With the summer months comfortably set in, Croatia is experiencing a most favorable tourism season which impacts all areas of business, according to Porobija & Spoljaric Partner Marko Porobija.
"Things have been very quiet on the political front," Porobija says, mentioning that the Croatian parliament is in summer recess and that things have slowed down legislatively as a result.
"The tourism sector, on the other hand, that’s what it's all about right now," Porobija continues. "The season has, so far, shattered all expectations – some tourism hotspots are doing even better than in 2019, mostly high-end locations in Istria and around Split." With most tourists avoiding large, crowded hospitality centers like hotels, 2020 has been less than stellar for Croatia, but 2021 has turned a corner. "It would appear that the sector has not only survived but is thriving right now," Porobija says.
"This positive trend in hospitality proves that it is a robust and stable sector, with no bankruptcies and insolvency situations among hotel chains on the seaside – Vila Dubrovnik even had an IPO!" He says that several other tourism sector IPOs are in the works for the end of the year and that things are moving along nicely, with no indications that the season will be halted due to the COVID-19 pandemic like it was last year.
The IT sector in Croatia is another "winner of the COVID era," according to Porobija, with big equity investments in companies such as Microblink, Photomath, or Infobip, and the sale of Nanobit happening in the last 12 months. "This is another industry where we can expect many pleasant surprises, come fall and winter," he accentuates.
Further, Porobija says that this fall might see some legislative updates and overhauls that could impact businesses. " The digital transformation of the justice system is the hot topic here, with an e-communication system, which is already widely used in commercial and municipal courts, finally set to be implemented into administrative courts," he says. "The justice system should be almost fully e-operational by the end of the year, with courts’ internal operations not lagging far behind."
Continuing, Porobija says that the issue of work being prohibited on Sundays is another interesting topic in Croatia right now. “It has been attempted to pass this into law several times – only for the retail sector – and the Constitutional Court has shot it down every time, but here it is again, rearing its head." He believes that it will die away again. Additionally, Porobija says that "certain reforms to the court system could be in the works, as well as potential changes to the company law framework – which was last updated two years ago." He also mentions expectations for the legislator to address the matter of individual bankruptcy.
Finally, Porobija mentions a piece of EU legislation he considers to be of the utmost importance for the Croatian legal framework and that of the entire Union. "The newly announced Market in Crypto-Assets Regulation (MiCA) has seen its first draft released recently and, while some aspects would require further work, it is a step forward in regulating relevant crypto-market issues and providing a framework for it,” he says. Porobija feels that this is going to be a “hot topic in the future and that Croatia should prepare for it well in advance.”