Services market liberalization

Services market liberalization

Services market liberalization is part of the regulatory reform of the economy where the goal is to continue to boost the services market competition through reducing the level of regulation of professions, and to encourage prevention of introducing new regulation of the market, services and professions in order to create a space for increasing productivity and innovation of the economy, (self)employment of new entrepreneurs and more competitive prices of services”, by applying OECD’s PMR methodology National Reform Programme 2020.

Services market liberalization enables competition and easier market access, which leads to reduction of administrative costs, especially in the process of cross-border business activities. The number of entrepreneurs in the market has also increased, and the process of exit from the market has been simplified for those who cannot remain in the market due to increased competition and their lack of efficiency. This increases market dynamics and boosts innovation. At the same time, consumers have been given more opportunities of more choice and lower prices, while consumer protection standards have been retained and even more strengthened with competition.

Service providers from EU/EEA, and thus from Croatia as well, are entitled to:

  1. freedom of establishment (on permanent basis and without discrimination)
  2. freedom to provide cross-border services (on temporary and occasional basis, in a range of services activities without establishment)

In this process, the rules and regulations should be as simple as possible, clear, proportional and non-discriminative. Furthermore, all information for service providers are available in one place, and procedures are being digitalized, while all other information should be checked along borders via joint IT system.

Summary overview of the result indicators:

  1. Services market liberalization means amending regulations across different sectors in order to remove different regulatory and administrative barriers to easier market access and competition. The entire reform has been horizontally coordinated by the Ministry of the Economy and Sustainable Development (official information in Croatian). Over 250 deregulation measures have been implemented across 50 services activities and professions by the end of March 2021. Furthermore, remaining 8 out of 20 measures from the first action plan are in implementation by end 2021, while the Second action plan envisages the implementation of 16 out of total 18 measures during 2021 or 2022.
  2. According to OECD’s PMR 2018 methodology the level of regulations of the Croatian methodology has been reduced from the highest EU point (PMR 2013) to the at least average EU and OECD levels, and in some sectors even below that average. The said result involves the level of regulation for the market access (staring business, services and network sectors, public procurement, trade and investments, retail distribution, taxi and road transport, telecommunications and the main market professions -accountants/bookepers, real estate agents, architects and civil engineers). Moreover, the OECD data show that legal services (attorneys and notaries) are more regulated than the EU average, but at the level of continental European framework, while retail of medicines (pharmacies) is among the most regulated within the EU.

More detailed overview of the methodological result indicators:

  • According to the PMR 2013 report, Croatia entered the European Union as its most regulated economy (2.08). On the other hand, according to data from the beginning of 2018 (PMR 2018), Croatia scored 1.43 which is within the EU-OECD average. This indicates that Croatia was in the same level as Iceland, Chile, Japan and Israel, and it was less regulated within the EU than Poland, Slovakia, Malta, Bulgaria, Romania, Austria, France and Belgium.
  • However, when observing the e-registration of establishment (Administrative burden on start-ups) in real time, Croatia is from the end of 2019 positioned below the EU-OECD’s average (with the top 1.35 according to the OECD’s simulation), and along with the real corrections of certain data (Interaction with Interest Groups) even below than indicated. Thus, Croatia is positioned to the level comparable with Czech Republic, Slovenia, Hungary, Estonia and Latvia.
  • Observing the two main segments measured by the PMR report, Croatia is with 1.82 above EU-OECD’s average by Distortions induced by state involvement, while with 1.05 below the said average in terms of Barriers to domestic and foreign entry, i.e. registration of establishment, entry to the market for services in variety of sectors and retail and investments. To be specific, when observing barriers to market entry, Croatia is among 10 the least regulated EU Member States in the internal market, i.e. at the level of the Netherlands, Estonia and Hungary, and it is less regulated than Czech Republic, Slovakia, Poland and Romania. From the implementation of e-establishment, the level of barriers to market entry is according to OECD simulation reduced to 0.92, below the level of Slovenia.
  • Concerning Barriers in Services Sectors, Croatia is with 2.22 among 10 EU states in the internal market with lower level of barriers, and at the same time with lover level of barriers than Latvia, Slovakia, Poland and Romania. At the same time, it is below the EU average and close to the OECD’s average (by 10% below the EU average).
  • As regards the main market-driven Professional Services such as accountants/bookkeepers, architects, engineers, real estate agents and attorneys), Croatia is with 1.48 below the EU-OECD’s average. In addition, Croatian market of professions is less over-regulated in comparison with the markets of Poland, Latvia, Slovenia, Czech Republic, Slovakia, Germany, Austria, Romania and Bulgaria. Furthermore, Croatia has the least over-regulated market professions among states of the Central Europe that share the similar regulatory framework. Regulatory framework for attorneys is within the level of comparable states of the Central Europe (the same applies to notaries), although slightly above the EU average. In comparison with the former PMR report, over-regulation of attorneys is slightly reduced (from 5.08 to 3.85), i.e. that level is lower than in Hungary, Poland, Czech Republic, Slovakia and Slovenia. Moreover, the over-regulation of architects and engineers is reduced (for architects from 3.85 to 1.15) so this is below the EU-OECD’s level, while engineers are within the EU average. In addition, Croatia is among ten EU states which do not have licensing procedure for accountants (0.00).
  • Retail Distribution is very open and with 1.22 it is somewhat less over-regulated than the EU-OECD’s average, when compared to Latvia, Poland and Slovakia. On the other hand, pharmacies are with 4.50 among the most regulated within the European Union, and less than Luxembourg and Spain.
  • Total Network Sectors regulation has been reduced to the level slightly above the EU-OECD’s average (from 2.25 to 1.53), and it is lower than comparable Latvia, Lithuania, Poland and Romania. Over-regulation is thus reduced in the energy sector (from 3.02 to 1.49), from electricity (from 3.85 to 1.50) to natural gas (from 2.16 to 1.48). Over-regulation is also reduced in the sector of transport (to 2.15), and over-regulation of the road transport is among the lowest in the internal market. Regulation of telecommunications is with 0.35 within the EU average and significantly lower than the OECD average. Over-regulation of mobile telecommunications almost does not exist (0.02), as in several EU states such as Czech Republic and Estonia.

