In cooperation with AUSSENWIRTSCHAFT ÖSTERREICH (AWO) at WKÖ (the Austrian Federal Economic Chamber)

Financial Market Report

Croatia

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Country Profile: Croatia Raiffeisen Research. As of April 2019.

Currency: Kuna

Gross Domestic Product and Budget 2017 2018 2019e 2020fReal GDP growth, % p.a. 2.9 2.6 2.5 2.0Nominal GDP, €bn 49.0 51.4 53.8 55.7Per capita GDP, PPP basis, € 17.400 17.700 n.v. n.v.Growth in industrial output, % p.a. 1.4 -1.0 0.5 2.0Consolidated budget deficit, % of GDP 0.9 -0.5 -0.5 -1.0

Inflation and EmploymentJobless rate, annual average, % 11.2 8.4 8.5 8.2Average monthly gross wage, € 1.079 1.139 1.201 1.237Consumer price inflation, annual average, % p.a. 1.1 1.5 1.0 1.5

Balance of Trade and Current AccountGoods exports, €bn 11.7 12.2 13.2 14.5Goods imports, €bn 21.9 23.6 20.5 21.5Current account deficit, €bn 1.8 1.4 1.1 1.0Current account deficit, % of GDP 3.7 2.6 2.0 1.8Foreign debt, % of GDP 81.8 75.6 71.6 70.9

Rates of Exchange and Interest RatesLocal currency/US$ (average) 6.62 6.29 6.47 6.12Local currency/€ (average) 7.46 7.42 7.40 7.403-month money market rate (TRIBOR), average, % 0.55 0.48 0.49 0.50

Country RatingsS&P BBB-Moody‘s Ba2Fitch BB+

n.a.: not available.U: unrated.

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The Croatian Financial Market

1. The Economic and Political Situation in Croatia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

2. Company Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

3. Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

4. Taxes and Customs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

5. Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

6. Subsidies and Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

7. Risk Hedging and Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

8. Payment and Account Services at Raiffeisenbank Austria d.d. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

9. Raiffeisenbank Austria d.d. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

10. Your International Business Specialists at Raiffeisenbank Austria d.d.

and the Global Raiffeisen Network . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Important:

Despite thorough research and the use of reliable sources, we cannot accept responsibility or liability for the completeness or accuracy of this brochure’s contents. The purpose of this brochure is to give you initial, general information to help you develop business relationships in Croatia. The content of this brochure does not consti-tute any form of advice or offer or invitation to make an offer.

Prepared in cooperation with AUSSENWIRTSCHAFT AUSTRIA at WKÖ (the Austrian Federal Economic Chamber).

Sources:Raiffeisen Bank International AGWKO: Croatia Country Report; Special Reports: Setting up a Company and Taxes in Croatia, Property and Receivables in Croatia of the AUSSENWIRTSCHAFT AUSTRIA.

Copy deadline: May 2019.

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Croatia has a GDP per capita equivalent to EUR 11,707, which is approximately 35% of the GDP per capita in the Eurozone, or EUR 17,400 GDP per capita in terms of purchasing power parity (around 52% of the eurozone level). GDP per capita stagnated in recent years because of the recession/economic stagnation which has now been going on for six or seven years (since 2009). Among other things, this long period of recession was caused by massive structural problems and the country’s general over-indebtedness (both in the public and the private sector), as well as the consolidation measures necessary because of this. The country has been showing signs of a slow recovery since 2015; GDP in Croatia grew by 2.8% compared to the previous year. Economic growth has therefore remained stable compared to the previous years. Economic growth was mainly driven by the stabilisation of the domestic market and strong export momentum (including very strong development in the tourism sector). We expect an increase in GDP in 2018 and 2019 of 2.3% and 2.5% respectively compared to the previous year. This outlook is supported by a stable level of domestic private consumption and visible indications of an orientation towards economic policy reform. Average inflation for 2017 was 1.1% compared to the previous year. This was significantly below the long-term trend, despite an increase on the previous year. We expect a further rise in inflation to about 1.4% in 2018. The unemployment rate in 2017 was 11.7% - a decrease of around 1.5 percentage points in comparison with the previous year, but a reflection of the massive structural problems. We expect unemployment to fall further during 2018 and 2019. Due to the consolidation efforts of recent years, the budget deficit for 2017 was 0.3% of GDP (in the preceding years, average values were between 5-7%). We expect a slight increase in budget deficits again in 2018 and 2019. National debt in 2017 was high, at 80% of GDP. In view of the above described development in the budget deficit, we expect the national debt ratio to fall slightly in the coming years. However, Croatia will have to continue its consolidation policies for years before it achieves levels of national debt which are sustainable. As in the preceding years, Croatia’s current account exhibited a surplus of 3.6% of GDP in 2017. We expect the current account surpluses to tail off again slightly in the next few years. DeleveragingForeign debt amounted to 82.8% of GDP (2017) and has therefore dropped significantly in the last few years because of the deleveraging in the private sector. We expect the foreign debt ratios to continue to fall in the coming years. The local currency remained stable in relation to the euro in 2017. In view of the strong economic policy preference for a stable exchange rate, there is only one crisis scenario which could cause noticeable changes in the exchange rate (e.g. failed consolidation or deleveraging). The political situation in Croatia is stable at present. The biggest challenge from an economic policy point of view will be pursuing additional structural reforms and a long-term policy of consolidation - despite there being slightly less pressure for immediate action.

