Tuesday, August 05, 2008

Croatia Online - Stunning Sunsets And False Dawns?


Croatia Online started two and a half years (and 222 posts) ago as a hobby, an outlet for a yearn to write, and a forum to share the exploration of a bountiful and hitherto relatively undiscovered country, warts and all. We inaugurated with a regular pattern of news, business research, destinations and, of course regular reviews of the latest in tourism news. Croatia Online has evolved, as has Croatia.

Very occasionally, we may have hijacked this site with a little self promotion in mind, but essentially Croatia Online remains our forum for free writing on a subject that has been endearingly easy to write about, and displays very few "warts". It has also allowed us to make many good friends along the way – fellow expats and Croatians.

Free writing on Croatia Online hasn’t been quite so much fun lately and we’re conscious of ever increasing gaps between posts. That’s partly down to pressure of work, irritating examples of outright plagiarism, occasional instances of “competitive rivalry” going a bit too far for our liking, but mostly down to a recent questioning of our roots and whether we are being completely honest with our readers.

Croatia is right to be proud of its natural and cultural heritage, and the independence it fought for so resolutely, at great cost. Croatia is a nation state that can choose its destiny - dare we suggest that Croatia will be judged as much by the journey as the destiny itself? It's our experience that this year’s journey is proving a little bumpy and circuitous for a number of reasons.

It’s easy to criticise a host country that isn’t your own and a great discourtesy without good cause and a great deal of thought. Throughout our time in Croatia we’ve endeavoured to adapt as far as possible, and find most of the cultural differences extremely refreshing. As we’ve said several times, the vast majority of Croatians we’ve met have been courteous, kind and helpful – perhaps not always as warmly welcoming as we might like but generally full of integrity. However Croatia is a country in transition and we very much hope that the transition pains are not, as they currently appear, felt too strongly by those foreigners who hope to spend more than just a couple of weeks holiday in such a beautiful country.

Croatia acknowledges openly its dependence on foreign tourists but even in this important area there are small signs that it might be beginning to sell its soul. In some parts of Croatia, drink and food prices have risen steeply for this year’s tourist season, parking appears to have become a “get rich quick scheme” for some with whole towns installing barriers and hourly rates rising sharply. The number of quality hotels has increased dramatically in recent years but the rates, in many cases, compare with a more developed Western Europe, and the five star service that is implied with the price is not always quite what it could be. Eastern Europeans, always very faithful to Croatia for good value apartment/beach holidays, were told peremptorily, earlier this year, that they could no longer bring their own food and drink with them as Croatia had decided to follow the relevant “EU regulations”. They cancelled their holidays en masse, to the surprise of the authorities, who promptly U-turned and decided Croatia would not be following EU regulations in this respect. Fine that Croatia is developing a strategy towards a better class of tourism but that can’t happen overnight and without some warning. Until the strategy and infrastructure is fully in place there’s a great risk that elite travellers will find their expectations are not met, visitors on a tight budget may find eg Bulgaria, Romania, Spain, Greece and Turkey more attractive and welcoming, and the “average” traveller will be caught between Croatia’s two stools.

For those that have chosen to live and/or work in Croatia, the year has been bumpier still. New laws introduced in January mean that owning a property no longer counts as one of the good reasons for a stay of longer than three months, or six months in any one year. So what happens to those that have sold up in their home country and moved lock stock and barrell to Croatia? Those that were advised to buy a property through a company, by the vast army of estate agents (foreign and local) that jumped on the rising property market bandwagon, are now met by silence when asking for advice on just how to cope with the new regulations on foreign owned companies used to purchase the property – the need to employ Croatian staff and invest a substantial amount of money in the company. And those foreigners running so far legitimate businesses in Croatia have been hit with the same sudden law changes and the likelihood that their business visa, allowing residency in the country for longer than three months, amongst other things, may not be renewed. Foreign owned estate agents have also been targeted with the requirement to pass an exam, in Croatian only, after an expensive course only available in a couple of cities.

