For the purposes of this Agreement:
(a)
‘Community company’ or a ‘Croatian company’ respectively shall mean a company set up in accordance with the laws of a Member State or of Croatia respectively and having its registered office or central administration or principal place of business in the territory of the Community or Croatia respectively.
However, should the company, set up in accordance with the laws of a Member State or of Croatia respectively, have only its registered office in the territory of the Community or of Croatia respectively, the company shall be considered a Community or a Croatian company respectively if its operations possess a real and continuous link with the economy of one of the Member States or of Croatia respectively;
(b)
‘Subsidiary’ of a company shall mean a company which is effectively controlled by the first company;
(c)
‘Branch’ of a company shall mean a place of business not having legal personality which has the appearance of permanency, such as the extension of a parent body, has a management and is materially equipped to negotiate business with third Parties so that the latter, although knowing that there will if necessary be a legal link with the parent body, the head office of which is abroad, do not have to deal directly with such parent body but may transact business at the place of business constituting the extension;
(d)
‘Establishment’ shall mean:
(i)
as regards nationals, the right to take up economic activities as self-employed persons, and to set up undertakings, in particular companies, which they effectively control. Self-employment and business undertakings by nationals shall not extend to seeking or taking employment in the labour market or confer a right of access to the labour market of another party. The provisions of this Chapter do not apply to those who are not exclusively self-employed;
(ii)
as regards Community or Croatian companies, the right to take up economic activities by means of the setting up of subsidiaries and branches in Croatia or in the Community respectively;
(e)
‘Operations’ shall mean the pursuit of economic activities;
(f)
‘Economic activities’ shall in principle include activities of an industrial, commercial and professional character and activities of craftsmen;
(g)
‘Community national’ and ‘Croatian national’ shall mean respectively a natural person who is a national of one of the Member States or of Croatia ;
(h)
with regard to international maritime transport, including intermodal operations involving a sea leg, nationals of the Member States or of Croatia established outside the Community or Croatia respectively, and shipping companies established outside the Community or Croatia and controlled by nationals of a Member State or Croatian nationals respectively, shall also be beneficiaries of the provisions of this Chapter and Chapter III, if their vessels are registered in that Member State or in Croatia respectively, in accordance with their respective legislation.
(i)
‘Financial services’ shall mean those activities described in Annex VI. The Stabilisation and Association Council may extend or modify the scope of that Annex.
1. Croatia shall facilitate the setting-up of operations on its territory by Community companies and nationals. To that end, it shall grant, upon entry into force of this Agreement:
(i)
as regards the establishment of Community companies treatment no less favourable than that accorded to its own companies or to any third country company, whichever is the better, and;
(ii)
as regards the operation of subsidiaries and branches of Community companies in Croatia, once established, treatment no less favourable than that accorded to its own companies and branches or to any subsidiary and branch of any third country company, whichever is the better.
2. The Parties shall not adopt any new regulations or measures which introduce discrimination as regards the establishment of Community or Croatian companies on their territory or in respect of their operation, once established, by comparison with their own companies.
3. The Community and its Member States shall grant, from the entry into force of this Agreement:
(i)
as regards the establishment of Croatian companies, treatment no less favourable than that accorded by Member States to their own companies or to any company of any third country, whichever is the better;
(ii)
as regards the operation of subsidiaries and branches of Croatian companies, established in their territory, treatment no less favourable than that accorded by Member States to their own companies and branches, or to any subsidiary and branch of any third country company, established in their territory, whichever is the better.
4. Four years after the entry into force of this Agreement, the Stabilisation and Association Council will establish the modalities to extend the above provisions to the establishment of nationals of both Parties to the Agreement to take up economic activities as self-employed persons.
5. Notwithstanding the provisions of this Article:
(a)
Subsidiaries and branches of Community companies shall have, from the entry into force of this Agreement, the right to use and rent real property in Croatia;
(b)
Subsidiaries of Community companies shall also have the right to acquire and enjoy ownership rights over real property as Croatian companies and as regards public goods/goods of common interest, the same rights as enjoyed by Croatian companies, where these rights are necessary for the conduct of the economic activities for which they are established excluding natural resources, agricultural land, forests and forestry land. Four years after the entry into force of this Agreement the Stabilisation and Association Council shall establish the modalities for extending rights under this paragraph to the excluded sectors.
(c)
Four years after the entry into force of this Agreement, the Stabilisation and Association Council shall examine the possibility of extending the rights under (b), including rights in the excluded sectors, to branches of Community companies.
1. Subject to the provisions of Article 49, with the exception of financial services described in Annex VI, each Party may regulate the establishment and operation of companies and nationals on its territory, in so far as these regulations do not discriminate against companies and nationals of the other Party in comparison with its own companies and nationals.
2. In respect of financial services, notwithstanding any other provisions of this Agreement, a Party shall not be prevented from taking measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owned by a financial service supplier, or to ensure the integrity and stability of the financial system. Such measures shall not be used as a means of avoiding the Party's obligations under the Agreement.
