The Services Directive applies to all states of the European Economic Area (EEA), and it prescribes adjustments to the institutional and regulatory framework to achieve the following:
- simple and non-discriminatory rules for the private sector of services in many sectors and professions,
- less barriers to starting a business, to market entry, and competition,
- simplification and digitalization of the authorization procedures for obtaining licenses for the provision of services.
Two scenarios of the provision of services
In accordance with the mentioned, there are two scenarios:
- freedom of establishment (on a permanent basis) – obligation of registration and licensing in Croatia,
- freedom to provide cross-border services (on a temporary and occasional basis, without obligation of establishment, registration, and obtaining licenses in the Republic of Croatia).
Ground rules
The Services Directive provides important horizontal rules:
- simpler (Article 5), made public in advance, clear, proportionate, and non-discriminatory rules, without duplicating equivalent requirements (Article 10),
- no licenses, unless they are necessarily justified (Article 9),
- licenses applicable throughout the national territory (Article 10),
- cross-border recognition of the equivalent liability insurance (Article 23),
- no ban on advertising of professions (Article 24),
- no limitations for multidisciplinary activities (Article 25),
- encouraging voluntary actions (Article 26),
- non-discrimination of consumers (Article 20).
Prohibited requirements
Conditions set out in Article 14 of the Services Directive are completely prohibited and they must be removed from all regulations governing services:
- discrimination based on nationality,
- obligation of temporary or permanent residence,
- proof of the existence of an economic need,
- prohibition of having more than one establishment,
- prohibition of being entered in the registers or enrolled with professional associations,
- restriction on choosing between principal or secondary establishment,
- an obligation of pre-registration and previous exercising of the activity,
- obligation to include local competitors.
Requirements to be evaluated
Requirements set out in Articles 15 and 16 of the Services Directive should be removed from all regulations governing services, unless, in exceptional cases, they can be justified on the grounds of non-discrimination, proportionality, and necessity:
- fixed minimum and maximum tariffs,
- territorial and quantitative restrictions of licenses,
- restrictions relating to the shareholding of a company and a legal form,
- requirements fixing a minimum number of employees,
- an obligation to supply more types of services,
- a ban on having more than one establishment,
- an obligation to set up a certain form or type of infrastructure,
- an obligation on the cross-border providers to have an establishment,
- a complex procedure to obtain authorization and/or registration with a professional body,
- an obligation regarding the address or to possess a special identity document,
- the application of restrictive contractual agreements,
- non-recognition of professional insurance.
Economic benefits of the Services Directive:
- easier market access for new entrepreneurs,
- promotion of (self)employment and cross-border mobility of professionals,
- opportunity for lower prices of services and higher disposable income and choice of services,
- quality and innovation of services,
- contribution to economic growth.
Competent authority, regulations, and information
Ministry of the Economy
Ulica grada Vukovara 78
10000 Zagreb
+385 1 6109 370
Services Directive
Services Act (Official Gazette of the Republic of Croatia – NN 80/11)
Information by the European Commission
Services market liberalization