Fair enough one might say – there’s a need to control rising property prices, rogue estate agents, companies that are essentially shams and excessive immigration, but are sudden and draconian law changes, so obviously targeted at the very foreigners that have, on the whole, been partly responsible for Croatia’s ever improving economy, the way to do it? And is the feeling engendered – effectively that foreigners' money is welcome but foreigners are not – a healthy one for a country that relies, to a certain extent, on foreign investment and tourism, and is hoping to join the EU?

This posting is not written lightly but comes from increasing feedback from a number of friends, contacts and colleagues that suggests, even with the best will in the world, it is becoming increasingly difficult to stay on the right side of the law in Croatia. Speaking for the fellow Brits we know, 100% of whom have grown up with respect for the law, whatever country they are in, for many it’s become an untenable situation. Some feel compelled to leave, whether or not they can realise a break even price for their property, or regardless of the fact that they have to start their business all over again somewhere else. Increasing and normally uncompromising inspections on property ownership, planning permissions, property letting and businesses, seem to be targeted mainly at foreigners. The Croatians we’ve spoken to seem used to law making that can be impossible to follow, and are generally left alone in their more practical interpretations of it. Foreigners risk losing their biggest investment – their property and/or their business, massive fines, and the threat of expulsion and a criminal record. All very unsettling though perhaps worst of all is the common complaint about how difficult it is to get hard information and facts.


Many of the reasons behind the law changes are understandable – the legislation itself, and its practical implementation are not, even to the very lawyers who are there to advise on it. The result is many very distressed Croatia loving and law abiding foreigners who can’t get answers, or are in limbo because they can’t get a decision from the authorities, or are confused because each person they talk to has a different experience or interpretation of the law, or now find they are unlikely to get approval to stay in their properties or to continue to run their business. You only have to read the various online forums to understand how many people are affected and the distress being caused. One of the best is the Visit Croatia site and the following links, the most active forums on the site, explain just a little of the confusion and what people are trying to do about it, including one enterprising individual who is consistently lobbying every European member of Parliament that will communicate with him:

http://visitcroatia.proboards21.com/index.cgi?board=living&action=display&thread=6145
http://visitcroatia.proboards21.com/index.cgi?board=living&action=display&thread=6119
http://visitcroatia.proboards21.com/index.cgi?board=living&action=display&thread=5978

Whilst the government is not helping to make foreigners feel welcome with its new focus on foreign residents and foreign owned companies, it can’t take all the blame: this is the first year that we’ve witnessed a number of nationalistic attacks, mostly verbal, on foreign registered cars and foreign visitors. It’s still very much a rarity but not a trend for the better, and this is also the first year that we’ve had consistent reports that certain parts of Dalmatian are more expensive than London …and it’s true!

The Croatian tourist board has, for some time, used the slogan “The Mediterranean that once was”. Change is inevitable, but increasing word of mouth reports from tourists and longer term foreign residents alike, that they don’t feel welcome in Croatia, or that it no longer provides value for money, or that it is becomingly increasingly nationalistic and diverging from Europe rather than converging, could, if not addressed, lead to a more apt slogan of “the Mediterranean that could have been”. Certainly the advantages of the Croatian Tourist Board’s massive spend on advertising could soon be wiped out by increasingly negative dinner table conversations, amongst foreigners wondering how to sell their properties and find a country that is happier to take their money.

What would we do if we were “king”?

1. Recognise that existing foreign home owners generally invested and continue to invest in Croatia abundantly and in good faith, encouraged by the authorities and abetted by locals cashing in on Croatia’s popularity as a dream "place in the sun destination", sometimes at hugely inflated prices. Help them to meet reasonable demands and reasonable and transparent law.

2. Recognise that small entrepreneurship, foreign or domestically owned, is the lifeblood of a strong economy and should be welcomed. Yes companies should follow certain basic rules and pay their taxes, but make the law friendly towards businesses of any size that are contributing to the economy – from little acorns…..