3. Nothing in the Agreement shall be construed to require a Party to disclose information relating to the affairs and accounts of individual customers or any confidential or proprietary information in the possession of public entities.
1. The provisions of this Chapter shall not apply to air transport services, inland waterways transport services and maritime cabotage services.
2. The Stabilisation and Association Council may make recommendations for improving establishment and operations in the areas covered by paragraph 1.
1. The provisions of Articles 49 and 50 do not preclude the application by a Party of particular rules concerning the establishment and operation in its territory of branches of companies of another Party not incorporated in the territory of the first Party, which are justified by legal or technical differences between such branches as compared to branches of companies incorporated in its territory or, as regards financial services, for prudential reasons.
2. The difference in treatment shall not go beyond what is strictly necessary as a result of such legal or technical differences or, as regards financial services, for prudential reasons.
In order to make it easier for Community nationals and Croatian nationals to take up and pursue regulated professional activities in Croatia and Community respectively, the Stabilisation and Association Council shall examine which steps are necessary for the mutual recognition of qualifications. It may take all necessary measures to that end.
1. A Community company or a Croatian company established in the territory of Croatia or the Community respectively shall be entitled to employ, or have employed by one of its subsidiaries or branches, in accordance with the legislation in force in the host country of establishment, in the territory of Croatia and the Community respectively, employees who are nationals of the Member States and of Croatia respectively, provided that such employees are key personnel as defined in paragraph 2 and that they are employed exclusively by companies, subsidiaries or branches. The residence and work permits of such employees shall only cover the period of such employment.
2. Key personnel of the above mentioned companies, herein referred to as ‘organisations’, are ‘intra-corporate transferees’ as defined in (c) of this paragraph in the following categories, provided that the organisation is a legal person and that the persons concerned have been employed by it or have been partners in it (other than as majority shareholders), for at least the year immediately preceding such movement:
(a)
Persons working in a senior position with an organisation, who primarily direct the management of the establishment, receiving general supervision or direction principally from the board of directors or stockholders of the business or their equivalent including:
—
directing the establishment of a department or sub-division of the establishment;
—
supervising and controlling the work of other supervisory, professional or managerial employees;
—
having the authority personally to recruit and dismiss or recommend recruiting, dismissing or other personnel actions;
(b)
Persons working within an organisation who possess uncommon knowledge essential to the establishment's service, research equipment, techniques or management. The assessment of such knowledge may reflect, apart from knowledge specific to the establishment, a high level of qualification referring to a type of work or trade requiring specific technical knowledge, including membership of an accredited profession;
(c)
An ‘intra-corporate transferee’ is defined as a natural person working within an organisation in the territory of a Party, and being temporarily transferred in the context of pursuit of economic activities in the territory of the other Party; the organisation concerned must have its principal place of business in the territory of a Party and the transfer be to an establishment (branch, subsidiary) of that organisation, effectively pursuing like economic activities in the territory of the other Party.
3. The entry into and the temporary presence within the territory of the Community or Croatia of Croatian and Community nationals respectively shall be permitted, when these representatives of companies are persons working in a senior position, as defined in paragraph 2(a) above, within a company, and are responsible for the setting up of a Community subsidiary or branch of a Croatian company or of a Croatian subsidiary or branch of a Community company in a Member State or in Croatia respectively, when:
—
those representatives are not engaged in making direct sales or supplying services, and
—
the company has its principal place of business outside the Community or Croatia, respectively, and has no other representative, office, branch or subsidiary in that Member State or in Croatia respectively.
During the first three years following the date of entry into force of this Agreement, Croatia may, on a transitional basis, introduce measures which derogate from the provisions of this Chapter as regards the establishment of Community companies and nationals of certain industries which:
—
are undergoing restructuring, or are facing serious difficulties, particularly where these entail serious social problems in Croatia, or
—
face the elimination or a drastic reduction of the total market share held by Croatian companies or nationals in a given sector or industry in Croatia, or
—
are newly emerging industries in Croatia.
Such measures:
(i)
shall cease to apply at the latest five years after the entry into force of this Agreement.
(ii)
shall be reasonable and necessary in order to remedy the situation, and
(iii)
shall not introduce discrimination concerning the activities of Community companies or nationals already established in Croatia at the time of introduction of a given measure, by comparison with Croatian companies or nationals.
While devising and applying such measures, Croatia shall grant preferential treatment wherever possible to Community companies and nationals, and in no case treatment less favourable than that accorded to companies or nationals from any third country. Prior to the adoption of these measures, Croatia shall consult the Stabilisation and Association Council and shall not put them into effect before a one month period has elapsed following the notification to the Stabilisation and Association Council of the concrete measures to be introduced by Croatia, except where the threat of irreparable damage requires the taking of urgent measures, in which case Croatia shall consult the Stabilisation and Association Council immediately after their adoption.
Upon the expiry of the third year following the entry into force of this Agreement Croatia may introduce or maintain such measures only with the authorisation of the Stabilisation and Association Council and under conditions determined by the latter.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