Summary overview of deregulation and services market liberalization:

Open cross-border market competition: The domestic market is open for the European market and foreign countries’ competition for a great majority of the services activities. Freedom of establishment on a permanent basis has been provided mutually within the EU. Furthermore, freedom to provide cross-border services on a temporary and occasional basis has been provided for various business activities for EU/EEA nationals, without obligation to register the establishment.

Simplified procedures: Staring a business has been simplified, accelerated and digitalized. Also, digital procedures for the services market access are available for the growing number of professions (architects, engineers, land surveyors, detectives, intellectual property, private education, real estate agents, retail and e-commerce) and process is ongoing (tourism and catering services, auditors and tax consultants). For a variety of other services, scanned documents may be sent by email, without seals and stamps, and an additional obligation of sending the documents via post office. Information on requests for the services’ sector activities are available in one spot (Point of Single Contact for services), thus there is no need of going to various institutions in person.

Less duplication: Equivalent type of professional liability insurance is recognized from other EU/EEA states. The access to regulated professions through automatic recognition of professional qualifications for EU/EEA citizens has been facilitated, and the same applies to the Croatian professionals in the EU market. The government does not demand documents from the domestic service providers that it already contains in the system. Information on the cross-border service providers have been largely verified via IMI system.

License-free: Relicensing of construction companies has been removed including energy certification, auditors, psychotherapists, and licensing of tourist guides and employment agencies. Professional chamber obligation has been removed for site supervisors, i.e. site managers.

Less exclusive rights: Landscape and interior design is not exclusively under competence of architects, so there are no limitations for others to perform this business activity.

Easier recognition of qualifications: Automatic recognition of the following professional qualifications has been implemented for the professions from EU Member States that have right of establishment in Croatia: doctors of medicine, dentists, midwifes, pharmacists and nurses. A general system for recognition of professional qualifications from the third countries has been introduced as well. European Professional Card issued for provision of services on temporary and occasional basis gives an automatic right to conduct the profession without fulfilling any additional requirement. A person who wants to provide regulated professional services may notify electronically the competent authority thereof or Point of Single Contact for services. Obligation of testing Croatian language proficiency is not obligatory anymore for professionals from EU/EEA countries, except for healthcare professions due to the patient safety. There is a 30-day deadline for a competent authority to issue a decision on recognition of foreign professional qualifications after fulfilment of an additional measure.

Market prices: Removing fixed tariffs has enabled free price formation in various professions and sectors such as real estate agents, architects, engineers, auditors, tax advisors, taxi, driving schools and energy sector.

Advertising: Architects and engineers, attorneys, pharmacists and physiotherapists are not banned to advertise their services anymore, as long as they comply with professional ethics.

No office and license restrictions: Territorial restrictions considering number of licenses have been removed (e.g. driving schools and taxi). Taxi drivers can obtain licences in any municipality. This enables expansion of professional business and their new investments. Furthermore, founders of driving schools and private archives are not under obligation to have economic justification of their business by means of an elaborate. The same applies to shopping malls. Architects, engineers, auditors and attorneys are free to open their offices as most of other professions.

Selection of legal form: In majority of professions, there are no limitations in terms of the legal form. Therefore, the entrepreneurs decide independently whether they want to start a business as natural or legal persons. This enables removal of costs of obligatory status change – for example, from natural to legal persons.

No permanent residence obligation: Architects, engineers and land surveyors are no longer under obligation to register their permanent residence in Croatia.

Less certificates: Architects and land surveyors are no longer under obligation to prove that they are not under any criminal procedure.

More open employment practices: As other professions, civil engineers and online travel agencies are no longer under obligation of hiring a minimum number of employees; instead they independently decide in this matter. Freedom of concluding a full-time or part-time job contracts is provided for driving schools. Online travel agency office manager is no longer under obligation to have a permanent residence and there is no obligation to have a full-time employed office manager in each branch office of a travel agency.

Detailed overview of the implemented deregulation and services market liberalization measures:

Architects

Ministry of Physical Planning, Construction and State Assets

Act on Physical Planning and Building Tasks and Activities; Act on the Chamber of Architects and Chambers of Engineers in Construction and Physical Planning; Ordinance on entries in directories, registers and records of the Croatian Chamber of Architects.