3. Announce a general amnesty for already established foreign owned companies, and foreign property owners and long term residents, to enable them to continue living and/or working in Croatia providing they meet the same basic requirements as before, and are paying reasonable and proportionate dues. Perhaps even a transitional period and assistance to meet stricter but still reasonable requirements so they have time to decide whether they have the will and the means to remain in Croatia. Currently many people feel they are as good as being expelled, at short notice, by default.

4. Provide transparent and clear rules for newcomers to Croatia that explain the steps for buying a house or setting up a company, or working in Croatia, or residing for longer than three months. If people know what the rules are before they invest, and the precise steps to meeting them, they have a free, informed and fair choice before making such an important decision.

5. Provide expert specialist advisors, perhaps listed on a government website, who are consulted by the government on prospective law changes affecting foreigners, and understand them sufficiently to be able to give clear information and advice.

***

And finally….!

1. To holiday makers – Croatia is still a great place for a holiday but it’s best to stay away from the best known tourist centres – Hvar, Trogir, Dubrovnik, etc - in the high season if you are travelling on a budget.

2. To all readers – apologies for the rather sombre tone of today’s posting. Unfortunately, it was a matter of conscience but we hope that now the subject has been aired, we can carry on enjoying the best of Croatia, hopefully within the “foreigner friendly environment that once was”.

3. By coincidence, today’s posting coincides with Croatia’s Victory Day or, more correctly, the "Day of Gratitude to the Homeland Defenders". Today marks the 13th anniversary of Operation Storm, the military offensive launched in 1995 and led by General Ante Gotovina, to recapture territory held by rebel Serbs for four years. We hope that, as well as enjoying the bank holiday and celebrating its freedom, Croatia can look forward to ever better relationships with its foreign neighbours, near and far.

4. To Croatian readers and friends – it has been a source of great comfort, in the past, to know that bureaucracy and “sledge hammer to crack a nut” legislation affected Croatian and foreign individuals equally alike. This doesn’t seem to be the case any longer and this posting is prompted by the strength of dejection amongst a number of our good expatriate friends here, and just a little depression ourselves. We know other countries, including our own, can be pretty difficult places for foreigners but feel that the recent trend in Croatia is disturbingly and increasingly negative. That's compelled us to air these issues in the hope that it will encourage a little debate, for the sake of honest blogging, and in order to move swiftly on.

5. As we’ve said before, if it was too easy, everyone would want to live here!

***

Today’s photo appeared with our first posting, back in January 2006, and features a fire plane, framed by two windsurfers, landing on the sea by Kaštela on a sunny day, to pick up more water to put out a bush fire – our best endeavour to find an image depicting a variety of the earth’s sometimes conflicting elements!

13 Comments:

Blogger Oliver said...

first off: very good posting.
although im not living in croatia (anymore) i notice the same trend.

however i wont go into detail since your points all utterly reflect especially the personal, passionately feelings
_not only foreigners_ suffer.

from my point of view croatia is still a young country, still in an early phase of development. it surely knows it true status as a tourist destination and what visitors, travellers, and also immigrants bring and mean to the country. on the one hands side croatia needs to adjust to the eu, law and bureaucracy wise willing to bring foreign investors and money into the country and is maybe overspeeding the process, on the other hands site "the mediterranean as it once was" is not only a slogan, the people love their country (as immigrants, who decided to live there do) and the country administration will support them as much as possible... all this collides.

croatia needs time, needs the foreign support. croatia is steady developing and will find its way, i thing these problems will be solved in the next years (maybe/must) rolling back complex and unnecessary laws - maybe with a "boom" when tourist will stay away... but failures are to learn from them.

to be honest - for me as a croat, it hurts to read your post. and so does for everyone loving and living in this country KNOWING these problems youve wrote about.

/oliver

12:26 pm  
Blogger Jane Cody said...

