INVESTMENTPOTENTIAL

GUIDE“Benefit from the Mediterranean Lifestyle”

DUBROVNIKNERETVACOUNTY

www.investindubrovnik.com

invest in

DUBROVNIK NERETVA REGION

W E L C O M E T OTHE DUBROVNIKNERETVA REGION

Dear investor,

Our region has always been one of the most visited parts of the Republic of Croatia. We are proud that the international community recognizes the undisputed natural beauties on and off shore, an amazing history full of worldfamous individuals like Marco Polo and Ivan Gundulic, fantastic food and wines…

However, the purpose of this guide is to illustrate in a brief and succinct way what our business and investment potential looks like today! We have tried to bring you closer to specific investment projects that could interest any foreign investor looking to invest in the most southern part of Croatia.

Our region is located at the crossroads of traditional trade routes in the Mediterranean and we have always benefited from this geographical position. Our goal is to continue to improve tourism and start operating at a fullcycle season, meaning our hotels, restaurants and coffeeshops should stay open for the whole year. The region has put forward a number of strategic documents for the tourism, wine business, ICT, energy and transportation sectors in order to attract strategic investors who want tobenefit from a unique lifestyle and a historic surrounding. Projects like the Pelješac Bridge or development of the Dubrovnik Airport are just a few of those that have multiple positive implications on our economic future.

This guide serves to bring you closer to our people, customs and culture so you can better understand what might potentially be of interest to your organization or company.Investments today come in different shapes and forms. Bringing fresh international capital requires new ideas and working hand in hand with each interested individual. Therefore, my office and our Development Agency DUNEA are constantly at your service to assist you.I look forward to hearing from you and hope thattogether we can find adequate solutions to your investment plan in the Dubrovnik Neretva Region.

Feel free to write me an email atzupan@dubrovnik-neretva.hr or call at+385 20 351 402.

Sincerely yours,

Dubrovnik NeretvaCounty Prefect

Nikola Dobroslavić

CONTENTS

Welcome to the DubrovnikNeretva region 3

Dubrovnik Neretva region:Where we are 4

Dubrovnik neretva regionIn figures 6

Regional advantages andCompetitiveness 8

Investment opportunities& business zones 10-17

Tourism & leisure 10-12

Transportation & infrastructure 13

Agriculture & mariculture 14-15

Research & development 16

High-end entertainment 17

Luxury real estate development 17

Doing businessConsiderations 18-19

Dubrovnik Neretva region is 20

Key investment contacts 21

Annual internationalInvestment forum Dubrovnik 22

DUBROVNIK NERETVAREGION: WHERE WE ARE

OVERVIEW:The Dubrovnik Neretva Region is the most southern part of the Republic of Croatia, located on a very important geostrategic position in southeast Europe and the Mediterranean basin. Its territory consists of 80% of sea and 20% of land (making up only 3.1% of the country’s land territory). Exceptionally rich with natural resources such as sun, wind, fertile land, water, national parks and islands, it is traditionally a hospitality and tourism oriented region.

The region has significant agricultural potential in the area of the Neretva River valley, the strategic deep sea cargo Port of Ploče (gateway of the future Pan-European corridor Vc), the Dubrovnik International Airport (over 62% of tourists arrive by air), the leading Mediterranean port for cruise ships in the city of Dubrovnik, developing mariculture sector in the prestine Mali Ston Bay and active production of high quality wines and shellfish on the Pelješac peninsula and Konavle.

Dubrovnik’s breathtaking medieval Old Town and spectacular southern Adriatic coastline has developed the city of Dubrovnik and the whole region into an elite European and world tourism destination. While preserving the beautiful coastline and nature, the tourism sector is definitely a strategic industry for the region and is continually developing, including the upgrading of resorts & hotel capacities, promoting health andrecreational tourism, and increasing synergy between agricultural and tourism development.

Elite tourism is in the process of developing potential for more nautical marinas and new golf projects throughout the region.The Dubrovnik Neretva Region is a relatively small county with a population of 122,870 inhabitants; hence, administrative resources are limited. However, the highly educated populace and experience with international clients adds tothe region’s attractiveness.

Dubrovnik has many friends around the world who are able to supplement the region’s limitations and provide potential investors with the required expertise to realize anymutually beneficial investment project. The prestigious Rochester Institute of Technology, one of the largest private universities in the U.S., opened a branch campus in Dubrovnik in 1997.