  1. E-service is available via system of e-Citizen, including recognition of foreign professional qualifications. The procedure of fulfilling the requirements and sending documents, i.e. obtaining approvals for starting a business is thus simplified and accelerated. Furthermore, there is still an alternative option of sending required documents via e-mail. All information on conditions for this activity is available at Point of Single Contact for services.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.
  3. Automatic recognition of professional qualifications for the architects from other countries of the European Economic Area has been provided.
  4. Mandatory fixed price regulation has been revoked for architects.
  5. There are no advertising limitations for architects (provided that professional ethics are respected).
  6. Certified architects are free to establish more than one office.
  7. Obligation to delete architects from the register if they fail to perform project activities and/or activities of professional supervision of construction processes for six consecutive months has been revoked.
  8. Architects do not have exclusive rights regarding building permits (but shared rights with engineers with regard to planning and design, professional supervision, project certification (attestation) and construction project management).
  9. The authorization procedure is no longer required for feasibility study, interior design project and landscape project design that are not under the construction project.
  10. Project management activities may be carried out by persons that are not entered in the project management records.
  11. Obligation of trainee internship through professional work experience under mentorship has been revoked, and it is sufficient to meet a two-year requirement of an adequate professional work experience.
  12. All certified architects may conduct activities of project attestation (certification), project development and signing of a project as well as site management activities.
  13. Requirement that architects as applicants for an approval may not be under a criminal procedure has been removed.
  14. Requirement of permanent residence in Croatia for architects from other countries has been removed.

Civil construction, mechanical and electrical engineers

Ministry of Physical Planning, Construction and State Assets

Act on Physical Planning and Building Tasks and Activities; Act on the Chamber of Architects and Chambers of Engineers in Construction and Physical Planning

  1. E-service is available via system of e-Citizen (for civil construction, mechanical and electrical engineers). The procedure of fulfilling the requirements and sending documents, i.e. obtaining approvals for starting a business is thus simplified and accelerated. Furthermore, there is still an alternative option of sending required documents via e-mail.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.
  3. Mandatory fixed mandatory price regulation has been revoked for engineers.
  4. There are no advertising limitations for civil construction, mechanical and electrical engineers (provided that professional ethics are respected).
  5. Certified engineers are free to establish more than one office.
  6. Obligation to delete engineers from the register if they fail to perform project activities and/or activities of professional supervision of construction processes for six consecutive months has been removed.
  7. Engineers do not have exclusive rights regarding building cost management (but shared rights with architects with regard to planning and design, professional supervision, project certification (attestation) and construction project management)
  8. Project management activities may be carried out by persons that are not entered in the project management records.
  9. Obligation of trainee internship through professional work experience under mentorship has been removed, and it is sufficient to meet a two-year requirement of an adequate professional work experience.
  10. The authorization procedure is no longer required for development of the feasibility study.
  11. All certified engineers may conduct activities of project attestation (certification), project development and signing of a project as well as site management activities.
  12. Requirement of permanent residence in Croatia for engineers from other countries has been removed.

Construction works managers and site engineers

Ministry of Physical Planning, Construction and State Assets

Act on the Chamber of Architects and Chambers of Engineers in Construction and Physical Planning

  1. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is not required to notify the Chamber.
  2. The requirement of obligatory membership in a professional chamber of construction works managers, i.e. site engineers has been removed.
  3. The requirement of professional liability insurance for construction work managers, i.e. site engineers has been removed.

Construction: construction works, project management, inspection of building components and testing the construction material

Ministry of Physical Planning, Construction and State Assets

Act on Physical Planning and Building Tasks and Activities; Act on the Chamber of Architects and Chambers of Engineers in Construction and Physical Planning

  1. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is not required to notify the Chamber.
  2. The licensing procedure has been removed for contractors – construction companies (the contractor has to be registered for construction works and needs to employ a manger of construction works).
  3. Obligation of hiring a minimum number of employees for construction works has been removed (note: construction work refers to building design and construction), therefore, the contractors independently decide on the number of employees.
  4. Persons carrying out the inspection of building components no longer have the obligation of accreditation.
  5. A fee for the decision on meeting requirements on evaluation and inspection of constancy of performance of construction components, has been reduced by half.
  6. Provision of services in civil engineering has been facilitated due to simplification procedures and cutting costs for obtaining a building permit.

Energy certification

Ministry of Physical Planning, Construction and State Assets

Building Act

  1. There is an option of sending required documents by email. Thus, the procedures on meeting the requirements, sending documents and obtaining licenses for starting a business have been simplified and accelerated. All information on requirements for this business activity is available at Point of Single Contact for services.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.
  3. The price of energy certification training has been approximately reduced by half thus enabling price competition.
  4. Obligatory work experience for graduate engineers (five-year study programme) has been reduced from five to two years and for undergraduate engineers (three-year study programme) from ten to five years, which simplifies licensing procedure.
  5. Obligation of attestation of documents by notaries before starting energy certification of buildings has been removed.
  6. Authorization fees have been reduced for entities performing energy certification.
  7. Obligation of re-licensing every five years has been removed, thus cancelling the additional procedural costs.
  8. Obligation of professional liability insurance has been removed.
  9. Obligation of obtaining a certificate proving that against a person no criminal proceedings are being conducted has been removed.

Land surveyors

State Geodetic Administration

Act on Geodetic Activity

  1. E-service is available via system of e-Citizen, including e-application of licensing exam. The procedure of fulfilling the requirements and sending documents, i.e. obtaining approvals for starting a business is thus simplified and accelerated. Furthermore, there is still an alternative option of sending required documents via e-mail. All information on conditions for this activity is available at Point of Single Contact for services.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.
  3. There are no limitations of legal form for land surveyors.
  1. Requirement of permanent residence in Croatia for land surveyors from other countries has been removed.
  2. Obligation of delivering a certificate proving that against a land surveyor no criminal proceedings are being conducted has been removed.

