Investment Incentives

 The incentive measures regulated by the Investment Promotion Act apply to investment projects covering:
  • the manufacturing sector activities;
  • technology centres;
  • strategic business support services.
The recipient of incentive measures must retain his eligibility status and maintain the investment and new employment linked to the investment during a minimum period of 5 years which shall not be shorter than the period in which it makes use of the incentive measures.
 
TAX INCENTIVES

 
Investment
(€ million)
People employed
Period
(years)
Corporate Income Tax
0.3 – 1.5
10
Up to 10
10%
1.5 - 4
30
Up to 10
7%
4 - 8
50
Up to 10
3%
> 8
75
Up to 10
0%
 
 
EMPLOYMENT INCENTIVES

 
Unemployment rate
Incentive rate in relation to eligible costs of opening new workplaces
Increase for technology innovation and development centres
Increase for business support strategic activities
< 10%
10%
Up to 1,500 EUR
+50%
(750 EUR)
+25%
(375 EUR)
10 - 20%
15%
Up to 2,000 EUR
+50%
(1,000 EUR)
+25%
(500 EUR)
> 20%
20%
Up to 3,000 EUR
+50%
(1,500 EUR)
+25%
(750 EUR)
 
 
AID TO COVER ELIGIBLE COSTS OF TRAINING LINKED TO AN INVESTMENT

 
 
Special education
General education
Large entrepreneurs
Up to 35%
Up to 60%
Small and medium entrepreneurs
Up to 45%
Up to 80%
 
 
For the projects concerning establishment and development of technology and innovation centres the allowable non-repayable grant shall not exceed 5 % of the actual eligible costs of investment in fixed assets, or in the case of the purchase of equipment for the technology and innovation centre in question the maximum aid amount shall not exceed EUR 500,000 expressed in legally equivalent HRK value, provided that the purchased equipment for the technology and innovation centre constitutes high-tech equipment.
 
A large investment project or investment project of significant economic interest is mean an investment project which involves a large economic activity, such as construction of a new factory or industrial plant, starting-up of a new economic activity, as well as development of new technologies, with the value of investment in fixed assets of the recipient of incentive measures of not less than EUR 15 million expressed in equivalent HRK value, provided that a minimum of 100 new jobs linked to the investment are created, starting from the end of the first year of investment.
 
For large investment projects, in the regions (counties) of the Republic of Croatia where the registered unemployment rate according to the data of the Croatian Bureau of Statistics for the preceding year exceeds 20%, the recipient of incentive measures shall be granted an increase in the incentive measures not exceeding 5 % of the actual eligible costs of investment in fixed assets:
  • for the costs of setting up of a new establishment or plant;
  • for the costs of purchase of new machinery or manufacturing equipment, whereby the maximum total aid amount shall not exceed EUR 1 million expressed in legally equivalent HRK value, provided that at least 40 % of the total value of investment is apportioned to the machinery or manufacturing equipment and at least 50 % of the purchased machinery or manufacturing equipment constitutes high-tech machinery or equipment;
For the large investment projects, the carrying-out of which implies the construction of new or extension or enlargement of the existing infrastructural facilities and installations linked to the investment, a non-repayable grant not exceeding 5 % of the actual costs of the construction of new or extension or enlargement of the existing infrastructural facilities and installations shall be awarded, subject to a maximum amount of EUR 500,000 expressed in legally equivalent HRK value.
In adition to goverment incentives local government can give their own incentives like cheaper land in business zones, comunal fees free of charge or reduced, etc.