As a truly multicultural and multinational destination, the Dubrovnik Neretva Region offers a remarkable opportunity to experience and benefit from the Mediterraneanlifestyle and cultural traditions that can be turned intoprofitable business projects in today’s globalized world.

SIZE & CLIMATE

- Area: 9,272 km2- 223 islands and reefs- Average temperature: 16,5 C- Climate: Mediterranean- Bordering: Bosnia-Herzegovina, Montenegro, Italy (Sea border)

100%

0%

GDP per capita: €10.160 Unemployment: 16% Net Salary (average): €752 Gross Salary (average): €1.062

GDP & EMPLOYMENT

POPULATION

No. 122,870Av. age: 39

COUNTY GOVERNMENT

Prefect and CountyAssembly

ADMINISTRATION

5 Cities17 Municipalities

ADMINISTRATIVE CENTER

DubrovnikPopulation 43,770

Dubrovnik Neretva region in figures

PERSONS IN EMPLOYMENT BY COUNTY(2013) - TOTAL: 45.612

In legal entitiesCrafts, trade, free lancePrivately insured farmers

36.293

8.896

423

GROSS INVESTMENT BY COUNTY (2011)(BY THOUSAND EUR) - TOTAL: 160,878

3,0921,533

13,8678,936

51,4468,644

21,80211,0224,4281,5296,1539,765

Agriculture and forestryManufacturingElectricity, gas, etc.Water, sewage, wasteConstructionWholesale and retail trade/servicesTransportationAccommodation, food servicesInformation/CommunicationFinance and insuranceReal estateArts and entertainment

GENERAL INFORMATION

4,284,889POPULATION

56,594 km2SIZE

Population: 4.4 Million

GDP (PPP): 58 USD Billion

GDP growth rate 0.5%

GDP Annual growth rate -0.4%

GDP per capita €10,160

Unemployment: 18.8%

Inflation (CPI): -0.2%

FDI inflow 2014: €2,876 Million

Public debt: 85 % OF GDP

100%

0%

GDP & EMPLOYMENT

Croatian KunaCURRENCY

REGIONAL ADVANTAGESAND COMPETITIVENESS

Key Competitive AdvantagesHigh-end European and global tourist destination

Well connected by the Dubrovnik International Airport

Quality educational infrastructure

Cargo port of Ploče important for trade routes with Eurasia and rest of the world

Close proximity to the modern A1 Zagreb-SplitDubrovnik motorway

Deep sea port of Dubrovnik suitable for home port for cruisers

Fertile land for agricultural/food production in Neretva River valley

The region continually supports all state infrastructure projects (e.g. transportation, utilities) with the intention of significantly increasing the quality of life of its citizens and to integrate Croatia’s dislocated southern region, but also to increase the business opportunities for potential investors, domestic and international.

Improving business environmentIn November 2013, the Dubrovnik Neretva County approved its future strategic objectives and all investors are welcome to contribute to these strategic development goals:

Ensure the cultural/economic sustainabilty of Croatia’s southern-most region

Connect the region with the remainder of Croatia’s territory with the Pelješac Bridge ensuring the fullintegration of Croatia’s territories

Finalize the just border with BosniaHerzegovina at the Neum region and with Montenegro at Prevlaka

Ensure a high-level of quality of life, and jobs for our citizens, including a bright future for our youth

Ensure the sustainable developmentand equally dispersed development throughout the region, retaining local administration autonomy wherefeasible

Protect the rich cultural treasures of the city of Dubrovnik and the region

Protect the environment and natural beauty of theregion, which is a fundamental prerequisite for thedevelopment of the tourism sector, the economyin general, and the quality of life of our citizens andvisitors

OVERVIEW:The Dubrovnik Neretva Region has experienced solid growth rates in tourism over the last decade despite the global economic crisis. However, the region is facing competitive challenges as any other destination looking to attract investment and capital. Through effective use of public –private organizational structures, the region aims to improve competitiveness, especially through EU funding schemes available during the 2014-2020 period.Croatia’s GDP per capita in 2012 was 13,878.58 USD; compared to Greece at 22,455.95 USD, the Croatian economy has many avenues to grow its productivity (World Bank, 2012). The slow pace of privatization of state-ownedbusinesses has traditionally hindered growth.

