INVESTMENT INCENTIVES ACT

(Narodne novine Republike Hrvatske /Official Gazette of the Republic of Croatia/, no. 73/00)

This Act regulates incentives for the investments of domestic and foreign legal or natural persons with the objective of stimulating economic growth, development and the achievement of the economic policies of the Republic of Croatia, its involvement in international trade flows by increasing exports and the strengthening of the Croatian economy's competitiveness. Investment incentives in the sense of this Act is a system of incentive measures and tax and tariff concessions.

The incentive measures and tax and tariff concessions regulated by this Act apply to investment in economic activities if this secures environmentally-friendly operations and achieves one or more of the following objectives:
- the introduction of new equipment and cutting-edge technology, - the introduction of new production procedures and new products, - greater employment and employee training, - the modernization and advancement of business operations, - the development of production with a higher degree of finishing works, - export growth, - expansion of economic activity in areas of the Republic of Croatia where economic growth and employment lag behind the national average, - development of new lines of services, - conservation of energy, - enhancement of IT activities, - cooperation with foreign financial institutions, - adaptation of the Croatian economy to European standards.

During investment in Croatia, foreign persons are:
- assured of the same rights and obligations as domestic investors,
- guaranteed the possibility of assuming profits and investments after the completion of the investment,
- granted concessions for the use of natural and other resources which allow for the application of special rates and tax exemptions,
- permitted to establish any type of company or representative office with minimum capital,
- permitted to acquire title to and freely dispose of property in Croatia, including the purchase and sale of real estate. These rights are guaranteed by the Constitution of the Republic of Croatia,
- exempted from double taxation pursuant to ratified international agreements,
- exempt from taxes for five or more years, depending on the rate of investment, the foreign persons using free trade zones who invest in the infrastructure within the free trade zone, which besides the necessity of extensive and numerous activities to revitalize and modernize the economy also represents a very favorable climate for investors.

The Investment Incentives Act marks a step forward in the improvement of this climate.



BROKER, real estate agency team.