Last Year, Services Exported to the United States Increased by 47%
Source: Croatian Chamber of Economy (HGK)
Last year, Croatia exported services worth over 1 billion euros to the United States, marking growth of 47% compared to the previous year. Although the growth is impressive, it is expected to accelerate even further with the removal of the last barrier—double taxation. The reasons for the delay in ratification and how to conduct business with the USA in the meantime were discussed at today’s seminar on the challenges of entering the U.S. market, with a focus on double taxation, organized by the Croatian Chamber of Economy, the Association of Croatian American Professionals (ACAP), and the U.S. Embassy.
Luka Burilović, President of the Croatian Chamber of Economy; Source: HGK
“The USA is among the top ten most significant export markets for Croatia and the eleventh most significant trade partner overall. The elimination of visas for U.S. holders of Croatian passports was a significant step in strengthening bilateral relations, however, we are still awaiting the abolition of double taxation. The agreement was signed almost two years ago, and with its enactment, we expect to see a reduction in business and administration costs and attract more direct investments, especially in the IT sector,” stated Luka Burilović, President of the HGK.
Direct U.S. investments in Croatia from 1993 to 2023 reached more than 600 million euros, with last year alone recording investments amounting to 25.5 million euros. This places the United States in the top twenty countries for direct foreign investment in Croatia.
Nathalie Rayes, US Ambassador to the Republic of Croatia; Source: HGK
“More than a hundred American companies are already operating in Croatia, creating thousands of jobs. The cooperation and friendship between the USA and Croatia have only grown over the years. We have removed visas, but the challenge of double taxation remains, which mostly affects the operations of small and medium enterprises. We are currently waiting for the U.S. Senate to ratify the Treaty. I emphasize that there is good will on the American side, and we are now making significant efforts to prioritize this issue. With our efforts and the support of the business community, I believe that we could close this matter to the satisfaction of Croatian and American entrepreneurs next year. Additionally, in order to strengthen relations, we will also advocate for the introduction of a direct year-round flight,” said Her Excellency Nathalie Rayes, U.S. Ambassador to the Republic of Croatia.
For Croatian IT companies, the USA is the largest foreign market, and it is expected that this sector would benefit the most from the elimination of double taxation, followed by the pharmaceutical, defense, and food industries.
Trpimir Kvesić, Director of InSky Solutions; Source: HGK
“The elimination of double taxation would accelerate our expansion into the U.S. market. This market, as well as its business culture, differs significantly from Europe. Decisions are made more quickly, and there is a high degree of orientation towards results. There is a strong focus on innovation, rapid growth, and expansion. On the other hand, the U.S. market is very competitive, with numerous domestic and international players. New trends and technologies are adopted faster, which means many doors are opened for companies like ours, which are inventive, can quickly respond to changes, and have an innovative product,” explains Trpimir Kvesić, Director of InSky Solutions.
InSky Solutions owns the platform TourismInSky, which is present in more than 400 hotels in the region and Europe, and, as they report, brings in over 4 million guests annually. They are successful in Europe, and for entering the U.S. market, they are preparing a series of classes at HGK alongside members of ACAP, with whom they collaborate on projects that connect the USA and Europe.
Don Markušić, President of ACAP Zagreb; Source: HGK
“ACAP is an organization that encourages cooperation and networking between Croatian American professionals. As such, we deal with various current issues, including the agreement on avoiding double taxation, investments in Croatia, and expanding business into the U.S. market. To further enhance the value of membership and provide targeted support to our members, ACAP has formed specialized committees, like the Business and Entrepreneurship Committee, which allow members to focus on specific areas of interest, such as business opportunities, legal issues, and investment potential, thus providing a platform for the exchange of knowledge, ideas, and resources,” says Don Markušić, President of ACAP Zagreb.
The USA is also an important tourist market for Croatia. Last year, Croatia was visited by nearly 680,000 American tourists, which translates to growth of 34% compared to the previous year, exhibiting the post-pandemic market recovery.