Many things matter for competitivnessinfrastructure is the backboneThe cost of the realization of badly needed infrastructure projects has always been an expensive venture and, hence, a slowly developing process. This has also hindered the potential of economic development. However, Croatia, as an EU member state since 1 July 2013, qualifies for European Structural and Investment Funds, which will support the development of numerous infrastructure projects.

New roads, bridges, power plants,wind parks…Such infrastructure projects include the hydro-electric power plant Dubrovnik II, which will increase the electrical capacity in the region, the Pelješac bridge, which will connect southern and northern Croatia and also improve the transportation connectivity of the peninsula ofPelješac and the island of Korčula, wind power parks on Pelješac (Orebić and Ponikve) and agricultural projects that will increase the productivity of the rich Neretva River valley delta.

Access to Southeast EuropeAlong with the attractiveness of investing in Dubrovnik and the Dubrovnik Neretva region, the county is a “gateway” to the Southeast Europe markets of Montenegro, Serbia, Bosnia-Herzegovina, Macedonia, Albania and the wider EuroAsia countries of Greece and Turkey.

EU FundingEU funding in the coming years will definitely and significantly improve the infrastructure development of the region, in turn, this will significantly increase the competitiveness and potential for supporting investments in other business sectors. A total of €11 billion of structural and cohesion funding from the 2014-2020 EU budget is allocated for Croatia.

EU SecurityThe EU’s support of Dubrovnik is not only supporting Croatia, as a small EU member.

The EU is also specifically interested in Dubrovnik, because of the fact that numerous tourists from EU members (e.g. UK, France, Germany, Italy, Austria, etc.) visit year around and the region will become the southern-most border between the EU and non-EU states, which requires additional EU diplomatic and security initiatives and infrastructure in the region (Schengen regime rules proposed for adoption in 2016).

REGIONAL INFRASTRUCTUREFOR GROWTH EUROPEANTRANSPORT CORRIDORS

Investments in infrastructure projects are crucial for the further development the Region, the investments should provide the direct road link between the Region and other European countries, reduce congestion and travelling time, increase traveling comfort and safety, and increase attractiveness of the Adriatic – Ionian direction for both goods and passenger transport.

The development plans od DNR are harmonized with the international documents which define the development of the European road network. The European corridors are in line with the Croatian longitudinal and transverse transport routes, and by adding the Adriatic – Ionian corridor, the backbone of the entire traffic network.

The Adriatic�Ionian Pan�European transport corridor is a stabilizing and development factor, connecting seven countries of the Adriatic�Ionian initiative, from Trieste in Italy to Kalamata in Greece. The corridor directs potential development forces to the west and southeast of Europe, which will form new values not threatening the existing ones on the parallel corridors. Approximately 70% of the Croatian part of the Adriatic� Ionian motorway is constructed in Croatia until now.

The transport corridor Vc (road, railway, river and air traffic) is a complex link between the North – Central and South Europe and is exceptionally valuable in the context of economic and transport integration processes of this Central European area. Construction of the Corridor Vc, the connection between road, railway, river and air traffic, will have a direct influence on the development of a wider and significant transport junction for the whole Europe.

Transportation & Infrastructure

Upgrading infrastructure andremoving existing bottlenecks Interventions plannedby the DNR government ź Continue developing the motorway to Dubrovnik and

Regional fast roads, and reconstruct and modernize local and Regional roads.

ź Secure further development of coastal transport of passengers, and significantly enhance the links between islands and the Regional centre, as well as the links between the islands.

ź Carry out investments in the sea infrastructure so as to enhance its condition and to increase the quality of sea transport network.

ź Initiate activities relevant to developing planned airports, and developing emergency heliodrome foreseen by the Region space planning.

ź Continue to introduce the Schengen regime at the B&H border.

ź Enhance the railway transport from Ploče to the state border.

ź Establish the system of intermodal transport.

LARGE SCALEINFRASTRUCTURE PROJECTS

KEY TO DEVELOPMENT

OPUZEN

METKOVIĆ

OREBIĆKORČULAVELA LUKA

LASTOVO

PLOČE

2.

3.

4.

5.

6.

Business zones

DUBROVNIK

SLANO

STON

CAVTAT

1.

1.

2.

3.

4.

5.

7.

