Doing Business 2018 Croatia Economy Pro le of Croatia Doing Business 2018 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction Procedures, time and cost to complete all formalities to build a warehouse and the quality control and permits safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-filing processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Labor market regulation Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. Page 2   for insolvency Doing Business Labor market 2018 regulation Croatia Flexibility in employment regulation and aspects of job quality About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local rms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more e cient regulation; o ers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business o ers detailed subnational reports, which exhaustively cover business regulation and reform in di erent cities and regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The rst Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has bene ted from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to two decimals. More about Doing Business (PDF, 5MB) Ease of Doing Business in Region Europe & Central Asia DB 2018 Rank 190 1 Croatia Income Category Upper middle income 51 Population 4,170,600 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 12,110 0 100 71.70 City Covered Zagreb DB 2018 Distance to Frontier (DTF) 0 100 76.27: Czech Republic (Rank: 30) 72.70: Italy (Rank: 46) 72.39: Hungary (Rank: 48) 71.70: Croatia (Rank: 51) 71.33: Regional Average (Europe & Central Asia) Page 3   68.70: Albania (Rank: 65) aggregate distance to frontier scores, rounded to two decimals. More Doingabout 2018 (PDF, Doing Business Business 5MB) Croatia Ease of Doing Business in Region Europe & Central Asia DB 2018 Rank 190 1 Croatia Income Category Upper middle income 51 Population 4,170,600 DB 2018 Distance to Frontier (DTF) GNI Per Capita (US$) 12,110 0 100 71.70 City Covered Zagreb DB 2018 Distance to Frontier (DTF) 0 100 76.27: Czech Republic (Rank: 30) 72.70: Italy (Rank: 46) 72.39: Hungary (Rank: 48) 71.70: Croatia (Rank: 51) 71.33: Regional Average (Europe & Central Asia) 68.70: Albania (Rank: 65) Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is re ected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Croatia 1 1 23 29 28 59 60 55 75 77 82 87 95 Rank 109 126 136 163 190 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Distance to Frontier (DTF) on Doing Business topics - Croatia 100.00 100 86.39 80 76.26 71.44 70.90 70.60 68.33 63.00 60 55.00 55.11 DTF 40 20 0 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.01 Change:+1.67 Change:0.00 Investors Change:0.00 Borders Change:0.00 Change:-0.51 Change:+0.03 Permits Change:0.00 Change:0.00 Change:-0.64 Starting a Business Page 4   This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Change:+0.01 Change:+1.67 Change:0.00 Investors Change:0.00 Borders Change:0.00 Change:-0.51 Change:+0.03 Permits Change:0.00 Change:0.00 Doing Business 2018 Croatia Change:-0.64 Starting a Business This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited liability company to start up and formally operate in economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and operate a To make the data comparable across economies, several assumptions company (number) about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay Pre-registration (for example, name verification no bribes. or reservation, notarization) Registration in economy’s largest business city The business: - Is a limited liability company (or its legal equivalent). If there is more than Post-registration (for example, social security one type of limited liability company in the economy, the most common registration, company seal) among domestic rms is chosen. Information on the most common form is Obtaining approval from spouse to start business obtained from incorporation lawyers or the statistical o ce. or leave home to register company - Operates in the economy’s largest business city and the entire o ce Obtaining any gender-specific permission that space is approximately 929 square meters (10,000 square feet). For 11 can impact company registration, company economies the data are also collected for the second largest business city. operations and process of getting national - Is 100% domestically owned and has ve owners, none of whom is a legal identity card entity; and has a start-up capital of 10 times income per capita and has a Time required to complete each procedure turnover of at least 100 times income per capita. (calendar days) - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does Does not include time spent gathering not perform foreign trade activities and does not handle products subject information to a special tax regime, for example, liquor or tobacco. It does not use Each procedure starts on a separate day (2 heavily polluting production processes. procedures cannot start on the same day) - Leases the commercial plant or o ces and is not a proprietor of real Procedures fully completed online are recorded estate and the amount of the annual lease for the o ce space is equivalent as ½ day to 1 times income per capita. Procedure is considered completed once final - Does not qualify for investment incentives or any special bene ts. document is received - Has at least 10 and up to 50 employees one month after the commencement of operations, all of whom are domestic nationals. No prior contact with officials - Has a company deed 10 pages long. Cost required to complete each procedure (% of The owners: income per capita) - Have reached the legal age of majority. If there is no legal age of majority, Official costs only, no bribes they are assumed to be 30 years old. No professional fees unless services required by - Are sane, competent, in good health and have no criminal record. law or commonly used in practice - Are married and the marriage is monogamous and registered with the authorities. Paid-in minimum capital (% of income per capita) - Where the answer di ers according to the legal system applicable to the Funds deposited in a bank or with third party woman or man in question (as may be the case in economies where there before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Standardized Company Page 5   before registration or up to 3 months after is legal plurality), the answer used will be the one that applies to the incorporation majority of the population. Doing Business 2018 Croatia Standardized Company Legal form Limited Liability Company, D.O.O. Paid-in minimum capital requirement HRK 10,000 City Covered Zagreb Europe & OECD high Indicator Croatia Central Asia income Overall Best Performer Procedure – Men (number) 8 5.2 4.9 1.00 (New Zealand) Time – Men (days) 7 10.1 8.5 0.50 (New Zealand) Cost – Men (% of income per capita) 7.2 4.4 3.1 0.00 (United Kingdom) Procedure – Women (number) 8 5.2 4.9 1.00 (New Zealand) Time – Women (days) 7 10.1 8.5 0.50 (New Zealand) Cost – Women (% of income per capita) 7.2 4.4 3.1 0.00 (United Kingdom) Paid-in min. capital (% of income per capita) 12.5 3.4 8.7 0.00 (113 Economies) Figure – Starting a Business in Croatia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 91.49: Albania (Rank: 45) 90.62: Regional Average (Europe & Central Asia) 89.42: Italy (Rank: 66) 87.60: Hungary (Rank: 79) 87.44: Czech Republic (Rank: 81) 86.39: Croatia (Rank: 87) Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Starting a Business in Croatia – Procedure, Time and Cost Time Cost 7 8 6 7 ost (% of income per capita) 6 5 5 Time (days) 4 4 3 3 2 Page 6   2 starting a business. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Croatia Figure – Starting a Business in Croatia – Procedure, Time and Cost Time Cost 7 8 6 7 Cost (% of income per capita) 6 5 5 Time (days) 4 4 3 3 2 2 1 1 0 0 1 2 3 4 5 6 *7 *8 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Details – Starting a Business in Croatia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Check the availability of the company's name Less than one day no charge Agency : Commercial Court (online procedure) Checking company name availability is free and can be done online. If the desired name is available, then clients can go through process of company name reservation. The Court Registry will check the company name reservation application within three days, and if it meets all legal criteria, will proceed with the reservation. The court fee for reservation of the company's name is 10 HRK. The reserved company name is visible on the sudreg.pravosudje.hr website and valid for 30 days. If the reserved company name is not used for company registration within 30 days, it is deleted from the registry. 2 The notary prepares the memorandum of association 1 day included in Agency : Public Notary procedure 3 The Public Notary prepares the documentation, which is then signed by the business founders and notarized. The documents necessary for the registration of a company are: 1. Articles of Association Page 7   2. Decision on Appointment of the Director (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Doing Business 2018 Croatia Details – Starting a Business in Croatia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Check the availability of the company's name Less than one day no charge Agency : Commercial Court (online procedure) Checking company name availability is free and can be done online. If the desired name is available, then clients can go through process of company name reservation. The Court Registry will check the company name reservation application within three days, and if it meets all legal criteria, will proceed with the reservation. The court fee for reservation of the company's name is 10 HRK. The reserved company name is visible on the sudreg.pravosudje.hr website and valid for 30 days. If the reserved company name is not used for company registration within 30 days, it is deleted from the registry. 2 The notary prepares the memorandum of association 1 day included in Agency : Public Notary procedure 3 The Public Notary prepares the documentation, which is then signed by the business founders and notarized. The documents necessary for the registration of a company are: 1. Articles of Association 2. Decision on Appointment of the Director 3. Statement on the Acceptance of the Appointment 4. The director's signature specimen 5. The founders' statement on non-existence of debts 6. The application of registration of the company 7. List of shareholders and managers 3 Register the company with the Commercial Court 1 day see procedure Agency : Commercial Court details It typically takes 24 hours to register company with the Commercial court electronically. Revised fees in 2015 by Chamber of Notaries are as follows: HRK 3400 + VAT + HRK 800 notary fee (drafting and notarizing the articles of association), HRK 700 + VAT + HRK 10 notary fee, per director (drafting application for registration) Page 8   HRK 100 + 25% VAT + HRK 15 notary fee (drafting the statement of Doing 7. List of shareholders Business and managers 2018 Croatia 3 Register the company with the Commercial Court 1 day see procedure Agency : Commercial Court details It typically takes 24 hours to register company with the Commercial court electronically. Revised fees in 2015 by Chamber of Notaries are as follows: HRK 3400 + VAT + HRK 800 notary fee (drafting and notarizing the articles of association), HRK 700 + VAT + HRK 10 notary fee, per director (drafting application for registration) HRK 100 + 25% VAT + HRK 15 notary fee (drafting the statement of acceptance of appointment) HRK 30 + 25% VAT + HRK 10 notary fee (notarizing founders’ statements of non-existence of debts, only the certi cation of signature is necessary) HRK 30 + 25% VAT + HKR 10 notary fee (notarizing director signature specimen) HRK 400 (court fees) 4 Order o cial seal 1 day HRK 169 Agency : Seal maker O cial seals are readily available throughout Croatia at special seal-making shops. A copy of the court decision on registration of incorporation should be presented in order to have the seal made. The seal should be used on all o cial documents (including invoices, receipts and so on) issued by the company. Seals can also be ordered through FINA o ces (on 24 locations as well as where are HITRO.HR o ces). If done through FINA, the entrepreneur can at the same time also apply for statistical registration. 5 Apply for statistical registration number 1 day HRK 55 Agency : Croatian Bureau of Statistics (cro. Državni zavod za statistiku) Applying for a statistical le number can be done at the Croatian Bureau of Statistics or through the One Stop Shop service, used by HITRO.HR o cers.     The following documents should be submitted: 1) Copy of the Commercial Court’s Decision on the entry into Court Registry; 2) Copy of the Personal Identi cation Number (OIB) for the company; 3) Proof of payment of the fee in the amount of HRK 55 In HITRO.HR o ce, the RPS form is to be completed. Submitting RPS request is required to obtain a Noti cation of Classi cation pursuant to the National Classi cation of Activities of the State Institute of Statistics (assignment of business identi cation number and the principal activity code). After Page 9   receiving a decision on the registration of the Company, HITRO.HR will well as where are HITRO.HR o ces). If done through FINA, the entrepreneur Doing can at the same Business also apply for statistical registration. time Croatia 2018 5 Apply for statistical registration number 1 day HRK 55 Agency : Croatian Bureau of Statistics (cro. Državni zavod za statistiku) Applying for a statistical le number can be done at the Croatian Bureau of Statistics or through the One Stop Shop service, used by HITRO.HR o cers.     The following documents should be submitted: 1) Copy of the Commercial Court’s Decision on the entry into Court Registry; 2) Copy of the Personal Identi cation Number (OIB) for the company; 3) Proof of payment of the fee in the amount of HRK 55 In HITRO.HR o ce, the RPS form is to be completed. Submitting RPS request is required to obtain a Noti cation of Classi cation pursuant to the National Classi cation of Activities of the State Institute of Statistics (assignment of business identi cation number and the principal activity code). After receiving a decision on the registration of the Company, HITRO.HR will automatically obtain noti cation of the State Institute of Statistics electronically, within one business day. 6 Open a bank account 1 day no charge Agency : Bank Documents required to open a company bank account are: 1. Ruling on registration of a Company, 2. Statistical registration number of a Company, 3. Personal identi cation number (OIB) of a Company In case of Ltd. Company establishment client signs: the Contract, signature cards, a statement of the bene cial owner and the related parties, and must provide a copy of personal data, extract from the Court Register and Information on classi cation of the business entity pursuant to the National Classi cation of Activities. 7 Register for VAT and employee income tax withdrawals 1 day no charge Agency : Tax Authority (Porezna Uprava) (simultaneous with previous Upon registering with the Commercial Court Register and ful lling its procedure) obligations with the State Bureau of Statistics, the company must register with the competent tax authority. Once a company is registered at the State Bureau of Statistics, company data is sent electronically to the tax authority, which levies the annual company tax. The company must register for VAT at the Tax O ce, however, only after its rst invoice (within 15 days of issuance). Once the company is registered for VAT, all tax payments can be processed through an electronic system, e-VAT. If the company’s total taxable annual income exceeds HRK 230,000, it must register itself as an entity in the VAT system with the competent tax authority, based on the company's registered seat. Starting from January 01, 2009 a revision of the existing Croatian Law on Page 10   Companies came into force (published in the O cial Gazette no. 146/2008). Information on classi cation of the business entity pursuant to the National Doing Classi cation Business of Activities. 2018 Croatia 7 Register for VAT and employee income tax withdrawals 1 day no charge Agency : Tax Authority (Porezna Uprava) (simultaneous with previous Upon registering with the Commercial Court Register and ful lling its procedure) obligations with the State Bureau of Statistics, the company must register with the competent tax authority. Once a company is registered at the State Bureau of Statistics, company data is sent electronically to the tax authority, which levies the annual company tax. The company must register for VAT at the Tax O ce, however, only after its rst invoice (within 15 days of issuance). Once the company is registered for VAT, all tax payments can be processed through an electronic system, e-VAT. If the company’s total taxable annual income exceeds HRK 230,000, it must register itself as an entity in the VAT system with the competent tax authority, based on the company's registered seat. Starting from January 01, 2009 a revision of the existing Croatian Law on Companies came into force (published in the O cial Gazette no. 146/2008). The change involves inducing "OIB" (personal identi cation number), that replaces tax number for legal entities. Personal identi cation number is de ned as identi cation mark of personal identi cation number that users of that number use in their o cial evidences and with change of dates. 