Debt Collection in Croatia
How can foreign companies recover their debts?
The Croatian economy started the year on a strong note but, nevertheless, recovering credits for the debtor companies may still seem impossible
The GDP data released recently shows that the Croatian economy has started the year on a strong note with an increase of 2.5% on an annual basis in the first quarter, and the unemployment rate has fallen to historic lows in April. This, in addition to improving consumer confidence, gives hope for private consumption in the future.
Located at the juncture of Central with Southeast Europe and surrounded by Italy, Slovenia, Hungary, Serbia and Bosnia-Herzegovina, the Republic of Croatia has one of the strongest economy in Southeast Europe, and in terms of its GDP is even stronger that the economies of some members of the European Union.
In 2017, Croatia bought US $ 24.7 billion worth of imported products up by 13.3% from 2016 to 2017.
The economy is expected to maintain a good pace of growth also for the 2018 based on solid consumer spending, as families continue to benefit from wage improvements and increased employment in a context of low inflation and interest rates.Furthermore, public investments are seen to increase due to the increased absorption of EU funds.
As regards trade, Italy is the main partner of Croatia. As a matter of fact, in 2000 our Country has reached the first place as a partner of Croatia that has kept until 2014, to subsequently surrender this position to Germany, moving back to the second place. Despite the German overtaking, Italy still plays a crucial role in the trade exchanges with the Croatian market, which amount to 5 billion dollars a year.
The following products are the most imported from Croatia in terms of value expressed in $ in the last year:
- Mineral fuels including oil: US$ 3.3 billion (13.4% of total imports) –
- Machinery: $2.4 billion (9.7%)-
- Electronic equipment: $1.9 billion (7.8%)-
- Vehicles: $1.8 billion ( 7.4% )–
- Pharmaceuticals: $1.1 billion (4.6%)–
- Plastics: $1.1 billion (4.3%)-
- Knit or crochet clothing: $673.8 million (2.7%)-
- Medical, technical equipment: $665.1million ( 2.7%)
- Iron and steel products: $604.7 million (2,4%)
Therefore, Croatia imports mainly from Germany, Italy, Slovenia, Hungary, Austria, the Netherlands, Poland and Bosnia Herzegovina. In details, Germany’s exports to Croatia amounted to $3.9 billion and regards vehicles, machinery, electronic equipment, plastics and pharmaceuticals and medical equipment. Instead, Croatia has imported from Italy the value of $3.2 billion products that concern machinery, mineral and fuels including oils, clothing items, iron and steel, electronic equipment, plastics, vehicles and paper.
Apart from Italy and Germany, Croatia also imports a lot from Slovenia ( $ 2.6 billion), Hungary and Austria ( $1.9 billion), Poland ( $ 861.8 million ) and Bosnia Herzegovina ( $819.4 million ).
So, foreign companies that export to Croatia must take into consideration different elements such as Opportunity and Country Risk but they should also analyze the justice system or the opportunity and risk Courts.
Efficient justice and economic growth, the length of the legal proceedings and the number of Judges per Court are representative criteria also for the purpose of the risk of recovering their own credits.
For this reason many companies every day choose the extra-judicial procedure – which is faster and less expensive compare to the legal approach – to recover credits.
So, even the debtor companies of Croatia rely on Invenium, one of the largest Italian company specialized in International Debt Recovery.
With more than 3,000 customers in Europe, 10.000 cases and 73 million receivables managed in the last two years, Invenium is the right choice for any company seeking effective results.
Invenium, for several years, supports in the recovery of credits the out-of-court approach. Especially, the amicable settlement allows to resolve, in short times, conflict situations between debtors and clients and also facilitate their business relationships.
For further information and to talk to one of our experts, contact us.