Relocations might become a trend.
When he announced two years ago that he would close his companies in Croatia, Hrvoje Prpić, a business angel, was serious. Disappointed with the local business environment, Prpić has already moved his two companies to London, and now says he will do something similar with his remaining businesses, reports Jutarnji List on April 10, 2016.
“I still have five companies in Croatia, and I will probably close them by the end of the year. More precisely, I will sell the shares in two of them, close another two and one will remain until an investor shows up, who will then most likely relocate it abroad”, said Prpić.
As the reasons for closing his local businesses, Prpić cited legal uncertainty and poor business climate. The main culprits are, he added, slow judiciary and public administration, as well as the pressure of inspections and tax services. “It is illegal here to work 12 hours. If an inspector catches you working in the company’s offices at three in the morning, he will fine you. These are all things that people outside Croatia do not understand. As for me, any new companies I will open in Britain”, he said.
Other companies have also moved some of their operations abroad. “Bellabeat is a company that has four offices – in Zagreb, San Francisco, London, and Shenzen. The reasons can be found in a number of mechanisms in Croatia which are not functioning as well as they should, so we are forced to perform certain business operations in other countries”, said representatives of Bellabeat, a company that produces smart devices that help women monitor the quality of life and health.
Similar problems plague numerous IT companies as well, especially start-ups. “In the IT sector, 70 percent of the cost of a company are costs related to employees. And labour costs in Croatia are higher than in neighbouring countries. In Romania, for example, employees in IT companies do not pay income tax, so this is another reason why IT companies from around the world come to Romania. If this is possible in Romania, why it would not be possible in Croatia?” asks Hrvoje Balen form the Algebra College.