8 Register with the Croatian Institute for Pension Insurance (HZMO) and Less than one day no charge Croatian Institute for Health Insurance (HZZO) (online procedure, Agency : Croatian Institute for Pension Insurance (HZMO) and Croatian simultaneous with Institute for Health Insurance (HZZO) previous procedure) The Company must register with the Croatian Institute for Pension Insurance within 24 hours from the start of its business operation. The Company must also register each of its employees with the Croatian Institute for Pension Insurance within 24 hours. Company with 3 or more employees will be obligated from 1 April 2014 to register/deregister employees at Croatian Institute for Pension Insurance exclusively online. Currently the procedure may be completed before the competent HZZO o ce. Croatian Institute for Pension Insurance and Croatian Health Insurance Fund are electronically connected, thus it is only needed for company to register with Croatian Institute for Pension Insurance and registration will be done automatically with Croatian Health Insurance Fund. The following documents should be submitted: • Decision about the registration into the Court Registry. • Notice of classi cation from the National Institute for Statistics Application (to the Croatian Health Insurance Fund). • Proof of place of residence and the work contract. All persons employed for the rst time and age 40 are obliged to register in the second pillar of retirement insurance. A person has to choose the obligatory pension fund within 3 months of the date of employment. If the fund is not chosen after that period, REGOS (the Central Register of the Insured) itself chooses the obligatory pension fund that the person will register in. All persons employed for the rst time and between ages 40 and 50 can, if they desire, register with the second pillar of retirement insurance. A person has to choose the obligatory pension fund within 6 months of the date of employment. Page 11   de ned as identi cation mark of personal identi cation number that users Doing of that number Business use in 2018 their o cial evidences and with change of dates. Croatia 8 Register with the Croatian Institute for Pension Insurance (HZMO) and Less than one day no charge Croatian Institute for Health Insurance (HZZO) (online procedure, Agency : Croatian Institute for Pension Insurance (HZMO) and Croatian simultaneous with Institute for Health Insurance (HZZO) previous procedure) The Company must register with the Croatian Institute for Pension Insurance within 24 hours from the start of its business operation. The Company must also register each of its employees with the Croatian Institute for Pension Insurance within 24 hours. Company with 3 or more employees will be obligated from 1 April 2014 to register/deregister employees at Croatian Institute for Pension Insurance exclusively online. Currently the procedure may be completed before the competent HZZO o ce. Croatian Institute for Pension Insurance and Croatian Health Insurance Fund are electronically connected, thus it is only needed for company to register with Croatian Institute for Pension Insurance and registration will be done automatically with Croatian Health Insurance Fund. The following documents should be submitted: • Decision about the registration into the Court Registry. • Notice of classi cation from the National Institute for Statistics Application (to the Croatian Health Insurance Fund). • Proof of place of residence and the work contract. All persons employed for the rst time and age 40 are obliged to register in the second pillar of retirement insurance. A person has to choose the obligatory pension fund within 3 months of the date of employment. If the fund is not chosen after that period, REGOS (the Central Register of the Insured) itself chooses the obligatory pension fund that the person will register in. All persons employed for the rst time and between ages 40 and 50 can, if they desire, register with the second pillar of retirement insurance. A person has to choose the obligatory pension fund within 6 months of the date of employment. Applies to women only. Takes place simultaneously with previous procedure. Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Page 12   Applies to women only. Takes place simultaneously with previous procedure. Doing Business 2018 Croatia Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required noti cations, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certi cation requirements. The most recent round of data collection was completed in June 2017. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility Submitting all relevant documents and obtaining connections are used. all necessary clearances, licenses, permits and certificates The construction company (BuildCo): Submitting all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the receiving all necessary inspections economy’s largest business city. For 11 economies the data are also collected for the second largest business city. Obtaining utility connections for water and - Is 100% domestically and privately owned; has ve owners, none of whom sewerage is a legal entity. Has a licensed architect and a licensed engineer, both Registering and selling the warehouse after its registered with the local association of architects or engineers. BuildCo is completion not assumed to have any other employees who are technical or licensed Time required to complete each procedure experts, such as geological or topographical experts. (calendar days) - Owns the land on which the warehouse will be built and will sell the warehouse upon its completion. Does not include time spent gathering information The warehouse: Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or though procedures that can be fully completed stationery. online are an exception to this rule - Will have two stories, both above ground, with a total constructed area of Procedure is considered completed once final approximately 1,300.6 square meters (14,000 square feet). Each oor will document is received be 3 meters (9 feet, 10 inches) high and will be located on a land plot of No prior contact with officials approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of - Will have complete architectural and technical plans prepared by a warehouse value) licensed architect. If preparation of the plans requires such steps as Official costs only, no bribes obtaining further documentation or getting prior approvals from external Building quality control index (0-15) agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative Sum of the scores of six component indices: and regulatory requirements). Quality of building regulations (0-2) The water and sewerage connections: Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer Quality control during construction (0-3) tap. If there is no water delivery infrastructure in the economy, a borehole Quality control after construction (0-3) will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. Liability and insurance regimes (0-2) - Will have an average water use of 662 liters (175 gallons) a day and an Professional certifications (0-4) average wastewater ow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater ow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater ow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Standardized Warehouse Page 13   and 4 inches in diameter for the sewerage connection. Doing Business 2018 Croatia Standardized Warehouse Estimated value of warehouse HRK 3,990,155.80 City Covered Zagreb Europe & OECD high Indicator Croatia Central Asia income Overall Best Performer Procedures (number) 18 16.0 12.5 7.00 (Denmark) Time (days) 126 168.3 154.6 27.5 (Korea, Rep.) Cost (% of warehouse value) 9.4 4.0 1.6 0.10 (5 Economies) Building quality control index (0-15) 12.0 11.4 11.4 15.00 (3 Economies) Figure – Dealing with Construction Permits in Croatia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 68.09: Regional Average (Europe & Central Asia) 67.93: Hungary (Rank: 90) 67.26: Italy (Rank: 96) 66.27: Albania (Rank: 106) 63.00: Croatia (Rank: 126) 62.77: Czech Republic (Rank: 127) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Dealing with Construction Permits in Croatia – Procedure, Time and Cost Time Cost 8 120 7 100 Cost (% of warehouse value) 6 80 5 Time (days) 4 60 3 40 2 20 1 0 0 1 *2 *3 *4 *5 *6 *7 *8 9 * 10 11 * 12 13 * 14 15 * 16 17 18 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 14   component indicators. Doing Business 2018 Croatia Figure – Dealing with Construction Permits in Croatia – Procedure, Time and Cost Time Cost 8 120 7 100 Cost (% of warehouse value) 6 80 5 Time (days) 4 60 3 40 2 20 1 0 0 1 *2 *3 *4 *5 *6 *7 *8 9 * 10 11 * 12 13 * 14 15 * 16 17 18 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Dealing with Construction Permits in Croatia and comparator economies – Measure of Quality 13.5 13.0 13.0 13 12.5 Index score 12.0 12.0 12 11.4 11.5 11.0 11 10.5 10 Croatia Albania Czech Republic Hungary Italy Europe & Central Asia Details – Dealing with Construction Permits in Croatia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Receive clearance from the waste collection department 30 days no charge Agency : Waste Collection Department There is a clearance to ensure that the building has been constructed in accordance with the conditions that were outlined for the building. 2 Receive clearance from the National Croatian Electric Grid 1 day no charge Agency : National Croatian Electric Grid BuildCo must obtain preliminary approvals from various authorities. Such approvals are issued based on the preliminary project design drawings and other documents. They must be obtained prior to applying for the building permit; however these applications can be led simultaneously. Page 15   Croatia Albania Czech Republic Hungary Italy Europe & Central Asia Doing Business 2018 Croatia Details – Dealing with Construction Permits in Croatia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Receive clearance from the waste collection department 30 days no charge Agency : Waste Collection Department There is a clearance to ensure that the building has been constructed in accordance with the conditions that were outlined for the building. 2 Receive clearance from the National Croatian Electric Grid 1 day no charge Agency : National Croatian Electric Grid BuildCo must obtain preliminary approvals from various authorities. Such approvals are issued based on the preliminary project design drawings and other documents. They must be obtained prior to applying for the building permit; however these applications can be led simultaneously. While the new Building Act of 2014 stipulates that silence is consent from agencies after 15 days, in practice, contractors would need to follow up with agencies if there has been no response. While agencies have improved their response time, usually to less than 15 days, most of the time further adjustments and corrections are required, leading to a longer time for obtaining approvals. 3 Receive clearance from the Sanitary Inspectorate 24 days HRK 70 Agency : Sanitary Inspectorate There is a clearance to ensure that the building has been constructed in accordance with the conditions that were outlined for the building. 4 Receive clearance from the Local Water Authority 14 days no charge Agency : Vodopskrba i odvodnja d.o.o. BuildCo must obtain preliminary approvals from various authorities. Such approvals are issued based on the preliminary project design drawings and other documents. They must be obtained prior to applying for the building permit; however these applications can be led simultaneously. While the new Building Act of 2014 stipulates that silence is consent from agencies after 15 days, in practice, contractors would need to follow up with agencies if there has been no response. While agencies have improved their response time, usually to less than 15 days, most of the time further adjustments and corrections are required, leading to a longer time for obtaining approvals. 5 Receive clearance from the Inspectorate for Fire at the Ministry of 3 days no charge Interior A airs Agency : Inspectorate for Fire at the Ministry of Interior A airs There is a clearance to ensure that the building has been constructed in accordance with the conditions that were outlined for the building. 6 Obtain excerpt from the Land Registry for subject and bordering lands 1 day HRK 20 Agency : Land Registry According to the new building code, The Building Act, which was passed December 6, 2013, the warehouse would no longer require a location permit. However, the excerpt from the Land Registry would still be required for the building permit application as evidence of the legal interest to build. Page 16   There is a clearance to ensure that the building has been constructed in Business with Doing accordance 2018 Croatia that were outlined for the building. the conditions 6 Obtain excerpt from the Land Registry for subject and bordering lands 1 day HRK 20 Agency : Land Registry According to the new building code, The Building Act, which was passed December 6, 2013, the warehouse would no longer require a location permit. However, the excerpt from the Land Registry would still be required for the building permit application as evidence of the legal interest to build. Land Registry Department of the Municipal Court in Zagreb has transferred a signi cant portion of Land Registry data into electronic form, as a result, excerpts can be obtained immediately upon request or in a shorter term. Also, as the backlog of cases has reduced due to increased number of sta and other reform e orts, general improvements in the e ciency of the Land Registry Department in Zagreb can be noted. The procedure takes now on average 1 day. Preliminary information is available online for applicants to review. While the documents are currently available for viewing online, they are not accepted as o cial documentation at this time. If the investor in the construction is not the owner of the land, according to The Building Act of 2013, there are other newly acceptable ways to prove legal interest, including contracts and written approval from the owner. 7 Obtain the list of land owners adjacent to the future construction site 1 day HRK 70 Agency : County O ce (Cadastre and Geodetic Activities) The geodetic study needs to contain a list of the people/legal entities that own the plots of land where the building is going to be built (i.e. a list of neighbors). This is required so that the proper individuals are noti ed of the future construction site. 8 Obtain authentication of the online cadastral map by the Cadaster 1 day HRK 110 Agency : County O ce (Cadastre and Geodetic Activities) The geodetic study needs to contain a list of the people/legal entities that own the plots of land where the building is going to be built (i.e. a list of neighbors). This is required so that the proper individuals are noti ed of the future construction site. 9 Obtain decision from the Municipal Authority regarding utilities 22 days HRK 292,613 Agency : Municipal Authority BuildCo must obtain a decision from the Municipal Authority on utility fees, based on the construction permit. The amount of the fee depends on the building size (in cubic meters) and on the location. Zagreb is divided into four zones for the purposes of communal fee calculations. The communal fee is set from HRK 56 to HRK 118 per cubic meter of a building, depending on the zone. The Doing Business case study warehouse would be located in Zagreb zone III, with the communal fee set at HRK 75 per cubic meter. The fee can be paid in full or in installments. According to Regulation on Procedure of Determining Volume of Buildings for Communal Fee Calculation currently in force, the volume of the buliding is used, and as for the warehouse used in the Doing Buisness case study, the volume of the warehouse is 3901.5 cubic meters. Therefore the cost is 3901.5 * HRK 75. Hire an external supervising engineer to conduct inspections during 1 day HRK 26,250 Page 17   neighbors). This is required so that the proper individuals are noti ed of the Doing future 2018 site. construction Business Croatia 9 Obtain decision from the Municipal Authority regarding utilities 22 days HRK 292,613 Agency : Municipal Authority BuildCo must obtain a decision from the Municipal Authority on utility fees, based on the construction permit. The amount of the fee depends on the building size (in cubic meters) and on the location. Zagreb is divided into four zones for the purposes of communal fee calculations. The communal fee is set from HRK 56 to HRK 118 per cubic meter of a building, depending on the zone. The Doing Business case study warehouse would be located in Zagreb zone III, with the communal fee set at HRK 75 per cubic meter. The fee can be paid in full or in installments. According to Regulation on Procedure of Determining Volume of Buildings for Communal Fee Calculation currently in force, the volume of the buliding is used, and as for the warehouse used in the Doing Buisness case study, the volume of the warehouse is 3901.5 cubic meters. Therefore the cost is 3901.5 * HRK 75. Hire an external supervising engineer to conduct inspections during 1 day HRK 26,250 10 construction Agency : Private Firm A private engineer is hired to conduct inspections during construction per Art. 50 & 56 of the Construction Law NN 153/ 13 , BuildCO must hire an external engineer to supervise the construction work. There is a cost to be paid for the hiring. 11 Request and receive building permit 30 days HRK 14,000 Agency : Municipal Authority Pay water contribution to the state company Croatian Waters (Hrvatske 15 days HRK 19,156 12 Vode) Agency : Hrvatske Vode The water contribution is paid to nance the management of water resources and protection from oods. The cost is determined based on the following: (i) The zone the new construction is in. Zone A is Zagreb and the protected coastal area, Zone B is the rest of the country, and Zone C are areas subject to special Government care. (ii) The purpose of the construction (residential, industrial, public interest) (iii) The volume of the construction. The cost for the case study warehouse is 3901.5 * HRK 4.91 according to the fee schedule of Hrvatske Vode (www.voda.hr). 