BANKS

Banks may be established by domestic or foreign natural or legal persons. There are no restrictions for all foreign natural and legal persons that are located in any of the WTO member countries. However, the condition of reciprocity still applies to those countries that are not members of the WTO. The level of founding capital that is necessary to establish a bank (20 to 60 million HRK) depends upon the type of operations that the bank wishes to perform. Newly established banks also have a time-limit restriction. Namely, they can start to carry out banking activities in gathering deposits and savings from citizens in both domestic and foreign currency only after a three-year period has expired from when the licence to operate was obtained.

INSURANCE COMPANIES

Natural or legal persons can establish a joint-stock insurance company. A maximum 15 percent single stake with voting rights can be held by a natural or legal person. For stakes larger than 15% special permission must be obtained from the Insurance Supervisory Directorate, which is the authority that issues operating licences and supervises the activities of insurance companies. Insurance activities may also be performed by subsidiaries of foreign insurance companies registered in Croatia.

THE CAPITAL MARKET

Entities established for dealing with securities are companies, bourses, other organised public markets, banks, account operators, transfer agents, the Central Depository Agency, as well as investment fund management companies. Trades in securities that are issued according to public offers are carried out through bourses and other organised public markets (Zagreb Stock Exchange, Vara瀌in Securities Market).

HE PENSION INSURANCE SYSTEM

Croatia is currently conducting a pension reform. The new pension insurance system will include three levels:

1. compulsory pension insurance based on generational solidarity (level I)
2. compulsory pension insurance based on individual capitalised savings (level II)
3. voluntary pension insurance based on individual capitalised savings (level III)

THE FOREIGN CURRENCY SYSTEM

Foreign currency transactions with foreign countries are based on the Foreign Currency System, Foreign Currency Transactions, and Trade in Gold Act, which states that foreign currency is freely available and that trade in foreign currency must be carried out through the foreign currency market.