October 2, 2021 – Visa-free travel to the United States for Croatia has finally been announced after years and years of waiting. As of December 1 of this year, Croatian passport holders will no longer need a visa to enter the United States, which is more than likely to further boost trade between the two countries. That said, of course problems remain.

As Tomislav Pili / Poslovni Dnevnik writes, Croatian visa-free travel to the United States, which the US administration says will begin in December, will improve Croatia’s economic cooperation with the world’s largest economy, but the main obstacle – double taxation – remains a huge problem, as the United States is one of the few countries with which Croatia has a trade surplus.

Export growth of 13%

As Andrea Grubisic, Senior Associate Expert at the Department of International Affairs of the Croatian Chamber of Commerce (HGK), explained, last year Croatia’s merchandise exports to the United States amounted to 521, $ 6 million, nearly 13% more than back in pre-pandemic 2019.

Although imports from the United States also increased by 5.3 percent, a surplus of US $ 323 million was achieved, 18.2 percent higher than the previous year. “The trend continued in the first six months of this year, so that Croatian exports to the United States increased by 93.6% and the surplus on the Croatian side by almost 53%,” said explained Grubisic. However, the world’s largest economy is not really a particularly important trading partner for Croatia.

In Croatia’s total trade with the rest of the world, the United States ranks only 15th with a share of 1.67%. In terms of exports, the United States ranks 8th with 3.06 percent, and in terms of imports, only 23rd with 0.77 percent.

Asked about the level of interest of Croatian companies in doing business “across the Atlantic”, Grubisic said that according to the Croatian Chamber of Commerce and the member contacts that have just opened in the US market, there is a interest in the export of consumer goods. , including food.

“Certainly, in recent years, the ICT sector has stood out, in which Croatian companies are showing more and more interest in opening their subsidiaries or companies in the United States, and depending on the income from the export of services to the United States, this sector looks promising, ”said Grubisic.

Darinko Bago, President of Croatian Exporters, believes that the facilitation of Croatian visa-free travel to the United States will greatly facilitate the ongoing work on this issue, and it will also lead to the conclusion of new trade movements.

“This is especially true for industries that produce higher value-added goods, as it eliminates the administrative visa application procedures, especially if you need these documents for a larger number of employees. If we look at the experiences of other countries that have a visa-free travel regime with the United States, it will undoubtedly increase the economic cooperation between Croatia and the United States, ” Bago said.

“However, a much bigger obstacle to the growth of trade is the absence of a double taxation agreement, which is necessary if we are to achieve a higher form of cooperation with the United States,” Bago added.

Two important reasons …

“Such an agreement would be particularly important for Croatia for two reasons: given that America is a technological powerhouse, it would facilitate access to technology as part of the digital transformation, and the other is that the states- United is also a financial center.

Croatia is currently “invisible” to American investors because they would have to pay tax twice on the profits made on each of their investments, in Croatia and in the United States. This is the main reason why we have a trade surplus with the United States, because American companies are planning for the long term, and at the moment it is not worth it for them to open a branch in Croatia ” , Bago pointed out.

“ It should be clarified that the announced abolition refers to B1 / B2 visas that allow Croatian citizens to travel to the United States for travel and business, ” said Andrea Doko Jelusic, Executive Director of the Chamber of Commerce American (AmCham) in Croatia.

“This is a separate category of business visas that each country, including the United States, has for occasional or longer work performed on its territory,” added Doko Jelusic.

She advised Croatian businesses to focus on a specific geographic area, specific industries and even the size of the business they are targeting. “It is easier to do business with small and medium-sized companies than to focus on large companies,” Doko Jelusic concluded.

To find out more, see our dedicated travel and business sections.