Croatia declared independence in 1991, but didn’t regain the two-thirds of its territory that had been under the control of the Yugoslav National Army and Serb paramilitaries, until the end of the bloody civil war in 1995.
It became part of the European Union in 2013 – when it became the 28th member state – and although it does plan to enter the eurozone, it still currently uses the kuna as its national currency.
Croatia still presents a great upcoming opportunity for UK businesses though – UK goods exports to Croatia were about £189.85 million in 2014 – so if you’re looking to export to Croatia, here’s all you need to know…
Pros and cons of exporting to Croatia
If you’re looking to export to Croatia, it’s worth considering the strengths of the Croatian market include:
- good transport links
- highest Internet penetration in southeast Europe
- well educated workforce
- stable economy with a stable currency
And the benefits to UK companies exporting there are:
- about 50% of population speak English
- increasingly sophisticated consumers
- modern distribution channels
- equal rights for domestic and foreign private and legal entities
- guaranteed free transfer of capital and free profit repatriation to investors
- average gross wages are high in comparison with neighbouring counties
Exporting to Croatia isn’t without its problems, while the business climate in the country is improving, you’ll need to be mindful of challenges including:
- bureaucracy
- lack of clarity and transparency in tax administration
- tax burden
- corruption
- slowness of the Croatian judicial system
The UK is Croatia’s 18th largest supplier, and the top UK exports to Croatia are:
- Boilers/machinery
- Vehicles
- Electrical, electronic equipment
- Pharmaceutical products
- Essential oils, perfumes, cosmetics, toiletries
- Plastics and articles thereof
- Miscellaneous edible preparations
- Ships, boats and other floating structures
- Optical, photo, technical, medical, etc apparatus
- Beverages, spirits and vinegar
If you’re doing business in Croatia, you’ll need a reliable and cost-effective conference call provider to help keep in touch when travelling isn’t an option. Here’s How to set up a conference call between the UK and Croatia.
And remember, you can now screen share and video conference, using Crankwheel.
Tax and customs
Tax
The UK signed a double taxation agreement with Yugoslavia, so tax isn’t paid twice – once in each country – on exported goods and services, and this still applies in Croatia.
The following tax rates currently apply in Croatia:
- VAT (known as PDV) is charged at 25%. Certain product categories are zero rated. A 10% rate is charged for tourism activities
- Corporate tax is charged at 20% on profits
- Income tax between 0% and 45%.
Customs
The internal EU single market allows for the free movement of goods and services without any import duties being applied. For more information on customs procedures, visit Customs Administration of the Republic of Croatia.
