ENTRY INTO SCHENGEN AND ITS IMPACT ON THE BUSINESS CLIMATE AND INVESTMENTS IN CROATIA

The formal and legal consequence of Croatia’s accession to the Schengen area is certainly the abolition of border controls and the establishment of a common external border between the countries of the same agreement. However, the long-term practical consequences are much more extensive. Namely, this enables the realization of the concept of free movement of people, goods, and services within the European integration area, which has a stimulating effect on various economic sectors, especially on the trade and tourism sector, as well as on the circulation of the workforce.

The essence of the agreement is based on the idea of flexible movement, which allows for multiple benefits. For example, Croatia, which has long established itself as one of the most desirable European tourist destinations, is creating conditions for greater fluctuation of guests and an increase in the number of overnight stays. In this sense, the question of foreign citizens’ property rights in the country is increasingly being raised. Also, the reduction in waiting times at border crossings leads to the minimization of costs in the transport industry, increasing the competitiveness and efficiency of domestic exporters. All of this leads to Croatia’s accession to the European Union’s single market and opening opportunities for trading on different markets. In addition, the abolition of border control also strengthens the flow of labor,

leading to networking, heterogeneity, and productivity development, and significantly simplifying the employment of foreign citizens from a legal perspective.

Due to all the above, Croatia becomes economically more resilient and attractive for business, gaining the opportunity to take advantage of all the benefits of its geostrategic position. By following the parallel growth of GDP, it attracts foreign investors and makes foreign investments more frequent than ever before.