Oliver

Many thanks for taking the time and trouble to comment - it hurt me to write it as well but it was hurting a lot more to ignore the problem. I think you're absolutely right in what you say about Croatia being a young country and needing time. It's got so much to offer that I think we sometimes expect to much too quickly - however, it's sad for me to hear people who previously loved living here, who didn't expect too much, now feeling that they're unwelcome, and worse - "illegal"!

12:51 pm  
Blogger Christine said...

Hello!

Well... I am getting my "stuff" organised here before my big move to Croatia soon and the start of an eco-friendly project in a quiet area... I have quite a few Croatian friends, am not aiming at "just making money" but at a certain quality of life, and need all the encouragements that can be :-) Hum :-)

So reading your post is a bit depressing right now as the selling-the-house part here is not going too well either (thanks to inflation, rising costs of petrol, etc.) but I'm very strong-headed and guess what? I'll do it :-))

Anyway - if you have any advice on what procedure to follow or any person to contact right now, it's most welcome!! :-)

All the best from Belgium...

Christine

11:35 pm  
Blogger Jane Cody said...

Hello Christine

Thanks for your comment and sorry to depress you. If you want to play it by the book and you're planning to stay for longer than three months then you will need to contact the Croatian Embassy in your country and apply for an extended stay there. It's no longer possible to do this from within Croatia. The Embassy should be able to supply you with all the details and alternatives - if you're staying in a quiet area in Croatia, it's highly likely that the local police may be as confused about the new laws as we all are.

Good luck!

10:27 am  
Blogger Jane Cody said...

Readers of this posting may be interested to learn of how a similar erosion of expat rights was dealt with in France. Here's a summary of the relevant points from a Croatia Online reader, resident in France.

***
Very briefly, towards the end of last year we received a letter from the French Health Service telling us that from the beginning of April this year we would no longer be covered by the French basic healthcare scheme and we would have to have totally private health cover. This applied to all early retirees in France (under the UK retirement age of 65 [men] and 60 [women]) despite the fact that we were already fully intregated into the French health system. Whilst this covered a very small percentage of Brits living in France, President Sarkozy deemed it a good proposal to help cut the French budget deficit!

As EU citizens we had to fulfil two requirements to have the right to live in France. The first, to have sufficient financial resources so as not to be a burden on the French state (we have) and have health cover. The latter requirement was fulfilled by having cover under form E111 for two years and subsequently being accepted by the French state health insurance scheme (CMU).

Brits like a fight, especially when their backs are to the wall and Sarkozy got one. We wrote to the Foreign Office, MEPs and the press; you may have seen some of the coverage.

The fundamental issue for Brits here in France, covered already by French health insurance, was that it was seen as an attempt to remove, retrospectively, our ability to fulfil one of our two conditions of residence. Discussions took place at government level and the upshot was that Sarkozy lost. Brits in France already covered by French health insurance remained covered; new arrivals would not be (but at least they know where they stand).

It seems to me that your legal rights in Croatia are being eroded retrospectively. I know that Croatia is not an EU member state, but it is an applicant member and is probably very conscious of doing what is right to obtain membership. If enough Brits and other EU citizens resident in Croatia make a fuss (see above), plus suggesting the EU Court of Human Rights as a forum, I am sure the message will get back to Croatian politicians. In addition if the Croatian bureaucrats decide on legal process, then appeal; by the time it is sorted out Croatia could well be a full EU member!

10:33 am  
Anonymous Jadranka said...

Dear Jane!
I've read with "crowded" heart your post. I am hungarian journalist, working for the greatest hungarian newspaper: www.nol.hu/adria.

We moved to Split on spring of 2007. It was my dream, I learned croatian language, before I was traveling all over the country repeatedly, I had 10 year knowledges of the land.

But.
Living in Split I recognised: "my Croatia" is does not exist in reality....

We had similar problems than you, that's why living now in Izola (Slovenia). And see, here I got all that back, which I was made to lose there.