Real estate agents

Ministry of the Economy and Sustainable Development

Real Estate Brokerage Act

  1. E-service for submitting an application for agents is available at Point of Single Contact for services (until it is integrated in the system of e-Citizen, including obtaining approvals). The procedure of fulfilling the requirements and sending documents, i.e. obtaining approvals for starting a business is thus simplified and accelerated, and the fee has been reduced. All information on conditions for this activity is available at Point of Single Contact for services.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.
  3. The price of licensing exam for real estate agents has been reduced.
  4. The price is formed in the market.

Accountants

Ministry of Finance

Accounting Act

  1. Licensing of accountants in accordance with the law has been revoked.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.

Auditors

Ministry of Finance

Audit Act

  1. E-service will to be available via system of e-Citizen. The procedure of fulfilling the requirements and sending documents, i.e. obtaining approvals for starting a business is thus simplified and accelerated. All information on conditions for this activity is available at Point of Single Contact for services.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment.
  3. The authorization for work of auditors no longer has time limit, i.e. the extension request every three years is no longer needed, which reduces administrative burden.
  4. Only one member of an audit company management board needs to be proficient in Croatian language, instead of majority of members.
  5. An authorized independent auditor is free to establish more than one audit office, and thus the establishment limitation has been lifted and, thereby, the option of expanding business has been created.
  6. Professional liability insurance for auditors from another EU state has been recognized automatically, and thus duplication of contracting another professional liability insurance has been removed.
  7. Cooperation with other EU Member States is mandatory with regard to harmonization of the requirement on professional qualifications of auditors.
  8. Free formation of prices has been kept.
  9. Advertising is enabled for auditors (provided that professional ethics are respected).
  10. There are no limitations with regard to legal form.
  11. Linked companies of an audit company are free to provide certain tax consulting services to audit clients of the public interest.
  12. An audit client may be provided with tax services with regard to preparation of tax forms, assistance at tax inspections, tax calculation and tax advising.
  13. Independent public supervision of audit services has been introduced, without influence of the Chamber.
  14. The Chamber contribution has been reduced.
  15. The Chamber membership fee has been reduced.
  16. The audit exam fee has been reduced.
  17. Competition of prices and organizers of professional training for audit exams has been enabled, which creates options of price reduction.

Tax advisors

Ministry of Finance

Tax Advising Act

  1. E-service will be available via system of e-Citizen. The procedure of fulfilling the requirements and sending documents, i.e. obtaining approvals for starting a business will thus be simplified and accelerated. Meanwhile, there is an option of sending the required documents by e-mail. All information on conditions for this activity is available at Point of Single Contact for services.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.
  3. Free price formation of tax advisory services has been enabled.
  4. Advertising is enabled for tax advisors (provided that professional ethics are respected).
  5. Limitation of legal form to limited liability company has been removed.
  6. A requirement that the amount of minimum capital for tax advisors is to be higher than the standard one for a limited liability company has been revoked.
  7. A limitation that a citizen of an EEA state may found only a branch office for tax advising and not some other type of an establishment has been lifted.
  8. An obligation that a tax advisor from the EU has to nominate a proxy for receiving documents if it provides the services on temporary and occasional basis.
  9. Limited tax advisory services may be conducted only by certified independent auditors and audit companies within the scope of their activity.

Attorneys

Ministry of Justice and Public Administration

Attorneys Act; Ordinance on Advertising and Website of Attorneys

  1. Required documents for obtaining an approval may be sent by email via Point of Single Contact for services.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.
  3. Attorneys from other EU Member States may establish more than one office in Croatia.
  4. Attorneys from other EU Member States may use Croatian word for an attorney (“odvjetnik”) if they select one of the following principles: If they pass the exam on Croatian legal system, or if they work in Croatia as attorneys under the same professional title as in their home country, provided that they prove efficient and regular legal practice under the same professional title as in their home country for a minimum period of three years.
  5. Joint provision of services of lawyers established in Croatia and in any EU Member State has been enabled.
  6. It has been enabled that a Croatian law office may establish its office in any other EU Member State.
  7. Attorneys from other EU Member States do not have to be members of the Chamber (but only presented to the Chamber along with proof of their legal practice in their home country and announcement of starting their legal practice in Croatia).
  8. It is not prohibited for branch law offices from other EU Member States to provide advisory services regarding law of their home country, EU law, international law and Croatian law.
  9. A ban on advertising has been lifted for attorneys, and regulations in this respect have been reduced to a more proportionate level, in order to facilitate a better communication. A long-term procedure of the preliminary Chamber approval for an attorney’s website including for an alteration of the website’s information is no longer required. The information available on the website is no longer strictly administered. Client information may be published on the website only with their prior consent. Attorneys may advertise as long as they comply with ethical standards of providing authentic and objective information to the public, also especially with regard to the client’s protection. Attorneys may unilaterally communicate their services on social networks.

