NEWSLETTER_EN15/JULY/2018

July 2018 (Date of issued: 3/8/2018)

Source: worldofbuzz

EuEu Kolinda Grabar-Kitarović

.

Officially the Republic of Croatia is a country at the crossroad

of Central and Southeast Europe, on the Adriatic Sea. Its capital Zagreb

forms one of the country's primary subdivisions, along with twenty

counties. Croatia has an area of 56,594 square kilometers (21,851 square

miles) and a population of 4.28 million, most of whom are Roman

Catholics.

Croatia is a republic governed under a parliamentary system and a

developed country with a very high standard of living. It is a member of

the European Union (EU), the United Nations (UN), the Council of

Europe, NATO, the World Trade Organization (WTO), and a founding member of the Union for the Mediterranean. As an active

participant in the UN peacekeeping forces, Croatia has contributed troops to the NATO-led mission in Afghanistan and took a

non-permanent seat on the UN Security Council for the 2008–2009 term. Since 2000, the Croatian government has constantly

invested in infrastructure, especially transport routes and facilities along the Pan-European corridors.

Croatia's economy is dominated by service and industrial sectors and agriculture. Tourism is a significant source of revenue, with

Croatia ranked among top 20 most popular tourist destinations in the world. The state controls a part of the economy, with

substantial government expenditure. The European Union is Croatia's most important trading partner. Croatia provides a social

security, universal health care system, and a tuition-free primary and secondary education, while supporting culture through

numerous public institutions and corporate investments in media and publishing.

EXPLORE EUROPE – CROATIA

Born 29 April 1968) Croatian politician and diplomat serving as the 4th and current President of Croatia since 2015. She is

the first woman to be elected to the office since the first elections in 1990. At 46 years of age, she also the youngest person to

assume the presidency.

Before her election as President of Croatia, Grabar-Kitarović held a number of governmental and diplomatic positions. She

was Minister of European Affairs from 2003 to 2005, the first female Minister of Foreign Affairs and European Integration from

2005 to 2008 in both the first and second cabinets of Ivo Sanader, Croatian Ambassador to the United States from 2008 to 2011

and Assistant Secretary General for Public Diplomacy at NATO under Secretaries General Anders Fogh Rasmussen and Jens

Stoltenberg from 2011 to 2014.

Grabar-Kitarović contested the presidential election held in December 2014 and January 2015 as the only female candidate (out

of four in total), finishing as the runner-up in the first round and thereafter proceeding to narrowly defeat incumbent

President Ivo Josipović in the second round. Her strong performance in the first round was widely viewed as unexpected, as

most opinion polls had given incumbent president Josipović a strong lead and some even showed it was possible that he would

win outright by acquiring more than 50% of the vote. In the second round, Grabar-Kitarović defeated Josipović by the closest

percentage margin of any presidential election to date (1.48%) and received the smallest number of votes of any elected

president in Croatia (1.114 million votes). Furthermore, as the country had previously also had a female Prime

Minister, Jadranka Kosor, from 2009 until 2011, Grabar-Kitarović's election as President of Croatia also included it into a small

group of parliamentary republics which have had both a female head of state and head of government.

Economy Overview

IMPORTANT FACTORS

Source:

BILATERAL TRADE RELATIONSHIP BETWEEN SRI LANKA AND CROATIA The total trade value between Sri Lanka and Croatia

stood at US$ 2,399 in 2017. (Exports to Sri Lanka = US$

1,110 and imports from Sri Lanka = US$ 1,289). Among

the top Sri Lankan Export products Articles of Apparel,

and clothing accessories, knitted or crocheted took the

lead in 2017.

SRI LANKA'S TOP EXPORTS TO CROATIA (Values in USD “000”)

Product

code

Product label Sri Lanka's

exports to Croatia

Value

in 2016

Value

in 2017

'TOTAL All products 1,620

1,110

'61 Articles of apparel and clothing

accessories, knitted or crocheted

781 670

'63 Other made up textile articles 204 142

'15 Animal or vegetable fats and oils.

264 96

Source: Trade Map

SRI LANKA'S TOP IMPORTS FROM CROATIA (Values in USD “000”)

Product

code

Product label Sri Lanka's imports

from Croatia

Value

in 2016

Value in

2017

'TOTAL All products 761 1,289

'90 Optical, photographic,

cinematographic, measuring,

checking, precision, medical.