13 Submit commencement notice 1 day HRK 20 Agency : Municipality of City of Zagreb The investor must notify the building control authority eight days before the commencement of construction. In the noti cation the builder must include: • Building classi cation • Register number • Date of issue of the building permit • List the contractor and supervising engineer • Evidence that the building plot was formed in the cadastre if the building is subject to speci cation of the building plot The building control authority will then, within ve days of receipt of the noti cation of commencement, notify the Ministry of Interior, building inspection, labor inspection, administrative body of the local self-government unit competent for determining utility Page 18   charges and body competent for determining water charges, while the The cost for the case study warehouse is 3901.5 * HRK 4.91 according to the Doing fee of Hrvatske schedule2018 Business Vode (www.voda.hr). Croatia 13 Submit commencement notice 1 day HRK 20 Agency : Municipality of City of Zagreb The investor must notify the building control authority eight days before the commencement of construction. In the noti cation the builder must include: • Building classi cation • Register number • Date of issue of the building permit • List the contractor and supervising engineer • Evidence that the building plot was formed in the cadastre if the building is subject to speci cation of the building plot The building control authority will then, within ve days of receipt of the noti cation of commencement, notify the Ministry of Interior, building inspection, labor inspection, administrative body of the local self-government unit competent for determining utility charges and body competent for determining water charges, while the building inspection shall also be noti ed whether the noti cation is complete. Receive random inspection from the Municipality 1 day no charge 14 Agency : Municipality of City of Zagreb Inspections are random and may occur on multiple occasions throughout the construction process. 15 Obtain water and sewage connection 20 days HRK 8,000 Agency : Water & Sewage Authority Apply for occupancy (use) permit 1 day HRK 20 16 Agency : Municipality of City of Zagreb The occupancy permit is mandatory for the use of a completed building. The following documents must be submitted: • Photocopy of the building permit or a copy of the main design for construction work • Information on the participants in the construction (investor, designer, performer of construction works, supervisory engineer) • Written statement of the contractor on works completed and the requirements for the maintenance of the construction • Final report of the supervisory engineer • Statement of the geodetic engineer that the construction work was built in accordance with the surveying design • Surveying study for entering the construction work in the cadastre or for change of information on buildings and other construction works, if the construction work is not subject to developing the surveying design, but is to be entered in the cadastre • Statement of the authorized geodetic engineer that the construction work is located on the building plot • Energy certi cate of the building, if applicable The Municipality forms an evaluation committee within 30 days after the submission of the application for the issuance of the occupancy permit, and determines the date of the on-site inspection. The investor submits various documents which substantiate that the construction has been conducted in accordance with the regulations (e.g., construction diary, licenses of the construction rm which executed the works, technical certi cates for the material used in the construction, etc.) to the evaluation committee not later than on the day after the site inspection. If any of the members of the evaluation committee nd that the building does not comply with a speci c requirement, the investor may be given an additional 90 days to make the Page 19   necessary corrections (if the error is, in fact, able to be corrected). If all 15 Obtain water and sewage connection 20 days HRK 8,000 Agency : Water & Sewage Authority Doing Business 2018 Croatia Apply for occupancy (use) permit 1 day HRK 20 16 Agency : Municipality of City of Zagreb The occupancy permit is mandatory for the use of a completed building. The following documents must be submitted: • Photocopy of the building permit or a copy of the main design for construction work • Information on the participants in the construction (investor, designer, performer of construction works, supervisory engineer) • Written statement of the contractor on works completed and the requirements for the maintenance of the construction • Final report of the supervisory engineer • Statement of the geodetic engineer that the construction work was built in accordance with the surveying design • Surveying study for entering the construction work in the cadastre or for change of information on buildings and other construction works, if the construction work is not subject to developing the surveying design, but is to be entered in the cadastre • Statement of the authorized geodetic engineer that the construction work is located on the building plot • Energy certi cate of the building, if applicable The Municipality forms an evaluation committee within 30 days after the submission of the application for the issuance of the occupancy permit, and determines the date of the on-site inspection. The investor submits various documents which substantiate that the construction has been conducted in accordance with the regulations (e.g., construction diary, licenses of the construction rm which executed the works, technical certi cates for the material used in the construction, etc.) to the evaluation committee not later than on the day after the site inspection. If any of the members of the evaluation committee nd that the building does not comply with a speci c requirement, the investor may be given an additional 90 days to make the necessary corrections (if the error is, in fact, able to be corrected). If all requirements have been met, the Municipality should issue the occupancy permit within 30 days after the inspection. 17 Receive nal inspection 1 day HRK 2,040 Agency : Municipality of City of Zagreb Within 15 to 30 days after receiving a request for the occupancy permit, a technical review team from the municipality must conduct the nal inspection. In practice this happens in about a week 18 Receive occupancy (use) permit 21 days HRK 14,000 Agency : Municipality of City of Zagreb After the on-site inspection, the municipality has up to 30 days to issue the occupancy certi cate. Takes place simultaneously with previous procedure. Details – Dealing with Construction Permits in Croatia – Measure of Quality Answer Score Building quality control index (0-15) 12.0 Page 20   Quality of building regulations index (0-2) 2.0 Takes place simultaneously with previous procedure. Doing Business 2018 Croatia Details – Dealing with Construction Permits in Croatia – Measure of Quality Answer Score Building quality control index (0-15) 12.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0 Free of charge. Which requirements for obtaining a building permit are clearly speci ed in the building List of required 1.0 regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 0.0 Which third-party entities are required by law to verify that the building plans are in By law, there is 0.0 compliance with existing building regulations? (0-1) no need to verify plans compliance; Civil servant reviews plans. Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during Inspections by 1.0 construction? (0-2) external engineer or rm. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a nal inspection required by law to verify that the building was built in Yes, nal 2.0 accordance with the approved plans and regulations? (0-2) inspection is done by government agency. Do legally mandated nal inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 1.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the supervision; Construction company. Page 21   Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 Liability Doing 2018 regimes and insurance Business index (0-2) Croatia 1.0 Which parties (if any) are held liable by law for structural aws or problems in the Architect or 1.0 building once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) engineer; Professional in charge of the supervision; Construction company. Which parties (if any) are required by law to obtain an insurance policy to cover No party is 0.0 possible structural aws or problems in the building once it is in use (Latent Defect required by law Liability Insurance or Decennial Insurance)? (0-1) to obtain insurance . Professional certi cations index (0-4) 4.0 What are the quali cation requirements for the professional responsible for verifying Minimum 2.0 that the architectural plans or drawings are in compliance with existing building number of years regulations? (0-2) of experience; University degree in architecture or engineering; Being a registered architect or engineer. What are the quali cation requirements for the professional who supervises the Minimum 2.0 construction on the ground? (0-2) number of years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer. Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the Page 22   receiving all necessary inspections data are also collected for the second largest business city. architect or engineer. Doing Business 2018 Croatia Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tari s index measures reliability of supply, transparency of tari s and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions are (number) used. Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the receiving all necessary inspections data are also collected for the second largest business city. Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is purchasing material for these works in an area with no physical constraints. For example, the property is not Concluding any necessary supply contract and near a railway. obtaining final supply - Is a new construction and is being connected to electricity for the rst time. Time required to complete each procedure - Has two stories with a total surface area of approximately 1,300.6 square (calendar days) meters (14,000 square feet). The plot of land on which it is built is 929 Is at least 1 calendar day square meters (10,000 square feet). Each procedure starts on a separate day Does not include time spent gathering The electricity connection: information - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, Reflects the time spent in practice, with little when 1 kVA = 1 kilowatt (kW). follow-up and no prior contact with officials - Has a length of 150 meters. The connection is to either the low- or Cost required to complete each procedure (% of medium-voltage distribution network and is either overhead or income per capita) underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10- Official costs only, no bribes meter road (such as by excavation or overhead lines) but are all carried out Value added tax excluded on public land. There is no crossing of other owners’ private property The reliability of supply and transparency of because the warehouse has access to a road. tari s index (0-8) - Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service Duration and frequency of power outages (0–3) panel or switchboard and the meter base. Tools to monitor power outages (0–1) Tools to restore power supply (0–1) The monthly consumption: Regulatory monitoring of utilities’ performance - It is assumed that the warehouse operates 30 days a month from 9:00 (0–1) a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity Financial deterrents limiting outages (0–1) on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours Transparency and accessibility of tariffs (0–1) (kWh); hourly consumption is 112 kWh. Price of electricity (cents per kilowatt-hour)* - If multiple electricity suppliers exist, the warehouse is served by the Price based on monthly bill for commercial cheapest supplier. warehouse in case study - Tari s e ective in March of the current year are used for calculation of the price of electricity for the warehouse. Although March has 31 days, for * N o t e : Doing Business m e a s u r e s t h e p r i c e o f calculation purposes only 30 days are used. electricity, but it is not included in the distance to frontier score nor the ranking on the ease of getting electricity. Page 23   Standardized Connection frontier score nor the ranking on the ease of getting electricity. Doing Business 2018 Croatia Standardized Connection Price of electricity (US cents per kWh) 17.1 Name of utility HEP ODS City Covered Zagreb Europe & OECD high Indicator Croatia Central Asia income Overall Best Performer Procedures (number) 5 5.4 4.7 2 (United Arab Emirates) Time (days) 65 113.7 79.1 10 (United Arab Emirates) Cost (% of income per capita) 298.5 344.3 63.0 0.00 (Japan) Reliability of supply and transparency of tariff 5 5.3 7.4 8.00 (28 Economies) index (0-8) Figure – Getting Electricity in Croatia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 90.33: Czech Republic (Rank: 15) 85.27: Italy (Rank: 28) 76.26: Croatia (Rank: 75) 70.35: Regional Average (Europe & Central Asia) 63.26: Hungary (Rank: 110) 48.31: Albania (Rank: 157) Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Getting Electricity in Croatia – Procedure, Time and Cost Time Cost 350 60 300 Cost (% of income per capita) 50 250 40 Time (days) 200 30 150 20 100 10 Page 24   50 getting electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Croatia Figure – Getting Electricity in Croatia – Procedure, Time and Cost Time Cost 350 60 300 Cost (% of income per capita) 50 250 40 Time (days) 200 30 150 20 100 10 50 0 0 1 2 *3 4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Getting Electricity in Croatia and comparator economies – Measure of Quality 9 8 8 7 7 7 6 Index score 5 5.3 5 4 3 2 1 0 0 Croatia Albania Czech Republic Hungary Italy Europe & Central Asia Details – Getting Electricity in Croatia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application and receive preliminary connection approval and 25 calendar days HRK 0 contract Agency : HEP Distribution System Operator (HEP ODS) An application cannot be submitted online. The application can be submitted with HEP ODS in the o ce. Required documents and the “Request for the issuance of energy consent and connection” are to be submitted in accordance with the General Conditions of Electricity Supply (O cial Gazette, No. 14/06) Article 7. These documents do not need notarization. An external site inspection is necessary to prepare an estimate for the connection fees. The customer's party does not have to be present, unless inevitable, to carry out the inspection. Page 25   The customer receives preliminary approval of the connection and technical Croatia Albania Czech Republic Hungary Italy Europe & Central Asia Doing Business 2018 Croatia Details – Getting Electricity in Croatia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Submit application and receive preliminary connection approval and 25 calendar days HRK 0 contract Agency : HEP Distribution System Operator (HEP ODS) An application cannot be submitted online. The application can be submitted with HEP ODS in the o ce. Required documents and the “Request for the issuance of energy consent and connection” are to be submitted in accordance with the General Conditions of Electricity Supply (O cial Gazette, No. 14/06) Article 7. These documents do not need notarization. An external site inspection is necessary to prepare an estimate for the connection fees. The customer's party does not have to be present, unless inevitable, to carry out the inspection. The customer receives preliminary approval of the connection and technical speci cations of the connection which are required to obtain a building permit of the warehouse. 2 Accept estimate and await completion of external works by utility 30 calendar days HRK 238,184.43 Agency : HEP ODS Upon the receipt of the application for the preliminary connection approval/the connection, the contract will be sent to the customer with details of the connection condition and charges. The terms of the connection contract (the estimate) are accepted by signing the contract and returning it to HEP DSO with the payment plus any other documentation speci ed in the preliminary connection approval. The work will start in accordance with the preliminary connection approval/the connection contract upon receipt of the signed connection contract and payment. HEP DSO designs the process and draws up the required investment technical documentation. External connection works include supply and installation of a connection cubicle, a meter, a tari switch unit or a time switch and a limiter switch or some other demand controller. The meter is installed in parallel with the connection process carried out by the Maintenance Department. Connection to the electric power network is possible after the customer concluded a supply contract with a chosen supplier and a use of network contract with HEP DSO. The utility will not do the nal connection ( ow of electricity) if the customer does not have a supply contract yet. 3 Conclude supply agreement 5 calendar days HRK 0 Agency : Electricity retailer After the preliminary connection approval has been issued to the customer and before the nal connection, the customer should conclude a supply and use of network contract. When providing a quotation it is practice to advise the customer that he needs to nominate a supplier before the connection can be made and preferably before accepting the quotation. It is advisable that the customer appoints and signs a contract with an electricity supplier at least 20 days before the date the customer wants electricity to ow. 4 Submit internal wiring certi cate to utility and request nal connection 5 calendar days HRK 0 Agency : HEP ODS After external and internal connection work has been completed, the customer visits HEP ODS o ce to arrange a time and method for energizing the connection. The customer has to submit the application for the issuance of the connection approval and for connection. The application form can be Page 26   that the customer appoints and signs a contract with an electricity supplier Doing at least 20 days Business 2018before the date the customer wants electricity to ow. Croatia 4 Submit internal wiring certi cate to utility and request nal connection 5 calendar days HRK 0 Agency : HEP ODS After external and internal connection work has been completed, the customer visits HEP ODS o ce to arrange a time and method for energizing the connection. The customer has to submit the application for the issuance of the connection approval and for connection. The application form can be found on the website. Information required in this form and in the procedure for the issuance of the connection approval and for connection is the building permit number, category of consumer, the building permit, con rmation from the contractor (Electrical Completion Certi cate) that the customer or a producer’s electric facilities and installations have been built and tested in accord with the preliminary connection approval, design documentation and technical regulations and standards, with an explicit statement of the contractor that the said facilities and installations may be connected to the network and the required test of quality. At the request of the application for issuance of connection approval and for connection, HEP ODS issues and the customer obtains the connection approval. 