1. Municipality of Konavle, Gruda 2. City of Ploče, Vranjak3. Municipality of Lumbarda, Humac-Pudarica4. Municipality of Vela Luka, Vela Luka5. Municipality of Blato, Krtinja

Industrial business zones

1. Municipality of Čibača2. Municipality of Dubrovačko primorje, Banići3. City of Opuzen, Veletržnica4. City of Opuzen, Business zone II5. City of Metković, Dubravica6. Municipality of Kula Norinska, Pozla gora7. Municipality of Pojezerje, Nova sela8. Municipality of Ston, Zabrđe

Business zones

The cargo Port of Ploče, gateway of the transport corridor Vc, and new entry port in a EU market is rapidly developing, in a past 10 years the investments in port infrastructure (project „Integration of Trade and Transport (ITT)“) reached up to 129 million euros. Upon completion of ITT

project, the port will become one of the most competitive cargo port in the Adriatic.

The passenger sea-port of Gruž, Dubrovnik - attractive Mediterranean Cruise Ship destination with widely developed port infrastructure is prime location to develop into a significant European cruise ship home port location. Port authorities are currently implementing the second phase of the

infrastructure project (development of operative quay), also working on a concessioning process of for the construction of the port superstructure.

International Airport of Dubrovnik - aim is to become the leading airport in the Region, and to increase the annual handing capacity to 2 + million passengers is currently implementing a infrastructure project that will improve air connectivity of the Region (construction of a new terminal

building, and other large-scale intervention). Total value of the project, co-financed by the European Union, is 220 million euros.

The Pelješac Bridge - the most significant Regional development project will ensure the full integration of Croatia's territories, will upgrade the economic development, and increase traffic safety. The estimated cost of the investment is 220 million euros, also to be co-financed by the European Union.

National gas pipeline – government continue to develop the project of the natural gas pipeline, which will ensure the stable and efficient supply of natural gas to households and business ventures, as an important pre-condition for business and industrial development in the Region.

INVESTMENTOPPORTUNITIES

& BUSINESS ZONES

Dubrovnik and the Dubrovnik Neretva Region is not only a leading regional destination, but also a global destination. Development of elite tourism is continually on the rise and a strategic objective for the Dubrovnik Neretva Region.

The Old Town of Dubrovnik is a UNESCO world heritage site and is a must see world destination. It’s amazingly preserved medieval Old Town with its awe inspiring stone fortress is an inspiration to world renowned visitors throughout its history from King Richard the Lion Heart to pop singer Beyonce. After visiting Dubrovnik, Ernest Hemingway called the city the “Pearl of the Adriatic”.

However, what makes Dubrovnik special and unique is that it is not a museum; rather its historical Old Town is a living breathing small town with local residents enjoying life within its medieval walls on a daily basis. With a mix of new international inhabitants of the city, residentsenjoy their morning grocery shopping at the open air market at Gundulić square, morning coffee at the City Coffee House (Gradska kavana), evening promenades on the Stradun main street, open air concerts on the medieval walls, etc.

The Dubrovnik Neretva Region includes other historical and tourism beauties including: Mali Ston, the Pelješac peninsula, Korčula and other islands, the Mljet national park, etc. Tourism development is focused towards providing opportunities for the development of elite tourism projectsand extending the tourism season year wide to allow every average citizens toexperience and enjoy the Dubrovnik experience.

The filming of the globally popular “Game of Thrones” in the Dubrovnik Neretva Region is but one well-known project aimed at promoting such a Dubrovnik experience.

Hotels, Nautical tourism,Cruising, Golf, Conventions

TABLE: Marina Berth Capacity per County Urban Plans /Nation Strategy for Nautical Tourism

Istria

Primorje-Gorski Kotar

Lika-Senj

Zadar

Šibenik - Knin

Split - Dalmatia

Dubrovnik

Subtotal

3,89

3,228

0

3,676

2,795

1,581

664

15,834

Sea Berths Land Berths Total

77

1,938

0

1,030

900

390

156

5,186

4,662

5,166

0

4,706

3,695

1,971

820

21,02

Sea Berths Land Berths Total

7,330

3,100

850

1,800

2,140

3,185

7,350

25,755

7,100

0

800

0

0

0

0

7,900

14,430

3,100

1,650

1,800

2,140

3,185

7,350

33,655

Total

19,092

8,266

1,650

6,506

5,835

5,156

8,170

54,675

County

Existing (2007) Planned (2020)

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Statistics of cruise ships arrivals and the number of passengers

Arrivals

Passengers

As Dubrovnik is a widely attractive location for Mediterranean Cruise Ship lines and given that the infrastructure is widely developed, Dubrovnik is also a prime location to develop into a cruise ship home port location.

