One Croatian company which pays its employees wages of over 1,000 euros per month has had an offer to move its business operations to Ireland. The company currently employs 100 people in Croatia and 50 people from outside Croatia.
As Poslovni Dnevnik writes on the 9th of November, 2018, the managing director of the Rijeka-based Alarm automatika company, Boris Popović, warned about the problems of entrepreneurs with employment and the retention of experts in domestic companies from the ICT sector in Osijek last week.
He said that in his Croatian company, which employs engineering teams, he always fears the departure of experts who are getting more profitable business deals. However, as Glas Slavonije reports, tempting offers are not only received by employees, but also by entrepreneurs.
Alarm automatika deals with delivery solutions in multiple segments of technical protection, ie security systems. The company buys hardware from across the world, but develops its software, creates its own brands and eventually puts it all together into a unique solution offered to customers across multiple markets. Approximately one third of the total revenue is realised by the company’s export of its products, and the plan, according to Popović, is for export revenue to reach half of the company’s entire revenue by 2020.
Popovic spoke in depth on the topic of how the Croatian state can assist exporters in Osijek, including examples from some countries such as Canada, which funds research and development salaries in strategic industries. He also mentioned the fact that both China and South Korea have measures in place to reward their exporters.
“The interests of the state and society are for entrepreneurs to open up new jobs and invest more in development. The state should therefore encourage those who invest and open new jobs. How can it do that? It can do so by covering part of the costs incurred in research and development, and also with tax breaks on that work. We’ve seen that with the example of Romania, which has deemed their ICT industry a strategic industry, and has reduced the costs to all employees in that sector to as little possible. 300,000 foreign companies are now active in Romania. This country has become the largest centre for the development of the ICT industry and now the average salary in that sector in Romania is two thousand euros,” Popović pointed out.
”We now have one hundred employees in Croatia, and 50 more outside of Croatia. On average, their salaries are over a thousand euros, of course, depending on the segment in which they work. It would be good if the taxes on these salaries were 20 to 30 percent lower, and that our employees’ salaries were higher by that same amount. We’re always in fear that the most important people will leave us, as they constantly receive offers from other companies. And not just those, but our company gets offers. We were the guest of the Irish development agency who suggested we move the entire company over to Ireland. For now, we’re not going to do it, but if we end up in a situation where we’re without people (staff), then what else can we do other than go there with them,” admitted Popović.
In Croatia, this Croatian company has offices in Zagreb, Rijeka, Split, Zadar, and outside of Croatia it operates in all the countries of the former Yugoslavia, as well as in Romania, Bulgaria, Hungary and Slovakia.
According to Popović, the best operating conditions are in Slovenia, followed by Romania, Bulgaria, and Hungary. In Croatia, the highest taxes are paid on employee salaries.
Want to keep up with more news about the domestic economic climate and doing business in Croatia? Make sure to stay up to date with our business page.
