INOZEMNE IZRAVNE INVESTICIJE U REPUBLICI HRVATSKOJ – MOGUĆNOSTI ZA SREDNJA I MALA PODUZEĆA
Foreign direct investment is an example of globalization in which money or other assets are spilled between the two countries to improve the business of the existing company. According to the UNCTAD (2019), this type of investment is still the most commonly used form of investment, although it has been decreasing for the third year in a row due to the decline in investments in Europe. This trend is confirmed by the research by A. T. Kearney (2019) who blames political and economic risks within those markets, growing protectionism and global and regional geopolitical instability. The same trend is also seen in the Republic of Croatia, which recorded a reduction in foreign direct investments in 2018, although the economic situation is improving. Furthermore, according to the Doing Business Report and the Global Competitiveness Index, the Republic of Croatia recorded a fall in the charts in 2018, while the most problematic factors have stayed the same: the ineffective government bureaucracy, unstable policy, high administrative barriers, high tax rates, corruption, lack of innovations and difficult financing. The same problems were identified by small and medium-sized enterprises that make up to 99.7% of economic entities in the Republic of Croatia and as such make up the backbone of the development of the economy. This paper identifies problems that small and medium-sized enterprises are struggling with to attract foreign direct investment. The example of five companies that have invested in small and medium-sized enterprises is given, giving specific recommendations to future investors, as well as general recommendations for making an investment climate stronger and more attractive.