5 Receive visit by utility to open the meter 5 calendar days HRK 0 Agency : HEP ODS An authorized person from HEP ODS will come to open the meter and electricity starts owing. Before electricity starts owing, the customer should provide all the forms related to the connection. Takes place simultaneously with previous procedure. Details – Getting Electricity in Croatia – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 5 Total duration and frequency of outages per customer a year (0-3) 1 System average interruption duration index (SAIDI) 5.0 System average interruption frequency index (SAIFI) 1.7 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 0 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages No exceed a certain cap? Page 27   Takes place simultaneously with previous procedure. Doing Business 2018 Croatia Details – Getting Electricity in Croatia – Measure of Quality Answer Reliability of supply and transparency of tari index (0-8) 5 Total duration and frequency of outages per customer a year (0-3) 1 System average interruption duration index (SAIDI) 5.0 System average interruption frequency index (SAIFI) 1.7 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 1 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on Yes reliability of supply? Financial deterrents aimed at limiting outages (0-1) 0 Does the utility either pay compensation to customers or face nes by the regulator (or both) if outages No exceed a certain cap? Communication of tari s and tari changes (0-1) 1 Are e ective tari s available online? Yes Link to the website, if available online http://www.hep.hr/o ds/kupci/poduzetnis tvo.aspx Are customers noti ed of a change in tari ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tari index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 28   What the indicators measure Case study assumptions If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Doing Business 2018 Croatia Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has ve dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable To make the data comparable across economies, several assumptions property (number) about the parties to the transaction, the property and the procedures are used. Preregistration procedures (for example, checking for liens, notarizing sales agreement, The parties (buyer and seller): paying property transfer taxes) - Are limited liability companies (or the legal equivalent). Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. business citya. For 11 economies the data are also collected for the second largest Postregistration procedures (for example, filling business city. title with municipality) - Are 100% domestically and privately owned. Time required to complete each procedure - Have 50 employees each, all of whom are nationals. (calendar days) - Perform general commercial activities. Does not include time spent gathering information The property (fully owned by the seller): - Has a value of 50 times income per capita, which equals the sale price. Each procedure starts on a separate day - though - Is fully owned by the seller. procedures that can be fully completed online - Has no mortgages attached and has been under the same ownership for are an exception to this rule the past 10 years. Procedure is considered completed once final - Is registered in the land registry or cadastre, or both, and is free of title document is received disputes. No prior contact with officials - Is located in a periurban commercial zone, and no rezoning is required. Cost required to complete each procedure (% of - Consists of land and a building. The land area is 557.4 square meters property value) (6,000 square feet). A two-story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in Official costs only (such as administrative fees, good condition, has no heating system and complies with all safety duties and taxes). standards, building codes and legal requirements. The property, Value Added Tax, Capital Gains Tax and illicit consisting of land and building, will be transferred in its entirety. payments are excluded - Will not be subject to renovations or additional construction following the Quality of land administration index (0-30) purchase. - Has no trees, natural water sources, natural reserves or historical Reliability of infrastructure index (0-8) monuments of any kind. Transparency of information index (0–6) - Will not be used for special purposes, and no special permits, such as for Geographic coverage index (0–8) residential use, industrial plants, waste storage or certain types of agricultural activities, are required. Land dispute resolution index (0–8) - Has no occupants, and no other party holds a legal interest in it. Equal access to property rights index (-2–0) Standard Property Transfer Property value HRK 3,990,155.80 City Covered Zagreb Page 29   Europe & OECD high Doing Business 2018 Croatia Standard Property Transfer Property value HRK 3,990,155.80 City Covered Zagreb Europe & OECD high Indicator Croatia Central Asia income Overall Best Performer Procedures (number) 5 5.3 4.6 1.00 (4 Economies) Time (days) 62 20.4 22.3 1.00 (3 Economies) Cost (% of property value) 4.0 2.5 4.2 0.00 (5 Economies) Quality of the land administration index (0-30) 22.5 19.8 22.7 29.00 (Singapore) Figure – Registering Property in Croatia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 81.70: Italy (Rank: 23) 80.09: Hungary (Rank: 29) 79.68: Czech Republic (Rank: 32) 76.02: Regional Average (Europe & Central Asia) 71.44: Croatia (Rank: 59) 59.28: Albania (Rank: 103) Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Registering Property in Croatia – Procedure, Time and Cost Time Cost 4.5 60 4 50 3.5 Cost (% of property value) 40 3 Time (days) 2.5 30 2 20 1.5 1 10 0.5 0 0 1 2 3 *4 *5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Page 30   Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for registering property. These scores are the simple average of the distance to frontier scores for each of the component indicators. Doing Business 2018 Croatia Figure – Registering Property in Croatia – Procedure, Time and Cost Time Cost 4.5 60 4 50 3.5 Cost (% of property value) 40 3 Time (days) 2.5 30 2 20 1.5 1 10 0.5 0 0 1 2 3 *4 *5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a di erent procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://www.doingbusiness.org/methodology). For details on the procedures re ected here, see the summary below. Figure – Registering Property in Croatia and comparator economies – Measure of Quality 30 26.0 26.5 25.0 25 22.5 19.8 20 Index score 15.5 15 10 5 0 Croatia Albania Czech Republic Hungary Italy Europe & Central Asia Details – Registering Property in Croatia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain the land registry extract from the competent land register court 1 day HRK 20 per extract Agency : Municipal Court Zagreb, Land Registry Department Due diligence requires that the buyer knows the status of the land registry. Obtaining a land registry land registration extract has become a crucial part during the preparation process for the purchase of a real estate, since the land registry extract enjoys public faith. An uno cial land registry extract, without legal power, can be obtained online by anyone at any time, via internet page of the Ministry of Justice, https://oss.uredjenazemlja.hr/public/lrextracts.jsp?action=publicLdbExtract. However, only the extract issued and stamped by the Land Registrar of the Page 31   Municipal Court are o cial and enjoy the public trust and probative force of Croatia Albania Czech Republic Hungary Italy Europe & Central Asia Doing Business 2018 Croatia Details – Registering Property in Croatia – Procedure, Time and Cost No. Procedure Time to Complete Associated Costs 1 Obtain the land registry extract from the competent land register court 1 day HRK 20 per extract Agency : Municipal Court Zagreb, Land Registry Department Due diligence requires that the buyer knows the status of the land registry. Obtaining a land registry land registration extract has become a crucial part during the preparation process for the purchase of a real estate, since the land registry extract enjoys public faith. An uno cial land registry extract, without legal power, can be obtained online by anyone at any time, via internet page of the Ministry of Justice, https://oss.uredjenazemlja.hr/public/lrextracts.jsp?action=publicLdbExtract. However, only the extract issued and stamped by the Land Registrar of the Municipal Court are o cial and enjoy the public trust and probative force of a public document. Electronic extracts are not considered o cial extracts when it comes to using them for collateral purposes. In accordance with the Regulation on Technical and Other Conditions of Electronic Operations in the Land Registry (O cial Gazette No. 119/15) from November 2,2015 it is possible to obtain an o cial land registry extract from a notary public or a lawyer. A notary public and a lawyer are authorized to issue o cial land registry extracts if they previously obtained a consent from the Ministry of Justice by submitting a request through the Croatian Notaries Chamber or the Croatian Bar Association. When obtaining a land registry extract from a public notary or a lawyer an additional fee in the amount of HRK 20 per extract is paid. It is also possible to obtain an o cial land registry extract personally by using a personal box in the "E-citizen system". The platform allows a person to use di erent public services including obtaining a valid land registry extract. The number of public services provided by "E-citizen system" increases every year. 2 Notary notarizes the sale contract 1 day HRK 40.0 (VAT not Agency : Notary included) (47.5 VAT included) per The sale contract contains a clausula intabulandi (i.e. the declaration by the signature verified by seller that the purchaser may be entered in the land register) and is public notary Page 32   extract. The number of public services provided by "E-citizen system" Doing increases Business every 2018year. Croatia 2 Notary notarizes the sale contract 1 day HRK 40.0 (VAT not Agency : Notary included) (47.5 VAT included) per The sale contract contains a clausula intabulandi (i.e. the declaration by the signature verified by seller that the purchaser may be entered in the land register) and is public notary prepared by the parties or by a lawyer. Pursuant to Article 52 of the Land Registry Act (O cial Gazette 60/13) in force as of May 16, 2013, Land Registry Department of the Municipal Court will allow a registration of ownership right only based on public documents or private documents with a notarized signature of at least a person whose right is going to be restricted, encumbered, terminated or conveyed. Pursuant to this regulation, Land Registry Department of the Municipal Court will allow a registration of ownership right based on the sale contact if a public notary veri ed / notarized the signature of the seller (a party whose property right will be restricted, encumbered, terminated or conveyed). Pursuant to Tari No. 29 of the Lawyers Fee Schedule and Cost Compensation (O cial Gazette No. 107/15) a lawyer is entitled to the remuneration for drafting a sale contract calculated according to the value of the property, increased by 25%. Pursuant to Tari No. 19, a lawyer is also entitled to the remuneration for drafting a request for land registry registration calculated according to the value of the property, increased by 25%. Both amounts are further increased by VAT in the amount of 25%. If the property value is above HRK 500.000 a lawyer is entitled to an additional fee and if the property value is lower than HRK 500.000 there is a xed fee on a scale. The documentation shall include: Land register extract (obtained in Procedure 1). 3 Register the title transfer at the Land Registry Court 1-2 months To be paid in Agency : Municipal Court in Zagreb (Land Registry Department) (simultaneous with procedure 5 procedures 4 and The request for the property registration must be submitted to the Registry 5) by the parties on the appropriate registration form approved by the Ministry of Justice. However, the request shall not be rejected just because it was not submitted on the prescribed registration form. The participation of an attorney is not mandatory, but if one is involved, his fees will be about 0.5% of the property value. The Registry conducts the registration Procedure and renders the decision issuing the property title. The process of recording the sale agreement with the competent land register court takes around 30-90 days, when the proceedings are conducted by an experienced lawyer. Depending on the various courts, this process may take even longer. It should be highlighted that only the nal decision, the one allowing the registration, produces the legal e ect. However, regardless of the time when the nal decision is rendered, the date of applying for registration will be the date marked in the Registry as the moment of transferring the ownership title. From that moment the party is protected towards all applications submitted afterwards. This rule is called the rule of priority: the buyer has the legal right to dispose of the property (to sell, lease, bequeath, transfer by gift, and mortgage the property). From that moment until the nal registration the buyer has "quasi ownership". Therefore, even before the registration is completed, the rst buyer - quasi owner can sell the property to another, second buyer. However there is a risk if the nal registration of the rst buyer - quasi owner is not allowed. In that case he will be liable for damage towards the second buyer. In practice the other contractual party will probably not be willing to enter into the legal transactions with the person who is not the legal owner of the real-estate in question (or take the risk). Page 33   scale. The documentation shall include: Land register extract (obtained in Doing Procedure Business 1). 2018 Croatia 3 Register the title transfer at the Land Registry Court 1-2 months To be paid in Agency : Municipal Court in Zagreb (Land Registry Department) (simultaneous with procedure 5 procedures 4 and The request for the property registration must be submitted to the Registry 5) by the parties on the appropriate registration form approved by the Ministry of Justice. However, the request shall not be rejected just because it was not submitted on the prescribed registration form. The participation of an attorney is not mandatory, but if one is involved, his fees will be about 0.5% of the property value. The Registry conducts the registration Procedure and renders the decision issuing the property title. The process of recording the sale agreement with the competent land register court takes around 30-90 days, when the proceedings are conducted by an experienced lawyer. Depending on the various courts, this process may take even longer. It should be highlighted that only the nal decision, the one allowing the registration, produces the legal e ect. However, regardless of the time when the nal decision is rendered, the date of applying for registration will be the date marked in the Registry as the moment of transferring the ownership title. From that moment the party is protected towards all applications submitted afterwards. This rule is called the rule of priority: the buyer has the legal right to dispose of the property (to sell, lease, bequeath, transfer by gift, and mortgage the property). From that moment until the nal registration the buyer has "quasi ownership". Therefore, even before the registration is completed, the rst buyer - quasi owner can sell the property to another, second buyer. However there is a risk if the nal registration of the rst buyer - quasi owner is not allowed. In that case he will be liable for damage towards the second buyer. In practice the other contractual party will probably not be willing to enter into the legal transactions with the person who is not the legal owner of the real-estate in question (or take the risk). From 2004 the Court no longer accepts incomplete applications. If the registration form contains certain de ciencies, the court will not invite the applicant to correct the request but will immediately dismiss the application. The applicant may submit a new request, which will then have a lower rank. This has resulted in some reduction of backlog at the Courts and has also led to higher demand for professional assistance with the application process. Furthermore, changes in 2005 entrust the Land Registry clerks with the authority to decide on applications, with judges deciding on appeals. With registration moving from a judicial process to a more administrative process, this is a welcome change that indicates potential for decreasing the amount of time for registration. Recent internal reorganization of the Land Books also indicates future potential for increased e ciency. The documentation shall include: (i) Notarized sale agreement (ii) Application form (iii) Certi ed copy of an ID or a passport (iv) Personal Identi cation Number (OIB) (required since January 1, 2009, Land registry Act of December 18, 2009). 