Taxi

Ministry of Maritime Affairs, Transport and Infrastructure

Road Transport Act

  1. A free and equal market conditions for existing and new business models have been provided.
  2. The number of requirements for obtaining a license has been reduced, i.e. a mandatory three-year skilled-driver course has been removed.
  3. Additional requirements may not be established by means of an ordinance.
  4. The procedure of obtaining a driving license is simplified so that it is issued within 15 days from the day of submitting an application.
  5. If the license is not issued within the stated time, the competent Ministry of Maritime Affairs, Transport and Infrastructure will issue a decision within the following 15 days.
  6. The content of the exam has been simplified.
  7. The price of the exam has been reduced.
  8. E-procedure has been provided for submitting an application, for paying a fee and for obtaining licences.
  9. Maximum fee for a license may not amount more than 10% of the net salary in the territory of the local self-government unit issuing the license.
  10. A driver may have a copy of the driving license in the vehicle instead of the original.
  11. The right of the local self-government units to limit the number of licenses has been cancelled.
  12. The license does not depend on business establishment and on permanent residence of a taxi driver anymore and it may be obtained in any unit of local self-government regardless of their number.
  13. Prices may be established on the market basis.
  14. Driving service may be paid via e-application, not only by a taximeter, which is important for digital platforms within the framework of economic cooperation.
  15. Information on the price per kilometer on a taximeter is from now on mandatory, i.e. information on maximum price via e-application.
  16. There are no limitations of legal forms of taxi drivers.
  17. Taxi drivers from other EU Member States are entitled to freedom of establishment in Croatia.
  18. Taxi drivers from third countries may provide their services if the aforementioned has been regulated under international treaty.

Driving schools

Ministry of the Interior

Road Traffic Safety Act

  1. Documents required for an approval may be sent by email via Point of Single Contact for services.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis).
  3. Driving schools may independently set their prices, without regulated minimum price.
  4. Driving schools’ network has been terminated because it served for limitation of the allowed number of driving schools per territory of each county and depending on the number of candidates, under justification of market demand.
  5. Freedom of contracting a job on a full-time or part-time basis has been enabled for driving schools, in order to adapt their work to market demand.
  6. A driving school may train driving candidates outside the area of the registered office as well, i.e. in branch offices.
  7. Driving schools will no longer be under obligation to change their cars every 7 years, i.e. their buses every 12 years. Considering that it is assumed that all the vehicles have undergone a technical inspection, driving schools may use 10-year old cars and 15-year old buses, which will result in financial savings.

Retail distribution

Ministry of the Economy and Sustainable Development

Retail Trade Act

  1. E-service for submitting an application for minimum technical requirements for the retail premises is available at Point of Single Contact for services (until it is integrated in the system of e-Citizen, including obtaining approvals). The procedure of fulfilling the requirements and sending documents, i.e. obtaining approvals for starting a business is thus simplified and accelerated, and the fee has been reduced. All information on conditions for this activity is available at Point of Single Contact for services.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), and in this respect it is sufficient to send notification to Point of Single Contact or directly to the competent authority.
  3. E-service for submitting an application with supporting documents for a license for retail premises (with regard to minimum technical requirements) is available at Point of Single Contact for services.
  4. Retailers no longer have the obligation of attesting of scales every year, but every two years.
  5. Continuation of a retail activity without issuing a new decision on meeting minimum technical requirements has been enabled, which then ensures a simplification of opening new retail stores without an additional burden.
  6. There is no special license for trade and distribution (except for liquefied petroleum gas).
  7. There is no price regulation, and no maximum amounts for seasonal sale.
  8. The procedure for obtaining an approval for building large shopping malls has been annulled, with economic justification of their opening.
  9. The storage area for a wholesale may be less than 50m2 (but not smaller than 25m2).
  10. It has been enabled that more selling facilities of the same trader on different locations use a joint storage.
  11. The procedure for obtaining an approval for conducting a wholesale activity for certain types of petroleum products and biofuels has been annulled, and thus including the fees amounting to HRK 700, i.e. HRK 140 for alteration of data.
  12. The obligation of disposition of specially equipped storages for a wholesale of petroleum products and biofuels has been removed, which enabled a direct retail network access to wholesalers and importers.

Tourism

Ministry of Tourism and Sports

Act on the Provision of Tourism Services

  1. E-service will be available via system of e-Citizen. The procedure of fulfilling the requirements and sending documents, i.e. obtaining approvals for starting a business will thus be simplified and accelerated. Meanwhile, there is an option of sending the required documents via e-mail. All information on conditions for this activity is available at Point of Single Contact for services.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.
  3. Obligation of proving capacity for work as a prerequisite to be a tourist guide has been removed.
  4. Obligation of proving that no ongoing safety measure or protective measure prohibiting a tourist guide to work have been issued in accordance with a final judgement or a decision on misdemeanors to a person that wants to provide tourist guide services has been removed.
  5. Obligation of proving that no ongoing safety measure or protective measure prohibiting a person to work as office manager have been issued in accordance with a final judgement or a decision on misdemeanor to a person that wants to provide office management services has been removed.
  6. Regulation of professions of a tour guide and a tour manager has been revoked.
  7. Limitation of the number of employees for online tourist agencies in residential premises has been lifted.
  8. Limitation for online tourist agencies operating in residential premises that office managers need to have registered permanent residence in such premises has been lifted.
  9. Obligatory work experience for managers of tourist agencies has been removed.
  10. Obligatory B2 language level for at least one foreign language for managers of tourist agencies has been removed.
  11. Obligation of tourist agencies to have an office manager in each branch office or business premises has been removed.
  12. Obligation of using a tourist agency ID code has been removed.
  13. Obligation of delivering tourist agency representation contracts to the Ministry of Tourism has been removed.
  14. Administrative procedure of obtaining a decision on meeting the minimum technical requirements for provision of tourist agency services has been cancelled; it is only required to deliver to the Ministry of Tourism a notification on the start of the service provision.
  15. Obligation of proving capacity for work as a prerequisite for a tourist agency manager has been removed.
  16. Obligation of attending seminars prior to taking licensing exam for office manager of tourist agency has been removed.
  17. Procedure of obtaining a decision on approving the provision of tourist services on a family farm has been cancelled.
  18. A procedure of obtaining a decision on approving the provision of services for a special type of tourist offer, with regard to meeting the minimum technical requirements (farm, health, cultural, wellness, congress, youth, adventure, hunting, sport and golf tourism; sport or recreational sea fishing, diving tourism, sport freshwater fishing as a supporting activity to aquafarming of fish, cramps and shells and so on) and a procedure of obtaining a decision on other tourist services (renting instruments and equipment for sports and recreation) have been cancelled.
  19. The group of service providers in the sector of health and congress tourism has been extended.
  20. Provision of tourist services in health tourism has been enabled to other health institutions and to the private health sector, in addition to special hospitals and sanatoria.

