CMS Expert Guide to Foreign Investment Screening Laws in Croatia

The Croatian FDI regime is set out in the Foreign Investment Screening Act (Official Gazette No. 136/25) (Croatian: Zakon o provjeri stranih ulaganja) (the “Act”), which came into force on 13 November 2025.

However, not all relevant implementing acts are in place yet, namely:

• A regulation prescribing a detailed list of covered (sub)sectors including the criteria for determining target entities to be adopted by the Government (the “Regulation”). The competent authorities responsible for identifying the target entities should, within six months from the Regulation’s entry into force, determine all target entities within their scope of competence.
• A by-law regulating details of the screening application, which should be adopted by the Minister of Finance by mid-February 2026 (the “By-law”).

Pursuant to unofficial guidelines of the Croatian Ministry of Finance, the obligation to file an application will apply only after the relevant targets are identified. This means there is no standstill obligation for the current investments – such obligation will arise only after the targets are identified. Still, investments completed before the targets are identified may be subject to subsequent (retroactive) review, as explained in more detail under ‎2.1 below.

The Croatian FDI regime requires a foreign nexus for its application. It applies to third country (non-EU/EEA) investors, whether natural persons or legal entities (including trusts and similar structures) as well as legal entities established in Croatia or the EU/EEA that are under direct or indirect control of a foreign investor or a public authority of a third country.

For approval to be required, there needs to be: (i) a trigger event; over (ii) a target entity; which (iii) must be active in at least one of the sensitive sectors of the economy defined by the Act (which will be further specified by the Regulation).

The FDI regime covers all forms of investment by which the foreign investor, directly or indirectly, acquires a qualifying shareholding or gains control over the target entity. Trigger events requiring approval are:

• The acquisition, directly or indirectly, of control over at least 10% of shares and/or voting rights, property rights or the total equity interests in the target entity by the foreign investor, either individually or jointly with affiliated persons or through concerted action. Increases and decreases in investment that result in a change in the shareholding or management structure or control over the target also constitute triggering events when the investment exceeds or falls below the qualifying threshold of 10%.
• The acquisition, directly or indirectly, of a controlling position in the target entity via different means e.g., the majority of voting rights; the right to appoint or remove most members of the management/supervisory boards; relevant decision-making rights, such as veto rights; the ability to exercise significant influence and impose relevant decisions; decisions on profit distribution or decisions leading to changes in the assets; and entering into agreements or arrangements with the target entity or other shareholders or responsible persons of the target entity.

The Act is also applicable to: (i) all types of concessions, including public-private partnership agreements, in which the foreign investor appears as the concessionaire; (ii) free zones, in which a foreign investor appears as the holder of the consent for the establishment of a free zone, the zone operator or the operator of its separate part and/or as a zone user; and (iii) concentrations regulated by competition law, in which a foreign investor participates as a party to the concentration.

Foreign investments concerning agricultural land, forests and forest land owned by the Republic of Croatia are exempt from the scope of the Act as they are subject to special regulations.

Foreign investments that were completed prior to the entry into force of the Act may be subject to screening as well. Screening of such investments must be carried out within three years from the Act’s entry into force (i.e., by 13 November 2028). Based on unofficial guidelines of the Croatian Ministry of Finance, the same will apply to foreign investments which were completed after the entry into force of the Act but before the relevant targets are identified in accordance with the pending implementing acts.

A relevant target entity is a trader or a company, regardless of its legal form, with its registered office or place of establishment in the Republic of Croatia, which operates or will be incorporated in connection with a foreign investment, in relation to which a foreign investment affects or may affect security or public order in the Republic of Croatia and/or in any member state of the EU/EEA.

Where there is a trigger event in relation to a relevant target entity, this will only give rise to a mandatory filing requirement if the target entity is active in at least one of sensitive sectors of the economy (to be) identified by the Act and the Regulation. The Act refers to sectors such as energy, transport, healthcare, water and waste management, food industry, research, defence, media, information and communication technologies, digital infrastructure, postal services, railway services, electoral system, banking and financial market infrastructure. A detailed list of (sub)sectors is to be defined by the Regulation.

Application for approval of the foreign investment is mandatory, and the transaction cannot be lawfully completed before obtaining clearance by the Ministry of Finance.

Supervisory bodies (commercial courts, SKDD, concession providers, the Croatian Competition Agency (AZTN)) will, ex officio, perform the function of a control mechanism with the aim of preventing the completion of foreign investments without a previously conducted screening procedure.