I travel often into Croatia, yet always this seacoast my love, but I admit it, from here much easier to love.:-)))
I wish much patience and beautiful days: Agnes Federer

3:28 am  
Blogger rif said...

jane,
I read your blog with great interest.I am a Brit married to a Bosnian - we have never lived in any part of ex yugoslavia since our marriage. Due to career reasons,and having our 3 kids as well as an extended family to support, we have worked in Germany, USA,Switzerland and now Greece.We have however always dreamed of a home at the seaside in "Yugoslavia" ie I wanted my husband to finally come back to his country .Of course there is no "yugoslavia" now and as a Bosnian passport holder he cannot purchase in Croatia. Did you know that? Of course I could have bought a house there as a Brit but in principle we wanted him to be the joint owner....but thats not allowed! Our best friend who is Croatian but took the Italian passport (wife Italian) during the war also cannot buy a house in his country of birth ie Italians can't buy in Croatia..even if they are of Croatian descent or born in croatia.. We have had to watch as prices spiralled and we got left out since we couldn't buy. That said my husband has always been cautious ie he says that a land and its people that can throw out so many 1000s of serbs can't change their attitude that quickly..Also we kept reading stories of Serbs and Bosnians being "controlled" and losing their "illegal" houses (some of which were then sold to eg Germans?).He has been predicting for the last 4 years that its only a matter of time before the racism turns on the Brits. I do hope he is wrong but won't be surprised if he's right. Its the Balkans after all...
We are wondering if the Germans are experiencing the same issues? They decided years ago that Croatia is "their" seaside and have had free reign in purchasing.Are they also suffering the same issues now as the brits?
BTW - we too would love to move to Izola (we married in Piran Slovenia 25 years ago) but unfortunately the house prices are way out of our league!!

6:48 pm  
Blogger Jane Cody said...

Hi Rif

Many thanks for your comment which I find rather humbling. I'm afraid I hadn't registered the fact that those far more deserving than we Brits, in terms of roots, faced even greater problems in buying properties in Croatia. I'm not an expert in house prices in Slovenia but I'd have thought if information was openly available on the Croatian market, no one in their right mind would want to buy until the law is clearer and more stable, and prices more realistic.

You raise a very interesting question about the German ex pat population - I'd guess they fall under "foreigner" in exactly the same way as Brits do but I don't know and it would be interesting to find out. I'd also guess however that they fall "less foul" of the new residency laws in that there are proably less German permanent residents/retirees than there are Brits, though again I don't know.

Many thanks for your insight and I hope you find the home and the destination you want, free of bizarre restrictions, and at a sensible price, in not too long a time.

Let's all hope that Croatia starts to look more positively outwards, rather than continuing to increasing the barriers to incomers.

8:32 pm  
Blogger Jane Cody said...

Readers affected by the changes may be reassured to know that ITV producer Phil Stein is interested in talking to Brits who have been caught out by the new laws.

Phil's message is as below:

Hi Jane. My name is Phil Stein, I'm a TV Producer at ITV in London. I read your postings about Croatia's new immigration laws- it seems shocking that so many people are being forced to abandon the country. I'm really interested in speaking to Brits who have been caught out by these new laws and are finding their homes and businesses under threat. If you (or any of your readers) know someone I'd like to speak with them. I can be reached at phil.stein@itv.com

Thanks
Phil

8:18 pm  
Anonymous Keith Pierce said...

Hi Jane,

Your post was very well written and really captures the feeling of despondancy that many of us Brits are feeling at the moment.

Many of our close friends and clients have also chosen to throw in the towel, some after a good fight, others choosing not to having seen and heard about so many unsuccesful cases.

i do not know your own situation, but wish you well in any case.

Keith Pierce.
keith@inlandcroatia.com

6:23 pm  
Blogger Jane Cody said...

Thanks for the comment Keith. We didn't buy here so we have more flexibility than some. However, looking at your website, I'm tempted! I spent a couple of weeks in inland Croatia and it's beautiful, affordable and such a refreshing change. There are rumours of changes to the law, for the better, so let's hope that happens soon before it upsets too many expat lives.