Catering

Ministry of Tourism and Sports

Hospitality and Catering Act

  1. E-service will be available via system of e-Citizen. The procedure of fulfilling the requirements and sending documents, i.e. obtaining approvals for starting a business will thus be simplified and accelerated. Meanwhile, there is an option of sending the required documents via e-mail. All information on conditions for this activity is available at Point of Single Contact for services.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.
  3. Validation period of temporary decisions for the work of caterers has been extended due to the extension of the legalization process and regulation of the real-property registers, and it has been enabled to submit new applications for issuing the mentioned temporary decisions.
  4. The requirement of annulment of the decision for a catering facility, which fails to start the service within nine months, has been removed.
  5. The requirement for lessors to obtain a certificate from an authorized health institution proving that they or a member of their household living in the same building or an apartment, have not been registered as patients suffering from a registered contagious disease or as mental patients who, due to their condition, may present a disturbing element to their surroundings, has been cancelled.
  6. Catering services may be provided by the private health sector as well.
  7. There are no limitations for renting within the economy of cooperation.
  8. The procedure of re-categorization of catering facilities has been simplified and the fee for categorization of the accommodation facilities has been removed.

Employment agency

Ministry of Labor, Pension System, Family and Social Policy

Labor Market Act

  1. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.
  2. Obligation of obtaining a license for work of an employment agency has been removed.

 Psychotherapists

Ministry of Labor, Pension System, Family and Social Policy

Psychotherapy Act

  1. All required documents may be sent by e-mail. All information on conditions for this activity is available at Point of Single Contact for services.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.
  3. Application for a permit is free of charge.
  4. The permit is no longer time limited.
  5. There are no limitations regarding legal form.
  6. There are no limitations regarding number of offices.
  7. Prices of private psychotherapists may be formed in accordance with market requirements.
  8. Freedom to provide advisory services is retained, while a psychotherapist may only be the person holding the title.

Intellectual property

 State Intellectual Property Office

Act on Copyright and Related Rights

  1. E-service is available via system of e-Citizen, including e-application of licensing exam. The procedure of fulfilling the requirements and sending documents, i.e. obtaining approvals for starting a business is thus simplified and accelerated. Furthermore, there is still an alternative option of sending required documents via e-mail. All information on conditions for this activity is available at Point of Single Contact for services.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment.

Private detectives

Ministry of the Interior

Private Detectives Act

  1. E-service is available via system of e-Citizen. The procedure of fulfilling the requirements and sending documents, i.e. obtaining approvals for starting a business is thus simplified and accelerated. Furthermore, there is still an alternative option of sending required documents via e-mail. All information on conditions for this activity is available at Point of Single Contact for services.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.

Veterinarians

Ministry of Agriculture

Veterinary Act

Ordinance on procedure of recognition of professional qualifications and requirements for temporary or occasional provision of veterinary services

  1. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.
  2. Automatic recognition of professional qualifications has been enabled.
  3. Procedure of obtaining an approval from the competent veterinary office for opening a veterinary pharmacy has been cancelled.

Environment protection

Ministry of the Economy and Sustainable Development

Environment Protection Act

  1. E-service for submitting applications is available at Point of Single Contact for services. The procedure of fulfilling the requirements and sending documents, i.e. obtaining approvals for starting a business is thus simplified and accelerated. Furthermore, there is still an alternative option of sending required documents via e-mail. All information on conditions for this activity is available at Point of Single Contact for services.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.
  3. It is not required to renew an approval to perform professional activities of environment protection every three years, but every five years.
  4. Conditions for working premises of an office manager responsible for professional work of environment protection have been removed.
  5. Obligation of participating and paying costs of professional council in the procedure of obtaining an approval for the policy of preventing major misfortunes in the sector of protection has been removed.

Private museums

Ministry of Culture and Media

Museums Act

  1. Required documents for obtaining an approval may be sent by email via Point of Single Contact for services.
  2. Private museums from other countries of the European Economic Area are entitled to freedom of establishment.
  3. Limitations with regard to legal form for establishing private museums have been lifted, which means that private museums may be natural and legal persons.

