Croatian Visa Free USA Travel Might Boost Trade, But Issues Remain

Lauren Simmonds

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As Tomislav Pili/Poslovni Dnevnik writes, Croatian visa free USA travel, which, according to the US Administration, will begin in December, will improve Croatia’s economic co-operation with the world’s largest economy, but the main obstacle – double taxation – remains an enormous issue, as the USA is one of the few countries with which Croatia has a trade surplus.

Export growth by 13 percent

As Andrea Grubisic, a senior expert associate of the International Affairs Department of the Croatian Chamber of Commerce (HGK), explained, last year, the export of goods from Croatia to the USA amounted to a massive 521.6 million dollars, almost 13 percent more than back in pre-pandemic 2019.

Although imports from the US also increased by 5.3 percent, a surplus of 323 million US dollars was realised, which is 18.2 percent more than in the previous year. “The trend continued in the first six months of this year, so Croatian exports to the USA increased by 93.6 percent, and the surplus on the Croatian side increased by almost 53 percent,” explained Grubisic. Nevertheless, the world’s largest economy isn’t really a particularly important trading partner for Croatia.

In the total trade of Croatia with the rest of the world, the USA ranks a mere 15th with a 1.67 percent share. In terms of exports, the United States ranks 8th with 3.06 percent, and in terms of imports, only 23rd with 0.77 percent.

When asked about the level of interest from Croatian companies in doing business “across the pond”, Grubisic said that according to the Croatian Chamber of Commerce and contacts with members that are just opening over on the US market, there is interest in exporting consumer goods, including food.

“Certainly, in the last few years, the ICT sector has stood out, from which Croatian companies are increasingly showing interest in opening their subsidiaries or companies in the United States, and according to revenues from exports of services to the United States, this sector looks promising,” said Grubisic.

Darinko Bago, President of Croatian Exporters, believes that the facilitation of Croatian visa free USA travel will greatly facilitate the ongoing work on this matter, and that it will also result in the conclusion of new business moves.

“This is especially true for industries that produce higher value-added goods because it eliminates administrative visa application procedures, especially if you need those documents for a larger number of employees. If we look at the experiences of other countries that have a visa free travel regime with the United States, it will undoubtedly raise economic cooperation between Croatia and the USA,” said Bago.

”However, a much bigger obstacle to trade growth is the lack of a double taxation agreement, which is necessary if we’re to achieve a higher form of co-operation with the US,” Bago added.

Two important reasons…

“Such an agreement would be especially important for Croatia for two reasons: given that America is a technological power, it would provide easier access to technology as part of the digital transformation, and the other is that the United States is also a financial centre.

Croatia is currently ”invisible” to American investors because they’d have to pay taxes twice on the realised profit from any of their investments, in Croatia and in the USA. That is the main reason why we have a trade surplus with the USA, because American companies are planning for the long term, and at the moment it just isn’t worthwhile for them to open a branch in Croatia,” Bago pointed out.

”It should be clarified that the announced abolition refers to B1/B2 visas that enable Croatian citizens to go to the US for travel and business,” said Andrea Doko Jelusic, the executive director of the American Chamber of Commerce (AmCham) in Croatia.

“They’re a separate category of business visas that every country, including the United States, has for occasional or longer work carried out on their territory,” added Doko Jelusic.

She advised Croatian companies to focus on a specific geographical area, specific sectors, and even the size of the company they’re targeting. “It’s easier to do business with small and medium-sized enterprises than it is to focus on large corporations,” concluded Doko Jelusic.

For more, check out our dedicated travel and business sections.


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