CROATIA Law and Practice Contributed by: Iva Basarić, Marija Gregorić and Matija Skender, Babic & Partners
rity ), there are certain sectors in Croatia where addi - tional industry-specific requirements and/or restric - tions apply, such as the obligation to acquire prior approval from the competent regulatory bodies, or to notify the regulatory body before conducting certain activities. Those restrictions often apply only to non- EU and/or non-EEA-based investors. The competent authorities, as well as the sanctions threatened for non-compliance with specific requirements, vary from sector to sector. The most significant areas that have a special regime regulating FDI are real estate, gam - bling, media, transportation, fishery and construction. Real Estate Legal entities established in the EU and natural per - sons who are EU nationals have rights and obligations equal to domestic nationals/entities when it comes to acquisition of ownership of real estate in Croatia. Non- EU investors may acquire ownership subject to the requirement of reciprocity, and conditional on obtain - ing the approval of the Ministry of Justice and Public Administration. Failure to acquire approval from the Ministry of Justice and Public Administration will result in the legal transaction being null and void. Gener - ally, restrictions apply only to the direct acquisition of real estate. However, based on information pub - lished by the Ministry of Justice and Public Adminis - tration, approval is also required in cases where the competent authority establishes that the sole intention behind the acquisition of shares in a local entity is the acquisition of the real estate owned by such entity. This is to be determined on a case-by-case basis. In addition, non-EU investors cannot acquire owner - ship of agricultural land and state-owned forests (ie, there is no approval system available in these instanc - es). Gambling In Croatia, games of chance can only be organised by an entity established in Croatia, which has a licence granted by the Croatian government and the Ministry of Finance. Although during the licensing process the Croatian entity must present various data regarding its shareholders, there are no hardcore restrictions regarding foreign (ie, non-Croatian) shareholders. However, where subsequent changes to the share - holding of the Croatian entity are intended, the Croa -
tian entity must report such intention to the Ministry of Finance, which will conduct a special procedure to decide whether the change in shareholding would result in the cancellation of the licence. Based on the non-binding interpretations of the officials of the Min - istry of Finance, the power to cancel the licence in case of a change in shareholding is completely sub - ject to the discretion of the Ministry of Finance. Organising games of chance in Croatia without a licence is subject to criminal sanctions (including imprisonment) as well as an administrative fine for the legal entity and responsible person within the legal Entities seated in EU/EEA member states may con - duct publishing activities, as well as publish electronic publications and video sharing platforms in Croatia, only on a temporary or sporadic basis, in reliance on the EU freedom of services principle. As an excep - tion, the publisher of an electronic publication seated in another EU/EEA member state may be allowed to permanently provide its services in Croatia, subject to being registered locally with the court (ie, if it has a local branch office established) or other appropriate registry (ie, if it has a representative or correspond - ent office in Croatia), and if it has an editor’s office in Croatia. Non-EU/EEA investors may not perform publishing activities, or provide electronic publication and video sharing platforms in Croatia, without having a local presence. Non-compliance with the foregoing provi - sions is sanctionable by an administrative fine for the legal entity and the responsible person within said entity. entity. Media Road, Air and Inland Water and Maritime Transport As a general rule, domestic and EU incorporated enti - ties can provide road, air, and inland and maritime cabotage within the borders of the Republic of Croatia under the same conditions, in accordance with the EU rules. By contrast, non-EU entities are generally prohibited from providing road, air or inland water and maritime cabotage, unless international agree - ments provide differently or if special approval from the Ministry of the Sea, Transport and Infrastructure
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