4 Submit the sale contract to the municipal tax administration to receive 30 days no cost an estimate of the land transfer taxes (simultaneous with Agency : Municipal Tax Administration procedure 3 and 5) Pursuant to Article 18 of the new Real Estate Transfer Tax Act (O cial Gazette No. 115/2016) in force as of January 1, 2017, a public notary is Page 34   obligated to electronically deliver one copy of a document which is a legal (iv) Personal Identi cation Number (OIB) (required since January 1, 2009, Doing Land registry Business Croatia 18, 2009). Act of December 2018 4 Submit the sale contract to the municipal tax administration to receive 30 days no cost an estimate of the land transfer taxes (simultaneous with Agency : Municipal Tax Administration procedure 3 and 5) Pursuant to Article 18 of the new Real Estate Transfer Tax Act (O cial Gazette No. 115/2016) in force as of January 1, 2017, a public notary is obligated to electronically deliver one copy of a document which is a legal base for real estate transfer, together with the personal identi cation number PIN ("OIB") of the parties, within 30 days to the Municipal Tax Administration where the real estate is located. Pursuant to Article 18 of the new Real Estate Transfer Tax Act (O cial Gazette No. 115/2016) in force as of January 1, 2017, a public notary is obligated to electronically deliver one copy of a document which is a legal base for real estate transfer, together with the personal identi cation number PIN ("OIB") of the parties, within 30 days to the Municipal Tax Administration where the real estate is located. Pursuant to Article 19 of the new Real Estate Transfer Tax Act (O cial Gazette No. 115/2016) in force as of January 1, 2017, a person obligated to pay the real estate transfer tax, is exceptionally obligated to submit a real estate transfer tax application if documents on the acquisition of the real estate were not notarized by the notary public, issued by the competent court or other public authority. A person is obligated to submit a real estate transfer application to the Municipal Tax Administration where the real estate is located within 30 days. 5 Pay land transfer taxes, stamp duty and registration fees at the 1 day HRK 50 (stamp duty) commercial bank or post o ce (simultaneous with + HRK 200 Agency : Commercial Bank or Post O ce procedure 3 and 4) (registration fee) + 4% of property value The fees and taxes can be paid in the post o ces or in the commercial (real property banks, but only to the indicated State Budget bank account number. transfer tax) Takes place simultaneously with previous procedure. Details – Registering Property in Croatia – Measure of Quality Answer Score Quality of the land administration index (0-30) 22.5 Reliability of infrastructure index (0-8) 5.0 What is the institution in charge of immovable property registration? Municipal Court Zagreb, Land Registry Department In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Zagreb City O ce for Page 35   Cadastre and Takes place simultaneously with previous procedure. Doing Business 2018 Croatia Details – Registering Property in Croatia – Measure of Quality Answer Score Quality of the land administration index (0-30) 22.5 Reliability of infrastructure index (0-8) 5.0 What is the institution in charge of immovable property registration? Municipal Court Zagreb, Land Registry Department In what format are the majority of title or deed records kept in the largest business city Computer/Scann 1.0 —in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Zagreb City O ce for Cadastre and Geodetic A airs In what format are the majority of maps of land plots kept in the largest business city— Computer/Scann 1.0 in a paper format or in a computerized format (scanned or fully digital)? ed Is there an electronic database for recording boundaries, checking plans and providing Yes 1.0 cadastral information (geographic information system)? Is the information recorded by the immovable property registration agency and the Di erent 1.0 cadastral or mapping agency kept in a single database, in di erent but linked databases databases but or in separate databases? linked Do the immovable property registration agency and cadastral or mapping agency use No 0.0 the same identi cation number for properties? Transparency of information index (0–6) 3.5 Who is able to obtain information on land ownership at the agency in charge of Anyone who 1.0 immovable property registration in the largest business city? pays the o cial fee Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made publicly available–and if so, how? Link for online access: http://sudovi.pra vosudje.hr/osvt/i ndex.php? linkID=24 https://gov.hr/m oja- uprava/stanovan je-i- okolis/vlasnicka- prava/upis- prava- vlasnistva/1855 Page 36   Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 Is the list of documents that are required to complete any type of property transaction Yes, online 0.5 made Doing publicly available–and Business 2018 Croatiaif so, how? Link for online access: http://sudovi.pra vosudje.hr/osvt/i ndex.php? linkID=24 https://gov.hr/m oja- uprava/stanovan je-i- okolis/vlasnicka- prava/upis- prava- vlasnistva/1855 Is the applicable fee schedule for any property transaction at the agency in charge of Yes, online 0.5 immovable property registration in the largest business city made publicly available– and if so, how? Link for online access: http://sudovi.pra vosudje.hr/ogszg /index.php? linkID=38 Does the agency in charge of immovable property registration commit to delivering a No 0.0 legally binding document that proves property ownership within a speci c time frame– and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the agency in charge of immovable property registration? Contact information: Are there publicly available o cial statistics tracking the number of transactions at the Yes 0.5 immovable property registration agency? Number of property transfers in the largest business city in 2015: Number of transactions in Croatia for 2016 is 489,165. Number of transactions in Zagreb for 2016 (including municipalities of Zagreb and Novi Zagreb) is 85,970 Who is able to consult maps of land plots in the largest business city? Freely accessible 0.5 by anyone Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, online 0.5 —and if so, how? Link for online access: http://www.katas tar.hr/dgu/proizv odi-Kopija- katastarskog- plana-83 Tari Page 37   Number 55 to 57 Is the applicable fee schedule for accessing maps of land plots made publicly available Yes, online 0.5 —and Doing if so, how? Business 2018 Croatia Link for online access: http://www.katas tar.hr/dgu/proizv odi-Kopija- katastarskog- plana-83 Tari Number 55 to 57 of the Administrative Fees Act and the Administrative Fees Tari (published in O cial Gazette No. 8/96, 77/96, 95/97, 131/97, 68/98, 66/99, 145/99, 30/00, 116/00, 163/03, 17/04, 110/04, 141/04, 150/05, 153/05, 129/06, 117/07, 25/08, 60/08, 20/10, 69/10, 126/11, 112/12, 19/13, 80/13). Does the cadastral or mapping agency commit to delivering an updated map within a No 0.0 speci c time frame—and if so, how does it communicate the service standard? Link for online access: Is there a speci c and separate mechanism for ling complaints about a problem that No 0.0 occurred at the cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 8.0 Are all privately held land plots in the economy formally registered at the immovable Yes 2.0 property registry? Are all privately held land plots in the largest business city formally registered at the Yes 2.0 immovable property registry? Are all privately held land plots in the economy mapped? Yes 2.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Land dispute resolution index (0–8) 6.0 Does the law require that all property sale transactions be registered at the immovable Yes 1.5 property registry to make them opposable to third parties? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Is there a speci c compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information Page 38   certi ed by the immovable property registry? Is the system of immovable property registration subject to a state or private Yes 0.5 guarantee? Doing Business 2018 Croatia Is there a speci c compensation mechanism to cover for losses incurred by parties who Yes 0.5 engaged in good faith in a property transaction based on erroneous information certi ed by the immovable property registry? Does the legal system require a control of legality of the documents necessary for a Yes 0.5 property transaction (e.g., checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar. Does the legal system require veri cation of the identity of the parties to a property Yes 0.5 transaction? If yes, who is responsible for verifying the identity of the parties? Registrar; Notary. Is there a national database to verify the accuracy of identity documents? No 0.0 For a standard land dispute between two local businesses over tenure rights of a Municipal civil property worth 50 times gross national income (GNI) per capita and located in the court Zagreb and largest business city, what court would be in charge of the case in the rst instance? Municipal court Novi Zagreb, Land Registry department How long does it take on average to obtain a decision from the rst-instance court for Between 1 and 2 2.0 such a case (without appeal)? years Are there any statistics on the number of land disputes in the rst instance? Yes 0.5 Number of land disputes in the largest business city in 2015: 449 cases resolved in 2016 Equal access to property rights index (-2–0) 0.0 Do unmarried men and unmarried women have equal ownership rights to property? Yes 0.0 Do married men and married women have equal ownership rights to property? Yes 0.0 Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory Page 39   registries (0-8) security interest is created, publicized and enforced according to the law. Do married men and married women have equal ownership rights to property? Yes 0.0 Doing Business 2018 Croatia Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the e ectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions Rights of borrowers and lenders through through 2 sets of indicators. The depth of credit information index collateral laws (0-10) measures rules and practices a ecting the coverage, scope and Protection of secured creditors’ rights through accessibility of credit information available through a credit registry or a bankruptcy laws (0-2) credit bureau. The strength of legal rights index measures the degree to Depth of credit information index (0–8) which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined Scope and accessibility of credit information whether a unitary secured transactions system exists. Then two case distributed by credit bureaus and credit scenarios, case A and case B, are used to determine how a nonpossessory registries (0-8) security interest is created, publicized and enforced according to the law. Credit bureau coverage (% of adults) Special emphasis is given to how the collateral registry operates (if Number of individuals and firms listed in largest registration of security interests is possible). The case scenarios involve a credit bureau as a percentage of adult population secured borrower, company ABC, and a secured lender, BizBank. Credit registry coverage (% of adults) In some economies the legal framework for secured transactions will allow Number of individuals and firms listed in credit only case A or case B (not both) to apply. Both cases examine the same set registry as a percentage of adult population of legal provisions relating to the use of movable collateral. Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Europe & OECD high Indicator Croatia Central Asia income Overall Best Performer Strength of legal rights index (0-12) 5 6.6 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 6 6.3 6.6 8.00 (34 Economies) Page 40   Credit registry coverage (% of adults) 0.0 22.2 18.3 100.00 (3 Economies) possible). ABC keeps ownership and possession of the assets. Doing Business 2018 Croatia Europe & OECD high Indicator Croatia Central Asia income Overall Best Performer Strength of legal rights index (0-12) 5 6.6 6.0 12.00 (4 Economies) Depth of credit information index (0-8) 6 6.3 6.6 8.00 (34 Economies) Credit registry coverage (% of adults) 0.0 22.2 18.3 100.00 (3 Economies) Credit bureau coverage (% of adults) 100.0 42.8 63.7 100.00 (23 Economies) Figure – Getting Credit in Croatia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 75.00: Hungary (Rank: 29) 70.00: Albania (Rank: 42) 70.00: Czech Republic (Rank: 42) 64.58: Regional Average (Europe & Central Asia) 55.00: Croatia (Rank: 77) 45.00: Italy (Rank: 105) Note: The ranking of economies on the ease of getting credit is determined by sorting their distance to frontier scores for getting credit. These scores are the distance to frontier score for the sum of the strength of legal rights index and the depth of credit information index. Figure – Legal Rights in Croatia and comparator economies 12 10 10 8 8 Index score 7 6.6 6 5 4 2 2 0 Croatia Albania Czech Republic Hungary Italy Europe & Central Asia Details – Legal Rights in Croatia Strength of legal rights index (0-12) 5 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No requiring a speci c description of collateral? Page 41   Croatia Albania Czech Republic Hungary Italy Europe & Central Asia Doing Business 2018 Croatia Details – Legal Rights in Croatia Strength of legal rights index (0-12) 5 Does an integrated or uni ed legal framework for secured transactions that extends to the creation, publicity and No enforcement of functional equivalents to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without No requiring a speci c description of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring Yes a speci c description of collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds No or replacements of the original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and Yes obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is uni ed geographically Yes and by asset type, with an electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? No Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be No performed online by any interested third party? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency No procedure? Are secured creditors paid rst (i.e. before tax claims and employee claims) when a business is liquidated? Yes Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised No reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law Yes allow the secured creditor to sell the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Croatia and comparator economies 8 7 7 6.3 6 6 6 5 Index score 4 2 0 Croatia Albania Czech Republic Hungary Italy Europe & Central Asia Details – Credit Information in Croatia Page 42   0 Croatia Doing Business 2018 Albania Croatia Czech Republic Hungary Italy Europe & Central Asia Details – Credit Information in Croatia Credit Credit Depth of credit information index (0-8) bureau registry Score Are data on both firms and individuals distributed? Yes No 1 Are both positive and negative credit data distributed? Yes No 1 Are data from retailers or utility companies - in addition to data from banks and financial institutions - No No 0 distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries that distribute more Yes No 1 than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? Yes No 1 By law, do borrowers have the right to access their data in the credit bureau or credit registry? Yes No 1 Can banks and financial institutions access borrowers’ credit information online (for example, Yes No 1 through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help banks and financial No No 0 institutions assess the creditworthiness of borrowers? Score ("yes" to either public bureau or private registry) 6 Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 3,115,790 0 Number of firms 174,934 0 Total 3,290,724 0 Percentage of adult population 100.0 0.0 Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it is assumed that Buyer is a large private company with multiple Page 43   transactions; Available legal remedies (damages, Percentage of adult population 100.0 0.0 Doing Business 2018 Croatia Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Extent of disclosure index (0–10): Review and To make the data comparable across economies, a case study uses several approval requirements for related-party assumptions about the business and the transaction. transactions; Disclosure requirements for related-party transactions The business (Buyer): Extent of director liability index (0–10): Ability of - Is a publicly traded corporation listed on the economy’s most important minority shareholders to sue and hold interested stock exchange. If the number of publicly traded companies listed on that directors liable for prejudicial related-party exchange is less than 10, or if there is no stock exchange in the economy, it transactions; Available legal remedies (damages, is assumed that Buyer is a large private company with multiple disgorgement of profits, fines, imprisonment, shareholders. rescission of the transaction) - Has a board of directors and a chief executive o cer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speci cally Ease of shareholder suits index (0–10): Access to required by law. internal corporate documents; Evidence - Has a supervisory board (applicable to economies with a two-tier board obtainable during trial and allocation of legal system) on which 60% of the shareholder-elected members have been expenses appointed by Mr. James, who is Buyer’s controlling shareholder and a Extent of conflict of interest regulation index member of Buyer’s board of directors. (0–10): Simple average of the extent of disclosure, - Has not adopted any bylaws or articles of association that di er from extent of director liability and ease of default minimum standards and does not follow any nonmandatory codes, shareholder indices principles, recommendations or guidelines relating to corporate Extent of shareholder rights index (0-10): governance. Shareholders’ rights and role in major corporate - Is a manufacturing company with its own distribution network. decisions Extent of ownership and control index (0-10): The transaction involves the following details: Governance safeguards protecting shareholders - Mr. James owns 60% of Buyer and elected two directors to Buyer’s ve- from undue board control and entrenchment member board. Extent of corporate transparency index (0-10): - Mr. James also owns 90% of Seller, a company that operates a chain of Corporate transparency on ownership stakes, retail hardware stores. Seller recently closed a large number of its stores. compensation, audits and financial prospects - Mr. James proposes that Buyer purchase Seller’s unused eet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer Extent of shareholder governance index (0–10): agrees. The price is equal to 10% of Buyer’s assets and is higher than the Simple average of the extent of shareholders market value. rights, extent of ownership and control and - The proposed transaction is part of the company’s ordinary course of extent of corporate transparency indices business and is not outside the authority of the company. Strength of minority investor protection index - Buyer enters into the transaction. All required approvals are obtained, (0–10): Simple average of the extent of conflict of and all required disclosures made (that is, the transaction is not interest regulation and extent of shareholder fraudulent). governance indices - The transaction causes damages to Buyer. Shareholders sue Mr. James and the other parties that approved the transaction. Europe & OECD high Indicator Croatia Central Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 5.7 6.