CROATIA Law and Practice Contributed by: Iva Basarić, Marija Gregorić and Matija Skender, Babic & Partners
Under an Asset Deal By contrast, an asset deal (if structured as the transfer of a business as a going concern) will often trigger the application of the Acquired Rights Directive (ARD)/ Transfer of Undertakings (Protection of Employment) (TUPE)-equivalent rules, under which all employment contracts pertaining to the transferring (part of a) busi - ness would transfer to the acquiring entity automati - cally by operation of law, together with works council and applicable CLAs. Employees are not entitled to object to the transfer, but the works council (or, if there is no works council, a union trustee if one is appoint - ed) must be consulted in advance of the envisaged business transfer. 11. Intellectual Property and Data Protection 11.1 Intellectual Property Considerations for Approval of FDI Currently, Croatia is in the process of setting up its FDI screening regime (see 1.2 Regulatory Framework for FDI and 7.1 Applicable Regulator and Process Over- view ). While the underlying FDI Act has been adopted, the implementing regulations (which are expected to regulate the screening process in more detail) still need to be put in place. Therefore, it remains to be seen how intellectual property will be treated by Croa - tian authorities in future instances of FDI screening. Considering the expanding consciousness regarding IP in Croatia, as well as the worldwide shift in the sig - nificance of the IP portfolios of companies, it may be that IP will play an important role in future FDI screen - ing procedures in Croatia. 11.2 Intellectual Property Protections Croatia is historically a jurisdiction that recognises and protects various types of IP. Croatian IP legislation is currently comprised of several pieces of legislation that regulate copyright and related rights, patents, trade marks, industrial designs, geographical indica - tions and designations of the origin of products, plant varieties, topographies of semiconductor products and business secrets. Croatian legislation is entirely harmonised with the relevant EU legislation, although Croatia is still outside the EU patent system. In addi - tion, Croatia is a member of the World Intellectual
als, introducing employment policies or personal data processing activities. 10.2 Employee Compensation Compensation for employees in Croatia commonly encompasses several elements, notably including the base salary, mandatory health and social/pension insurance, and additional compensation elements. Additional compensation elements, such as perfor - mance bonuses, 13th salary, allowances, Christmas or vacation bonuses, jubilee awards, equity compen - sation (eg, stock options) and non-cash perks (eg, a company car) are in principle subject to a company’s discretion unless an applicable CLA mandates any such elements and/or minimum amounts of such ele - ments. The base salary is paid in cash on a monthly basis in an amount set by the contract, policy or appli - cable CLA, and in any case no less than the statutory minimum national wage (currently set at EUR1,050 gross monthly for full-time employment in 2026). In Croatia, employee compensation generally remains unaffected by acquisition, change-of-control or oth - er investment transactions, regardless of whether the transaction is structured as a share deal or an asset deal. That said, the acquiring party would usu - ally assess, before transaction closing, whether any adjustments to the current compensation framework at the target will be necessary in the course of inte - gration, as well as the legal prerequisites for any such adjustments. 10.3 Employment Protection The legal implications of an M&A transaction for employees vary depending on the type of transaction, and notably, whether the transaction is structured as a share deal or an asset deal. Under a Share Deal As a general rule, change of control (direct or indirect) by way of a share deal will not impact the employees of the target company, as the identity of the employer entity and the employment contracts with the employ - er entity remain unchanged.
192 CHAMBERS.COM
Powered by FlippingBook