New investment account for savers: State introduces tax-free investment option

Croatia is launching a new financial product aimed at encouraging citizen investment and savings. The Ministry of Finance has proposed a new law establishing the Croatian Investment Account (HRI), which will offer individuals tax advantages and minimal administrative fees for investing in financial instruments. This initiative aligns with the country's capital market development strategy and European Union recommendations.

Matej Bule, State Secretary at the Ministry of Finance, highlighted that the HRI is a novel feature in Croatia's financial system. Every adult citizen can open an account, including for their minor children. The account allows for both saving and investing, with a lifetime limit of 200,000 euros. This limit can increase by 50,000 euros to a total of 250,000 euros if individuals consistently contribute to the account for five years without withdrawals.

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This measure is comparable in importance to state or 'people's' bonds, for which citizens have shown great interest and which have generated around 16 billion euros in 20 issues.

Bule emphasized that this measure is comparable in importance to state or "people's" bonds, which have attracted significant interest. The HRI aims to enable citizens to benefit from Croatia's economic growth by investing in domestic companies. A key requirement is that at least 20% of their investments must be in Croatian companies listed on the stock exchange.

The HRI is a distinct personal account, not a standard transaction account, and can be opened through intermediaries like banks and investment firms, all of whom have expressed strong interest. The Croatian Financial Services Supervisory Agency (Hanfa) was involved in drafting the law and will oversee its implementation, while the Central Depository and Clearing Company (SKDD) will manage the register of deposits and withdrawals. Both Bule and Hanfa representatives stressed that this is a new service for all small investors, with no minimum investment amount required. Investment returns will be tax-free and do not count towards the 200,000 euro deposit limit. Withdrawals can be made at any time and are also tax-exempt. Citizens will have the freedom to choose their investments or delegate this decision to their intermediaries.

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This is also a step further, so that citizens also benefit from the growth of the Croatian economy by investing in shares of domestic companies through this account, and it is also an obligation that 20 percent of their investments must be in domestic companies listed on the stock exchange.