CROATIA Law and Practice Contributed by: Iva Basarić, Marija Gregorić and Matija Skender, Babic & Partners
• an initial investment resulting in at least 10% shareholding in the local company, regardless of the value of the investment; • any subsequent investment in the local company increasing the share capital or any other capital component of the company, or the acquisition of additional shares in the company with a minimum value of EUR15,000; • any investment resulting in a less than 10% shareholding in the local company, if the sum of all transactions in a single month exceeds EUR15,000; • any withdrawal of investment resulting in the reduction of share capital or divestiture of shares of a minimum value of EUR15,000; and • withdrawal of any investment that would result in a domestic person/entity holding a 100% share in the company. In Croatia, the primary source of funding is still pre - dominantly bank financing. Although access to capital markets exists, this type of financing is still not fre - quently utilised and, fairly recently, there was actually a trend towards a decrease in the number of JSCs (which have the possibility of going public and benefit - ting from equity financing). Although new listings are rare, Croatia’s recent joining of the eurozone is expected to boost interest in the Croatian capital market, and in foreign investment in general. In recent years, the Croatian market saw the listing of the first “green” (sustainability-linked) bonds, valued at almost EUR40 million. In 2024, due to inves - tor demand, the Republic of Croatia issued two bonds on the domestic market: one aimed at both retail and institutional investors and maturing in three years, val - ued at EUR750 million; and another aimed exclusively at institutional investors, maturing in ten years and valued at EUR1.25 billion. 5. Capital Markets 5.1 Capital Markets Overview Recent capital markets developments in Croatia also include a strategic regional partnership with Slova - kia, Romania, Hungary, Slovenia, Macedonia, Bulgaria and Poland to boost market efficiency, and a focus on
digitalisation, particularly tokenisation and the use of AI, alongside initiatives to improve the capital market’s infrastructure and the public’s financial understanding. 5.2 Securities Regulation The Croatian securities market is primarily regulated by the Croatian Capital Market Act, which has trans - posed various EU legal instruments, including the: • Directive on Investor Compensation Schemes (Directive 97/9/EC of the European Parliament and of the Council); • Directive 2016/1034/EU amending Directive 2014/65/EU on markets in financial instruments (the so-called “Quick Fix Directive”); and • Directive 2011/61/EU (MiFID II), as amended. Other important pieces of legislation include the Act on Open-End Investment Funds with a Public Offer - ing, the Alternative Investment Funds Act, the Takeo - ver Act, the Companies Act and a number of imple - menting regulations. Authorities The Croatian regulator in charge of the supervision of the securities market in Croatia is the Croatian Finan - cial Services Supervisory Agency ( Hrvatska agencija za nadzor financijskih usluga HANFA). HANFA’s main tasks with respect to the securities market are the supervision of fair securities trading rules; supervi - sion over the conduct of stock exchanges, authorised dealers, investment funds and other market partici - pants; and issuing licences and mandating the meas - ures necessary for proper functioning of the securities market. The SKDD is authorised to manage the central deposi - tory of non-materialised securities, as well as to per - form clearances and settlements with respect to transactions with securities executed on or outside of a regulated market or a multilateral trading facility (MTF). Issuance of Securities Securities in Croatia may generally only be placed on the market by way of public offering, and public offer - ing requires preparation of a prospectus (subject to certain exceptions). The content of the prospectus is
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