Amended Investment Promotion Act Targets Small and Medium Enterprises, Introduces Three Innovations

The Croatian Parliament unanimously amended the Investment Promotion Act on Friday, which is expected to increase realized investments in projects, particularly in small and medium enterprises, activate inactive state-owned assets, and contribute to balanced regional development.

The legal amendments introduce three innovations, the first concerns the encouragement and use of incentives for micro-enterprises, which will now have the opportunity to use them even in the case of purchasing used equipment up to five years old. This equipment will be recognized as an investment cost, unlike the current solution that only recognizes the purchase of new equipment.

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The law introduces more favorable conditions and expands the possibilities for using incentives for the information and communication technology (ICT) industry, i.e., for entrepreneurs from that sector.

The third innovation is related to activating state property, specifically economically inactive property located in units of regional and local self-government.

State property that is not in use and on which there is no economic activity can be leased to entrepreneurs for a period of ten years, without paying rent, but on the condition that the investor invests three million euros in the project within three years, while simultaneously increasing the value of the state property by 50 percent.

‘Work-Based Learning’

The Parliament also amended the Vocational Education Act, the key of which is ‘work-based learning’. Vocational occupations will receive practical knowledge, in addition to theoretical knowledge, based on work. This will be implemented in three ways: through combined programs popularly known as dual, then in school with practical training at employers, and integrated into the vocational education program.

The law introduces another key innovation – regional competence centers that will actually be centers of excellence for vocational education.

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– Through two European funds, one billion kuna has been secured for the establishment of these centers in five priority areas: tourism, mechanical engineering and electrical engineering, information and communication technologies, agriculture, and healthcare, said Minister Blaženka Divjak recently in Parliament.

Legislative proposals for amendments to the POS law and for the rental of apartments have been sent for a second reading.