The decision of the Ministry of Finance on clearance of the foreign investment is based on the opinion of the FDI Screening Committee (the “Committee”) on the impact of the foreign investment on security and/or public order. When adopting its opinion, the Committee shall consider the following:

1. the risk of a negative impact on security / public order, taking into account at least the following:
   • whether the foreign investor is under the direct or indirect control of a public authority of a third country, including through its ownership structure or provision of significant financial resources;
   • whether the foreign investor is already involved in activities affecting security and/or public order in any member state;
   • whether there is a serious risk of the foreign entity’s engagement in unlawful activities;
2. objections, opinions and other information obtained from the European Commission and any member state;
3. the opinion of the European Commission on the impact of the foreign investment on strategic projects or programmes of interest to the EU as a whole;
4. whether restrictive measures have been applied to the foreign investor (or its responsible or affiliated persons) or whether they are listed on sanctions lists, or whether there is suspicion or reason to suspect that criteria for inclusion on a sanctions list should apply;
5. verification of the good reputation of the foreign investor and its responsible persons;
6. Government acts on strategic planning for the resilience of critical entities and the national risk assessment of critical infrastructure adopted under relevant laws; and
7. Government acts on medium-term strategic planning and the national program for managing cyber crises adopted under relevant laws.

The Ministry of Finance may also dismiss the application if it establishes that restrictive measures have been applied to the foreign investor (or its responsible or affiliated persons) or they are listed on sanctions lists, or there is suspicion or reason to suspect that criteria for inclusion on a sanctions list should apply.

5.     Clearance procedure

Competent authority

The Croatian FDI regime is administered by the Ministry of Finance. The Government is to establish the Committee, which will have a key role in the risk assessment. The National Contact Point (the “NCP”), established within the Ministry of Economy, shall be responsible for coordination and cooperation with the competent contact points in the member states and the European Commission.

Party responsible for filing

The mandatory application for clearance may be submitted by either the foreign investor or the target entity.

Timing / Steps of the procedure

The application must be submitted to the Ministry of Finance prior to acquiring, increasing, or decreasing a qualifying holding, or prior to acquiring a controlling position, and at the latest before filing for registration with the court register or the Central Depository and Clearing Company (SKDD), before adoption of a decision on concession or entering into a concession agreement or agreement on public-private partnership or any amendments to such agreement which are subject to registration in the register of concessions.

Upon receipt of the application, the Ministry of Finance has 30 days (exceptionally 60 days) to confirm that the application is complete. Once the application is considered complete, the Ministry of Finance must forward the application to the Committee and the NCP within 3 days, which then act as follows:

• The NCP must notify the European Commission and the member states under the cooperation mechanism under Regulation (EU) 2019/452 within a further 3 days,
• The Committee must issue an opinion on the impact on security and/or public order within a further 90 days (exceptionally extended by 30 days). The opinion must be forwarded to the Ministry of Finance within 3 days of being issued.

Overall, the Ministry of Finance must adopt a decision on clearance or blocking of the foreign investment within 120 days of concluding that an application is complete (or within 150 days if the deadline for the Committee’s opinion has been extended as explained above). However, a failure of the Ministry of Finance to adopt a decision within these deadlines does not lead to a presumption of clearance, meaning that a procedure can last longer in practice. No appeal is permitted against decisions of the Ministry of Finance; however, an administrative dispute may be initiated before the High Administrative Court of the Republic of Croatia by filing a lawsuit.

Costs

The Act itself does not contain provisions on the costs; however, it remains to be seen whether certain costs will be prescribed by the By-law.

Publicity

The competent authorities responsible for identifying the target entities shall ensure the public availability of statistical data on decisions of the Ministry of Finance, the investment area (based on critical subjects’ criteria), and the origin of foreign investors, as well as other relevant information within their scope of competence.

It follows from the above that individual investment details will not be publicly available. The Act expressly states that the list of target entities, data on target entities and foreign investors, as well as all other data generated for the purpose of implementing the Act shall not be publicly disclosed.

No fines are prescribed by the Act. However, if the closing occurs without clearance, a foreign investor may be ordered under the Act to sell all shares or interests and any property rights. Such consequence is possible in case of any violation of the Act, especially where the Ministry of Finance establishes a threat to security and/or public order, or if it finds it necessary to protect the public interest. For the same reason (violation of the Act) the Ministry of Finance may also revoke already issued clearance (and order the sale of shares / other rights).