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Strategic Investment Projects Act

For long time expected, but also long debated Strategic Investment Projects Act was finally passed in late October of 2013 and soon entered into force. The Act contains a number of easements for the investors of so-called strategic projects of the Republic of Croatia.

Strategic projects can be private investment projects, public investment projects or public - private investment projects in the field of economy, energy, tourism, transport, infrastructure, electronic communications, postal services, environmental protection, public utilities, agriculture, forestry, water management, fisheries, health, culture, science, defence, judiciary, technology and education which include the construction of structures. Particular project is given the status of a strategic project if such is declared by the Croatian Government.

Strategic projects must meet certain conditions prescribed by the Act. These conditions are as follows: (i) the project must be in compliance with the urban planning documents and (ii) the total capital investment costs must be equal to or greater than HRK 150 million, or (iii) project that can be co-financed from EU funds and programs, and the total capital costs of the project are equal to or greater than HRK 75 million, or (iv) project is realized in assisted areas, i.e. in areas of local self-government district in accordance with regulations governing Croatian regional development, and the total capital investment costs are equal or greater than HRK 20 million, or (v) project is realized on islands, and the total capital investment costs on the islands are equal to or greater than HRK 20 million, or (vi) a project falls within the area of agriculture and fisheries, and the total capital investment costs are equal to or greater than HRK 20 million.

To have a certain project declared as a strategic project, interested investor should apply the project to the Ministry of Economy. However, in order to attract investments, the Croatian Government can, through the Ministry of Economy, make a public invitation to investors to invest in a certain strategic project.

In its application, the interested investor must include a detailed description and explanation of the project and submit documents based on which it can be demonstrated that the project complies with the legal requirements, as well as other documents required by the Act.

The procedure of evaluating, selecting, preparing and implementing strategic projects is as follows:

  • The assessment and the proposal to declare a certain project as a strategic one is performed by the Committee established by the Croatian Government.
  • On the proposal of the Committee, the Government adopts a Decision on the Promulgation of a Strategic Project and this Decision is published in the "Official Gazette".
  • Within 30 days of the publication of the Decision on the Promulgation of Strategic Project, the Economy Minister concludes with a private investor the Agreement on the Preparation and Implementation of the Project. The Agreement regulates the issues of technical project preparation, execution dynamics of certain liabilities, investor’s guarantees, and other issues relevant to the project.
  • All procedures relating to the preparation and implementation of the strategic project, including the processing of orderly submitted claims of the investors are considered to be urgent. The Act provides short deadlines in which the competent authorities should make certain decisions, opinions or administrative acts that are necessary in the implementation of the project.

The Act also provides certain easements for strategic projects in disposal of real estates in the ownership of the Republic of Croatia. These easements, among others, include the sale of such real estates without the tendering procedure, at market value as estimated by an authorized court expert as well as the separation of the forests from the forest fund and the sale of these forests or establishment of the right to build on them.

We hope that this Act, if effectively applied by the competent authorities, as well as by interested investors, can significantly contribute to improving the investment climate in Croatia and attracting the so much needed investments to Croatian economy.

11.12.2013. at 8:30

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