RESTRICTED
WORLD TRADE WT/ACC/HRV/17
29July1996
ORGANIZATION(96-2991)
Original: English
ACCESSION OFCROATIA
Communication from Croatia
Thefollowing information onEstablishing aBank, Branch andRepresentative Office hasbeen
received from theMinistry ofEconomic Affairs oftheRepublic ofCroatia.
_______________
THE ESTABLISHMENT OFABANK,1BRANCH AND
REPRESENTATIVE OFFICE (FOREIGN BANKS) INTHE
REPUBLIC OFCROATIA
Theestablishment ofabankandabranch intheRepublic ofCroatia isregulated bytheLaw
ofBanks andSavings banks (hereinafter referred toas:theLaw) andcorresponding laws, rules and
regulations.
ESTABLISHING ABANK
Foreign anddomestic physical orlegalpersons mayestablish abankintheRepublic ofCroatia
through orbymeans ofreciprocity. Confirmation ofexisting reciprocity willbegranted bytheMinistry
ofJustice.
Initial capital ofthebank mustbeatleasttheequivalent of5million Deutschmarks (DM)
intheCroatian currency Kuna (HRK), determined bytheNational Bank ofCroatia exchange rate,
onthedateofregistration.
Banks engaged inoneorseveral banking operations named inarticle 3,paragraph 1ofthe
Lawmust begranted approval forsuchactivities.
TheNational Bank ofCroatia willusetheinitial capital asacriterion forissuing thelicenses
forperforming external payments andexternal credit operations. Thelicense performing external
1Banking activities are:
- acceptance ofalltypes ofdeposits
- loangranting
- foreign exchange andforeign currency transactions
- purchase ofbillsofexchange andchecks
- theassumption ofcollateral securities, guaranties andother capital commitments for
other persons
- payments operationsWT/ACC/HRV/17
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payments andexternal credit operations willbeissued tobanks whose initial capital isatleasttwo
times therequired amount forestablishing abank. Thelicense expires oneyearafterthedateof
registration, andinthattimethebankshould havetripled itsinitial capital.
Thenecessary documents fortherequest ofestablishing legal status andregistration of
abank are:
1. proof ofrequired initial capital;
2. proof ofatleasttwomanaging directors withtheprofessional knowledge tomanage thebank.
Therequest foranoperating license must alsoinclude:
1. thebankstatue;
2. adetailed description ofthebanking activities andtheplaninwhich these activities willbe
carried outforthenexttwoyears.
3. evidence ofthefounder 'sshare oftheinitial capital foreachrespective founder;
4. information about thefinancial status ofthefounders andtheirpossible capital andmanagement
connections;
5. proof ofpersonnel, technical means andorganizational abilities tocarry outtheoperations
envisaged inthetwoyearplan;
6. certificate ofreciprocity, ifthefounder isforeign.
ESTABLISHING ABRANCH
Abranch isconsidered adomestic banktherefore theappropriate regulations apply.
Abranch isnotconsidered alegalentity butislegally entitled toenter transactions withthird
persons intheterritory oftheRepublic ofCroatia inaccordance withtheauthorization oftheparent
bank.
Aforeignbankmay,underreciprocity,establishabranchtoperformspecificbankingtransactions
(stipulated inarticle 3paragraph 1oftheLaw).
Initial capital ofthebranch mustbeleasttheequivalent of2.5million Deutschmarks (DM)
intheCroatian currency Kuna (HRK), determined bytheNational Bank ofCroatia exchange rate,
onthedateofregistration.
Aforeign parent bank opening abranch must employ atleasttwopersons withpermanent
residency intheRepublic ofCroatia authorized toperform banking transactions, tomanage thebranch
andtorepresent theparent bankintransactions completed bythebranch onbehalf oftheparent bank.
Thebranch isobligated tofollow thelawsandregulations oftheRepublic ofCroatia.
Aforeign bank wishing toestablish abranch intheRepublic ofCroatia must apply foran
operating license totheNational Bank ofCroatia.
