Background information

Development and innovation activities are activities that affect the development of new and significantly improving existing products, production series, manufacturing processes and/or production technologies.

Investment in fixed assets depends on the Classification of enterprise category done according to Annex I of Commission Regulation (EU) no. 651/2014 of 17 June 2014.

Content of measure

An employer who creates new jobs with investments in regions where the regional unemployment rate is at 10% will be approved a grant of a maximum of 10% of justifiable investment costs or up to €3,000 per created job. Mentioned amount increased for 50% (up to €1,500) if investment is intended for development and innovative activities and for 25% (up to €750) if it is planned for business support activities and high added value activities. If new jobs are created in the counties with an unemployment rate between 10% and 15%, a maximum of 20% of the costs of opening a new job are refunded (up to €6,000) per created job. If the unemployment rate exceeds 15%, a maximum of 30% of eligible costs of creating a new job is refunded, which is an equivalent of up to €9,000 per job created.

Incentive measures may be used by entrepreneurs registered in the Republic of Croatia who invest the following minimum amounts in fixed assets:

• €50,000 in addition to creating a minimum of 3 new jobs for micro entrepreneurs.
• €150,000 in addition to creating a minimum of 5 new jobs for small, medium-sized and large entrepreneurs.
• €50,000 in addition to creating a minimum of 10 new jobs for centres developing information and communication systems and software.
• €3,000,000 in addition to creating a minimum of 15 new jobs for investment projects based on economic activation of inactive assets owned by the Republic of Croatia.
• €500,000 for projects to invest in modernisation and increasing productivity of business processes.

Use of measure

For 2022, total value of planned investment for 1,323 registered projects (allowed and in preparation) is more than HRK 55.8 billion (€7.4 billion) with planned creation of 33,981 new jobs.

Of this amount, HRK 30.4 billion (€4.0 billion) and 13,810 new jobs is related by the investment of big entrepenreurs, while more than HRK 25.4 billion (€3.4 billion) and creation of new jobs is related to SME investments. The listed investment projects relate to tourism (14.7%), metal processing industry (14.4%), ICT (12%), wood processing industry (10%), production of machinery and equipment (7.1%), food -process industry (6.2%), production of rubber and plastic products (4.9%), and production of construction products (3.3%).

Target groups

Workers	Businesses	Citizens
Employees in standard employment	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	No involvement	No involvement
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Unknown

Involvement

No involvement

Views and reactions

Unknown

Sources

• 25 September 2015: Croatian Official Gazette 102/15, the Act on Investment Promotion (narodne-novine.nn.hr)
• 30 March 2016: Uredba o poticanju ulaganja (The Decree on Tax Incentives) OG 31/2016
• 08 March 2018: Izmjene i dopune Zakona o poticanju ulaganja (Amendments to the Act on Investment Promotion OG 25/18) (narodne-novine.nn.hr)
• 01 January 2019: Croatian Official Gazette 114/18, Amendments to the Act on Investment Promotion (narodne-novine.nn.hr)
• 19 March 2020: Zakon o dopunama i izmjenama Zakona o poticanju ulaganja (Amendments to the Act on Investment Promotion - OG 32/20) (narodne-novine.nn.hr)
• 24 May 2022: The report on investment incentives (Izvještaj o potivanju ulaganja) (www.sabor.hr)
• 27 May 2022: Zakon o poticanju ulaganja (The Act on Investment Promotion) - OG 63/22 (narodne-novine.nn.hr)