Cruising

2 1

34

56

78

91011

12

13

14

15

17

16

18192021

2223

Nautical zones

Municipality of Konavle - PREVLAKAMunicipality of Konavle - Gornji MolunatMunicipality of Dubrovnik - ZatonMunicipality of Dubrovnik - Donje ČeloMunicipality of Dubrovnik - LopudMunicipality of Dubrovnik - SuđurađMunicipality of Dubrovnik - Šipanska lukaMunicipality of Dubrovnik - JakljanMunicipality of Dubrovačko primorje - SestriceMunicipality of Dubrovačko primorje - KručicaMunicipality of Dubrovačko primorje - Kručica

1.2.3.4.5.6.7.8.9.

10.11..

Municipality of Ston - KobašMunicipality of Mljet - Prožurska lukaMunicipality of Mljet - PolačeMunicipality of Ston - ŽuljanaMunicipality of Orebić - TrstenikMunicipality of Ploče - Pod cestomMunicipality of Orebić - OrebićMunicipality of Korčula - DominčeMunicipality of Orebić - Kučište Hotel "Komodor"Municipality of Korčula - RačišćeMunicipality of Balto - OtočacMunicipality of Lastovo - Pasadur - Jurjeva Luka

12.13.14.15.16.17.18.19.20.21.22.23.

Tourist zones

DUBROVNIK

SLANO

STON

OPUZEN

METKOVIĆ

OREBIĆKORČULAVELA LUKA

LASTOVO

CAVTAT

PLOČE

19. 18. 17. 14. 13. 12. 11.

20.

16. 15.

10. 9. 8. 7. 6.

5. 4. 3. 2. 1.

Municipality of Konavle - PREVLAKAMunicipality of Konavle - MEĆAJACMunicipality of Župa dubrovačka - GAJ BETERINAMunicipality of Župa dubrovačka - KUPARI 1*Municipality of Župa dubrovačka - KUPARI 4City of Dubrovnik - LOPUD SKALINIMunicipality of Dubrovačko primorje - RATMunicipality of Dubrovačko primorje - BUDIMAMunicipality of Dubrovačko primorje - SESTRICEMunicipality of Ston - PRAPRATNO

1.2.3.4.5.6.7.8.9.

10.

City of Ploče - DOBROGOŠĆEMunicipality of Janjina - PALATAMunicipality of Trpanj - JAVIĆ ZAGLAVMunicipality of Orebić - DUBRAVICAMunicipality of Lumbarda - BERKOVICACity of Korčula - DOMINČEMunicipality of Blato - PRIŽBA RAVNOMunicipality of Vela luka - GABRICAMunicipality of Vela luka - PLITVINEMunicipality of Lastovo - UBLI

11.12.13.14.15.16.17.18.19.20.

Accommodation capacity in DNRTotal: 65.980

PrivateCamping sitesHotelOther

36.003

8.302

18.8422.833

2000.

2001.

2002.

2003.

2004.

2005.

2006.

2007.

2008.

2009.

2010.

2011.

2012.

2013.

2014.

507,7

563,6

597,2

697,0

796,8

909,4

928,6

978,4

986,8

957,2

982,6

1.046,8

1.122,4

1.241,3

1.346,3

Year TOTAL (in 000)

Tourists arrivals in dnr

2000.

2001.

2002.

2003.

2004.

2005.

2006.

2007.

2008.

2009.

2010.

2011.

2012.

2013.

2014.

2.844,4

3.128,8

3.260,1

3.657,0

3.944,6

4.478,5

4.385,3

4.414,0

4.452,6

4.324,5

4.538,0

4.775,2

5.188,1

5.618,3

5.883,8

Year TOTAL (in 000)

Overnight stays inDubrovnik-Neretva County

LUXURY REAL ESTATEDEVELOPMENT

With the objective of further developing elite tourism, one of the areas that is lacking in the City of Dubrovnik and the Dubrovnik Neretva Regionare locations for high-end luxury real estate development.

Various present projects, suchas the golf resort development on Mount Srđ overlooking the Old Town will have such property available for elite tourists and CEOs looking to have their summer homes in Dubrovnik.

However, such individual projects are not adequate in advancing the region’s goal of increasing elite tourism and making the region a year-long destination and home for our welcome guests, entrepreneurs, and corporate CEOs. Therefore, such real estate development projects are welcome investments in the Dubrovnik Neretva Region. For example, “the Croatian Dream Project” is in the early stages of development.