0 941

'12 Oil seeds & oleaginous fruits,

miscellaneous grains, seeds & fruits

215 210

'85 Electrical machinery & equipment &

parts thereof

78 59

Source: Trade Map

Though still one of the wealthiest of the former Yugoslav republics,

Croatia’s economy suffered badly during the 1991-95 war. The

country's output during that time collapsed, and Croatia missed the

early waves of investment in Central and Eastern Europe that

followed the fall of the Berlin Wall. Between 2000 and 2007,

however, Croatia's economic fortunes began to improve with

moderate but steady GDP growth between 4% and 6%, led by a

rebound in tourism and credit-driven consumer spending. Inflation

over the same period remained tame and the currency, the Kuna,

stable.

Croatia experienced an abrupt slowdown in the economy in 2008;

economic growth was stagnant or negative in each year between

2009 and 2014, but has picked up since the third quarter of 2014,

ending 2017 with an average of 2.8% growth. Challenges remain

including uneven regional development, a challenging investment

climate, an inefficient judiciary, and “brain drain” of educated

young professionals seeking higher salaries elsewhere in the EU. In

2016, Croatia revised its tax code to stimulate growth from domestic

consumption and foreign investment. Income tax reduction began

in 2017, and in 2018 various business costs were removed from

income tax calculations. At the start of 2018, the government

announced its economic reform plan, slated for implementation in

2019.

Tourism is one of the main pillars of the Croatian economy,

comprising 19.6% of Croatia’s GDP. Croatia is working to become

a regional energy hub, and is undertaking plans to open a floating

liquefied natural gas (LNG) regasification terminal by the end of

2019 or early in 2020 to import LNG for re-distribution in southeast

Europe.

Important Factors

Population: 4,292,095 (July 2017 est)

GDP (Purchasing $100.3 billion (2017 est)

Power parity)

GDP – real growth 2.8% (2017 est)

Rate

GDP – per capita $23,400 (2016 est)

(ppp)

Exports $15.76 billion (2017 est)

Exports commodities Transport equipment,

Machinery, Textiles,

Chemicals, Foodstuffs, Fuels

Import Partners Italy 13.4%, Germany

12.2 %, Slovenia 10.6%,

Bosnia & Herzegovina 9.8%

Austria 6.2%, Serbia 4.8%

(2017)

Source: World Factbook

UPCOMING TRADE FAIRS IN CROATIA

TOP BRANDS IN CROATIA

The Croatian economy is one of the strongest in Southeast

Europe, and in terms of its GDP is even stronger that the

economies of some members of the European Union. After the

collapse of the socialist system, it underwent transition to an

open market economy, which especially related to industrial

production.

Croatia, as the only country in the world which is central

European, Danubian and Mediterranean at the same time,

with its unique geographical location links Europe to the

world. Modern transport and energy infrastructure,

untarnished soil, unpolluted sea and rich sources of fresh

water provide the foundations for Croatia to build its future

on and further develop in the European and World markets.

EASIER ACCESS TO EUROPEAN &

WORLD MARKETS Croatia is situated at the heart of Europe, only two or three

hours air distance to any European destination. With its

unique geostrategic position and the farthest reaching

European sea inlet, Croatia is a gateway to Central and

Eastern Europe providing an easy access to European and

world markets.

Croatia offers the shortest route over land and sea connecting

Europe and other overseas destinations, thus making the sea

route from Europe to the Middle and Far East advantageous

offering up to several days’ shorter transit times than those

of northern European ports

MODERN TRANSPORT

INFRASTRUCTURE

Croatia has highly developed road and rail network, the

network of international sea ports of great importance, the

network of river ports and airports, as well as inland

waterways and intermodal terminals. The network of

modern motorways place Croatia together with leading

European countries, and let’s not forget that there are three

Pan-European international corridors passing through

Croatia, thus making it an essential part of all major

European and international transport routes. The

country is 100% digitized, with its entire territory

covered by broadband Internet. Its highly developed

natural gas distribution network places it at the very top

of European countries.