1. The Economic and Political

Situation in Croatia

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2. Company Law

Croatia’s companies act is very similar to Austrian company law and essentially provides for the same types of enterprise:• the sole trader (Trgovac pojedinac, abbreviated as t.p.); • the general partnership (Javno trgovacko drustvo, abbreviated as j.t.d.); • the limited partnership (Komanditno drustvo, abbreviated as k.d.); • the silent partnership (Tajno drustvo);• the joint-stock company (Dionicko drustvo, abbreviated as d.d.); • the limited liability company (Drustvo s ogranicenom odgovornoscu, abbreviated as d.o.o.).

Although mixed forms like the limited liability company and partnership (d.o.o. k.d.) are not explicitly regu-lated by law, legal practice does recognize them as permissible. In contrast to Austrian company law, all the forms listed above apart from the sole trader and silent partnership are considered to be legal entities and have full legal personality. Consequently, they can own movable and immovable property, acquire rights and obligations and sue or be sued before a state court or court of arbitration. Besides the legal forms listed above, foreign investors can also set up branches (Podruznica) and rep-resentative and liaison offices (Predstavnistvo strane osobe). However, the latter do not themselves have legal personality. They acquire all rights and obligations on behalf of their founder. Another form of enterprise is the association of business interests (Gospodarsko interesno udruzenje). Generally, enterprises are free to choose any legal form with which to carry on their activities. A specific legal form is only required to carry on certain activities (banking, insurance, etc.). Instead of setting up a new company, a foreign investor can acquire interests in a business or shares in an existing company (of whatever legal form) and thus take over enterprises that are already active.Croatian company law has already been brought broadly into line with EU law.

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Enterprises (persons and entities carrying on a business activity for profit) must keep books in Croatian in accordance with the Croatian accounting act and international standards.All entries in the books must take place on the basis of properly kept and plausible accounting records. The books must comprise: • the journal, where accounting entries are recorded in chronological order;• the ledger, containing accounting records of changes in assets, liabilities, capital, expenses, income and

the results of the company’s operations;• auxiliary ledgers.

The journal and ledger must be kept for at least 11 years, and auxiliary ledgers for at least seven. At the end of a reporting period (financial year = calendar year), companies must prepare the following financial reports: • balance sheet; • income statement:• cash flow statement;• equity statement; • notes to the annual report.

Financial reports must be kept for at least 11 years. For accounting purposes, enterprises are classified as small, medium-sized or large enterprises. Small enterprises: • total assets of not more than HRK27 million;• revenues of not more than HRK54 million; • not more than 50 employees.

Medium-sized enterprises:Satisfy two of the above criteria and do not exceed more than two of the following three criteria:• total assets of not more than HRK108 million;• revenues of not more than HRK216 million;• not more than 250 employees.

Large enterprises: Exceed at least two of the above three criteria for medium-sized enterprises.

Large enterprises also include: banks, building societies, insurers and leasing companies.The classification of an enterprise will determine whether it is obliged to publish financial reports and to have its financial reports audited. Joint-stock companies must publish their financial reports.

3. Accounting

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4. Taxes and Customs

The restructuring of the Croatian tax system, which has taken place over the past decade, is fundamentally based on the principles of the tax systems that are in place in Western European states. There is no fun-damental difference between Croatian and foreign natural persons and legal entities.The basis for the tax system is the General Tax Law (Opci porezni zakon), and the Official Gazette of the Republic of Croatia no. 147/08, 18/11, 78/12; other taxes are regulated by a variety of special laws

Taxes and duties Croatian tax law is harmonised with the applicable directives and regulations of the European Union. However, there are still certain difficulties relating to the implementation of the legal provisions by the Croatian tax authorities.

The General Tax Act forms the basis of the tax system (Fiscal Code - “Opći porezni zakon” - Official Journal of the Republic of Croatia No. 127/00 in the version 44/16). Other taxes are governed by individual laws.

The Republic of Croatia has concluded double taxation treaties (DTT) with a number of different countries.