OVERVIEWThe Dubrovnik Neretva Region is continuously workingtowards making the region a year-long tourism destination, continuously incorporating systematic efforts to provide its guests a variety of activities to enhance the present attractiveness of cultural sites and pleasant weather.

Along those lines, the entertainment industry is very welcome to invest and do business in the region with such projects as the “Game of Thrones” and other international filming opportnities. Along with the strategy of supporting elite tourism, the Dubrovnik Neretva Region also cautiously supports the development of high-end and general populace entertainmentand gaming projects, which will significantly increase the entertainment offer to our international and local guests, thereby considerably extending the tourism season in the region.

Interested investors are kindly asked to contact the Regional Development Agency (DUNEA) to begin to support these ideas, in order to cautiously develop the sector without overdeveloping the Dubrovnik Neretva Region and the City of Dubrovnik in ways that would be detrimental to Dubrovnik’s sensitive environment.

High-end Entertainment

AGRICULTURE& MARICULTURE

OVERVIEWThe Dubrovnik Neretva Region is the location of high quality agricultural and maricultural products, such as the wine production on th Pelješacpeninsula, the island of Korčula and the Konavle region, citrus production in the rich NeretvaRiver Valley, shellfish production at the Mali Stone Bay, etc. These high quality products provide investment opportunities for high-end “niche” markets throughout Europe, North America, and other highly developed markets worldwide. Business zones are locations especially designed to attract investment in production and the services sectors. Developing Agro-tourismprojects, including developing and increasing the capacity of the local agriculture sector (e.g. Neretva River Delta citrus production, shellfish at Mali Ston Bay, wine production on Pelješac, etc.) is an integral part of the strategy to support tourism in the Dubrovnik Neretva Region by providing high quality and indigenous agricultural and maricultural products to local citizens and the millions of visiting guests. The development of this sector is an important integrator and provides opportunities for investment.

MARIBIC – Mariculture Business InnovationCenter, University Of DubrovnikMARIBIC was established in June 2008, as part of the Program for the Technological Development of Croatia – TEHCRO, which is partly financed by the World Bank.Its main purpose is to provide technological and educational support for the Unversity and the aquaculture industry towards the development of new technologies andthe activation of entrepreneurship. MARIBIC presently has demonstration/production facilities for fish and shellfish production. Vertically integrated fish productionsystem includes: broodstock conditioning facility, finfish hatchery, recirculating aquaculture production systems and floating cages.

The shellfish hatchery consists of brood stock conditioning systems, facilities for larval and pat production and MARIBIC – Mariculture Business Innovation Center, University Of Dubrovnik laboratory for phytoplankton production. Within the scope of its technology-innovation activities, MARIBIC works towards the development of new technologies, the evaluation and transfer of existing technologies, development and evaluation of new equipment, and on the introduction of new species and new products in aquaculture.

1.

2.3.

4.5.

5.

7.8.

9.10.

11.

1.

2.3.

4. 5. 6.

1. Sreser, Drače2. Stupa3. Mali Ston channel4. Blace5. Blace6. Komarna

Shellfish farming areas

1. Osobjava2. Sobra, Babino polje/valley, Kozarica3. Prožura4. Blace5. Vela Luka6. Prevlaka7. Oskorušno, Kuna pelješka8. Nakovana, Lovište9. Duba Stonska10. Brijesta- Drače11. Trpanj, Duba pelješka, Donja Vručica

Fish farming areas

Maricultural zones

MEDITERRANEANINNOVATIVER & D CENTERSOF EXCELLENCE

Due to Dubrovnik’s extreme attractiveness and high quality of lifestyle, there is also high potential for the development of a “Silicon Valley”- type center that would gather the world’s greatest scientific minds, institutions and corporations.

The goal is to strengthen the Region's competitiveness and economic growth through increased collaboration and knowledge transfer between the public and the business sector, encourage business investment in R & D, and the development of economy based on the high added value products and services.

A priority area of the Region are sustainable environment & energy, health, engineering, bio economy and biotechnology, while the horizontal overlapping sectors are: KET's & ICT, tourism, creative and cultural industries, green growth and social themes/challenges.

