Varazdin Free Zone, started in 2001 as an empty lot is now alive due to local and global investors trying to increase their units to utilize incentives and tax benefits which have made the zone successful.
The zone was set up to bring investors to provide employment to 1,500 labourers rendered jobless due to closure of a local textile unit.
Currently, 11 firms belonging to five different countries provide jobs to 3000 people and have exported products valued at 1.3 billion kuna ($222.5 million) in 2005.
Zone manager Kresimir Mestric said half of these firms are operational, while rest are being developed which will increase volume export. This Croatian zone is targeting production.
Famous for textiles, Varazdin city's industry was not damaged by the 1991 war. Within two years the zone's exports will reach 500 million euros ($634 million) that is ten percent of the country's total export.
Although investors are interested, Varazdin's tax benefits may be reduced by EU rules. Instead of free zones, officials are planning ownership and business zones with limited incentives.
Economy Ministry stated that to abide by EU rules, free zones will be converted to industrial zones. It is holding talks with Brussels on giving current zone users their rights temporarily.
Presently local and global Varazdin firms fill 50 percent less income tax and have custom free imports. Infrastructure investment provides them five year income tax break.
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