Croatia’s parliament has begun considering legislation that would allow residents to invest as much as €250,000 through a tax-advantaged personal investment account. The government hopes the instrument will move part of the country’s large pool of bank savings into capital markets and encourage longer-term retail investment.

Under the proposal discussed in parliament on 22 September, every adult Croatian taxpayer could hold one Croatian Investment Account, known by the abbreviation HIR. The standard contribution ceiling would be €200,000.

An investor who makes no withdrawals for five years after the first payment could contribute an additional €50,000. Profits generated within the account could be withdrawn without capital-gains tax.

Eligible assets would include listed shares, bonds, money-market instruments, exchange-traded funds and UCITS investment funds. Accounts would be provided by banks, investment companies and other authorised institutions rather than functioning as ordinary bank deposit accounts.

To limit concentration, no more than 50% of a portfolio exceeding €20,000 could be invested in instruments issued by a single entity. At least 20% of the portfolio would have to remain invested during the year in financial instruments connected with Croatia. Hina’s report on the parliamentary debate, published by N1 Croatia.

Government representative Matej Bule said Croatian households hold substantial savings in banks at relatively low rates of return, while their participation in capital markets remains limited. An HDZ parliamentarian put total household savings assets at approximately €91 billion.

The proposal has also received support in principle from the opposition Social Democratic Party. Former finance minister and current MP Boris Lalovac argued that the account could operate as a form of long-term savings or supplementary retirement provision, while reducing tax and administrative obligations.

A professional accounting and finance review of the draft notes that the account would also be available to Croatian tax residents and that the Central Depository and Clearing Company would maintain its register. The proposal underwent public consultation before entering the legislative process. Croatian Association of Accountants and Financial Experts’ explanation of the draft.

The account would offer tax advantages, but it would not eliminate investment risk. Shares, funds and bonds can lose value, and assets held in an investment account do not have the same risk profile as insured bank deposits.

Its economic effect will also depend on participation. A high statutory ceiling does not mean that typical households will invest amounts approaching €200,000. Financial literacy, provider fees, product choice and public confidence are likely to determine whether the measure meaningfully broadens investment beyond Croatia’s existing group of retail investors.