By partnering with international and regional corporations, the Region is interested in becoming a scientific center of excellence in Southeast Europe, the Mediterranean, and even globally by attracting world-renowned scientists in their respective fields to come to Dubrovnik and work on their scientific research that will make important breakthroughs in their fields.

The Dubrovnik Neretva Region is an ideal choice for such a center and has numerous synergies, especially since the advancements in the field that are geared towards the diversification of energy sources in Europe are also in the strategic interest of Southeast Europe and the Dubrovnik Neretva Region. The region already has various development locations prepared for such R&D centers.

DOING BUSINESSCONSIDERATIONS

As in all countries in the world, Croatia has its specific regulations that international investors need to consider while doing business in the country. These issues include the regulation of work permits, taxation, building permits, and various investment incentives.

Possible considerations and steps

Foreign investors have the same rights, obligations and legal status as domestic investors. However, Croatian law distinguishes between the rights of residents and non-residents. Foreign investments are regulated by the Companies Act, Foreign Exchange Act, Investment Promotion Act and other laws. For detailed information please visit the Croatian Chamber of Economy (www.hgk.hr).

Regulations for new foreign investors

EU nationals do not need a visa or a work permit to stay and work in Croatia, with the exceptions of the citizens of Austria, Belgium, Cyprus, France, Greece, Germany, Italy, Luxembourg, Malta, the Netherlands, Slovenia, Spain and the UK; these countries have chosen to limit Croatian citizens’ employment in their countries for the next couple of years and through the principle of reciprocity the same limitations exist for their citizens in Croatia. If you are from one of these countries you will need a work registration certificate to work for up to 90 days a year. If you want to work more you will have to obtain a work permit. Non-EU nationals need a work and a residence permit. They may be employed in Croatia only if they hold either a business visa or an employment visa, and a work permit. w w w . a i k - i n v e s t . h r /e n / i n v e s t m e n t - g u i d e /stay-and-work-permits-and-visas/

The law on the employment of foreignNationals regulates the employment ofForeigners in croatia

When investing in Croatia, there are two possible levels of investment incentive – National and Local. Incentives provided by the authorities of municipalities or cities where the investment is located include: reduction in communal tax, reduction in utility infrastructure installation costs, etc. National level incentives are defined by the Investment Promotion and Development of Investment Climate Act (www.minpo.hr/UserDocsImages/Investment%20Promotion%20and%20Development%20of%20Investment%20Climate%20 Act.pdf).The incentive measures in the new Act are aimed atstrengthening production activities and the use of new technologies, supporting development research activities and stimulatingemployment.

Investment incentives

ź An application to acquire the status of a recipient of incentive measures must be submitted to the Ministry of Economy for approval before the beginning of the investment. The investmentvalue and employment thresholds to qualify are:

ź € 50,000 and 3 new jobs created for micro enterprisesź € 150,000 and 5 new jobs created for small, medium and

large enterprises

LocationInformation

BPApplication

SCApproval

PPDCompliance

ParcelArrangement

PartiesInsight

BPDecision

Communaland Water

Contribution

UPApplication

UPTechnicalReview

Final Report

Building and usage permitting process

A foreign investor, under the condition of reciprocity which is assumed, establishes or participates in the establishment of companies in the Republic of Croatia, acquires the rights in them and assumes the obligations under the same conditions and has the same position as a national of Croatia.The condition of reciprocity does not apply to foreign investors with headquarters or a permanent residence in the member state of the World Trade Organization, or if he/she is its national. Foreign companies and sole traders, under the conditions prescribed by law, are considered to be domestic legal entities with all rights and obligations as applied to Croatian nationals. However, they cannot permanently perform activities on the Croatian territory until they have established a subsidiary in Croatia.

Tax treatment of residents and non residents is equal. Taxation of non residents is conducted respecting double taxation avoidance agreements which Croatia has signed with 52 countries (the United States is a country of note with whom Croatia does not have a Double Taxation Agreement).

Tax system

By the accession of the Republic of Croatia to the European Union, the area of the Republic of Croatia became a part of a single customs territory of the Union.

The entry into a single customs territory of the EU means that, as of July 1st, 2013, all customs control over entry of goods or trade between Croatia and the other Member States is abolished.Trade between domestic goods between persons in different Member States is not considered as imports and is not a subject to customs procedures and supervision.

Dealing with foreign goods imported from countries outside the EU is regulated by the provisions of the Act on Customs Regulations of the European Union (NN 54/2013). Subject to customs supervision are the goods for which the EU customs regulations prescribe customs supervision.