The following kinds of taxes are currently levied in Croatia: On national level: • VAT (“Porez na dodanu vrijednost”); • Corporate income tax (profit tax) (“Porez na dobit”); • Special taxes and excise duties (special tax: motor vehicles, coffee and non-alcoholic beverages, tax

on liability and comprehensive road vehicle insurance premiums; excise duties: on alcoholic beverages, tobacco products, energy products and electricity)

On the county level: • Inheritance and gifts tax (“Porez na nasljedstvo ili darove”) • Tax on road motor vehicles (“Porez na cestovna motorna vozila”) • Tax on vessels (“Porez na plovila”) • Tax on coin-operated machines for games for amusement (“Porez na automate za zabavne igre”)

On city/municipal level: • Local income tax (“Prirez poreza na dohodak”) • Special consumption tax on alcoholic beverages (“Porez na potrošnju”) • Tax on holiday homes (“Porez na kuće za odmor”) • Tax on company names (“Porez na tvrtku ili naziv”) • Tax on the use of public land • Car tax

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Joint taxes – taxes which are shared between the Federation, the counties and the cities/municipalities: • Income tax (“Porez na dohodak”) • Real estate transfer tax (“Porez na promet nekretnina”)

Other taxes: • Gambling tax (“Porezi na dobitke od igara na sreću i naknade na priređivanje igara na sreću”): Betting, slot-machine games, games in casinos, organisation of one-off games of chance, lottery • Fee for organising games of chance (“Naknada za priređivanje nagradnih igara”): a required duty which the entity organising games must pay to the Croatian Red Cross.

The following text only addresses those taxes which are of interest to Austrian companies.

Note: You can find detailed information on all taxes mentioned here in English on the website of Croatia’s main tax authority.

Corporate tax Profit tax is levied at a rate of 20% and can be compared to Austrian corporation tax (basis: Profit Tax Act - “Zakon o porezu na dobit”, Official Journal of the Republic of Croatia No. 109/93 in the version 143/14, plus an additional regulation).

Trading companies and other legal entities with their registered office in Croatia, as well as permanent establishments of foreign trading companies in Croatia (establishments), which conduct activities with the intention of earning profits or income, are subject to profit tax.

VAT / VAT-ID number At the start of 2013, Croatia began to make piecemeal amendments to the VAT Act, which originated in the 1990s. Since November 2014, there has been a new VAT Act (“Zakon o porezu na dodanu vrijednost”, Croatian Official Journal No. 143/2014), which completely conforms to EU rules.

All entrepreneurs, together with their companies, irrespective of whether they are natural persons (indepen-dent professions, traders) or a legal entity (corporations or partnerships) are subject to this tax.

The registration obligation for foreign entrepreneurs is triggered when services are rendered to persons who are not under an obligation to pay VAT. However, if services are rendered to Croatian companies who are under an obligation to pay VAT, the foreign company does not have to register for the purposes of VAT; the reverse charge procedure applies. The threshold for the obligation to register in the VAT system is currently HRK 230,000 in annual revenues - this applies for both natural and legal entities.

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VAT / VAT-ID number At the start of 2013, Croatia began to make piecemeal amendments to the VAT Act, which originated in the 1990s. Since November 2014, there has been a new VAT Act (“Zakon o porezu na dodanu vrijednost”, Croatian Official Journal No. 143/2014), which completely conforms to EU rules.

All entrepreneurs, together with their companies, irrespective of whether they are natural persons (indepen-dent professions, traders) or a legal entity (corporations or partnerships) are subject to this tax.

The registration obligation for foreign entrepreneurs is triggered when services are rendered to persons who are not under an obligation to pay VAT. However, if services are rendered to Croatian companies who are under an obligation to pay VAT, the foreign company does not have to register for the purposes of VAT; the reverse charge procedure applies. The threshold for the obligation to register in the VAT system is currently HRK 230,000 in annual revenues - this applies for both natural and legal entities.Every Croatian citizen, every company registered in Croatia, but also foreigners staying in Croatia tempo-rarily and companies which are taxable in Croatia, receive a so-called OIB number (Osobni identifikacijski broj) - a “personal identification number”. This eleven-digit number replaces the “basic citizen number / matriculation number” (JMBG) and should therefore guarantee a higher level of privacy and data protection, but is also the only number which can be used by the authorities for identification purposes and should also help to combat money laundering and corruption. All companies received VAT-ID numbers when Croatia joined the EU. There is extensive information (in English) on the website of Croatia’s main tax authority on how foreign companies can obtain a Croatian OIB number (personal identification number), which, in turn, is the prerequisite for the allocation of a VAT-ID number. The Foreign Trade Centre in Zagreb can send you the necessary forms for registering the Croatian VAT-ID and OIB numbers (in Croatian and German) upon request. Companies need the VAT-ID of the relevant Croatian company for VAT-free services rendered by an Austrian entity to a Croatian entity and vice versa.

The following are subject to VAT: • Deliveries of goods of all kinds, as well as all services rendered by a Croatian tax subject in return for

payment, • The acquisition of objects in the territory of Croatia from another member state of the European Union, • Private consumption (acquisition of goods from a company for private use, drawing services for own

purposes etc.), • Importing goods from a third country.