Theapplication must include thefollowing documents:
1. documents disclosing thename, legalstatus andheadquarters oftheparent bank;
2. documents disclosing theoperations oftheparent bank;
3. annual reports ontheparent bankoperations forthelasttwoyears;
4. adetailed description ofoperations tobeperformed bythebranch;WT/ACC/HRV/17
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5. documents disclosing theamount ofdisposable capital ofthebranch;
6. acertified statement whereby theparent bankassumes responsibility forallliabilities entered
bythebranch intheRepublic ofCroatia;
7. name ofthepersons whowillmanage thebranch anddocuments supporting theirexpertise,
required formanaging thebranch;
8. statementbyanauthorizedsupervisorybodyinthecountrywheretheparentbank'sheadquarters
arelocated, evidencing either thatthesamebodyhasgranted itsconsent regarding theopening
ofabranch intheRepublic ofCroatia, orthatsuchaconsent isnotrequired;
9. proof ofexisting reciprocity.
Within a60dayperiod, theNational Bank ofCroatia willrespond positively withalicense
ornegatively totheapplication forestablishing abank orabranch ofaforeign parent bank. When
alicense isgranted bytheNational BankofCroatia thebankorbranch mayenterinthebaking activities
stipulated inArticle 3.paragraph 1oftheLaw.
TheNational Bank ofCroatia willrespond negatively intheevent thatnotalltherequirements
aremetupon application.
Thelicense forbanking activities forabranch willbetaken away orterminated ifthe
foreign-establishing bankhasterminated theapproval forperforming banking activities.
TheNational Bank ofCroatia reserves therighttowithdraw thelicense ifthebankorbranch
isnotinoperation within sixmonths ofapproval orifthedocuments included intheapplication are
faulty. Thedecision ofthewithdrawal ofthelicense isfinalintheadministrative procedure andmay
notbecontested.
ESTABLISHMENT AND OPERATION OFAREPRESENTATIVE OFFICE OFAFOREIGN
BANK
Theregulations forestablishing arepresentative office intheRepublic ofCroatia arepublished
intheNational Gazette number 104,November 19,1993.
Arepresentative office isnotconsidered alegalentity, butcanperform representative baking
transactions inaccordance with theauthority granted bytheforeign bankintheLaw.
Aforeign bank mayestablish arepresentative office intheRepublic ofCroatia alone orin
cooperationwithotherforeignbanksunderconditionsofreciprocity.Aforeignbankwitharepresentative
office intheRepublic ofCroatia mayopenmore thatonelocation. Thepurpose oftherepresentative
office maybetoperform market research inthefinancial andbanking sector, promote andinforming,
andtoselfrepresent.
Therepresentative office oftheforeign bankcannot perform banking transactions fromarticle 3
oftheLawonBanks andSavings.
Aforeign bank mayestablish arepresentative office intheRepublic ofCroatia alone orin
cooperationwithotherforeignbanksunderconditionsofreciprocity.Aforeignbankwitharepresentative
office intheRepublic ofCroatia mayopenmore thatonelocation.
Therepresentative office musthaveacertified statement bytheparent bankthatittakesliability
fortheobligations entered bytherepresentative office intheRepublic ofCroatia.WT/ACC/HRV/17
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Therepresentative office oftheforeign bank maybeestablished andstartoperations upon
entering theappropriate information intheRegister ofthenational BankofCroatia. Upon registration,
theNational BankofCroatia willissuearegistration certificate, which willbepublished intheNational
Gazette atthecostoftheforeign bank.
Thenecessary documents forregistration are:
1. firmofthefounder (certified records from theCourt Register);
2. name andlocation oftherepresentative office;
3. activities oftherepresentative office.
Inaddition totherequest forregistration, theforeign bank must present:
1. adetailed description ofoperations tobeperformed bytherepresentative office;
2. acertified statement bytheforeign bankthatittakes liability fortheobligations entered by
therepresentative office intheRepublic ofCroatia;
3. name oftheperson(s) managing therepresentative office;
4. statementbyanauthorizedsupervisorybodyinthecountrywheretheforeignbank'sheadquarters
arelocated, evidencing either thatthesamebodyhasgranted itsconsent regarding theopening
ofarepresentative office intheRepublic ofCroatia, orthatsuchaconsent isnotrequired;
5. proof ofexisting reciprocity, more specifically, documentation thatthecountry oforigin
fortheforeign bank allows Croatian banks toopenrepresentative offices, upon therequest
oftheNational Bank ofCroatia.
ThecompliancewiththelegislationoftheRepublicofCroatiawillberegulatedbythecompetent
inspection authorities.
ByDubravko Radoševic´
Director ofInternational Monetary Relations
National Bank ofCroatia