Through ‘sandbox play’ to information on whether a company can go public

Domestic companies considering financing in the capital market, whether through going public, issuing bonds, or via venture capital funds, will now be able to verify in reality whether such an option is possible. This will be enabled by the sandbox ‘Path to the Capital Market’, an educational-simulation program designed by the financial regulator with the support of the Ministry of Finance. The aim of the program is to simulate, for example, a company’s IPO.

In this way, entrepreneurs gain firsthand experience of what all the ‘paperwork’ required for capital raising in the market entails, whether they would be interesting to investors in that case, and whether it is worth it for them at all. A similar project was previously launched in Portugal, and the experiences there are very good, it was heard at the presentation.

Swedish Example

The Croatian Financial Services Supervisory Agency (Hanfa) and the Ministry of Finance signed a partnership agreement in Zagreb on Monday for this reason. As highlighted by Deputy Prime Minister and Minister of Finance Tomislav Ćorić before the signing, the goal is to encourage a new generation of Croatian issuers. He stated that more than 35 institutions are involved in the project from various sectors, from banks to brokerage firms and auditing companies to law firms.

– When we want to highlight the strong connection between a successful national economy and a developed and liquid capital market, we usually talk about the United States and their market. However, excellent examples exist within the European Union, such as Sweden as one of the most interesting markets with a large number of successful IPOs of small and medium-sized enterprises – said Ćorić.

He reminded that just over a year ago, the Government adopted the Strategic Framework for the Development of the Capital Market in the Republic of Croatia for the period 2025 – 2030, along with the accompanying action plan. – This is actually the first time we have a strategic document aimed at improving the capital market with the ultimate goal of achieving emerging market classification. Such classification would open up space for greater interest from international institutional investors and would have a consequential effect on investments, capital, and long-term economic growth – emphasized Ćorić.

He also added that the Government is simultaneously continuing work on other initiatives from the strategic framework, and in this context, two initiatives should be particularly highlighted: investment accounts for citizens and the launch of an IPO fund. As Ćorić stated, investment accounts will allow Croatian citizens to invest seamlessly in domestic and foreign instruments within a simple framework with favorable tax treatment. The role of the IPO fund is to provide demand-side support, where the IPO fund will be an institutional and strategic investor.

Underutilized Market

The Chairman of the Management Board of Hanfa, Ante Žigman, explained that the sandbox was launched because our entrepreneurs have knowledge, ideas, and a market in which they operate. – What they lack is a structured and clear path to capital. Financing opportunities exist, but the information leading to them is often fragmented, complex, and insufficiently transparent. Loans, funds, grants; all are legitimate sources of financing, but they often come with certain limitations: administrative complexity, conditions that do not follow the developmental phases of companies, or simply a lack of information. This leaves the capital market underutilized – emphasized Žigman. Therefore, entrepreneurs often perceive the capital market as unknown, demanding, and reserved for large companies, which is not true.

This project will provide a safe testing environment in which entrepreneurs receive expert, objective, and concrete insights into their readiness for capital raising in the market, at no cost and with no risk to them. – Entrepreneurs get the opportunity to view their business from the perspective of those who decide on capital: investors, banks, funds, lawyers, and auditors. This means, first of all, a realistic assessment of the entrepreneur’s market readiness, and then precise mapping of areas where improvements can be made – said the head of Hanfa.

The plan is to ensure readiness assessment diagnostics in the pilot phase, and then proceed through the simulation of the financing process via the capital market, simulation of regulatory and market obligations after going public, and, of course, a final report with concrete and actionable recommendations. – It is important to clearly state – this is not a regulatory procedure, this is actually a developmental tool we want to provide to our entrepreneurs. The process is educational, simulation-based, and focused on creating value. It does not create any obligations, but it creates knowledge, security, and readiness for the next step – emphasized Žigman.

Four Functionalities

Ivana Tomašić, the chief advisor of the Capital Market Supervision Sector at Hanfa, detailed the role of the ‘Path to the Market’ sandbox in the presentation. According to her, it is a structured program that allows entrepreneurs, with the support of experts, to understand what going public looks like in practice, check how ready the entrepreneur is for it, gain insight into how the capital market views them (specifically investors and other participants), and what is already well established in their business organization and what they should work on. All of this is conducted in a safe environment, without risk and without costs.

The sandbox in its full version includes four functionalities. After the pilot phase, which the regulator will conduct until mid-2027, the other functionalities will follow. This is a simulation of the financing process in which entrepreneurs have the opportunity to experience how to prepare information for going public, such as an IPO, all the way to simulated listing on a regulated market or multilateral trading platform. Then follows a simulation of issuer obligations so they can experience the daily life of an issuer in a testing environment and go through what the market and the exchange expect from them. Finally, there is a final report that contains a set of information on how the company has passed all phases and recommendations on what to do to be ready for a real market entry.

The application process is set up to be quick, simple, and clear, Tomašić emphasized. A basic set of information about the program has been prepared on the Sandbox website. A short web form for expressing interest is also available, which takes less than a minute to fill out, through which companies can request a 15-minute informational conversation.

Hanfa Comes to Entrepreneurs

Companies can already submit their basic data, goals, and a basic set of financial indicators through the diagnostic form. Hanfa has fully automated the calculation of financial indicators, and all documentation exchange takes place in a secure online environment.

Along with the application form, entrepreneurs also submit a statement of understanding the simulation nature of the project, confirming that this is an educational program without legal and regulatory effects. After that, Hanfa, together with partners, conducts a selection process. As the first step towards diagnostics, each company receives an individual team of experts: one legal and one financial expert, and, if necessary, additional experts.

In the coming months, Hanfa will not wait for entrepreneurs to come to the regulator, but will come to them. – We plan to conduct informational workshops in a hybrid format together with partners, online info days for entrepreneurs across Croatia, and we intend to reach them through partner channels via all platforms that are easily accessible and understandable to them. We also intend to prepare a set of simple materials accompanied by examples from the pilot phase – Tomašić stated.