The normal tax rate is 25% and applies for all taxable revenues. Reduced VAT tax rates apply for certain groups of products/services:

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• Products/services subject to VAT of 5%: Bread. milk, specialist books and textbooks, medicaments, medi-cal aids included on the medicaments list of the national sickness insurer, cinema tickets, certain daily newspapers and specialist magazines

• Products/services subject to VAT of 13%: Cooking oil, children’s food, sugar, water (except for bottled drinking water), concert tickets, tourism services (guest accommodation in commercial hospitality build-ings, preparation of food and food sales services in the hospitality business), other print media which are not caught by the abovementioned reduced rate of tax.

Exports from Croatia No VAT is charged on exports from Croatia to other EU member states, provided that the recipient’s VAT-ID number is stated and proof of the export can be provided. In the case of exports from Croatia to countries outside the EU, a net invoice (i.e. without Croatian VAT) must be issued.

The following services are tax free: Deliveries of goods in customs-exempt areas within the territory of Croatia, deliveries of goods and services rendered for consular or diplomatic representative bodies in the Republic of Croatia (subject to the condi-tion of reciprocity), deliveries of goods to entities permitted to export abroad for humanitarian and charitable purposes.

Tax free Travellers who are not resident in Croatia or another EU member state may obtain a VAT refund on the goods they take with them to countries outside of the EEA. This applies to goods which cost more than HRK 740 incl. VAT.

Reverse charge system The “place of rendering” determines whether a service is taxable in Croatia. The place of rendering is defined in section 5 of the VAT Act and does not depend on whether the entity rendering the services was ever in Croatia.

If a Croatian company draws services from a company which has its registered office abroad and these ser-vices are subject to VAT in Croatia, the “reverse charge” procedure applies (section 16 VAT Act, 73/2013). In such cases, the Croatian recipient of the service pays the VAT for the foreign company and can treat it as input tax.

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Excise duties A special tax, or excise duty, must be paid on certain product groups before they are put into circulation in Croatia.

The following products/product groups/services are subject to excise duties: • Non-alcoholic and alcoholic beverages • Tobacco products • Energy products (fuels) and electricity • Motor vehicles • Liability and comprehensive road vehicle insurance premiums

The following provisions apply when importing these products and putting them into circulation on the Croatian market: • Excise Duty Act for coffee and non-alcoholic beverages (“Zakon o posebnom po-rezu na kavu i bezalko-

holna pića”, No. 111/13) • Rules on Excise Duties (“Pravilnik o trošarinama”, NN 83/15) • Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation

of energy products and electricity • Rules on the Special Tax on Motor Vehicles (“Pravilnik o posebnom porezu na motorna vozila”, NN 31/15) • Excise Duties Act (Croatian: “Zakon o trošarinama”, NN 22/2013, 32/2013 and 81/2013)

Luxury tax Croatia eliminated the special tax of 30% on luxury goods (including jewellery and watches, amongst other items) with effect from 1 January 2013; it was not replaced.

Cars, vessels and aircraft There are specific excise duties on cars, motorbikes, vessels and aircraft which are imported to (or which are manufactured in) the Republic of Croatia. The tax subject is the importer, the producer or the purchaser (acquirer). The assessment basis is the purchase price, motor strength and CO2 emissions. There are new rules on the exemption of vessels from VAT. As of 1 July 2013, all boats more than eight years old, have - in principle - been exempt from VAT.

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Croatia has ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). In it, the contracting states undertake to recognize and enforce arbitral awards made in another contracting state.

Consequently, the jurisdiction of the International Chamber of Commerce (ICC) or another arbitrator can be agreed in a contract concluded with a foreign party.

The International Chamber of Commerce is a globally represented organization based in Paris. Unlike the judgements of state courts, arbitral awards can be enforced practically worldwide. For a dispute to be settled by a court of arbitration, its jurisdiction must have been agreed upon beforehand in writing. It is therefore advisable to include an arbitration clause in the contract with your foreign counterparty.

The Austrian Federal Economic Chamber offers institutional arbitration as a service through the International Arbitral Centre of the Austrian Federal Economic Chamber.

The arbitration clause of the International Arbitral Centre of the Austrian Federal Economic Chamber reads as follows (versions are also available in the languages that are most important for Austrian exporters):

‘All disputes arising out of this contract or related to its violation, termination or nullity shall be finally settled under the Rules of Arbitration and Conciliation of the International Arbitral Centre of the Austrian Federal Economic Chamber in Vienna (Vienna Rules) by one or more arbitrators appointed in accordance with these Rules.’

Useful agreements to supplement this arbitration clause: • the number of arbitrators shall be .......................... (one or three); • the applicable law shall be ............................; • the language used during arbitration proceedings shall be ......................................