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 8 6.6 6.4 Page 44   9.00 (Kazakhstan) and the other parties that approved the transaction. Doing Business 2018 Croatia Europe & OECD high Indicator Croatia Central Asia income Overall Best Performer Extent of conflict of interest regulation index (0- 5.7 6.3 6.4 9.3 (New Zealand) 10) Extent of shareholder governance index (0-10) 8 6.6 6.4 9.00 (Kazakhstan) Figure – Protecting Minority Investors in Croatia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 71.67: Albania (Rank: 20) 68.33: Croatia (Rank: 29) 64.31: Regional Average (Europe & Central Asia) 58.33: Czech Republic (Rank: 62) 58.33: Italy (Rank: 62) 50.00: Hungary (Rank: 108) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their distance to frontier scores for protecting minority investors. These scores are the simple average of the distance to frontier scores for the extent of con ict of interest regulation index and the extent of shareholder governance index. Figure – Protecting Minority Investors in Croatia and comparator economies – Measure of Quality Croatia 7 6 5 9 8 6 Albania 8 7 9 6 6 7 Czech Republic 5 6 2 7 6 9 Hungary 7 4 2 5 6 6 Italy 8 4 7 4 6 6 OECD high income 7.3 5.6 6.5 5.2 6.3 7.4 Europe & Central Asia 7.4 4.6 7 5.5 7.2 6.8 0 5 10 15 20 25 30 35 40 45 Sub-Indicator Score Extent of corporate transparency index (0­10) Extent of director liability index (0­10) Extent of disclosure index (0­10) Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Details – Protecting Minority Investors in Croatia – Measure of Quality Answer Score Page 45   Extent of ownership and control index (0­10) Extent of shareholder rights index (0­10) Ease of shareholder suits index (0­10) Doing Business 2018 Croatia Details – Protecting Minority Investors in Croatia – Measure of Quality Answer Score Extent of con ict of interest regulation index (0-10) 5.7 Extent of disclosure index (0-10) 5 Which corporate body is legally su cient to approve the Buyer-Seller transaction? (0-3) Shareholders or 1.0 board of directors including interested parties Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his con ict of interest to the board of directors? (0-2) Full disclosure of 2.0 all material facts Must Buyer disclose the transaction in published periodic lings (annual reports)? (0-2) Disclosure on 2.0 the transaction and on the con ict of interest Must Buyer immediately disclose the transaction to the public and/or shareholders? (0- No disclosure 0.0 2) obligation Extent of director liability index (0-10) 6 Can shareholders representing 10% of Buyer's share capital sue directly or derivatively Yes 1.0 for the damage the transaction caused to Buyer? (0-1) Can shareholders hold the interested director liable for the damage the transaction Liable if negligent 1.0 caused to Buyer? (0-2) Can shareholders hold the other directors liable for the damage the transaction caused Liable if negligent 1.0 to Buyer (0-2) Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by Yes 1.0 shareholders? (0-1) Must Mr. James repay pro ts made from the transaction upon a successful claim by Yes 1.0 shareholders? (0-1) Is Mr. James disquali ed or ned and imprisoned upon a successful claim by No 0.0 shareholders? (0-1) Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if 1.0 negligently concluded Ease of shareholder suits index (0-10) 6 Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction documents? (0-1) Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Documents that 1.0 the defendant Page 46   Before suing can shareholders representing 10% of Buyer's share capital inspect the Yes 1.0 transaction Doing 2018 (0-1) documents? Business Croatia Can the plainti obtain any documents from the defendant and witnesses at trial? (0-3) Documents that 1.0 the defendant relied on Can the plainti request categories of documents from the defendant without No 0.0 identifying speci c ones? (0-1) Can the plainti directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plainti s recover their legal expenses from the company? (0-2) Yes if successful 1.0 Extent of shareholder governance index (0-10) 8 Extent of shareholder rights index (0-10) 8 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of Yes 1.0 shareholders? Must Buyer obtain its shareholders’ approval every time it issues new shares? Yes 1.0 Do shareholders automatically receive preemption rights every time Buyer issues new Yes 1.0 shares? Must shareholders approve the election and dismissal of the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the a ected Yes 1.0 shares approve? Assuming that Buyer is a limited company, does the sale of 51% of its assets require No 0.0 member approval? Assuming that Buyer is a limited company, can members representing 10% call for a Yes 1.0 meeting of members? Assuming that Buyer is a limited company, must all members consent to add a new Yes 1.0 member? Assuming that Buyer is a limited company, must a member rst o er to sell their No 0.0 interest to the existing members before they can sell to non-members? Extent of ownership and control index (0-10) 9 Is it forbidden to appoint the same individual as CEO and chair of the board of Yes 1.0 directors? Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the Yes 1.0 end of their term? Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board members? Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Page 47   Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Must the board of directors include a separate audit committee exclusively comprising Yes 1.0 board Doing members? Business 2018 Croatia Must a potential acquirer make a tender o er to all shareholders upon acquiring 50% Yes 1.0 of Buyer? Must Buyer pay declared dividends within a maximum period set by law? Yes 1.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Assuming that Buyer is a limited company, must Buyer have a mechanism to resolve Yes 1.0 disagreements among members? Assuming that Buyer is a limited company, must a potential acquirer make a tender No 0.0 o er to all shareholders upon acquiring 50% of Buyer? Assuming that Buyer is a limited company, must Buyer distribute pro ts within a Yes 1.0 maximum period set by law? Extent of corporate transparency index (0-10) 7 Must Buyer disclose direct and indirect bene cial ownership stakes representing 5%? Yes 1.0 Must Buyer disclose information about board members’ primary employment and No 0.0 directorships in other companies? Must Buyer disclose the compensation of individual managers? No 0.0 Must a detailed notice of general meeting be sent 21 days before the meeting? Yes 1.0 Can shareholders representing 5% of Buyer’s share capital put items on the general Yes 1.0 meeting agenda? Must Buyer's annual nancial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Assuming that Buyer is a limited company, must members meet at least once a year? Yes 1.0 Assuming that Buyer is a limited company, can members representing 5% put items on No 0.0 the meeting agenda? Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Page 48   Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory Assuming that Buyer is a limited company, must Buyer's annual nancial statements be Yes 1.0 audited by an external auditor? Doing Business 2018 Croatia Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as measures the administrative burden in paying taxes and contributions. The most recent round of data collection for the project was completed on June 30, 2017 covering for the Paying Taxes indicator calendar year 2016 (January 1, 2016 – December 31, 2016). Last year (Doing Business 2017) the scope of data collection was expanded to better understand the overall tax environment in an economy. The questionnaire was expanded to include new questions on post- ling processes: VAT refund and tax audit. The data shows where post ling processes and practices work e ciently and what drives the di erences in the overall tax compliance cost across economies. The new section covers both the legal framework and the administrative burden on businesses to comply with post ling processes. See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in Using a case scenario, Doing Business records taxes and mandatory 2016 (number per year adjusted for electronic and contributions a medium size company must pay in a year, and measures joint ling and payment) the administrative burden of paying taxes, contributions and dealing with post ling processes. Information is also compiled on frequency of ling Total number of taxes and contributions paid, and payments, time taken to comply with tax laws, time taken to comply including consumption taxes (value added tax, with the requirements of post ling processes and time waiting. sales tax or goods and service tax) Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: Time required to comply with 3 major taxes - TaxpayerCo is a medium-size business that started operations on January (hours per year) 1, 2015. It produces ceramic flowerpots and sells them at retail. All taxes Collecting information, computing tax payable and contributions recorded are paid in the second year of operation Completing tax return, filing with agencies (calendar year 2016). Taxes and mandatory contributions are measured at all levels of government. Arranging payment or withholding Preparing separate tax accounting books, if The VAT refund process: required - In June 2016, TaxpayerCo. makes a large capital purchase: the value of the Total tax and contribution rate (% of pro t before machine is 65 times income per capita of the economy. Sales are equally all taxes) spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per Profit or corporate income tax capita divided by 12). The machinery seller is registered for VAT and excess Social contributions, labor taxes paid by input VAT incurred in June will be fully recovered after four consecutive employer months if the VAT rate is the same for inputs, sales and the machine and Property and property transfer taxes the tax reporting period is every month. Input VAT will exceed Output VAT Dividend, capital gains, financial transactions in June 2016. taxes The corporate income tax audit process: Waste collection, vehicle, road and other taxes - An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, or incorrectly treating an expense as tax deductible) Post ling Index leads to an incorrect income tax return and a corporate income Time to comply with a VAT refund tax underpayment. TaxpayerCo. discovered the error and voluntarily Time to receive a VAT refund noti ed the tax authority. The value of the underpaid income tax liability is Time to comply with a corporate income tax audit 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax Time to complete a corporate income tax audit return, but within the tax assessment period. Europe & OECD high Indicator Croatia Central Asia income Overall Best Performer Payments (number per year) 35 16.5 10.9 3 (Hong Kong SAR, China) Page 49   return, but within the tax assessment period. Doing Business 2018 Croatia Europe & OECD high Indicator Croatia Central Asia income Overall Best Performer Payments (number per year) 35 16.5 10.9 3 (Hong Kong SAR, China) Time (hours per year) 206 218.4 160.7 55 (Luxembourg) Total tax and contribution rate (% of profit) 20.6 33.1 40.1 18.47% (32 Economies) Postfiling index (0-100) 61.20 65.20 83.45 99.38 (Estonia) Figure – Paying Taxes in Croatia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 79.26: Czech Republic (Rank: 53) 75.78: Regional Average (Europe & Central Asia) 71.49: Hungary (Rank: 93) 70.90: Croatia (Rank: 95) 68.29: Italy (Rank: 112) 63.94: Albania (Rank: 125) Note: The ranking of economies on the ease of paying taxes is determined by sorting their distance to frontier scores on the ease of paying taxes. These scores are the simple average of the distance to frontier scores for each of the four component indicators – number of tax payments. time, total tax rate and post ling index – with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax rate. The nonlinear distance to frontier for the total tax rate is equal to the distance to frontier for the total tax rate to the power of 0.8. The threshold is de ned as the total tax rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax rate below this threshold receive the same score as the economy at the threshold. Figure – Paying Taxes in Croatia and comparator economies – Measure of Quality 100 90.75 90 80 70 63.94 65.20 61.20 Index score 57.61 60 52.39 50 40 30 20 10 0 Croatia Albania Czech Republic Hungary Italy Europe & Central Asia Details – Paying Taxes in Croatia Total tax and Tax or mandatory Payments Notes on Time Statutory contribution rate (% of Notes contribution (number) Payments (hours) tax rate Tax base profit) on TTR Page 50   Social security 1 online 96 17.2% gross salaries 19.40 Doing Business 2018 Croatia Figure – Paying Taxes in Croatia and comparator economies – Measure of Quality 100 90.75 90 80 70 63.94 65.20 61.20 Index score 57.61 60 52.39 50 40 30 20 10 0 Croatia Albania Czech Republic Hungary Italy Europe & Central Asia Details – Paying Taxes in Croatia Total tax and Tax or mandatory Payments Notes on Time Statutory contribution rate (% of Notes contribution (number) Payments (hours) tax rate Tax base profit) on TTR Social security 1 online 96 17.2% gross salaries 19.40 contributions Forest contribution 5 0.0265% total income 0.47 Tourist fee 1 online 0.0204% total turnover 0.36 Chamber of Economy 12 HRK 1,083 fixed fee 0.29 fee per month Radio and Television fee 12 HRK 80 per Every TV and 0.02 month radio receiver Tax on company name 1 HRK 260 fixed fee 0.01 Value added tax (VAT) 1 online 52 25% value added 0.00 not included Corporate income tax 1 online 58 20% taxable profit 0.00 Employee paid - Social 0 online and 20% gross salaries 0.00 withheld security contributions jointly Fuel tax 1 included into 0.00 small fuel price amount Totals 35 206 20.6 Details – Paying Taxes in Croatia – Tax by Type Taxes by type Answer Profit tax (% of profit) 0.0 Labor tax and contributions (% of profit) 19.4 Other taxes (% of profit) 1.2 Page 51   Totals 35 206 20.6 Doing Business 2018 Croatia Details – Paying Taxes in Croatia – Tax by Type Taxes by type Answer Profit tax (% of profit) 0.0 Labor tax and contributions (% of profit) 19.4 Other taxes (% of profit) 1.2 Details – Paying Taxes in Croatia – Measure of Quality Answer Score Post ling index (0-100) 61.20 VAT refunds Does VAT exist? Yes Does a VAT refund process exist per the case study? Yes Restrictions on VAT refund process None Percentage of cases exposed to a VAT audit (%) 25% - 49% Is there a mandatory carry forward period? No Time to comply with VAT refund (hours) 0.0 100 Time to obtain a VAT refund (weeks) 6.2 94.27 Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 25% - 49% Time to comply with a corporate income tax audit (hours) 36.5 35.78 Time to complete a corporate income tax audit (weeks) 27.3 14.73 Notes: Names of taxes have been standardized. For instance income tax, pro t tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The post ling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Page 52   Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research a corporate income tax audit and time to complete a corporate income tax audit. N/A = Not applicable. Doing Business 2018 Croatia Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tari s) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. Given the importance of trade digitalization, in Doing Business 2018, the Trading across Borders questionnaire included research questions on the availability and status of implementation of Electronic Data Interchange (EDI) and Single Window (SW) systems. With this information, Doing Business built a comprehensive dataset on the adoption and level of sophistication of electronic platforms in 190 economies. These data are not used to compute the distance to frontier score or ranking of the ease of doing business. The new dataset on EDI and SW systems is available here. