Croatia Business Reforms Show Positive Results in 5 Years

ZAGREB, March 23, 2023-Three Business Environment Reform (BER) technical assistance projects have enhanced important business regulatory processes in Croatia including introducing sustainable digital solutions, and assisting business regulators to exchange pertinent, integrated information to the private sector. The project series was funded by the European Union via the Structural Reform Support Programme and implemented by the World Bank, in cooperation with the Directorate General for Structural Reforms of the European Commission (DG REFORM) providing assistance to the Croatian government, represented by the Ministry of Economy and Sustainable Development.

Improving the business environment is central to boosting Croatia’s competitiveness and supporting sustainable and inclusive private sector development. Each year, thousands of entrepreneurs across Croatia start new businesses, creating jobs and new opportunities for Croatia’s growth. To help these entrepreneurs step up their productivity they need transparent and easily available information about the rules, regulations, and conditions to conduct their business operations. Today, the accomplishments of the BER project series in these important areas of business reform were presented to key stakeholders, including the private sector in Zagreb.

“The digital transformation of Croatia through the digitization of public administration, transport, the legal system and higher education is the focus of this government, and the digital transition is one of the key development directions defined by the 2030 National Development Strategy of the Republic of Croatia. The BER project, which we have implemented with the support of the World Bank since 2019, built the backbone for the transformation of the economy towards a more transparent, efficient and simpler provision of public services, primarily G2B, which, I am sure, will soon be recognized and positively evaluated by entrepreneurs and citizens in the Republic of Croatia. Namely, everything that this Government plans and implements is aimed at strengthening the quality of business and life in our country, which has great potential and strength to become one of the leaders among modern, digital and innovative economies within the EU and beyond,” emphasized Hrvoje Bujanović, State Secretary at the Ministry of Economy and Sustainable Development.

The first BER project laid the foundations for a modern, electronic, centralized, and up-to-date registry, unifying data on all business entities operating in Croatia. It launched the online platform “START” for business registration, consolidating services of several government institutions under one online service. Under the BER2 project, the World Bank conducted the analyses on the requirements for Business Licensing and recommended how to streamline these processes. In BER3, further steps were taken towards full digitalization of business licensing by providing preparation for digitalization of key business activities and recommending a roadmap for their automatic update and the interoperability business model.

With the onset of the new era embracing the green and digital paradigm in G2B (Government 2 Business) service delivery and with a rise in the use of innovative technologies and of the new digital economy models, Governments across the EU require innovative regulatory approaches, including new models to operate a business,” said Jehan Arulpragasam, World Bank Country Manager for Croatia. “We are very pleased that the Croatian authorities are focusing their efforts on adopting these innovative practices, that will speed up, simplify and make regulatory procedures for businesses more transparent for the overall economic benefit of Croatia and we look forward to continue providing our expertise and cooperation in future endeavors.”

“The green and digital transition is at the heart of the European Union’s effort to enhance the recovery and resilience of Member States. DG REFORM via the Technical Support Instrument is their strategic partner to design and implement reforms that spur jobs and foster sustainable and inclusive growth. Since 2017, we have joined forces with the Ministry of Economy and Sustainable Development and the World Bank in inventorying, simplifying, digitalizing, and optimizing business registration and licensing requirements. We are very pleased to see these efforts put into practice for the benefit of a stronger business environment and growth potential of Croatia alongside our continuous support for the digitalization of the country’s public administration in different areas namely the judiciary, health, customs, tax and education.” stressed Mario Nava, Director-General, DG Reform, European Commission.

The event provided a discussion platform to key stakeholders to elaborate on the results of the BER projects. It also helped them identify the challenges faced related to G2B service delivery and operating a business in a time of digitalization from public and private sector perspectives.

About the World Bank in Croatia

The World Bank has been a partner to Croatia for 30 years. During this period, the Bank has supported more than 50 projects, totaling almost $5 billion, produced numerous studies, and provided technical assistance to help strengthen institutions and support the design of policies and strategies. The Bank’s current program focuses on supporting the authorities with the %implementation of the National Recovery and Resilience Plan (NRRP) in several areas, including public sector wage reform, modernization of the R&D framework, education, social policy and pensions. The Bank program also provides lending and technical assistance in areas of transport, justice service delivery, business environment, land administration, solid waste management, and science and technology. In addition, the Bank is supporting post-earthquake reconstruction of key health and education facilities.

About the Technical Support Instrument in Croatia

The Technical Support Instrument, with a budget of € 864 million for the period 2021-2027, supports Member States in designing, developing, and implementing reforms. The support is provided upon request and covers a wide range of areas, but it is also linked to broader EU priorities. Croatia is among the top users of the Structural Reform Support Programme and its successor the Technical Support Instrument. DG REFORM has provided technical support in a broad range of policy areas. From 2016 onwards, 113 technical support projects have been or are still implemented in the country. Projects are mostly related to the European Semester recommendations and recent euro-accession and, around 45 of the implemented and on-going technical support projects directly or indirectly contribute to the National Recovery and Resilience Plan. The policy areas covered include public financial management, earthquake reconstruction, public administration, digitalization, justice, healthcare and e-health, state-owned enterprises, business environment and professional services market liberalization, capital markets and access to finance, social services, education and pension reform.

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