Private libraries

 Ministry of Culture and Media

Act on Library Activities and Libraries

  1. Private libraries from other countries of the European Economic Area are entitled to freedom of establishment.
  2. Limitations with regard to ownership forms have been lifted, which means that in addition to public libraries, private libraries may be established as well.
  3. Libraries may be founded by natural and legal persons.
  4. Founding of digital libraries and libraries of religious communities has been regulated as well.

Private theatres

Ministry of Culture and Media

Theatres Act

  1. Private theatres from other countries of the European Economic Area are entitled to freedom of establishment on a horizontal level in Croatia.
  2. Private theatres and theatrical groups may be founded as institutions, companies and art associations.

 Court experts

Ministry of Justice and Public Administration

Act on Courts

  1. Court experts from other countries of the European Economic Area are entitled to freedom of establishment.

 Undertakers

Ministry of the Economy and Sustainable Development

Act on Undertakers

  1. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.
  2. Professional liability insurance from another EU state has been recognized.

Media and paper press

Ministry of Culture and Media

Media Act

  1. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.

Social welfare

Ministry of Labor, Pension System, Family and Social Policy

Social Welfare Act

  1. Required forms and documents may be sent by email via Point of Single Contact for services in the process of obtaining work permit.
  2. Private service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.

Nannies

Ministry of Labor, Pension System, Family and Social Policy

Nannies Act

  1. Documents and forms required for obtaining an approval may be sent by email via Point of Single Contact for services.
  2. By opening this market to competition, service providers from other countries of the European Economic Area are entitled to freedom of establishment (on a permanent basis) and freedom to provide cross-border services (on temporary and occasional basis), without prerequisite of business establishment registry. As regards the latter, it is sufficient to send e-notification to Point of Single Contact or directly to the competent authority.

Private schools

Ministry of Science and Education

  1. E-service is available via system of e-Citizen. The procedure of fulfilling the requirements and sending documents, i.e. obtaining approvals for starting a business is thus simplified and accelerated. All information on conditions for this activity is available at Point of Single Contact for services.
  2. Private schools from other countries of the European Economic Area are entitled to freedom of establishment.

Education and rehabilitation services

Ministry of Labor, Pension System, Family and Social Policy

Act on Education and Rehabilitation Services

  1. Providers of education and rehabilitation services from other countries of the European Economic Area are entitled to freedom of establishment, as well as freedom of providing cross-border services on temporary and occasional basis, without prerequisite of business establishment registry.

Pharmacists

Ministry of Health

Pharmaceutical Affairs Act; Ordinance on standards and norms on premises, medical devices and healthcare workers; Ordinance on start and end time, i.e. work schedule of healthcare institutions and private healthcare workers in offices of public healthcare service network; Ordinance on pharmaceutical advertising

  1. Requirements with regard to pharmaceutical advertising have been reduced, provided that professional standards are respected.
  2. Regulations with regard to opening hours of pharmacies have been reduced.

Physiotherapists

Ministry of Health

Act on Physiotherapy; Decision on invitation to tender for conclusion of the healthcare service provision contract with regard to mandatory health insurance for provision of private physiotherapy practice; Ordinance on physical therapy advertising methods

  1. Requirements with regard physiotherapy advertising have been reduced, provided that professional standards are respected.
  2. Physiotherapists have been provided with equal requirements to participate in public tenders on provision of physiotherapy services. Croatian Institute for Health Insurance has issued a Decision on invitation to tender for conclusion of the healthcare service-provision contract with regard to mandatory health insurance for provision of private physiotherapy practice.

Dentists

Ministry of Health

Act on Dental Medicine

  1. Obligation for dentists from EU states to pass the professional exam has been removed.

Air-conditioner maintenance

Ministry of the Economy and Sustainable Development

Act on Climate Change and Protection of Ozone Layer

  1. Freedom of establishment and provision of cross-border services has been ensured for EEA citizens without obligation to register establishment for temporary and occasional provision of services.
  2. Licensing exam passed in another EEA state is recognized (and it is mandatory in accordance with the EU law).
  3. Persons having a higher qualification in the field of mechanical engineering, persons who completed secondary vocational school, persons having master craftsman’s certificate or having master craftsman’s status in the field of installation and maintenance or servicing the air-conditioners, i.e. persons who passed the vocational exam before entering into the procedure of obtaining the approval, have been exempted from the obligation to pass the vocational exam (mandatory in accordance with the EU law).

Private security guards

Ministry of the Interior

Act on Private Security

  1. Documents and forms required for obtaining an approval may be sent by email via Point of Single Contact for services, and the procedure regarding obligatory documents has been simplified.
  2. Equal conditions for provision of private protection services to natural and legal persons from EU/EEA countries have been set.
  3. It has been provided for natural and legal persons from EU/EEA countries to provide private protection services on occasional basis for a maximum of four times per year and to provide services on temporary basis in a limited and continuous duration for a maximum of three days.
  4. Security guards may be persons who completed primary school education.

 Chemicals

Ministry of Health

Act on Chemicals

  1. The procedure of obtaining the approval to conduct activities related to dangerous chemicals has been cancelled.

 Sports

Act on Sports

  1. EU/EEA citizens may be engaged in sports business.
  2. Limitations in terms of legal form have been lifted so craftsmen as natural persons may be engaged in sports business.