Detailed information: Internationales Schiedsgericht der Wirtschaftskammer Österreich International Arbitral Centre of the Austrian Federal Economic Chamber Dr. Manfred Heider; Phone: +43-5-90 900-4398; Fax: +43-5-90 900-216. E-mail: arb@wko.at; Internet: wko.at/arbitration

The fact that you as an Austrian company are a member of the Federal Economic Chamber can in some circumstances be a cause for concern for a strong foreign counterparty. In this case we recommend that you agree on a different arbitral court, such as the one belonging to the International Chamber of Commerce. This has its headquarters in Paris and is represented in Austria by ICC Austria.Note: As the application of Croatian legislative provisions is mandatory in many areas, it does not make much sense to agree a foreign legal jurisdiction or applicable law. Proceedings in civil cases already take a very long time in the court of first instance, so agreeing on a court of arbitration in Croatia – or an international court of arbitration abroad if the majority of the shares are held by foreign shareholders – is generally advisable.

5. Arbitration

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6. Subsidies and Support

EU cohesion policy / regional policy 2014-2020Initial situation / status quoThe various regions of Europe, especially Central and Southeastern Europe, exhibit large differences in economic and social development. To strike a balance between the regions, the EU has set the following targets as part of its Europe 2020 strategy:

• Creation of jobs• Strengthening companies’ competitive position• Promotion of economic growth and sustainable development• Improvement in EU citizens’ life quality

The cohesion / regional policy is aimed at all regions in the EU in order to create intelligent, sustainable and integrative growth. The cohesion policy is defined for a seven-year period (2014-2020). A budget of EUR 351.8 billion, i.e. almost one third of the entire EU budget, is set aside for achieving the above targets in the timeframe mentioned. Within the scope of this budget, funding is granted in the form of non-repayable grants.

Structure of the funding programmes / from the EU target to the national funding programmeThe individual EU member states use the EU targets set under the Europe 2020 strategy to define their national and regional priorities, from which the individual Operational Programmes (OPs) are derived.The Operational Programmes are structured according to region and topic. Within these programmes “priority axes” are defined, which are subject to guidelines approved by the European Commission. The following topics are priorities for the individual countries: Innovation, research & development, job creation, environmental protection, education, SMEs, transport and regional development.

Dedicated national funding agencies (ministries and investment agencies) are responsible for awarding the grants. While grants can be applied for continuously in framework programmes in Austria, they are mostly awarded in the context of “calls” (tender exercises) in Eastern Europe.

For each priority axis mentioned above, tender exercises are held once or twice a year and are open for one to three months. The main assessment criteria for company grants are company size, location, content and impact of the funding project.

How can your company obtain funding?Clearly defined projects can be submitted during the period when the tender exercise is open. Only complete applications (project description, approvals, budget,...) in the respective national language are accepted. The submitted projects are then evaluated by assessors using a points system based on the guidelines specified/defined in the program. All projects within a “call” take part in a competition. Only those with the highest score are shortlisted for funding commitments.

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Getting from the application to the possible disbursement of grants involves going through a complex, time-consuming process.It requires experience in dealing with public authorities and their targets.

National grantsIn addition to the EU structural funds, companies can also apply for funding from national resources.

The economic importance for the country or region is very important for determining whether the investment project can be funded.The criteria for evaluation are: Minimum investment volume and the number of jobs created as well as the minimum period for which these jobs will exist.

The following investment incentives are possible:• Tax reductions, tax deferrals and tax exemptions• Grants• Loans• Sureties• Equity participations• Discounted land purchases

However, these are subject to the respective national regulations and must be applied for at regional fund-ing agencies.

Warning:• The application must be made before the project begins (= first legally binding obligation).• The details of the guidelines can change during the tender exercise and must therefore always be kept in view.• Make contact with the company’s bank/funding agency as early as possible.

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7. Risk Hedging and Financing

Risk hedging of Austria Wirtschaftsservice

Gesellschaft mbH (aws, federal funding agency)

Legal framework conditions:

The legal framework conditions of the guarantees issued by aws were redrafted on 1 January 2017.In detail, the regulations are based on the guidelines of the Austrian Federal Ministry of Finance (BMF) for accepting guarantees by aws pursuant to the Guarantees Act 1977, including supplementary conditions for grants.

The aws offers small and medium-sized companies (max. 3,000 employees) with their registered office and operating site in Austria guarantees for loans and lease financing as part of domestic and foreign invest-ments.

Guarantees for national investments:aws guarantees the financing of economically desirable projects by Austrian companies, i.e.: Construction/expansion investments, modernisation of production facilities, the innovation of processes and procedures, environmental measures or the purchase of, or participation in, companies.

aws guarantees up to 80% (max. EUR 25 m) of the financing amount in the form of a financing guarantee and covers the economic risk of the investor (loan default due to the insolvency of the domestic company) for the bank. In the case of large projects, aws guarantees up to a maximum of one third of the project volume.

Guarantees for international investments:aws supports Austrian companies (max. 3,000 employees) with direct investments abroad, i.e. establish-ment of subsidiaries/joint ventures, acquisition of companies/company shares, expansion investments and investments in environmental technologies.The risk hedging of aws is provided either in the form of a project guarantee or a financing guarantee.

