Late 2020 without a visa and double taxation with the US?
Even the European Commission threatened the USA that it would introduce visas for citizens of the USA and Canada, but the EC still gave up on that move. The Holy Grail and the only solution to this story is for the percentage of rejected visa applications to be less than three percent. And according to the information from the American Embassy, Croatia is very close to fulfilling that. Ivan Barbarić, Vice President of the Croatian Chamber of Commerce for International Affairs and the EU, pointed out: “The United States is the world’s leading economic power and the largest global importer. Their GDP in 2018 exceeded 21 trillion dollars. In comparison, the value of Croatian trade with the United States, which amounted to 620 million dollars last year, is literally a drop in the ocean. The good thing is that out of those 620 million, over 400 are Croatian exports to the United States. In the first half of this year, our exports to America increased by 25 percent compared to the same period last year. These are not big numbers in total, but the positive trend is certainly gratifying”. But he stressed that the biggest obstacles to the faster development of economic relations between the United States and Croatia – visa regime and double taxation. US Ambassador to Croatia Robert Kohorst; Source: HGK They also discussed the US tax system, which was presented in more detail by Goran Križanac from KMPG. “You have corporate taxes at the federal level, but also at the level of each state. Dividends for non-tax residents are taxed at a rate of 30 percent, which creates problems for Croatian companies. This is a high rate, and if we had an agreement on avoiding double taxation, it would be between 10 and 15 percent. This certainly hinders Croatian investments in the United States”, Križanac emphasized, noting that contributions for pension and health insurance are significantly lower in the USA than in Croatia. He advised entrepreneurs to definitely turn to local tax experts to avoid additional costs in doing business. Goran Križanac, KMPG: Dividends for tax non-residents are taxed at a rate of 30 percent and this creates problems for Croatian companies. The American Chamber of Commerce in Croatia, in cooperation with the Croatian Chamber of Commerce and the Avitus Group, organized the “America Made Easy” event where Croatian companies could learn more about the ways in which they can enter the United States market. There is no better way to test your business idea than entering the US market, said Andrea Doko Jelusic, CEO of AmCham. “It is a large and potent market, but it is also specific, with numerous requirements. Several Croatian companies are already operating quite successfully in the USA, and today we will show what is important for others to successfully cross the Atlantic.”, Said Doko Jelusic. Two painful topics and the main brakes that have been discussed for years and a positive outcome is expected. But we can’t wait for that either. It is important to emphasize that Croatia with Bulgaria, Romania and Cyprus are the only remaining EU members that do not enjoy the principle of reciprocity between the EU and the US, which certainly leads to unequal relations. IMPORTANT INFO FOR TOURIST EMPLOYEES TARGETING THE MARKET NOW.IN 1783, THE REPUBLIC OF DUBROVNIK WAS THE FIRST STATE IN THE WORLD TO RECOGNIZE THE UNITED STATES OF AMERICA. US Ambassador to Croatia Robert Kohorst also referred to these problems, saying that the US Government has a special team that is preparing agreements on the abolition of double taxation with countries around the world, including Croatia: “Our administration is primarily focused on large countries, but we are systematically trying to encourage our Ministry of Finance to move Croatia to the list of priorities. It is good that the agreement with Croatia does not require any special preparations, but can be based on agreements with other EU member states. As far as visas are concerned, Croatia should fall below 3 percent of rejected applications, and at the moment you are very close to that figure and I think it is only a matter of time before it is abolished, perhaps by the end of 2020”, Said the Cohort. Robert Kohorst, US Ambassador to Croatia: It is only a matter of time before visas are abolished, perhaps by the end of 2020 Frank Levene from Avitus presented the cultural differences that business people expect “across the pond”. “You need to look American, have an American cell phone number, a web address ending in .com, know the imperial system of measures. Don’t focus solely on big cities because they are expensive and the competition is relentless, the US is a huge country and offers many opportunities even in less famous places”, Explained Levene.