Services market liberalization aims to facilitate business operations in the Croatian and the European internal market. Such regulatory reform opens opportunities for increased economic activity and productivity.
Services include dozens or several hundred activities and professions where economic value is mostly generated. These include professional and business services that contribute to the industry’s added value.
Therefore, the Croatian Ministry of Economy horizontally encourages the further reduction of red tape in sectoral regulations for services.
A key result indicator is more than 300 implemented measures in 50 service activities and professions. This has achieved the objective of the National Recovery and Resilience Plan 2021-2026 and the 2020 National Reform Programme.
According to the OECD methodology, Product Market Regulation (PMR), the overall regulation of the Croatian economy and services market has been roughly reduced from the highest level (PMR 2013) to the average OECD level (PMR 2018 and PMR 2023).
The main professional services (accountants, architects, engineers, real estate agents, and lawyers) are regulated less than the EU and OECD average. Zero licensing of accountants and reduced regulation of engineers, architects, and real estate agents contribute to this result.
On the other hand, the regulation of pharmacies is high (the highest within the EU and twice the OECD average). Also, the regulation of legal services is high, although they do not deviate from comparable EU continental countries.
This reform aims to continue encouraging competition in the services market by applying the PMR methodology for reducing the regulation of professions. This would open up room to increase productivity. (the National Reform Programme 2020)
This reform aims to simplify or lift additional regulatory requirements for the private professional services sector. (National Recovery and Resilience Plan 2021-2026 & Annex to the Council Implementing Decision)
Additional reform measures will ensure the continuation of easing and removing regulatory and administrative barriers to market access for professional and business services. Also, indicators and results based on the OECD’s Product Market Regulation (PMR) methodology are used. (National medium-term fiscal-structural plan of the Republic of Croatia for the period 2025-2028)
The institutional framework governing the right of establishment and the freedom to provide services is shared by all states of the European Economic Area (EU+EFTA) through the Treaty on the Functioning of the European Union (Articles 49-61). This framework for the free market for services is enabled by the Services Directive, i.e., the Services Act.
Services market liberalization is carried out at the EU level and in line with specific reform recommendations within the framework of the European Semester. In addition, within the Single Market Enforcement Taskforce (SMET), the European Commission and the Member States remove cross-border barriers to the freedom to provide services.
EU Internal Market Centre supports easier access to the European market by bringing together a range of institutional tools used by all EU/EEA countries—all in one place. In this respect, two administrative support tools are used to facilitate business start-up and access to the services market:
The Point of Single Contact for Services provides information on starting a business in the Croatian services market (establishment, freedom to provide services, sectoral requirements, and so on). Access to the EUGO network is also available, which answers questions from Croatian exporters on how to operate in the European Union and particular Member States. Further simplification and digitalization of authorization procedures for individual service activities have been continued. The Point of Single Contact for Services (as well as the Product Contact Point) is a customer support service through the Single Digital Gateway. It needs to be developed by all Member States in cooperation with the European Commission through the Your Europe portal.
The Internal Market Information System (IMI) is a common European online tool for cross-border notification concerning the justification of regulatory requirements for the services market to prevent unjustified restrictions. In addition, IMI facilitates cross-border administrative checks of data in different areas, which reduces the time to respond.
All the mentioned tools support the services market liberalization.