OPEN COMPETITION FOR NEW FREE TRADE ZONES TO BE LAUNCHED

ZAGREB, Dec 30 (Hina) - In line with a decision by the Croatian government, an open competition is to be launched soon for concessions for the establishment of four new free trade zones - Krapina (about 50 kilometres northwest of Zagreb); Osijek, in a port on the river Drava (about 220 kilometres east of Zagreb); north Adriatic port Rijeka-Bakar and the central Adriatic port of Sibenik, Podi area. The zones are intended for production, wholesale trade, banking and other financial business and security services, Croatian Economy Minister assistant for free zones, Miran Cofek, told Hina on Monday. #L# Before the open competition and because of business advantages in the free zones, many foreign and domestic companies had shown interest for investing in them, Cofek said. A user of the zone is to pay profit tax at a 50% lower rate, that is, 17.5 percent. In order to stimulate investors into real estate and the construction of facilities and infrastructure in the zone, all those who are to invest more than a million kuna (over US $182,000) are freed from profit tax for the next five years after which they are to pay taxes at half the rate, Cofek said. Free zones are located at transport junctions, mostly at sea and river ports. Eight free zones have been established in Croatia, but six of them are operational - the ports of Rijeka, Ploce, Pula, Split and Zadar, as well as the Zagreb-based zone Jankomir. Renowned international companies operate there, for example Benetton in Pula, Lumic in Rijeka, Heli in Pula and so on. In 1995, their returns amounted to 37.30 million German marks, and in the first six months, their revenue amounted to DM 22.3 million, which, according to estimates, meant that their revenues in 1996 should amount to DM 45 million, that is, 40 percent more than last year, Cofek said. (hina) lm jn 301423 MET dec 96