Private archives

Ministry of Culture and Media

Act on Archival Material and Archives

  1. Mandatory feasibility study on establishing private archives has been cancelled.

Energy

Ministry of the Economy and Sustainable Development

Act on Electricity Market; Act on the Market of Oil and Petroleum Products; Act on Gas

  1. Freedom of establishment is guaranteed to service providers from EEA countries in the energy sector (electricity, oil and gas).
  2. Electricity and oil price formation is left to the market.
  3. Category of privileged and tariff customers for gas and electricity has been cancelled.
  4. Obligation of gas producers to sell the produced volume of natural gas in total to suppliers on the territory of the Republic of Croatia has been cancelled.
  5. Tenders for nominating suppliers on a wholesale gas market have been introduced.

Telecommunications

Ministry of Maritime Affairs, Transport and Infrastructure

Act on Electronic Communications

  1. Freedom of establishment has been enabled to providers of telecommunication services.

Financial services

Ministry of Finance

Capital Market Act

  1. Freedom of establishment has been enabled to providers of financial services.

Shipping and nautical affairs

Ministry of Maritime Affairs, Transport and Infrastructure

Act on Croatian Register of Shipping

  1. Registration of ships has been simplified and digitalized.
  2. Provision of services in nautical tourism has been simplified.

Postal services

Ministry of Maritime Affairs, Transport and Infrastructure

Act on Postal Services

  1. Freedom of establishment on a permanent basis has been enabled to providers of postal services from other European Economic Area countries, along with obtaining an approval via e-service.
  2. Monopoly on provision of the reserved postal services has been terminated.
  3. There are no limitations in terms of legal forms for provision of postal services.
  4. Cross-border provision of postal services in terms of parcel delivery has been simplified, along with transparent price formation.

Healthcare

Ministry of Health

Healthcare Act

  1. The system of private offices has been introduced in the primary healthcare service.
  2. Private practice in offices without concession has been defined, i.e. without time-limited license.
  3. Private healthcare workers may provide healthcare services in dislocated premises, i.e. locations, as in special vehicles.
  4. Development of services in private healthcare tourism has been facilitated.
  5. Healthcare institutions, healthcare companies and private healthcare workers may provide healthcare services in medical tourism, including catering services.

Related crafts

Ministry of the Economy and Sustainable Development

Crafts Act

  1. Seasonal duration of a craft business has been extended from six to nine months.
  2. Regulation of a business activity to be performed as a seasonal craft business has been repealed.
  3. Two years of work experience for related craft business are sufficient, provided that a person has adequate secondary school qualifications. The exam certificate is required, however persons may provide services without the exam certificate, if they start a company.
  4. Master craftsman’s certificate is not required, but an adequate secondary school qualification for a craft business such as: dairymen, bakers, leather craftsmen, photographers, founders, blacksmiths, tinsmiths, boat mechanics, stove fitters, mechanics for agricultural machinery, air conditioning and heating mechanics, plumbers, roofers, musical instrument manufacturers and repairers, organ builders, upholsterers, watchmakers, electronics mechanics, plasterers, painters and decorators, car-bodyworkers, car painters, beauticians and sign painters.
  5. It has been ensured that bookkeeping services may be provided by persons with a grammar-school diploma as well (in addition to persons with a diploma in secondary school of economics).

Regulated professions

Ministry of Labor, Pension System, Family and Social Policy

Act on Regulated Professions and Recognition of Foreign Professional Qualifications

  1. A general system of recognition of professional qualifications from third countries has been introduced.
  2. European Professional Card issued for temporary and occasional provision of services, automatically grants right to perform a profession, without the requirement of fulfilling additional conditions.
  3. Persons who want to perform regulated-profession services for the first time may electronically notify thereof a competent authority or Point of Single Contact for services.
  4. Examination of Croatian language proficiency is no longer mandatory for professionals from EU/EEA countries, excluding healthcare professions due to patient safety.
  5. A competent authority has to issue a decision on recognition of foreign professional qualifications within 30 days, after an additional measure has been implemented.
  6. Foreign providers of services are subject to professional rules directly linked with professional qualifications, instead with regulations establishing professional qualifications.
  7. Candidates have to pass the licensing exam within six months, if they have failed to pass it.
  8. Persons from third countries may provide regulated professional services under same conditions applied to Croatian citizens (provided that they have three years of professional experience in the territory of a Member State that recognized professional qualification acquired in the third country, which is proved by a certificate from that country).
  9. Explicit obligation of competent authorities to approve partial access to regulated professions has been introduced, provided that all mandatory requirements have been cumulatively fulfilled.
  10. Automatic recognition of professional qualifications for doctors of medicine, doctors of dental medicine, midwives, pharmacists and nurses from EU Member States has been introduced, and they are entitled to freedom of establishment in Croatia.

Foundations

Ministry of Justice and Public Administration

Act on Foundations

  1. The procedure of establishing a trust has been facilitated.
  2. Time-limit to establish a trust or its duration has been cancelled.
  3. Trusts may be established by domestic or foreign natural or legal persons, which removes the limitations in terms of legal forms.
  4. The obligation of obtaining an approval on a purpose of a trust is no longer required. Trusts may provide economic activities, i.e. provision of services.

Companies and craft business

Ministry of the Economy and Sustainable Development (START System)

Ministry of Justice and Public Administration

Act on Companies; Ordinance on taking actions in the procedure of starting companies remotely; Ordinance on the method of making an entry in the company register; Crafts Act

  1. Electronic registration of establishment has been provided to Croatian citizens (and service providers) in form of companies (limited liability company (d.o.o.) and simple limited liability company (j.d.o.o.)) and craft businesses.

Updated: 7 April 2021

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