Press Release - Reception with the U.S. Ambassador, H.E. W. R. Kohorst

“In terms of economic growth and the improvement of investment climate, we have seen the Croatian Government take some positive steps over the last few years – reducing parafiscal charges and taxes, a continuous decline in government debt and, more recently, Croatia's entry into the European Exchange Rate Mechanism. I am encouraged by the Government’s recent efforts to simplify procedures for incorporation of companies and to form a Government-level working group focused on improving the business climate. I also welcome the Government’s commitment to cut red tape. These are all important reforms which Croatia should continue pursuing aggressively,” stated the United States Ambassador W. R. Kohorst at a reception hosted by the American Chamber of Commerce in Croatia on 15 September and added that although the Covid-19 pandemic poses a major challenge to the economy, it should not be used as an excuse for inaction.

He stated that the investment climate remains a challenge, with the current regulations and procedures making the U.S. investments extremely difficult. Investors face an inefficient, sometimes unpredictable, justice system which contributes to slow litigation, rigid labor legislation, and heavy bureaucracy. He also believes that the Government should continue reducing the number of state-owned enterprises. These enterprises, most of which are historically inefficient and poorly managed, control much of the economy and ultimately impede the country's growth potential. The Government is reluctant to reduce the number of regulations and undertake the necessary reforms to boost innovation and stimulate the formation of competitive markets as its primary focus remains the prevention of job losses in state-owned enterprises.

Ambassador Kohorst believes that another obstacle to attracting foreign investment is the structure of public procurement and tender processes. Current processes stifle competition and, in some cases, directly prevent foreign companies from participating. Offers are often written in such a way as to favor a particular company and put everyone else at disadvantage. Therefore, it is necessary to ensure greater transparency at each stage of the public procurement cycle.

In his speech, he also referred to the economic relations between the United States and Croatia, which he believes are strong, but could be stronger. He also pointed out that more than 100 companies based in the USA currently operate in Croatia, with more than 820 million dollars of invested capital and more than 7,000 employees.

He believes that the commitment of Croatian Government to continue pursuing economic and judicial reforms will make Croatia a more attractive destination for American companies, as will the opening of negotiations with Croatia on the agreement for the avoidance of double taxation.

He pointed out that the Embassy would continue emphasizing the need for reforms of business climate and advocating for the establishment of an investment verification mechanism to protect the strategic infrastructure and assets and to ensure cooperation with reliable suppliers in 5G networks, because he believes these are key steps to achieving economic growth without sacrificing sovereignty or security.

Andrea Doko Jelušić, Executive Director of AmCham, pointed out Ambassador Kohorst's commitment to opening the negotiations on the avoidance of double taxation and thanked him for his support to the business community in Croatia and his efforts to strengthen political and economic ties between the two countries.

Ruža Tomić Fontana, President of the Board of Directors of AmCham, thanked Ambassador Kohorst for his commitment to improve the business environment in Croatia and strengthen Croatian-American relations through cooperation, investment, and promotion of entrepreneurship.