Land connection to all European transport routes:

29,547 km of roads

2,726 km of rail network

2-3 hours air distance to any European destination:

7 international airports (Zagreb, Split, Dubrovnik,

Zadar, Rijeka, Pula, Osijek) and 2 airfields (Mali Lošinj,

Brač)

The inmost sea into the heart of European continent

6 seaports (Rijeka,Ploče,Šibenik, Zadar, Split,

Dubrovnik)

4 river ports (Vukovar, Osijek, Slavonski Brod, Sisak)

One of the most developed natural gas distribution

networks in Europe

100% digitized country

100% broadband Internet coverage

RELIABLE INVESTMENT &

BUSINESS ENVIRONMENT The Croatian legal framework governing foreign

investment has been designed in a way that does not

make any difference between domestic and foreign

investors. All possibilities in relations between domestic

investors are also open to foreigners investing capital in

Croatia.

Moreover, foreign investors enjoy additional guarantees

that are not given to domestic investors. The Croatian

Constitution provides that no law or other legal

document shall reduce the rights granted to a foreign

investor at the time of investment in Croatia. It also

guarantees the free repatriation of profits or capital

upon fulfillment of all legal obligations

Source: REI.com

Being a full member of NATO and the 28th member of the

European Union (1 July 2013), Croatia guarantees stability and

the safety of business activities. Croatian legislation,

harmonized with the basic postulates of the European Union,

ensures business activities of the highest standard and opens

the possibility of using EU funds, while agreements for the

avoidance of double taxation signed with over 50 countries,

provide Croatia with additional benefits.

STIMULATING INVESTMENT

CLIMATE

The Republic of Croatia strongly supports investments. With

the aim of stimulating investments in manufacturing sector

activities, technology centres, strategic business support and

high value-added services as well as tourist activities,

investors are offered various incentives.

The incentives offered for business activities to investors

range from tax incentives, incentives for employment and

education, to additional incentives for investment in areas of

special state concern.

Investments in the sector of industry, especially in the not so

developed parts of the country, are strongly supported in

order to incite the creation of new job opportunities and

preconditions for strengthening export-oriented sectors.

Tax incentives – Partial or full exemption from profit

tax in the period of up to 10 years, depending on the

amount of investment.

Employment incentives- Up to 9,000 euros per

employee, depending on unemployment rates in the

investment area

Grants- Coverage of up to 80% of employee’s training

costs, depending on the type of training and the size of

the business

20% regular profit tax rate -> 10 – 0% profit tax rate for

investors

HIGHLY EDUCATED,

MULTILINGUAL & COMPETENT

WORKFORCE

Croatia is a country of multilingual and highly educated

workforce. With 56 high-education institutions, out of

which 7 are universities, Croatia offers a pool of various

skilled and educated workforce. Croatia also has the

highest percentage of persons in the age group 20 to 24

who have completed at least secondary school education.

Did you know that the University of Zagreb, comprised

of 34 faculties, is one of the oldest universities in this part

of Europe providing education to students continuously

since its establishment in 1669.

According to the Human Development Index, Croatia

ranks 47 out of 187 countries. In the period from 1990 to

2012, Croatia showed a 12% increase, that is an average

annual increase of about 0.5%

HIGH QUALITY OF LIFE

Croatia is truly a unique country – nowhere in the world

can three different climate zones – continental,

mountainous and Mediterranean, be found in only 400

km (the distance between the North and South of the

country). From hilly and gentle Zagorje in the North,

through vast fertile plains of Slavonia in the East, Lika

and Gorski Kotar rich in forests and rivers, to

Dalmatinska Zagora, bounded by mountain ranges and

typical Dalmatian karst, all the way to its indented

coastline stretching from Istria to South Dalmatia with

over a thousand islands, Croatia is truly a treasure.

Copyright © 2018 European Chamber of Commerce of Sri Lanka, All rights reserved.

Our mailing address is:

The European Chamber of Commerce of Sri Lanka

358/B Elvitigala Mawatha

Narahenpita

Colombo, 05 00500

Sri Lanka

EDITORIAL BOARD

Heinz Reuter President ECCSL

Arnold Perera Vice President ECCSL

John Wilson Director / Legal Counsel ECCSL

Janani Wijetunge Operational Manager

Shantali Munasinghe Marketing Officer /

Editor