Croatia’s deal flow is lively, with investor appetite outpacing the supply of high-quality targets and activity visible across a range of sectors, according to Attorney at Law Ivan Zornada, who also focuses on an important draft for the FDI-screening regime, possible US tariff impacts, and succession-driven exits.
"Croatia’s current market mood and deal flow are vibrant," Zornada begins. "For the first time in a long while, it genuinely feels like there are more investors than quality targets. Croatia is a relatively small market, so just a handful of sizable transactions can set the tone, but the pipeline is broad and active." As for which sectors are pulling the most weight, Zornada indicates that it is "a little bit of everything. Because the economy is diversified and the market is compact, momentum quickly becomes visible across multiple industries when capital is available. What’s consistent is strong competition for well-run assets."
Taking aim at the legislative front, Zornada goes on to say that the "biggest item on the agenda is the draft framework for screening foreign direct investments. It matters greatly for cross-border deals, especially with non-EU investors, like US-based funds. The draft was published for comment, but, frankly, the engagement was limited and the text reads at points like a less-than-tailored transposition from another system." According to him, clarity is needed, particularly around transactions already in motion and transactions already completed.
Regarding the main pain points with the FDI screening mechanism draft legislation, Zornada highlights timing and procedure. "By year-end, we expect a rule that places certain deals under mandatory screening; however, the detailed procedural rulebook could take months to finalize. That creates a practical impasse where parties will have an obligation without an operational roadmap." Crucially, he feels that the obvious risk is to ongoing deals in sensitive sectors. "Some may feel compelled to pause until the mechanism is fully operational. I don’t expect many to be affected, but those that are could be large, given the nature of the sectors typically captured by FDI regimes."
Outside of M&A, Zornada shares that corporate work is mostly dictated by compliance efforts across the board. "State-owned and municipally-owned companies, as well as enterprises with public-sector touchpoints, are under closer scrutiny. With Croatia aiming to join the OECD in 2026, companies are proactively aligning with OECD guidance on corporate governance, integrity, and anti-corruption; that’s translating into policy upgrades, board training, and internal control enhancements," he explains.