Goods are subject to customs supervision from the time of their entry, and the same should require a customs-approved treatment or use of goods. Customs-approved treatment or use of goods requires the submission of a customs declaration for the customs procedure or use of goods.

Customs system

Establishing a company

UPDecision

ACRONYMS:SC - Special ConditionsBP - Building PermitPPD - Physical Planning DocumentsUP - Use Permit

KEY INVESTMENT CONTACTS

Ministry of EconomyIvan Vrdoljak, MinisterTel: +385 1 6106 155www.mingo.hr

Agency for Investmentsand Competitiveness (AIK)Damir Novinić, Managing DirectorTel: +385 1 6286 800www.aik-invest.hr/en/

Center for MonitoringBusiness Activities in the EnergySector and Investments (CEI)Josip Borak, CEOTel: +385 1 6430 600www.cei.hr/en/

State PropertyManagement Administration (DUUDI)Mladen Pejnović, Managing DirectorTel: +385 1 6346 401www.duudi.hr

Dubrovnik-Neretva CountyNikola Dobroslavić, County PrefectTel: +385 20 351 473www.edubrovnik.org

Dubrovnik-Neretva CountyDevelopment Agency (DUNEA)Melanija Milić, Managing DirectorTel: +385 20 312 714www.dunea.hr

LOCAL AUTHORITIES

City of DubrovnikAndro Vlahušić, MayorTel: +385 20 321 528www.dubrovnik.hr/index.php

City of KorčulaAndrija FabrisTel: +385 20 711 143; +385 20 711 184www.korcula.hr

City of MetkovićBožo Petrov, MayorTel: +385 20 681 395www.metkovic.hr

City of OpuzenIvo Mihaljević, MayorTel: +385 20 671 139www.opuzen.hr

City of PločeKrešimir Vejić, MayorTel: +385 20 679 828www.ploce.hr/e-uprava/

Municipality of LastovoLeo Katić, Head of Municipalitywww.lastovo.hr Municipality of Vela LukaTonči Gugić, Head of Municipalitywww.velaluka.hr

Municipality of BlatoAnte Šeparović, Head of Municipalitywww.blato.hr

Municipality of SmokvicaLenko Salečić, Head of Municipalitywww.smokvica.hr

Municipality of LumbardaIgor Kršinić, Head of Municipalitywww.lumbarda.hr

Municipality of OrebićTomislav Ančić, Head of Municipalitywww.orebic.hr

Municipality of TrpanjJakša Franković, Head of Municipalitywww.trpanj.hr

Municipality of Janjina

Vlatko Mratović, Head of Municipalitywww.janjina.hr

Municipality of StonVedran Antunica, Head of Municipalitywww.opcinaston.hr

Municipality of MljetĐivo Market, Head of Municipalitywww.opcinamljet.com.hr

Municipality of Dubrovačko primorjeNikola Knežić, Head of Municipalitywww.dubrovackoprimorje.hr

Municipality of KonavleLuka Korda, Head of Municipalitywww.opcinakonavle.hr

Municipality of Župa DubrovačkaSilvio Nardelli, Head of Municipalitywww.zupa-dubrovacka.hr

Municipality of Kula NorinskaNikola Krstičević, Head of Municipalitywww.kulanorinska.hr

Municipality of SlivnoSmiljan Mustapić, Head of Municipalitywww.opcina-slivno.hr

Municipality of PojezerjeBoris Dominiković, Head of Municipality

Municipality of ZažabljeIvan Obradović, Head of Municipality

20164th

DUBROVNIKNERETVACOUNTY

invest in

DUBROVNIK NERETVA REGION

Dubrovnik Neretva CountyPred Dvorom 1

20 000 Dubrovnik, Croatiatel: + 385 (0)20 351 400fax: + 385 (0)20 321 059

www.dubrovnik-neretva.hr

DUNEA llcRegional Development Agency

Dubrovnik Neretva CountyBranitelja Dubrovnika 41

20 000 Dubrovnik, Croatiatel: + 385 (0)20 312 714fax: + 385 (0)20 312 715

www.dunea.hr

Dubrovnik Neretva CountyRepresentation office in Bruxelles

47 Rue de ToulouseBruxelles B-1000, Belgija

tel: + +32 22 80 28 22fax: +32 22 30 13 40

www.dubrovnik-neretva.eu