November 11, 2018 – Imagine an American married a local, wanted to live in your country and bring up to 2 billion dollars in investment. Would you welcome him? Not in Croatia…
I get to meet a lot of people, both local and international, from all walks of life and all over Croatia with this job running Total Croatia News. It is a lot of fun and without doubt one of the most rewarding things I have done professionally over the last 30 years or so.
And with those connections comes a better understanding of Croatia and a cross-section of views, experiences and insights. In the last month, for example, several events and conferences I have attended in the medical tourism industry have enabled me to meet and interview the editor of the leading health tourism media in the world (Keith Pollard from IMTJ), two leading medical travel gurus (Ilan Geva and Dr Prem Jagyasi) and the CEO of business running the best medical tourism in the world, Sherene Azli, of the Malaysia Healthcare Travel Council. All here in Croatia. And the picture they paint, and the path they have outlined, shows the huge potential Croatia has to develop a lucrative niche in medical tourism.
But this is Croatia…
As we move TCN away from its initial prime focus of tourism, more contact with the business community is proving equally fascinating. That Croatia desperately needs investment is hardly a secret; that Croatia does not have a reputation of being kind to foreign investors even less so; and for foreign businessmen who are masochistic enough to actually want to live here, getting residence permits can be very frustrating indeed.
Especially, for some reason – or maybe it is just my personal experience – Americans.
I met an American recently who I will call Steve. He is happily married to a local, is in love with Croatia and its lifestyle, is extremely wealthy and is desperate to invest several million into construction projects. He has a successful track record of working on some major construction projects back in the United States, and he has sufficient confidence and interest from investors that he is confident he could bring up to 2 billion dollars into Croatia with the right projects.
And yet, some 10 years after he first came to Croatia to do two big developments on the coast back in 2008 (neither of which have moved forward in the intervening decade), Steve not only has not managed to build anything in Croatia, but he also now is experiencing problems with his residency and ability to stay in the country of his wife and one he has come to love and wants to badly to invest in.
Steve sent me an email recently after our meeting, published with permission:
In search of a residence permit and investment project in Croatia
“So, I have been doing a great deal of thinking the past 2 weeks since we met. As you know, with this drastic law change regarding residence permits, the needless frustration of the past 3 months took a tremendous health toll upon my wife and myself. Zagreb MUP is terribly worse than Split MUP and they, along with HZZO purposefully and publicly target Americans more than any other foreigner. This process has kinda sucked the life out of us, along with any enthusiasm for trying to even work here within my construction consulting business and 2 other non-connected businesses I was/am considering here in Zagreb.
Besides the personal stay permit fiasco, for over 8 years now, I have been trying to actively build a thriving business for myself here. Colleagues and clients of mine have the resources to invest in projects up to 2 Bln USD. But as you know and we discussed…..the government here is just too negative, close-minded, short-sighted and non-proactive. The large projects here simply will never commence despite fancy press conferences (Pasman) and the 2 in Dubrovnik will never be built…. as you know the Dubrovnik Golf project is suing the government for 500 mln euros, and also I remember that comment in one of your blogs attributed to the process in Croatia by a Russian billionaire. (Editor note – a Russian billionaire with lots of investment experience in the region said that there was corruption all over the region, but the only difference was that in Croatia, you pay the politicians and they do nothing, and then four years later, you have to start again).
I recently remembered a couple things here said to me when I originally moved here 10 years ago. “Preko veze” (through connections) of course. Well, that is and isn’t true. When I first arrived I immediately contacted the large commercial global brokerage firms as I have had lengthy successful relationships with their namesake sister firms back in the USA. Remarkably they don’t seem to value existing relationships with clients from their sister firms abroad. Same with the architects here.
The other is someone told me in the beginning “never send a written racun (invoice)”. Well. I only conduct business in a correct, professional manner and that is what I did. Well, as you must know, Croatia maybe be the only country in the world that collects taxes (VAT) on contracts/racuns that were never paid. So, I paid approx 500,000 kns (25%) in VAT my first year here. And although have FINA court judgments, cannot collect because the ” developers” have many blocked accounts and the government won’t help either…..and they have more cash than God. Which brings up the other statement told to me by many Croatians “never, ever….do business with a Croatian!”.
Well, that made no sense to me but here we are over 8 years later. I am not bitter nor have any regrets….because I have done things the right way…..morally, ethically and with the proper motives.
That said, I am a realist and have learned many lessons here….but am also an eternal optimist. I am always open to meeting new people, new faces and networking. One never knows the outcome or future potential, correct? But gone are the days of my jumping thru hoops prematurely. Again, knowing the proper way to conduct business I always responded with detailed packages for RFQ’s. Unfortunately this has led to a couple bad situations here as well despite the usage of non-disclosure and non-compete agreements….specifically with one “Croatian gentleman” (I say that loosely.. lol) who alleges to provide similar services as I, was appreciating included in my project teams….then went behind my back after I got the “foot in the door” ….to unethically steal clients and business from me. Oh well, lessons learned.”
I do like living here (as long as the government doesn’t change the laws and regs again for the worse…lol) but maybe it is time to live here in semi-retirement….
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Do you have an investment in Croatia story (positive or negative) which would be interesting to feature on TCN, Or a residence permit tale of woe or joy? Contact us on news@total-croatia-news with full details, Subject title – Facepalm.