Under the project guarantee, aws hedges the economic risks (insolvency or similar circumstances) of a company’s investment project and undertakes to provide a certain amount of capital up to the maximum guaranteed amount in the event of damage or loss.

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aws guarantees up to 50% of the loan used (for large projects up to 1/3 of the project volume). The guar-antee fee is dependent on the ratings result calculated when examining the respective project, as well as the term of the guarantee.

Under the international financing guarantee, aws guarantees the financing of Austrian companies for eco-nomically desirable projects abroad, i.e.: construction/expansion investments, modernisation of production facilities, the innovation of processes and procedures, environmental measures or the purchase of, or participation in, companies.

aws guarantees up to 80% (max. EUR 25 m) of the financing volume and thereby covers the economic risk of the investor for the bank.

Conditions of the aws guarantee:

National guarantees: • Processing fee: 0.25% (one-off) of the assessment basis (max. EUR 30,000)• Guarantee fee: The guarantee fee depends on the ratings result calculated when examining the

respective project as well as the term of the guarantee

International guarantees:• Processing fee: 0.25% (one-off) of the assessment basis (max. EUR 50,000)• Guarantee fee: The guarantee fee depends on the ratings result calculated when examining the

respective project as well as the term of the guarantee.

Austria

Abroad

BANK

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OeKB (Oesterreichische Kontrollbank AG)In order to achieve sustainable success in the export business and for investments made abroad, com-panies need good risk management and attractive financing arrangements. With federal export guaran-tees and OeKB refinancing packages, the OeKB offers instruments via the respective house banks that strengthen Austrian companies and their partners in global competition. By processing export guarantees, the OeKB acts as the Export Credit Agency (ECA) of the Republic of Austria.

Export guarantees protect the entrepreneur against payment defaults (for economic or political reasons) related to export transactions. In the case of foreign investments, export guarantees provide protection against political risks.

Federal export guarantees also offer an attractive way to access financing for export and investment activi-ties. Export guarantees can be utilised by all large, medium and small companies whose guaranteed trans-actions have a positive impact on Austria’s current account balance or are in the national interest.

Companies can learn more about the ideal kinds of guarantee from the OeKB Export Service (www.exportservice.at) or from their house bank. OeKB’s export financing process provides the possibility of refi-nancing exports and equity participations abroad. This export financing process is available as a source of refinancing at domestic and foreign commercial banks and is offered to companies via these banks within the scope of their export business and foreign investments.

The prerequisites for this type of financing are• A federal guarantee as required by the Export Funding Act (EFA), or• A guarantee from a credit insurer within the meaning of the EFA• A guarantee from aws, or• A guarantee of an international organisation within the meaning of the EFA.Furthermore, the financing of the underlying supplies/services must bring about a direct or indirect improve-ment in the Austrian current account balance or be in the Austrian national interest.

ERP fundThe ERP fund is a fund with its own legal personality, which was attached to aws in 2002. ERP loans are reduced-interest loans with multi-year redemption-free periods and multi-year redemption periods, and are collateralised by a guarantee from aws or a bank.

ERP financing programme Companies are eligible to apply which have their registered office and operating site in Austria and which are active in one of the following sectors: industrial or commercial production, research and development services, transport, processing of agricultural products, and trading companies.

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The following provides an overview of the available ERP financing programmes:• ERP - Micro-Credit• ERP - Technology Programme• ERP - SME Programme• ERP - Regional Programme• ERP - Tourism Programme• ERP - Transport Programme• ERP - Forestry Programme• ERP - Agriculture Programme

Conditions of ERP loansThe maximum financing volume is EUR 30 m.• Term: 6 years (up to 15 years is possible)• Utilisation period: 0.5 years• Redemption-free period: 2-3 years, interest fixed at 0.50% p.a.• Redemption period: 3–4 years, interest fixed at 0.75% p.a.

- Longer redemption-free and redemption periods are offered for some programmes, i.e.:- Future industries, research infrastructure within the scope of the technology programme- Infrastructure measures within the scope of the Regional Programme

• Interest rate and redemption costs are anticipatory• Processing fee: 0.5% - 0.9% of the ERP loan• The guarantee fee of the guaranteeing bank must be added to these costs.

Austrian Company

BANK

Guarantee

Trust Money

ERP LoanLoan Agreement

Chart 2: ERP Loan Process

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The fundable projects/costs are dependent upon the respective ERP financing programmes, based on the purpose and mandate of the respective programme.

