How to Invest In Croatia 2
Dubrovnik, UNESCO world heritage site

Croatia is one of the more developed frontier market countries that we watch with a GDP per capita (PPP) over $20,000 USD. With a population of about 4.2 million people, it remains on the fringes of the investing universe. But from a pop-culture standpoint it’s claim to fame of late has been as the real-life location for many of the scenes in the HBO show Game of Thrones, where the city of Dubrovnik has been used as King’s Landing.

Croatia joined the European Union in July 2013, but still uses its own currency, the Kuna (HRK).  While it’s not pegged to the Euro, the Kuna is kept in a stable range against it. Croatia has long had plans to adopt the Euro, which much of the populace already uses, but has yet to meet all the required criteria.

It’s biggest trade partners are all in the European Union led by Italy, Germany, and Slovenia. The economy has bounced nicely since contracting through the financial crisis years, and GDP growth is expected to be around 2% in 2016.


Croatia has a well diversified economy with an Economic Complexity Ranking of 0.75, good for 35th in the world. Here is a visualization of their main exports:

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Unlike many of the other frontier market economies that we look at, Croatia’s economy is service based with services comprising 70% of total GDP. It is a very developed country with 100% broadband internet coverage and almost 96% of people in their early twenties have a secondary school education.

Notable Companies in Croatia:

Oddly, some of Croatia’s largest companies by revenues are not listed on the Zagreb stock exchange, or are not traded enough to make the main market index.

INA (Ticker: INA, not in main index): oil and gas company with the highest revenues of any Croatian company

Konzum (delisted): the largest supermarket chain in Croatia, was taken private

Hrvatska Elektroprivreda (HEP) (not listed): main power company in Croatia

Zagrebačka banka (Ticker: ZABA, in main index): Croatia’s largest bank, owned by UniCredit

T-Hrvatski Telekom (Ticker: HT, in main index): Croatia’s largest telecom, owned by Deutsche Telekom, the parent company for T-Mobile brands globally

Valamar Riviera (Ticker: RIVP, in main index): Croatia’s largest tourism company which operates 30 hotels in Croatia, one of the most traded companies on the exchange

Adris Grupa (Ticker: ADRS, in main index): large conglomerate with business lines in real estate, insurance, tourism, and food

Is It Safe To Invest In Croatia?

According to our Investment Safety Rankings, Croatia is ranked #46 in the world and is relatively safe to invest in. As a developed country in the European Union, Croatia is one of the safer bets when compared to other frontier market countries. The knock on Croatia is usually the lack of transparency and a past history of corruption

Can Foreigners Invest In Croatia?

Yes, Croatia is actively trying to recruit foreign investment into the country, and its laws treat foreign investors similar to locals. Having joined the EU only in 2013, Croatia is still in a transition phase in terms of attracting foreign investment.

For equity investors, the Zagreb Stock Exchange is the main avenue for investment.

Zagreb Stock Exchange (ZSE) Snapshot:

In operation since: 1991

Location: Zagreb, Croatia

Market hours: 09:00 to 16:30

Currency: Kuna (HRK)

Market Capitalization (as of Oct 2016): around 1.26 billion HRK (approx. $19 billion USD)

Local Listed companies (as of Oct 2016): 147 companies listed on the Regulated market, but some are tiny with less than 1000 outstanding shares

Exchange Fees: Depends on your brokerage firm

Taxes: Capital gains are currently not taxed, dividends are taxed at 12%

Main Index: CROBEX, the top 25 companies on the exchange that trade on 80% of the trading days. Note that this is why INA, Croatia’s largest company, is not in the index as the high price of the shares (3200 HRK per share currently) means that it does not trade as frequently as others.


How the Zagreb Stock Exchange is Structured:

The Zagreb Stock Exchange offers both equities and bonds. Equities are split into two main markets, the Regulated Market which trades listed instruments, and the Multilateral Trading Facility (MTF) which is OTC and requires much less transparency.

The Regulated Market is split into three main sections: Prime Market, Official Market, and Regular Market in order of listing requirements with Prime Market the most stringent.

The bulk of listed equities are in the Official market, denoted by the -R- in the ticker. There are also some listed on the Regular Market, denoted by -P- in the ticker, but we saw very few companies listed on the Prime Market.

Top Companies on the Zagreb Stock Exchange:

Here are the top 10 companies in Croatia by market capitalization (as of Oct 2016):

CompanyTickerIndustryMarket Cap (HRK)
INA-industrija nafteINA-R-AEnergy         32,000,000,000
Zagrebačka bankaZABA-R-ABanks         15,858,381,612
Privredna banka ZagrebPBZ-R-ABanks         14,496,824,440
Hrvatski TelekomHT-R-ATelecom         13,184,054,135
Adris grupa (Official Mkt)ADRS-R-AConglomerate           5,683,093,059
VALAMAR RIVIERARIVP-R-AHospitality           4,429,868,101
Adris grupa (Regular Mkt)ADRS-P-AConglomerate           3,134,254,200
Plava lagunaPLAG-R-AHospitality           3,004,749,000
JamnicaJMNC-R-AFood           2,940,545,400
Atlantic GrupaATGR-R-AConsumer Goods           2,892,505,250
MaistraMAIS-R-AHospitality           2,799,124,143


How to Invest on the Zagreb Stock Exchange:

To trade on the Zagreb Stock Exchange, you need to trade through a Croatian brokerage firm which is a member of the exchange. Opening processes are similar to opening bank accounts and will depend on the brokerage firm you choose.

There are currently 17 member companies that can trade on the Zagreb Stock Exchange, a list that can be found here. This is down from 19 companies last year.

The exchange also publishes rankings for each brokerage, so this is the current ranking for all 17 members as of August 2016 by market share:

RankBrokerage FirmMarket Share (%)
1Interkapital vrijednosni papiri d.o.o.                26.81
2Erste&Steiermarkische Bank d.d.                16.35
3Zagrebačka banka d.d.                11.77
4HITA vrijednosnice d.d.                   9.38
5Fima vrijednosnice d.o.o.                   9.18
6Agram brokeri d.d.                   7.90
7Privredna banka Zagreb d.d.                   6.74
8Raiffeisenbank Austria d.d.                   3.72
9Societe Generale-Splitska banka  d.d.                   2.11
10Croatia banka  d.d.                   1.18
11Podravska banka d.d.                   1.17
12ADDIKO BANK d.d.                   1.03
13Hrvatska poštanska banka d.d.                   0.93
14OTP banka d.d.                   0.90
15Antea brokeri d.o.o.                   0.42
16Credos d.o.o.                   0.38
17Istarska kreditna banka  d.d.                   0.03


This article was written by Investment Frontier.

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