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: Obtaining, preparing and submitting documents during transport, clearance, inspections and port Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 or border handling in origin economy days are recorded as 22×24=528 hours). If customs clearance takes 7.5 Obtaining, preparing and submitting documents hours, the data are recorded as is. Alternatively, suppose documents are required by destination economy and any transit submitted to a customs agency at 8:00a.m., are processed overnight and economies can be picked up at 8:00a.m. the next day. The time for customs clearance Covers all documents required by law and in would be recorded as 24 hours because the actual procedure took 24 practice, including electronic submissions of hours. information Border compliance Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Customs clearance and inspections Contributors are asked to convert local currency into U.S. dollars based on Inspections by other agencies (if applied to more the exchange rate prevailing on the day they answer the questionnaire. than 20% of shipments) Contributors are private sector experts in international trade logistics and Handling and inspections that take place at the are informed about exchange rates. economy’s port or border Assumptions of the case study: - For all 190 economies covered by Doing Domestic transport Business, it is assumed a shipment is in a warehouse in the largest Loading or unloading of the shipment at the business city of the exporting economy and travels to a warehouse in the warehouse or port/border largest business city of the importing economy. - It is assumed each Transport between warehouse and port/border economy imports 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the Traffic delays and road police checks while shipment is en route largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (de ned by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000. - The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport, or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport, airport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 53   of agriculture or industry, national security agencies and any other Doing Business 2018 Croatia government authorities. Europe & OECD high Indicator Croatia Central Asia income Overall Best Performer Time to export: Border compliance (hours) 0 28.0 12.7 0 (17 Economies) Cost to export: Border compliance (USD) 0 191.4 149.9 0.00 (19 Economies) Time to export: Documentary compliance 1 27.9 2.4 1.0 (25 Economies) (hours) Cost to export: Documentary compliance (USD) 0 113.8 35.4 0.00 (19 Economies) Time to import: Border compliance (hours) 0 25.9 8.7 0.00 (21 Economies) Cost to import: Border compliance (USD) 0 185.1 111.6 0.00 (27 Economies) Time to import: Documentary compliance 1 27.3 3.5 1.0 (30 Economies) (hours) Cost to import: Documentary compliance (USD) 0 94.7 25.6 0.00 (30 Economies) Figure – Trading across Borders in Croatia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 96.29: Albania (Rank: 24) 83.96: Regional Average (Europe & Central Asia) 100.00: Czech Republic (Rank: 1) 100.00: Croatia (Rank: 1) 100.00: Hungary (Rank: 1) 100.00: Italy (Rank: 1) Note: The ranking of economies on the ease of trading across borders is determined by sorting their distance to frontier scores for trading across borders. These scores are the simple average of the distance to frontier scores for the time and cost for documentary compliance and border compliance to export and import (domestic transport is not used for calculating the ranking). Figure – Trading across Borders in Croatia – Time and Cost Time Cost 1.2 1.2 1 1 1 1 0.8 0.8 Time (hours) Cost (USD) 0.6 0.6 0.4 0.4 0.2 0.2 0 0 0 0 0 0 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Page 54   Doing Business 2018 Croatia Figure – Trading across Borders in Croatia – Time and Cost Time Cost 1.2 1.2 1 1 1 1 0.8 0.8 Time (hours) Cost (USD) 0.6 0.6 0.4 0.4 0.2 0.2 0 0 0 0 0 0 0 0 Export - Border Compliance Export - Documentary Compliance Import - Border Compliance Import - Documentary Compliance Details – Trading across Borders in Croatia Characteristics Export Import Product HS 85 : Electrical machinery and equipment and parts thereof; sound recorders and HS 8708: Parts and reproducers, television image and sound recorders and reproducers, and parts and accessories of motor accessories of such articles vehicles Trade partner Austria Germany Border Croatia- Slovenia border crossing Croatia-Slovenia border crossing Distance (km) 76 76 Domestic 2 2 transport time (hours) Domestic 135 135 transport cost (USD) Details – Trading across Borders in Croatia – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 0.0 0.0 Export: Clearance and inspections required by agencies other than customs 0.1 0.0 Export: Port or border handling 0.1 0.0 Import: Clearance and inspections required by customs authorities 0.0 0.0 Import: Clearance and inspections required by agencies other than customs 0.1 0.0 Import: Port or border handling 0.1 0.0 Page 55   (USD) Doing Business 2018 Croatia Details – Trading across Borders in Croatia – Components of Border Compliance Time to Complete Associated Costs (hours) (USD) Export: Clearance and inspections required by customs authorities 0.0 0.0 Export: Clearance and inspections required by agencies other than customs 0.1 0.0 Export: Port or border handling 0.1 0.0 Import: Clearance and inspections required by customs authorities 0.0 0.0 Import: Clearance and inspections required by agencies other than customs 0.1 0.0 Import: Port or border handling 0.1 0.0 Details – Trading across Borders in Croatia – Trade Documents Export Import CMR waybill CMR waybill Commercial invoice Commercial invoice Packing list Packing list Intrastat Intrastat Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000. Court structure and proceedings (-1-5) - The seller requests a pretrial attachment to secure the claim. Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. Page 56   Intrastat Intrastat Doing Business 2018 Croatia Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local rst-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and e ciency in the court system. The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the The dispute in the case study involves the breach of a sales contract courts (calendar days) between 2 domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes Time to file and serve the case the case from simple debt enforcement. Time for trial and to obtain the judgment To make the data comparable across economies, Doing Business uses Time to enforce the judgment several assumptions about the case: Cost required to enforce a contract through the - The dispute concerns a lawful transaction between two businesses (Seller courts (% of claim) and Buyer), both located in the economy’s largest business city. For 11 Attorney fees economies the data are also collected for the second largest business city. - The buyer orders custom-made goods, then fails to pay. Court fees - The value of the dispute is 200% of the income per capita or the Enforcement fees equivalent in local currency of USD 5,000, whichever is greater. Quality of judicial processes index (0-18) - The seller sues the buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000. Court structure and proceedings (-1-5) - The seller requests a pretrial attachment to secure the claim. Case management (0-6) - The dispute on the quality of the goods requires an expert opinion. Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. Alternative dispute resolution (0-3) - The seller enforces the judgment through a public sale of the buyer’s movable assets. Standardized Case Claim value HRK 157,128.00 Court name Zagreb Commercial Court City Covered Zagreb Europe & OECD high Indicator Croatia Central Asia income Overall Best Performer Time (days) 650 489.9 577.8 164.00 (Singapore) Cost (% of claim value) 15.2 26.2 21.5 9.00 (Iceland) Quality of judicial processes index (0-18) 13.0 10.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Croatia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 73.75: Hungary (Rank: 13) 70.60: Croatia (Rank: 23) 65.38: Regional Average (Europe & Central Asia) Page 57   of judicial processes Quality Business Doing index (0-18) 2018 Croatia 13.0 10.0 11.0 15.50 (Australia) Figure – Enforcing Contracts in Croatia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 73.75: Hungary (Rank: 13) 70.60: Croatia (Rank: 23) 65.38: Regional Average (Europe & Central Asia) 58.21: Czech Republic (Rank: 91) 54.79: Italy (Rank: 108) 53.66: Albania (Rank: 120) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their distance to frontier scores for enforcing contracts. These scores are the simple average of the distance to frontier scores for each of the component indicators. Figure – Enforcing Contracts in Croatia – Time and Cost Time Cost 1200 1120 40 34.9 33.8 35 1000 Cost (% of claim value) 30 26.2 800 Time (days) 23.1 25 650 611 21.5 605 577.8 600 525 489.9 20 15.2 15.0 15 400 10 200 5 0 0 Albania Croatia Czech Republic Europe & Hungary Italy OECD high income Central Asia Figure – Enforcing Contracts in Croatia and comparator economies – Measure of Quality Croatia 2.5 3.5 2 5 Albania 1.5 1.5 1 2 Czech Republic 2 3 3 1.5 Hungary 3 4 2.5 4.5 Italy 3 4 3 3 OECD high income 2.5 2.9 2 3.6 Europe & Central Asia 2.1 2.9 1.5 3.5 0 2 4 6 8 10 12 14 Page 58   16 Albania Croatia Czech Republic Europe & Hungary Italy OECD high income Central Asia Doing Business 2018 Croatia Figure – Enforcing Contracts in Croatia and comparator economies – Measure of Quality Croatia 2.5 3.5 2 5 Albania 1.5 1.5 1 2 Czech Republic 2 3 3 1.5 Hungary 3 4 2.5 4.5 Italy 3 4 3 3 OECD high income 2.5 2.9 2 3.6 Europe & Central Asia 2.1 2.9 1.5 3.5 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Alternative dispute resolution (0­3) Case management (0­6) Court automation (0­4) Court structure and proceedings (­1­5) Details – Enforcing Contracts in Croatia Indicator Time (days) 650 Filing and service 50 Trial and judgment 365 Enforcement of judgment 235 Cost (% of claim value) 15.2 Attorney fees 8.6 Court fees 4 Enforcement fees 2.6 Quality of judicial processes index (0-18) 13.0 Court structure and proceedings (-1-5) 5.0 Case management (0-6) 3.5 Court automation (0-4) 2.0 Alternative dispute resolution (0-3) 2.5 Details – Enforcing Contracts in Croatia – Measure of Quality Page 59   Alternative dispute resolution (0-3) 2.5 Doing Business 2018 Croatia Details – Enforcing Contracts in Croatia – Measure of Quality Answer Score Quality of judicial processes index (0-18) 13.0 Court structure and proceedings (-1-5) 5.0 1. Is there a court or division of a court dedicated solely to hearing commercial cases? Yes 1.5 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, automatic 1.0 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 3.5 1. Time standards 1.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? Yes 1.c. Are these time standards respected in more than 50% of cases? Yes 2. Adjournments 0.5 2.a. Does the law regulate the maximum number of adjournments that can be No granted? 2.b. Are adjournments limited to unforeseen and exceptional circumstances? Yes 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? Yes 3. Can two of the following four reports be generated about the competent court: (i) Yes 1.0 time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the Yes 1.0 competent court? 5. Are there any electronic case management tools in place within the competent court No 0.0 for use by judges? 6. Are there any electronic case management tools in place within the competent court No 0.0 for use by lawyers? Court automation (0-4) 2.0 1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 the competent court? 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? Page 60   1. Can the initial complaint be led electronically through a dedicated platform within No 0.0 Businesscourt? the competent Doing 2018 Croatia 2. Is it possible to carry out service of process electronically for claims led before the No 0.0 competent court? 3. Can court fees be paid electronically within the competent court? Yes 1.0 4. Publication of judgments 1.0 4.a Are judgments rendered in commercial cases at all levels made available to the Yes general public through publication in o cial gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme Yes court level made available to the general public through publication in o cial gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.5 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public No order or public policy—that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes 2. Mediation/Conciliation 1.0 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or Yes consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects? 2.c. Are there nancial incentives for parties to attempt mediation or conciliation (i.e., No if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Page 61   Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent if mediation or conciliation is successful, a refund of court ling fees, income tax credits or the like)? Doing Business 2018 Croatia Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection for the project was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are Measured in calendar years used: Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 Cost required to recover debt (% of debtor’s estate) suppliers. The hotel experiences nancial di culties. Measured as percentage of estate value - The value of the hotel is 100% of the income per capita or the equivalent Court fees in local currency of USD 200,000, whichever is greater. - The hotel has a loan from a domestic bank, secured by a mortgage over Fees of insolvency administrators the hotel’s real estate. The hotel cannot pay back the loan, but makes Lawyers’ fees enough money to operate otherwise. Assessors’ and auctioneers’ fees In addition, Doing Business evaluates the adequacy and integrity of the Other related fees existing legal framework applicable to liquidation and reorganization Outcome proceedings through the strength of insolvency framework index. The index tests whether economies adopted internationally accepted good Whether business continues operating as a going practices in four areas: commencement of proceedings, management of concern or business assets are sold piecemeal debtor’s assets, reorganization proceedings and creditor participation. Recovery rate for creditors Measures the cents on the dollar recovered by secured creditors Outcome for the business (survival or not) determines the maximum value that can be recovered Official costs of the insolvency proceedings are deducted Depreciation of furniture is taken into account Present value of debt recovered Strength of insolvency framework index (0- 16) Sum of the scores of four component indices: Commencement of proceedings index (0-3) Management of debtor’s assets index (0-6) Reorganization proceedings index (0-3) Creditor participation index (0-4) Europe & OECD high Indicator Croatia Central Asia income Overall Best Performer Recovery rate (cents on the dollar) 32.7 38.0 71.2 93.1 (Norway) Time (years) 3.1 2.3 1.7 0.4 (Ireland) Page 62   Cost (% of estate) 14.5 13.1 9.1 1.00 (Norway) Creditor participation index (0-4) Doing Business 2018 Croatia Europe & OECD high Indicator Croatia Central Asia income Overall Best Performer Recovery rate (cents on the dollar) 32.7 38.0 71.2 93.1 (Norway) Time (years) 3.1 2.3 1.7 0.4 (Ireland) Cost (% of estate) 14.5 13.1 9.1 1.00 (Norway) Outcome (0 as piecemeal sale and 1 as going 0 .. .. .. concern) Strength of insolvency framework index (0-16) 12.0 10.8 12.1 15.00 (6 Economies) Figure – Resolving Insolvency in Croatia and comparator economies – Ranking and DTF DB 2018 Distance to Frontier (DTF) 0 100 76.97: Italy (Rank: 24) 76.69: Czech Republic (Rank: 25) 66.13: Albania (Rank: 41) 55.11: Croatia (Rank: 60) 54.75: Hungary (Rank: 62) 54.19: Regional Average (Europe & Central Asia) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their distance to frontier scores for resolving insolvency. These scores are the simple average of the distance to frontier scores for the recovery rate and the strength of insolvency framework index. Figure – Resolving Insolvency in Croatia – Time and Cost Time Cost 3.5 25 3.1 22.0 3 20 17.0 2.5 2.3 Cost (% of estate) Time (years) 2.0 14.5 2.1 2.0 14.5 13.1 1.8 15 2 1.7 10.0 1.5 9.1 10 1 5 0.5 0 0 Albania Croatia Czech Republic Europe & Hungary Italy OECD high income Central Asia Figure – Resolving Insolvency in Croatia and comparator economies – Measure of Quality Croatia 4 3 2 3 Page 63   Albania 6 3 2 3 Albania Croatia Czech Republic Europe & Hungary Italy OECD high income Central Asia Doing Business 2018 Croatia Figure – Resolving Insolvency in Croatia and comparator economies – Measure of Quality Croatia 4 3 2 3 Albania 6 3 2 3 Czech Republic 5.5 2.5 2 3 Hungary 5 2.5 2 0.5 Italy 5.5 3 2 3 OECD high income 5.4 2.8 2.3 1.9 Europe & Central Asia 4.4 2.6 2.1 1.8 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0­6) Commencement of proceedings index (0­3) Creditor participation index (0­4) Reorganization proceedings index (0­3) Figure – Resolving Insolvency in Croatia and comparator economies – Recovery Rate Recovery Rate (cents on the dollar) 80 70 67.0 64.6 60 50 43.7 41.6 38.0 40 32.7 30 20 10 0 Croatia Albania Czech Republic Hungary Italy