ERP loans for large companies:For large companies, ERP loan financing is provided by the ERP Regional Programme and the ERP Technology Programme. Within the scope of these two programmes, large companies in particular can apply for funding for the following projects/costs:

Fundable projects for large companies:• Initial investment in NEW economic activities (new NACE-4 provider)• Construction of a NEW independent operating site• Within the de minimis limits (max. fundable value of EUR 200,000 within the last 3 years), further projects

can also be funded (product and process innovations, innovative services through implementation of in-house research results, purchase and adaptation of new technologies, modernisation and expansion investments, construction/acquisition of start-up, technology and innovation centres)

• Research/development projects for the introduction of new/significantly improved products• Projects for prototype production• Construction of pilot/demonstration/testing facilities

Fundable costs for corporations:• New investments and in-house services to be capitalised• Construction investments• Land purchases for founding new companies, business expansion and business location to the extent

required by the business• Costs for intangible assets (patents, licences, etc.) and consultancy costs• Regarding R&D projects: Staff costs, laboratory facilities, costs of consultancy and provision

of services, equipment costs for pilot and demonstration facilities

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8. Payment and Account Services at

Raiffeisenbank Austria d.d.

8.1. Cash management productsAccount Services Local Currency Foreign Currency LCY Current Acc. LCY Deposit (FCY) Current Acc. FCY DepositResident* 3 3 3 3

Non-resident 3 3 3 3

Credit Interest 3 3 3

Overdraft Facility 3

Payments, Deposits • Domestic payments LCY• Domestic payments FCY (in limited cases-according to the Decision on Foreign

Currency Payments Within the Country)

• Foreign payments LCY• Foreign payments FCY• Check collection• Eurochecks (collection only)

• Traveller’s checks• Cash payments / withdrawals LCY*• Cash payments / withdrawals FCY*• Purchase & Sale of FCY• Credit cards• Debit cards

Cash Management local Products & Services

Electronic Banking• Internet banking• SWIFT MT 940• SWIFT MT 941• SWIFT MT 942• SWIFT MT 101• MultiCash

Liquidity Management• Overdraft facilities (in LCY and for residents only)

• Cash Pooling Notional Pooling

(resident LCY accounts, intrabank only)

• Direct Debit (all accounts must be held with RBA)

Cash Management: Group Products and Services

• Cash Management International (CMI)• CMI@Web• Central Conversion Solution• International Account Reporting• International Disbursement Service• Intra Group Payments (IGP)

* RBHR is opening multicurrency accounts for both resident and non-resident legal entities

• Cross Border Target Balancing• Cross Border Margin Pooling• UniCash Member• SWIFT for Corporates (SCORE, MA-CUG))

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8.2. Legal & Foreign Exchange RegulationsCurrent Accounts • Resident companies can hold current accounts without restrictions with any bank. The accounts at RBHR

are multicurrency. Residents are allowed to hold accounts abroad and perform payment transactions through these accounts, including utilization of foreign loans.

• Non-resident companies are allowed to open current accounts with local banks. Non-resident accounts at RBHR are multicurrency.

• IBAN available for all accounts.

Transaction Accounts

• Resident companies can hold transaction accounts without restrictions with any bank. The accounts at RBHR are multicurrency. Residents are allowed to hold accounts abroad and perform payment transac-tions through these accounts, including utilization of foreign loans.

• Non-resident companies are allowed to open transaction accounts with local banks. Non-resident accounts at RBHR are multicurrency.

• IBAN available and obligatory for all accounts.• Tax payments are standard domestic payments and have no special payment type, but should contain

relevant payment basis code.• Account number and model code are listed on the invoice. The correct construction of modal code is

prescribed in the “Instruction on the manner of payment of budget revenue, mandatory contributions and revenue to fund other public needs” released by Minister of Finance according to the National Payment System Act and a Unique Overview of Basic ‘’Reference Number’’ Models with Model Description, Contents and Application Explanations as well as Applicable Control Number Calculation Modules (issued by FINA).

Foreign Payments

• A client is not obliged to submit to the Bank accompanying documentation and the Bank is not obliged to control the basis nor permissibility of a foreign currency payment. However, clients are obliged to comply with the provisions of the Foreign Exchange Act- responsibility for the legality of transactions has been transferred to the client.

• Grantings and payments in FCY between resident companies with restrictions (in accordance with The Decision on Foreign Currency Payments Within the Country).

• Cross border or international transactions between resident and non-resident companies can be denomi-nated in foreign or local currency.

• Capital transactions can only be effected in local currency with exceptions: purchase of real estate or purchase of securities in accordance with The Decision on Foreign Currency Payments Within the Country.

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• Incoming cross border payments: resident companies may collect their receivables from abroad arising from their business activity and from direct investments, or receive loans.

• Resident companies can take and accept loans from foreign persons either corporate or individual (reporting of loan arrangements to the CNB according to the Decision on the collection of data for com-piling balance of payments, external debt and international investment position).

• Resident companies may freely buy real estates abroad if they have settled all their tax obligations in Croatia.

• Resident companies which have entered into an agreement on deposits or current/transaction account with a non-resident financial institution, are obliged to report deposit transactions with foreign countries to the CNB (according to the Decision on the collection of data for compiling balance of payments, external debt and international investment position).

• Non-resident companies may freely effect payment transactions.

