The stone houses of Istria are a Hit

We are referring here to luxuriously furnished stone houses in the typical native-style of Istria, whose living-quarters range from about 150 to 200 square meters

Ever since Croatia has become an official candidate for European Union Membership in June 2004, there have been more and more disputes about the consequences of this membership on the Croatian real-estate market. Like all the candidates before - upon joining the EU - Croatia will be bound to allow unlimited circulation of goods, services, capital and people. Since the EU legislative regulations grant unlimited rights on estate purchasing in any member country, the Croatian economy is becoming increasingly exposed to the largest foreign investments for real-estate ever.

Approval of the Ministry of Foreign Affairs

According to the Agreement on stabilization and merging, after the four year transition period expires, EU citizens will have unlimited rights to purchase real-estate in Croatia. Even now, in the transition period, foreign citizens have the right to buy real-estate in the Republic of Croatia, if they have the approval of the Ministry of Foreign Affairs. The approval can be gained by citizens of the countries with which Croatia has signed the Reciprocity Agreement. An ‘exceptional approval’ can even be gained by citizens of other countries. Therefore foreign citizens can purchase Croatian real-estate under the same conditions that a Croatian citizen can in the subject country. As a result of the reciprocity principle, sale of Croatian real-estate is available to the citizens of

Germany, Britain, Ireland, Finland, Sweden, France, Spain, Slovakia, the Benelux states, and about ten of the states in the USA. Data available from the Croatian Ministry of Foreign Affairs indicates that the most numerous buyers of Croatian real-estate up till now have been German, British and Irish citizens. The same data indicates that the greatest amount of the real-estate was bought in the areas of Istria, Dubrovnik, the Riviera of Makarska, and on the islands and the coastal strip of mid-Dalmatia.

Thanks to an “omission” in Croatian law though, a lot of real-estate was bought in Croatia by foreign citizens using ‘fake companies' which they could establish in the Republic of Croatia with a minimal bank deposit in the amount of 20.000 kuna (approx. 3.000 EUR). Since this manner of purchase was legal, and remarkably fast, there are many more foreign citizens who have decided to have both a company and property in Croatia.

The full article can be found on pages 66-67 of January 2007 issue.