic souvenirs can be found at the Tourist Information Centre on the main square (Ban-Jelacic-Platz). They are usually to be purchased in the national currency (1 euro = approx. 7.3 HRK) but euros are also increasingly accepted for payment.

Gourmets have a wide variety of restaurants in the Zagreb area serving national specialities. The city's openness means that there are no unique Zagreb dishes but Croatian favourites include "strukli", a type of cheese puff pastry, chicken with "plinsen" (pancakes), "kotlovina" (boiled meat), home-made sausages and Mediterranean cuisine. Thanks to the proximity of the sea, the morning catch can be served for lunch in Zagreb's fish restaurants.

Zagreb also offers plenty of facilities for sport and recreation. The well tended parks are ideal for joggers and walkers; hunting is possible in the surrounding area; and there are plenty of rivers, lakes and ponds close to the city for angling enthusiasts. Swimmers can take advantage of the swimming pools in Mladost sports park on a barrage on the river Save. There are also 11 thermal and medicinal spas close to the capital.

More city portraits can be found under "My City". City portraits for business travellers published so far: Prague, Belgrade, Ljubljana, Bucharest, Krakow, Budapest, Sarajevo, Sofia, Moscow and Bratislava.