The insider’s guide to doing business in Croatia and Serbia

Two senior executives have recently swapped countries and offer expert tips for those looking to invest

Phil Smith


Intesa Sanpaolo is one of Europe’s leading banking groups, with 7.2 million customers served through 1,072 international branches across Europe, the Middle East and Africa.

Two of the nations in which it operates are Croatia (via Privredna banka Zagreb) and Serbia (Banca Intesa Beograd). Two senior managers swapped positions last year; Gabriele Pace is now deputy CEO in Serbia, while Alessio Cioni became deputy CEO in Croatia.

The prospects for growth look good in both countries. What would you say are likely to be the main drivers?

Alessio Cioni“Post-recession recovery was primarily led by a growth in exports surrounding EU accession; more recently we’ve seen a strong recovery in domestic demand. It is expected that over the next few years, growth will average around 2.5 per cent, with inflation and exchange rates stable, as well as gradual strengthening of bank lending activity.

Looking at specific sectors, tourism has shown the biggest upward trend over the past couple of years, both in terms of employment and investments, and will continue to do so in the medium term. The manufacturing industry in general is positive as many sectors such as food processing, electrical equipment and pharmaceuticals become more export oriented. The construction sector has also started to show signs of recovery, which will be further supported by the commencement of large infrastructure projects like the new Pelješac bridge.”

Gabriele Pace: “Over the past several years, Serbia has put itself firmly on the road to EU accession and transformed itself into a stable economy that today boasts fiscal balance, growing investments and a low and stable inflation rate. The latest projections by the central bank revise the country’s 2018 economic expansion upwards to 4 per cent, with growth being primarily driven by better-than-projected results in agriculture and construction, as well as an accelerated investment flow. Manufacturing is also expected to continue contributing to GDP growth on the back of past foreign investments, while I would also highlight the ICT sector, which is developing quickly, including the digital and creative industries.”

You both mentioned the EU. How important has EU integration been for Croatia and how will Serbia’s bid to join the bloc impact legislation, particularly in the banking industry?

Alessio Cioni: “As a result of EU membership, Croatia has made reforms in many sectors. The flexibility of the labour market has been enhanced, for example, while steps have been taken to improve the judicial system, business environment and the resilience of the financial sector. However, there are still some important areas where further work is needed, such as strengthening fiscal governance, pensions and health system reform and also of public administration. The incentives for further progress are set by two important targets: acceptance into the Schengen area and adoption of the euro. Most likely, Croatia will be technically ready for Schengen by year-end, while euro membership looks viable in five years.”

Gabriele Pace: “Serbia is progressively aligning its practices and regulations to EU standards and is on a good path to reaching full membership in the bloc. I would say that most of the regulations governing the banking business are already converged with EU norms to a very great extent.”

“Serbia has put itself firmly on the road to EU accession and transformed itself into a stable economy that today boasts fiscal balance, growing investments and a low and stable inflation rate”
Gabriele Pace, deputy CEO in Serbia (Banca Intesa Beograd)

How much is the bank involved in assisting foreign companies and clients?

Alessio Cioni: “Benefitting from membership of a large international banking group [Intesa Sanpaolo], while also acting as a regional hub for business operations in Slovenia and Bosnia and Herzegovina, PBZ is able to support the most demanding client groups via sophisticated automated services, providing them with access to international markets.”


Gabriele Pace agrees that the backing of the wider group is vital. “The support to our international clients is not limited to structuring the best financial products. Instead it extends to providing them with expert advice on how to establish or expand business in Serbia as well as on how to understand local market specifics.” It is important to underline that foreign investments are not only entitled to conduct business in Serbia under the same conditions as domestic investors but, under certain provisions, are supported by state programmes.

What services are provided to Italian clients doing business in your country? How significant is this part of the bank’s operation?

Gabriele Pace explained that Banca Intesa Beograd has a desk dedicated to multinational corporate clients, staffed by Italian speakers. “For an Italian investor, it is critical to find a network of institutional support. This includes the Italian Embassy, the Italian trade agency and the Italian-Serbian Chamber of Commerce.”


Alessio Cioni says it is similar in Croatia. “The Multinational Client Department provides information to Italian clients on legal regulations, establishing domestic companies, paying share capital, resident and non-resident accounts within the Intesa Sanpaolo Group and finding partners in Croatia.”

What do overseas companies need to understand about cultural differences?

Gabriele Pace: “Serbia is home to many different ethnic groups and languages, so there are cultural differences within Serbia as well as with other European countries. However, I would say that Serbs have some pronounced Mediterranean characteristics, expressed in their warmth and welcoming attitude, in life and business alike.”


Alessio Cioni: “Although a small country, Croatia has some specific regional characteristics. The north, for example, has a more Austrian style of doing business while along the coast people have a more Italian mentality, but everywhere they are welcoming, highly structured and very proud. In certain cases, this may be perceived as bureaucratic. It is crucial to respect and understand how business is done.”


“Croatia will be technically ready for Schengen by year-end, while euro membership looks viable in five years”
Alessio Cioni, deputy CEO in Croatia (Privredna banka Zagreb)

Finally, what advice would you give each other?

Gabriele Pace: “Mr Cioni is an experienced and well-travelled banker, so I have no doubt that he has managed to appreciate the strengths of the environment and the areas where his experience would be most useful. Surely, he will fully appreciate local traditions, the beauty of the country and its proud and welcoming people.”


Alessio Cioni: “Try to learn the language. People really appreciate your efforts and knowing the language can help you in many circumstances.”

Related stories.