Europe & Central Asia Details – Resolving Insolvency in Croatia Indicator Answer Explanation Proceeding foreclosure Mirage will apply for the pre-bankruptcy settlement procedure under the Bankruptcy Act. But, it is likely that BizBank would not be interested to reach a settlement on restructuring in that procedure, because, if agreement is settled, Bizbank would not get the payment for, at least, few years. As Bizbank owns 74% of Mirage's debt, the agreement on restructuring plan depends only on the BizBank decision. Instead of agreeing with the Miracle's plan of reorganization in pre-bankruptcy procedure, it is likely that BizBank will initiate foreclosure proceedings requiring sale of the hotel property As a creditor with a registered pledge, BizBank could enforce its interest in separated foreclosure process, even if Insolvency proceedings is opened. Outcome piecemeal sale Even if Mirage management initiates pre-insolvency or insolvency proceedings, the hotel will not be able to operate if its acts would be done at the expense of the bankruptcy estate. It will have to reduce its working power and cut expenses. And after the bank enforces itsPage 64   Croatia Albania Czech Republic Hungary Italy Europe & Central Asia Doing Business 2018 Croatia Details – Resolving Insolvency in Croatia Indicator Answer Explanation Proceeding foreclosure Mirage will apply for the pre-bankruptcy settlement procedure under the Bankruptcy Act. But, it is likely that BizBank would not be interested to reach a settlement on restructuring in that procedure, because, if agreement is settled, Bizbank would not get the payment for, at least, few years. As Bizbank owns 74% of Mirage's debt, the agreement on restructuring plan depends only on the BizBank decision. Instead of agreeing with the Miracle's plan of reorganization in pre-bankruptcy procedure, it is likely that BizBank will initiate foreclosure proceedings requiring sale of the hotel property As a creditor with a registered pledge, BizBank could enforce its interest in separated foreclosure process, even if Insolvency proceedings is opened. Outcome piecemeal sale Even if Mirage management initiates pre-insolvency or insolvency proceedings, the hotel will not be able to operate if its acts would be done at the expense of the bankruptcy estate. It will have to reduce its working power and cut expenses. And after the bank enforces its security interest, and it can do that outside the insolvency proceedings framework, the hotel will stop operating and its assets will be sold piecemeal. Time (in years) 3.1 It will take 37 months to complete an unsuccessful pre-bankruptcy settlement procedure, which is followed by foreclosure, when BizBank enforces its security interest in Mirage's assets. Cost (% of 14.5 Major expenses in foreclosure include attorneys' fees (8%) and fees of accountants and estate) other professionals involved in the proceedings, especially the insolvency representative (5- 6%), the rest will cover court fees and sale of the assets. Recovery rate (cents on the 32.7 dollar) Details – Resolving Insolvency in Croatia – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 12.0 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (c) Both (a) and 1.0 insolvency framework? (b) options are available, but only one of them needs to be complied with Page 65   Management of debtor's assets index (0-6) 4.0 dollar) Doing Business 2018 Croatia Details – Resolving Insolvency in Croatia – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 12.0 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency (a) Debtor may 1.0 proceedings? le for both liquidation and reorganization Does the insolvency framework allow a CREDITOR to le for insolvency of the debtor? (a) Yes, a creditor 1.0 may le for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the (c) Both (a) and 1.0 insolvency framework? (b) options are available, but only one of them needs to be complied with Management of debtor's assets index (0-6) 4.0 Does the insolvency framework allow the continuation of contracts supplying essential Yes 1.0 goods and services to the debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome Yes 1.0 contracts? Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit No 0.0 after commencement of insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (c) No priority is 0.0 assigned to post- commencement creditors Reorganization proceedings index (0-3) 3.0 Which creditors vote on the proposed reorganization plan? (b) Only creditors 1.0 whose rights are a ected by the proposed plan Does the insolvency framework require that dissenting creditors in reorganization Yes 1.0 receive at least as much as what they would obtain in a liquidation? Are the creditors devided into classes for the purposes of voting on the reorganization Yes 1.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 2.0 Page 66   Does the insolvency framework require that dissenting creditors in reorganization Yes 1.0 receive Doing at least as Business much as 2018 what they would obtain in a liquidation? Croatia Are the creditors devided into classes for the purposes of voting on the reorganization Yes 1.0 plan, does each class vote separately and are creditors in the same class treated equally? Creditor participation index (0-4) 2.0 Does the insolvency framework require approval by the creditors for selection or Yes 1.0 appointment of the insolvency representative? Does the insolvency framework require approval by the creditors for sale of substantial No 0.0 assets of the debtor? Does the insolvency framework provide that a creditor has the right to request No 0.0 information from the insolvency representative? Does the insolvency framework provide that a creditor has the right to object to Yes 1.0 decisions accepting or rejecting creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost Page 67   (i) notice period for redundancy dismissal; (ii) the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”. Doing Business 2018 Croatia Labor Market Regulation Doing Business presents the data for the labor market regulation indicators in an annex. The report does not present rankings of economies on these indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business. Detailed data collected on labor market regulation are available on the Doing Business website (http://www.doingbusiness.org/data/exploretopics/labor-market-regulation). The most recent round of data collection was completed in June 2017. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions (i) whether xed-term contracts are prohibited for about the worker and the business are used. permanent tasks; (ii) maximum cumulative duration of xed-term contracts; (iii) length of the The worker: probationary period; (iv) minimum wage. - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. Working hours - Is a full-time employee. (i) maximum number of working days allowed per - Is not a member of the labor union, unless membership is mandatory. week; (ii) premiums for work: at night, on a weekly rest day and overtime; (iii) whether there are The business: restrictions on work at night, work on a weekly rest - Is a limited liability company (or the equivalent in the economy). day and for overtime work; (iv) whether nonpregnant - Operates a supermarket or grocery store in the economy’s largest and nonnursing women can work same night hours business city. For 11 economies the data are also collected for the second as men; (v) length of paid annual leave. largest business city. - Has 60 employees. Redundancy rules - Is subject to collective bargaining agreements if such agreements cover (i) whether redundancy can be basis for terminating more than 50% of the food retail sector and they apply even to rms that workers; (ii) whether employer needs to notify are not party to them. and/or get approval from third party to terminate 1 - Abides by every law and regulation but does not grant workers more redundant worker and a group of 9 redundant bene ts than those mandated by law, regulation or (if applicable) collective workers; (iii) whether law requires employer to bargaining agreements. reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments due when terminating a redundant worker. Job quality (i) whether law mandates equal remuneration for work of equal value and nondiscrimination based on gender in hiring; (ii) whether law mandates paid or unpaid maternity leave; (iii) length of paid maternity leave; (iv) whether employees on maternity leave receive 100% of wages; (v) availability of ve fully paid days of sick leave a year; (vi) eligibility requirements for unemployment protection. Details – Labor Market Regulation in Croatia Answer Hiring Page 68   Fixed-term contracts prohibited for permanent tasks? Yes days of sick leave a year; (vi) eligibility requirements for unemployment protection. Doing Business 2018 Croatia Details – Labor Market Regulation in Croatia Answer Hiring Fixed-term contracts prohibited for permanent tasks? Yes Maximum length of a single xed-term contract (months) No limit Maximum length of xed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 497.1 Ratio of minimum wage to value added per worker 0.3 Maximum length of probationary period (months) 6.0 Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 0.0 Premium for overtime work (% of hourly pay) 0.0 Restrictions on night work? Yes Whether nonpregnant and nonnursing women can work the same night hours as men Yes Restrictions on weekly holiday? Yes Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 20.0 Paid annual leave for a worker with 5 years of tenure (working days) 20.0 Paid annual leave for a worker with 10 years of tenure (working days) 20.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 20.0 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party noti cation if one worker is dismissed? Yes Third-party approval if one worker is dismissed? No Third-party noti cation if nine workers are dismissed? Yes Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Page 69   Third-party Doing approval Business 2018 if nine workers are dismissed? Croatia No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? Yes Priority rules for reemployment? Yes Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure 4.3 Notice period for redundancy dismissal for a worker with 5 years of tenure 8.7 Notice period for redundancy dismissal for a worker with 10 years of tenure 10.7 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 7.9 Severance pay for redundancy dismissal for a worker with 1 year of tenure 0.0 Severance pay for redundancy dismissal for a worker with 5 years of tenure 7.2 Severance pay for redundancy dismissal for a worker with 10 years of tenure 14.4 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure) 7.2 Job quality Equal remuneration for work of equal value? Yes Gender nondiscrimination in hiring? Yes Paid or unpaid maternity leave mandated by law? Yes Minimum length of maternity leave (calendar days)? 208.0 Receive 100% of wages on maternity leave? Yes Five fully paid days of sick leave a year? Yes Unemployment protection after one year of employment? Yes Minimum contribution period for unemployment protection (months)? 9.0 Business Reforms in Croatia In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Croatia implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Dealing with Construction Permits: Croatia made dealing with construction permits more costly by increasing the administrative fees for building and occupancy permits. Registering Property: Croatia made it less costly to transfer property by lowering the real estate transfer tax. DB2017 Starting a Business: Croatia made starting a business more di cult by increasing notary fees. Page 70   Protecting Minority Investors: Croatia strengthened minority investor protections by requiring detailed internal disclosure of Minimum contribution period for unemployment protection (months)? 9.0 Doing Business 2018 Croatia Business Reforms in Croatia In the year ending June 1, 2017, 119 economies implemented 264 total reforms across the di erent areas measured by Doing Business. Doing Business has recorded more than 2,900 regulatory reforms making it easier to do business since 2004. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are the reforms for Croatia implemented since Doing Business 2008. = Doing Business reform making it easier to do business. = Change making it more di cult to do business. DB2018 Dealing with Construction Permits: Croatia made dealing with construction permits more costly by increasing the administrative fees for building and occupancy permits. Registering Property: Croatia made it less costly to transfer property by lowering the real estate transfer tax. DB2017 Starting a Business: Croatia made starting a business more di cult by increasing notary fees. Protecting Minority Investors: Croatia strengthened minority investor protections by requiring detailed internal disclosure of con icts of interest by directors. Paying Taxes: Croatia made paying taxes more complicated by introducing a radio and television fee, and eliminating the reduction of the Chamber of Economy fee for new companies. DB2016 Enforcing Contracts: Croatia made enforcing contracts easier by introducing an electronic system to handle public sales of movable assets and by streamlining the enforcement process as a whole. Labor Market Regulation: 1) Croatia eliminated the requirement to retrain or reassign employees before they can be made redundant. 2) In accordance with the Minimal Wage Act, Art. 1, published in O cial Gazette No.151/2014, the minimum wage has been increased from 3.017,61 Kuna/month to 3.029,55 Croatian Kuna/month gross salary, in force for the period of January 1, 2015 to December 31, 2015. DB2015 Starting a Business: Croatia made starting a business easier by reducing notary fees. Dealing with Construction Permits: Croatia made dealing with construction permits easier by reducing the requirements and fees for building permits and carrying out the nal building inspection more promptly. Paying Taxes: Croatia made paying taxes more complicated for companies by raising the health insurance contribution rate, increasing the Croatian Chamber of Commerce fees and introducing more detailed ling requirements for VAT. On the other hand, it abolished the contribution to the Croatian Chamber of Commerce. Trading across Borders: Croatia made trading across borders easier by implementing a new electronic customs system. Labor Market Regulation: Croatia lifted the 3-year limit on the duration of rst-time xed-term contracts. DB2014 Paying Taxes: Croatia made paying taxes easier for companies by introducing an electronic system for social security contributions and by reducing the rates for the forest and Chamber of Commerce contributions. Trading across Borders: Croatia made trading across borders easier by improving the physical and information system infrastructure at the port of Rijeka and by streamlining export customs procedures in preparation for accession to the Common Transit Convention of the European Union. Enforcing Contracts: Croatia made enforcing contracts easier by streamlining litigation proceedings and transferring certain enforcement procedures from the courts to state agencies. Resolving Insolvency: Croatia made resolving insolvency easier by introducing an expedited out-of-court restructuring procedure. Page 71   enforcement procedures from the courts to state agencies. Doing Business Resolving Croatia 2018 Croatia Insolvency: made resolving insolvency easier by introducing an expedited out-of-court restructuring procedure. DB2013 Paying Taxes: Croatia made paying taxes less costly for companies by reducing the health insurance contribution rate. DB2012 Getting Credit: In Croatia the private credit bureau started to collect and distribute information on rms, improving the credit information system. DB2011 Starting a Business: Croatia eased business start-up by allowing limited liability companies to le their registration application with the court registries electronically through the notary public. Dealing with Construction Permits: Croatia replaced the location permit and project design con rmation with a single certi cate, simplifying and speeding up the construction permitting process. Paying Taxes: Croatia made paying taxes more di cult and costly for companies by introducting a tourist fee. Labor Market Regulation: Croatia increased the mandatory paid annual leave. DB2010 Dealing with Construction Permits: Croatia improved its construction permitting process through the operation of a one-stop shop and enforcement of the building code. DB2009 Dealing with Construction Permits: Croatia made dealing with construction permits easier through a new building code that eliminated several procedures for obtaining a building permit—though other changes caused an administrative backlog for building and occupancy permits that increased the overall time required. Paying Taxes: Croatia made paying taxes easier for companies by encouraging online ling. Trading across Borders: Croatia reduced the time for exporting and importing through ongoing improvements in port infrastructure. DB2008 Starting a Business: Croatia made starting a business easier by enhancing the services of the one-stop shop. Registering Property: Croatia reduced the time required to register property through ongoing improvements at the land registry. Getting Credit: Croatia strengthened its secured transactions system by launching a uni ed and geographically centralized collateral registry and improved access to credit information by setting up a new private credit bureau, HROK. Resolving Insolvency: Croatia made resolving insolvency easier through amendments to its insolvency act regulating the profession of bankruptcy administrators. Page 72   Resolving Insolvency: Croatia made resolving insolvency easier through amendments to its insolvency act regulating the profession 2018 administrators. of bankruptcy Doing Business Croatia Page 73