FDI Qualities Review of Croatia.

Format:

Book

Author/Creator:

Organization for Economic Cooperation & Development, author.

Language:

English

Subjects (All):

Quality (Aesthetics).

Physical Description:

1 online resource (180 pages)

Edition:

1st ed.

Place of Publication:

Paris : Organization for Economic Cooperation & Development, 2023.

Summary:

The FDI Qualities Review of Croatia provides policy recommendations on the design and implementation of a new strategic framework for investment promotion and facilitation in Croatia. It provides an assessment of how foreign direct investment (FDI) contributes to sustainable development, including productivity and innovation, job quality and skills development, decarbonisation and regional development.

Contents:

Intro

Preface

Foreword

Abbreviations and acronyms

Executive summary

1 Overview and key policy considerations

Trends and qualities of foreign direct investment in Croatia

Investment promotion and facilitation for a sustainable and resilient recovery

Harnessing investment for regional development

Towards more effective investment tax incentives

References

2 Trends and qualities of foreign direct investment in Croatia

Summary

Potential for increased integration in global production networks

Boosting FDI as driver of future growth

Diversifying into high productivity activities through FDI

Building on existing comparative advantages

Leveraging higher productivity and innovation performance of foreign firms

Supporting sustainable development through FDI

FDI creates jobs in Croatia but contributes to income inequality among workers as foreign firms pay higher wages than domestic firms

Foreign firms create employment opportunities for women

FDI supports sustainable resource management and the expansion of the renewable energy sector in Croatia

Notes

3 Investment promotion and facilitation for a sustainable and resilient recovery

Summary and policy recommendations

The institutional framework for investment promotion and facilitation

The institutional framework for investment promotion and facilitation has gone through many organisational reforms

The Internationalisation Directorate has been entrusted with a higher number of mandates than other OECD IPAs

Resources devoted to investment promotion and facilitation are gradually increasing but challenges remain

Investment generation efforts could be strengthened and better targeted

Investment facilitation could focus more on embedding foreign MNEs in local value chains.

Promoting and attracting investment: strategy and tools

A well-articulated national strategy and action plan could provide a coherent framework for investment promotion

Clearly defined investment prioritisation criteria could help Croatia target quality FDI in line with its development objectives

M&amp

E tools and processes will be crucial to track and evaluate the implementation of the forthcoming strategic framework for investment promotion and facilitation

Formal coordination mechanisms could help address resource constraints

Leveraging investment promotion and facilitation for sustainable development

Knowledge spillovers from FDI require strengthening domestic firms' capacities

R&amp

D investments could be scaled up by facilitating collaboration between Croatia's business and innovation ecosystems

Strengthening labour market institutions could improve FDI's contribution to job creation and skills development

Promoting green and low-carbon investment will require removing regulatory barriers for renewable energy projects

Spatial planning rules could be further harmonised to facilitate land acquisition for large-scale investment projects

4 Harnessing investment for regional development

Investment in support of regional development in Croatia: trends and impacts

The geography of foreign investment in Croatia

The impacts of FDI on regional development are positive but unevenly distributed

Place-sensitive policies to promote FDI for regional development

Decentralisation has shaped Croatia's policy and institutional framework on investment

Strategies should better connect investment promotion to regional development

The National Plan on Investment Promotion should include a place-based dimension.

…and subnational governments' strategies should include an investment promotion angle

Setting the "right" subnational level for an investment promotion strategy can help overcome fragmented planning

Craft place-sensitive policies to attract FDI for balanced regional development

Investment promotion efforts to attract FDI for regional development can be improved

Attracting FDI for regional development goes beyond typical investment promotion efforts

The multi-level institutional framework for investment and regional development

Several national and subnational bodies share the mandate to promote investment

Subnational investment promotion evolved with the absorption of the IPA into a Ministry

Subnational agencies promoting investment are crucial but highly fragmented players

There is a plethora of subnational development agencies but their impact on FDI is unclear

Croatia should clarify subnational bodies' engagement on investment promotion

There is a large discretion in how local government authorities attract investment

Coordination mechanisms could be improved across tiers of government

Coordination can hardly take place when mandates are not well defined in the first place

Coordination could be particularly reinforced over some strategic investment matters

Croatia has several options to strengthen coordination on subnational investment

5 Towards more effective investment tax incentives

The tax system is only one of many factors for investment decisions

Landscape of investment tax and non-tax incentives

Incentives are governed by EU State aid rules

The Investment Promotion Act grants tax and financial incentives to spur new investment, job creation and regional development.

CIT incentives offer substantial reductions from statutory rates

Financial grants are available for job creation and training

Financial grants target capital costs related to high-technology equipment

Land and buildings can be leased rent-free under certain conditions

Faster administrative procedures available for Strategic Investment Projects

D activities incentivised through tax benefits and financial grants

Economic zones offer other tax and non-tax benefits and business support services

Sub-national governments grant additional incentives

Incentives are governed by different institutions and under various legal acts

Assessing design of investment tax incentives

Consider moving from income-based to expenditure-based tax incentives

Consider if eligibility conditions best support policy goals

Incentives could further support costs of job creation and skills development

Assess if changes to tax incentives are supporting regional development

Expenditure-based incentives could support technology upgrading

Assess tourism incentives ahead of planned reforms

Transparency can increase take up of incentives

Monitoring and evaluation

Croatia monitors incentive take-up and compliance

Efforts to evaluate incentive polices could be strengthened

Notes.

Notes:

Description based on publisher supplied metadata and other sources.

ISBN:

92-64-94423-0