Press Release - AmCham presented results of the Survey of the Business Environment in Croatia

“In 2020 business worsened for 39% of the respondents, and for an approximately equal proportion business got better when compared to 2019. Among those for whom the situation worsened, most of the respondents, 67% of them, record a decline of up to 30%. Most of the companies (52%) managed to keep the same level of employment as in 2019, while 31.6% saw an increase in the number of employees. A considerable number of respondents (55%) rated the business experience in Croatia as good or very good, and 42% of the respondents noticed an improvement in business conditions in the last five years,” said Andrea Doko Jelušić, Executive Director of AmCham, while presenting the results of the Survey of the Business Environment in Croatia conducted in the period from December 17, 2020 to February 1, 2021 on a sample of 135 board members of domestic and international companies in Croatia.

What the respondents noticed as an improvement were the financing conditions, demand for goods and services, and the level of taxation, whereas the availability and quality of the workforce, the judiciary, and the application of legal rules and procedures were seen as a deterioration. Moreover, 46% of the respondents rated the influence of the Croatian judiciary on business as negative or significantly negative.

“Despite the challenges faced in the last year, when business worsened for a considerable number of respondents, most of the AmCham members plan to expand their business operations (74%) and to employ an additional number of people (64%). Also, 60% of the respondents intend to make it possible for their employees to continue working from home even after the coronavirus pandemic is over,” added Doko Jelušić.

“Under the influence of the coronavirus, as the main limiting factor for business in 2020, the respondents for the first time pointed out insufficient demand (due to the pandemic and other reasons), which is followed by a lack of an adequate workforce and taxation of labor. Almost two-thirds of the respondents think that the Government’s measures directed towards aiding the economy to overcome the crisis caused by the coronavirus were effective. While the coronavirus has mostly had an impact on the transformation of business processes (digitalization), short-term strategic goals, and finances and liquidity, it is expected that it will continue to have a negative impact on business in the next two years”, stated Ruža Tomić Fontana, President of the Board of Governors, AmCham.

The survey covered the following areas: business activities in 2020, business environment, the impact of institutions on the business environment, comparison with the region, business expectations, and the impact of the coronavirus on business.

The biggest disadvantages of conducting business in Croatia compared to CEE countries are the small market, slow administration, and lack of a long-term strategy of the Government. A total of 41% of the respondents believe the business conditions in Croatia to be worse than in the other Central and Eastern European countries.