Croatia Slides to 58th Place in Doing Business Rankings

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ZAGREB, October 31, 2018 – Croatia slid 7 places to 58th place in the World Bank’s latest Doing Business report covering 190 countries, and while last year it ranked 51st with a score of 77.70 points out of 100, this year it earned 71.40 points.

According to the report entitled “Doing Business 2019: Training for Reform”, which was published on Wednesday, Croatia has the poorest performance in “Dealing with Construction Permits”, plunging from 126th place to 159th place. It also slid in the “Starting a Business” segment, from 87th place last year to 123rd this year.

Croatia has improved performance in “Registering Property”, moving up eight places to rank 51st. It also moved up in the “Getting Electricity” segment, from last year’s 75th place to 61st place this year. Croatia also made progress in “Paying Taxes”, going up from 95th to 89th place.

Measured by the “Getting Credit” criterion, Croatia fell from 77th to 85th place. It also regressed in “Protecting Minority Investors”, from 29th to 38th place and in “Enforcing Contracts”, slipping two places down to rank 25th.

Croatia ranked best in “Trading Across the Borders”, scoring the maximum 100 points and top position, just as it did last year.

The overall ranking was topped by New Zealand, Singapore and Denmark. Hong Kong moved upward by one notch to fourth place, and South Korea fell from fourth to fifth place. Macedonia returned to the top 10 this year, inching up one spot to 10th place and displacing Sweden to 12th position.

Economy Minister Darko Horvat said on Wednesday that the latest World Bank Doing Business report clearly showed what Croatia was bad at and what should be changed, adding that by introducing the possibility of starting a business electronically, on which his ministry was working, Croatia would go up 10 places in the World Bank ranking.

“We are aware of the sore spots of the national economy and of the fact that some countries, notably those in our neighbourhood, make more radical and faster changes. The Doing Business report also gives us a clear signal in terms of what we are bad at and what we need to change,” Horvat told reporters.

Horvat said that for the past two months he had been working with the ministers of public administration and justice on a specific, radical measure to remove all administrative barriers when starting a business in Croatia electronically, which is the segment where Croatia dropped the most in the Doing Business ranking. “Starting a business electronically will include the opening of a bank account, electronic payment of the necessary taxes without any physical signature. Once this is introduced, I am confident that it will help Croatia go up 10 places in the ranking.”

In a message to investors, Horvat said that at the moment his ministry, the Croatian Employers Association and all interested business entities were working on two action plans that should be implemented in 2019 and result in the removal of many administrative barriers and alleviating the tax burden on businesses by removing non-tax levies in the amount of around one billion kuna.

The Croatian Employers’ Association (HUP) director-general Davor Majetić, commenting on Wednesday on the latest World Bank’s Doing Business Report, said that changes are happening in the country but they were too slow and insufficient to trigger significant headway required to make the national economy more competitive.

It is evident that the countries in the neighbourhood are undergoing changes much faster than we are and it is more and more difficult for our companies to compete with peers from those countries, he said. “We expect the government to keep implementing the reforms it has launched and to intensify efforts in conducting all other reforms needed to enhance the country’s business climate.”

To read more about Croatian economy, click here.


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