Zagreb - Despite declining interest in free zones in recent years, their role remains important, State Secretary at the Economy Ministry Ivan Rakocija said on Wednesday as he presented to parliament a bill regulating their establishment and management.
Croatia had six registered free zones in 2024 - in Zagreb, Škrljevo, Pula, Rijeka, Split and Ploče - down from 14 in 2013. Rakocija said EU membership had reduced their appeal by changing customs and tax treatment, but added that companies trading with non-EU countries still benefit significantly from customs and VAT exemptions.
In 2024, 48 companies operated in free zones, employing 1,464 people and generating revenues of about €257 million. Rakocija said the aim was to preserve existing business activity and attract new users.
The bill simplifies procedures for setting up free zones and lowers the minimum export revenue requirement from 50% to 33%. It also streamlines annual reporting by shifting oversight from parliament to the government.
Opposition lawmakers criticised the removal of parliamentary scrutiny, with Bridge MP Ante Kujundžić saying that weaker oversight in some European countries had led to money laundering, tax evasion and opaque ownership structures. The SDP, Centre and GLAS said they would not back the bill either for the same reason.
Rakocija rejected the criticism, saying the change would reduce administrative burdens for a small segment of the economy while maintaining transparency, as reports would remain publicly available.
Opposition lawmakers also said the bill lacked a clear strategy for developing free zones.
Ruling HDZ lawmaker Tomislav Klarić noted that Denmark, Portugal and Hungary each operate only one such zone and France, Germany and the Czech Republic two each. He predicted Croatia's number would eventually fall to between two and four.
Dubravka Lipovac Pehar of the Homeland Movement said the current law dated from the mid-1990s and required update.