8.3. Clearing mechanismsSettlement • Description: National Clearing System (NKS) (mass payments) Croatian Real Time Gross Settlement System (HSVP)

• Type: Domestic payments in LCY

• Transaction value: NKS – mass, low value payments HSVP – urgent, high value payments

• Settlement cycle: NKS – 4 cycles per day HSVP – real time payments (cut off time for same day execution is 15:30 for

paper-based and 16:00 for electronic payments)

Clearing Membership of the Bankmandatory for NKS and HSVP

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Raiffeisen has been present on the Croatian market since Raiffeisenbank Austria was founded in 1994. The number of customers stood at about 500,000 at the year-end 2018. Raiffeisenbank offers the full range of banking services for all customer segments. The bank is considered a leader in innovation among banks in the market and is constantly aiming at implementing new products and services for its customers via the most relevant and attractive channels.

At the beginning of 2018, its branch network consisted of 78 outlets, and it operates with more than 1,400 ATMs and around 12,000 POS terminals throughout the country.

Raiffeisenbank Austria d.d. (RBA) was founded in 1994 as the first bank in Croatia established with foreign capital. RBA is a subsidiary of Raiffeisen Bank International (RBI) and part of Austria’s largest banking group. RBA offers a full range of banking and financial services in Croatia, also via its own subsidiaries like Raiffeisen Leasing, Raiffeisen Pension Insurance Company and Raiffeisen Invest. RBA provides services to approximately 500,000 customers via a sales network of 78 outlets, 1,400 ATMs and around 10,000 POS devices, contracted with retailers in Croatia and through a developed digital sales channels. The strategic approach to business operations is based on tailoring the needs of customers. By its flexible approach to product and service development in the bank itself, as well as in a group of specialized financial institutions, RBA improves the offer and achieves high standards in the quality of services.

The bank is considered a leader in innovation among banks in the market and is constantly aiming at implementing new products and services for its customers via the most relevant and attractive channels.

Of all the recent outstanding achievements, there is to highlight the award of the renowned Global Finance and Euromoney magazines for “Best Private Bank in Croatia 2019”, and the award of the magazine EMEA Finance for “Best Bank in Croatia in 2017 and 2018”.

Raiffeisenbank Austria d.d.Magazinska cesta 6910000 Zagreb - CroatiaPhone: +385 1 4566 466Fax: +385 1 4811 624

9. Raiffeisenbank Austria d.d.

Assets, €m 4,755

Branches 78

Staff 1,982

Shareholder structure

Raiffeisen SEE Region Holding GmbH 100 %

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Your specialist at Raiffeisenbank Austria d.d.Alzbeta RAMICinternational.desk@rba.hr+385 1 4566 622

Your international business specialistsRaiffeisen Bank International AGHerwig Haidnherwig.haidn@rbinternational.comPhone: +43 / 1 / 717 07 – 1574

Raiffeisen Bank International AGRudolf Lercherrudolf.lercher@rbinternational.comPhone: +43 / 1 / 717 07 – 3537

Raiffeisenlandesbank NÖ-Wien AGNadja Wattinadja.watti@raiffeisenbank.atTel: +43 / 5 / 1700 – 92426

Irene Kammerhoferirene.kammerhofer@raiffeisenbank.atTel: +43 / 5 / 1700 – 92157

Raiffeisen-Landesbank Steiermark AGFranz Rogifranz.rogi@rlb-stmk.raiffeisen.atPhone: +43 / 316 / 4002 – 7110

Beatrix Narathbeatrix.narath@rlb-stmk.raiffeisen.atPhone: +43 / 316 / 4002 – 7141

Raiffeisenlandesbank Oberösterreich AGHelmut Zeindlingerzeindlinger@rlbooe.atPhone: +43 / 732 / 6596 – 23113

10. Your International Business

Specialists at Raiffeisenbank Austria d.d.

and the Global Raiffeisen Network

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Artem Snegirevsnegirev@rlbooe.atPhone: +43 / 732 / 6596 – 23161

Raiffeisenverband SalzburgBernhard Knollbernhard.knoll@rvs.atPhone: +43 / 662 / 8886 – 14161

Raiffeisen-Landesbank Tirol AGAndrea Zanklandrea.zankl@rlb-tirol.atPhone: +43 / 512 / 5305 – 12230

Raiffeisenlandesbank VorarlbergAlexandra Weltealexandra.welte@raiba.atTel.: +43 / 5574 / 405 - 528

Raiffeisenlandesbank BurgenlandWilhelm Schedlwilhelm.schedl@raiffeisen-burgenland.atPhone: +43 / 2682 / 691 – 605

Raiffeisenlandesbank KärntenMichael Stegmüllermichael.stegmueller@rbgk.raiffeisen.atPhone: +43 / 463 / 99300 – 2280

Herbert Schöffmannherbert.schoeffmann@rbgk.raiffeisen.atPhone: +43 / 463 / 99300 – 2269

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Notes

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Notes

Received from: