CROATIA Law and Practice Contributed by: Iva Basarić, Marija Gregorić and Matija Skender, Babic & Partners
Babić & Partners Trg Drazena Petrovica 3, 13th floor 10000 Zagreb Croatia
Tel: +385 1 3821 124 Fax: +385 1 3820 541
Email: office@babic-partners.hr Web: www.babic-partners.hr
1. Legal System and Regulatory Framework 1.1 Legal System
the relevant legislation available so far, please see 7.1 Applicable Regulator and Process Overview . It should be noted that the Act does provide for ret - roactive application, meaning that the authorities will be authorised to screen transactions that have closed prior to the Act coming into force, within a period of three years from that date. Based on the public com - mentary, such retroactive screening would only be applied to investments that have a negative impact on national security and public order in Croatia, but no such caveat has been expressly introduced in the Act. 2. Recent Developments and Market Trends 2.1 Current Economic, Political and Business Climate Croatia is a small economy with strong financial and trade links to the eurozone and is mostly open to for - eign investment. Both foreign and domestic investors generally enjoy equal treatment, with specific excep - tions described in more detail in 8.1 Other Regimes. Croatia adopted the euro as its official currency on 1 January 2023, and the country’s inclusion in the eurozone has eliminated currency risks. Croatia’s GDP is characterised by the domination of tourism in the services sector, which accounted for almost 20% of its GDP. According to the forecasts of the Euro - pean Commission, the initial GDP growth figures for 2024 have been revised upward to an expected 3.9%, while the figure for 2025 is 3.2%. The projected figure for 2026 is 2.9%. Furthermore, based on the Com -
Croatia (officially “the Republic of Croatia”) is a civil law jurisdiction, influenced to an extent by German and Austrian jurisprudence. The law is codified, and the legal system in principle does not follow the prec - edent rule. Croatia has been an EU member state since 1 July 2013. The Croatian judicial system is composed of municipal and county courts (which hear both civil and criminal cases); misdemeanour, commercial and administra - tive courts; the High Criminal Court, the High Misde - meanour Court, the High Commercial Court and the High Administrative Court; and the Supreme Court of Croatia. Croatia (like some other jurisdictions in con - tinental Europe) has in place a Constitutional Court (separate from the judicial branch), which has the authority, among other things, to decide on the con - formity of laws and regulations with the constitution, and to hear challenges against specific decisions of other courts and state bodies that are claimed to be in violation of the constitution. 1.2 Regulatory Framework for FDI Croatia has only recently adopted its first FDI Act, which is set to come into force on 13 November 2025. This being said, the adoption of the Act is still to be followed by the establishment of one of the authori- ties in charge of FDI screening, as well as adoption of the implementing regulation detailing certain aspects and criteria for said screening. For further details on
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