Incentive measures for investment projects in the Republic of Croatia are regulated by the Act on Investment Promotion (OG, No. 102/15, 25/18, 114/18) and pertain to investment projects in:
- manufacturing and processing activities,
- development and innovation activities,
- business support activities,
- high added value services.
Incentive measures can be used by enterprises registered in the Republic of Croatia investing
in fixed assets the minimum amount of:
- € 50,000 together with creating at least 3 new jobs for microenterprises
- € 150,000 together with creating at least 5 new jobs for small, medium and large enterprises
- € 50,000 together with creating at least 10 new jobs for ICT system and software development centers
Classification of enterprises is done in accordance with the GBER.
|Enterprise category*||Number of employees and||Annual turnover||or||Annual balance sheet|
|Large||≥ 250||> 50 million €||or||> 43 million €|
|Medium||< 250||≤ 50 million €||or||≤ 43 million €|
|Small||< 50||≤ 10 million €||or||≤ 10 million €|
|Micro||< 10||≤ 2 million €||or||≤ 2 million €|
* when classifying enterprises one should also consider affiliated enterprises
The amount of aid shall be calculated as a percentage of investment value, which is determined on the basis of eligible investment cost. Eligible investment costs are:
- tangible (value of land/buildings and plant/machinery) and intangible assets (patent rights, licences, know-how), or
- gross wage calculated over a period of two years
The minimum period for maintaining the investment and newly created jobs linked to investment is five years for large enterprises, and three years for small and medium-sized enterprises, but no less than the period of use of the incentive measures.
Profit tax incentives
|Investment amount (€ mil.)||Number of newly employed||Period of employment (years)||Profit tax rate reduction||Period (years)|
(>0,05 for micro and ICT system and software development centers)
|5 (3 for micro, 10 for ICT system and software development centers)||3 (SME’s), 5 (large)||50%||10 (5 for micro)|
|1-3||10||3 (SME’s), 5 (large)||75%||10|
|>3||15||3 (SME’s), 5 (large)||100%||10|
|COUNTY UNEMPLOYMENT RATE||INCENTIVE RATE IN RELATION TO ELIGIBLE COSTS OF JOBS CREATION||INCREASE FOR DEVELOPMENT AND INNOVATION ACTIVITIES**||INCREASE FOR BUSINESS SUPPORT ACTIVITIES*** AND HIGH ADDED VALUE ACTIVITIES****|
|<10%||10% (max. 3,000 €)*||+50% (1,500 €)*||+25% (750 €)*|
|4% (max. 1,200 €)||+50% (600 €)||+25% (300 €)|
|10-20%||20% (max. 6,000 €)*||+50% (3,000 €)*||+25% (1,500 €)*|
|8% (max. 2,400 €)||+50% (1,200)||+25% (600 €)|
|>20%||30% (max. 9,000 €)*||+50% (4,500 €)*||+25% (2,250 €)*|
|12% (max. 3,600 €)||+50% (1,800)||+25% (900 €)|
* The specified amount of the grant refers to the unemployed, who are registered as unemployed with Croatian Employment Service (CES) for at least 6 months, regardless of the length of the work experience and level of education, persons older than 50 years registered as unemployed with CES and persons without work experience registered as unemployed with CES. For other categories of workers, the incentive rate is 40% of the above-specified amount. (Investment Promotion Directive, OG 31/16, 2/19)
** Development and innovation activities – activities that affect the development of new and significantly improving existing products, production series, manufacturing processes and / or production technologies
*** Business support services:
1. Customers / Clients relationship centers – all types of call centers, multimedia contact centers and other types of contact and service centers focused on technical support and problem solving for customers/clients.
2. Centers of outsourced business activities – focused on outsourcing and pooling of business activities, such as finance, accounting, marketing, product design, audio-visual activities, human resources development and development of information technology.
3. Logistics and Distribution Centres – aimed at establishing and building high-technology logistics and distribution centers providing intermodal transportation, warehousing, packaging and handling in order to significantly improve logistics and distribution activities within the business process and delivery of goods.
4. ICT System and Software Development Centres: development and application of information systems, outsourcing of IT management operating systems, development of telecommunications network operation centers and development and application of new software solutions.