Hope all goes well with you and your friends too.

7:31 pm  
Anonymous istracpsboss said...

Hi Jane

Rif's comment on Italians not being able to buy here has not been true for a year. Italians always bought in Istria but simply did it through a Croatian company. It is no longer necessary. They can now buy in their own names. I'm surprised at the comment about Bosnians not being able to buy. I've sold on behalf of Bosnians, but never to them, but I would have thought they could still use the company route. There are certainly Bosnians, some in high positions, owning houses here.

The other big change, as from February, has been that EU nationals can now buy without having to go through the cumbersome process of getting Ministry of Justice (Previously Foreign Affairs)acknowledgment that they came from a country that permitted Croatians to buy there.
this means that they can get entered into the Land Registry in a matter of two or three weeks, rather than having to wait months.

The residency problem continues, though. People who had retired here and lived here for under 5 years found themselves unable to get 12 months residency permits and could only get 6 months in any year. Where were they supposed to go for the other 6 months? They lived here and were not second home owners. Worse, when many sold up in the UK, they bought cheaper properties here and gave money to their kids,to help them with buying homes of their own, reducing their capital and leaving insufficient to buy anything remotely comparable back in the UK. These were people that brought out of season business, supporting shops, restaurants and tradesmen and were good for the country. One family had to have their dog put down before returning. Bringing it here, duly chipped, had not been a problem, but returning to the UK would have meant quarantining him, and seperating him from the people who loved him for weeks was something they couldn't impose on him after having him for many years.

Business owners, employing Croatians and paying Croatian taxes, are finding the same thing.
It doesn't make sense, putting them through all this, as once we are in the EU, they will all have the right to live and work here anyway. It is no wonder that some are just sitting tight and hoping that in a few months the problem will go away.

The strangest thing is the categorisation issue, particularly for new property. It is actually costing the Croatian finances a fortune. If people buying, intending to rent out, don't buy a new property, then the government doesn't get the 22% PDV or the 5% PTT and the property just sits there, a burden on the local builder. Furthermore, the putative buyer is not advertising the property for rental and promoting Croatia and, as there is no rental, there is no tax earned on the rental. The government loses out all along the line. No-one seems to know why, or why the law is being observed in some places and not others.
A foreign business owner in one place can only get a 6 month residence permit, but if he reregisters his business 50 miles away, he can. It is the illogicality of so much of it that is sapping people's faith.

On the one hand, we love being here and integrating, but on the other, we are increasingly aware that all of us, Croatians and foreigners alike, appear to be at loggerheads with the government, rather than the government representing us. Croatians have been used to it and simply work around it, one way or another, but foreigners used to greater rationality and greater rights, find it very difficult.

Estate agents and property managers can all tell you stories of overseas clients mistrusting them because some of the problems occurring are literally unbelievable to them and they think we are hiding something and inventing the problems to cover it.

Typical was one the other day who had borne with us through all sorts, not necessarily legal problems, only to find at the last minute that the contract couldn't be registered because since Jan 1st, they need an OIB and lots haven't gone out yet. I had an exasperated email talking of international property scams. It was the straw to break the camel's back. Fortunately, the lady at the local tax office was helpful and we eventually resolved it after a couple of days, but for a day or so, until I could point him to forums discussing them, he thought there was more to it.

Prices do seem to be creeping up. I noticed it with a coffee the other day, although, in fairness, it was still enormously cheaper than anything comparable in the UK or Italy.

I just hope everything sorts its self out before too much of what still makes this a fantastic place to live and work is ruined.

I'm in for the long haul! I've fortunately got citizenship and I'm not personally affected by the visa problem.

4:46 pm  
Blogger Jane Cody said...

Many thanks for the comment. Yes, aware of the February changes to buying as an individual but there have also been a lot of changes to the regulations applying to foreign owned companies which makes that route increasingly difficult.

On the plus side, we hear that there may be imminent good news on the residency regulations - fingers crossed!

5:05 pm  

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