New Croatian Foreign Investment Screening Regime – What Foreign Investors Need to Know

By Josip Perkušić, Attorney-at-Law in Zagreb

 

In November 2025, the Republic of Croatia introduced the Foreign Investment Screening Act, establishing a mandatory system of prior review for certain foreign investments. The purpose of the Act is not to restrict capital flows, but to safeguard national security and public order, while ensuring alignment with the European legal framework and cooperation mechanisms within the European Union, including the European Commission.

The Act applies to investments by foreign investors, namely persons from countries outside the EU/EEA, as well as to companies established in Croatia or the EU that are directly or indirectly controlled by entities from third countries. Crucially, the assessment is not limited to formal ownership, but extends to actual control, including decision-making rights, management powers, or any decisive influence over a company’s operations.

A foreign investment is deemed to exist where an investor acquires or increases a qualifying participation of at least 10% or obtains a position of control in a Croatian company, as well as through participation in concessions and public-private partnerships. The Act applies not only to new investments, but also to subsequent changes in ownership or management structures, where such changes may have security implications.

Particular attention is paid to so-called sensitive and strategic sectors. These include, inter alia, energy, transport, digital and cyber infrastructure, the financial sector, healthcare, defence, media, artificial intelligence, advanced technologies, and food production. Where a company operates in such a sector, the investment will almost certainly be subject to screening.

An application for approval must be submitted prior to the registration of changes in the court register, prior to the conclusion of concession or similar agreements, and prior to the acquisition of shares or equity interests. An unnotified investment constitutes a serious breach of the Act and may result in ex post review, revocation of approval, and an obligation to divest the acquired interest.

The screening procedure is conducted by the Ministry of Finance, with the opinion of a special committee and in coordination with EU institutions. In practice, the procedure may take several months, particularly where additional information is required regarding the ownership structure, sources of funds, or related parties. The outcome may be an approval, a rejection, or the subsequent annulment of an already issued decision if a risk to security or public interest is identified.

It is important to note that the Act also provides for the review of investments made prior to its entry into force. Such investments must be aligned with and reviewed within the prescribed transitional period, provided that they meet the statutory criteria.

For foreign investors, the message is clear: Croatia remains open to investment, but regulatory compliance has become a key element of any investment strategy. Timely legal analysis, proper transaction structuring, and early communication with the competent authorities can prevent delays, additional costs, and serious legal consequences.

For this reason, engaging a law firm specialised in corporate and status law, with experience in regulatory procedures and legal assistance in the implementation of investment decisions, enables foreign investors to carry out investments in the Republic of Croatia in a secure, timely, and efficient manner, while minimising legal risks.

 

Zagreb, 29.12.2025.