**** High Added Value Activities:
1. Creative service activities: activities in the field of architecture, design, different forms of media communication, advertising, publishing, culture, creative industry and other activities in the field of fine arts
2. Hospitality and tourism activities – hospitality and tourism accommodation facilities categorized as four or five stars, such as hotel, aparthotel, tourist resort and camps; heritage hotels, other types of accommodation facilities created by renovation of cultural and historical structures, with the mandatory submission of conservation requirements of reconstruction; supporting services of the aforementioned types of accommodations; health tourism, congress tourism, nautical tourism, golf tourism, cultural tourism, entertainment and/or recreation centres and parks, ecological tourism projects and other innovative projects in tourism with high added value.
3. Industrial engineering services.
For investment in development and innovation activities, a non-repayable grant shall be approved for the purchase of plant/machinery amounting to 20% of the actual eligible costs for purchasing plant/machinery, in the maximum amount of EUR 500,000 in equivalent HRK value, provided that the purchased plant/machinery represents high technology equipment.
Incentives for education and training:
The eligible costs for the purpose of training may include trainers’ personnel costs, for the hours during which the trainers participate in the training; trainers’ and trainees’ operating costs directly relating to the training project such as travel expenses, materials and supplies directly related to the project, depreciation of tools and equipment, to the extent that they are used exclusively for the training project. Accommodation costs are excluded.; costs of advisory services linked to the training project; trainees’ personnel costs and general indirect costs (administrative costs, rent, overheads) for the hours during which the trainees participate in the training.
Incentives will not be awarded for the training conducted to ensure compliance with the mandatory training prescribed by national norms.
The aid intensity shall not exceed 50 % of the eligible costs. It may be increased, up to a maximum aid intensity of 70 % of the eligible costs, as follows:
(a) by 10 percentage points if the training is given to workers with disabilities or disadvantaged workers;
(b) by 10 percentage points if the aid is granted to medium-sized enterprises and by 20 percentage points if the aid is granted to small enterprises.
Incentive measures for the capital costs of the investment project
Eligibility: over € 5 million and more than 50 new jobs
|County Unemployment Rate||Incentives for Capital Expenses|
|10-20%||Cash grant in the amount of 10% of the eligible costs of investments for:
(max amount up to 0.5 million EUR with the condition that the part of the investment in the machines / equipment equals at least 40% of the investment and that at least 50% of those machines/equipment are of high technology)
|>20%||Cash grant in the amount of 20% of the eligible costs of investments for:
(max amount up to 1 million EUR with the condition that the part of the investment in the machines / equipment equals at least 40% of the investment and that at least 50% of those machines/equipment are of high technology)
Incentive measures for labour-intensive investment projects
|Number of newly created jobs||Increase of Support for creating new jobs|
|100 and higher||25%|
|300 and higher||50%|
|500 and higher||100%|
Incentive Measures for Investment Projects through Economic Activation of Inactive Property Owned by the Republic Of Croatia
|INVESTMENT AMOUNT (€ MIL.)||NEWLY EMPLOYED||OBLIGATORY INVESTMENT INTO INACTIVE PROPERTY GRANTED FOR LEASE||INCENTIVE||PROCEDURE FOR GETTING THE LEASE|
|3||15||50% increase in the value of the property within 3 years in relation to the estimated value of the inactive property at the time of starting the lease||free lease of inactive property for up to 10 years* from the start of the investment||for investment located in lower developed local self-government units (I-IV) – without any additional preconditions|
|for investment located in higher developed local self-government units (V-VIII) – after three rounds of public tender for sale of inactive property|
*After the expiration of the free lease or after reaching the maximum aid intensity, the beneficiary of the incentive measure can conclude the agreement on the purchase of inactive property with the Ministry of State Property
According to the procedure for applying for incentive measures under the Act on Investment Promotion (NN 102/15, 25/18, 114/18) an enterprise intending to acquire the status of a beneficiary of incentive measures must file an Application for the use of incentives using the prescribed forms either to the Ministry of Economy, Entrepreneurship and Crafts before the beginning of the investment.
Incentives application forms – .docx files