Croatia has unveiled the first set of regulations underpinning a sweeping overhaul of governance in state-owned companies, as the government seeks to centralise oversight, professionalise management and improve transparency in strategically important enterprises.

Deputy Prime Minister and Finance Minister Tomislav Ćorić on June 19 presented five of nine implementing by-laws tied to the reform, covering ownership policy, appointment procedures, reporting standards and compliance functions for state-owned legal entities.

The regulations mark the operational launch of a new legislative framework established under the Law on Legal Entities Owned by the Republic of Croatia and amendments related to the Center for Restructuring and Sale (CERP), which came into force in October.

“We intend to start with this as soon as all the decisions, i.e. by-laws, are passed and we believe that we will start this process in the coming months,” Ćorić said, according to a government statement. “This process cannot last indefinitely, it is not in anyone’s interest… we can expect the first administration according to this model at the beginning of 2027.”

The reform focuses on 39 state-owned entities designated as being of special interest due to their economic importance, up from 36 currently. According to the government, these companies generate €11.4bn in revenue, out of a total €14bn generated by all state and locally owned legal entities.

Ćorić said the reform would shift Croatia from a dispersed ownership model, in which individual ministries oversee companies, to a centralised system led directly by the government.

“Therefore, the government, and not the ministries that dealt with these companies until the law was passed, will actually be the central point in the context of ownership rights,” he said.

The government says the overhaul aims to strengthen professional standards in supervisory and management boards, improve compliance and introduce measurable performance targets and unified remuneration policies.

“The final outcome of fulfilling these goals and the functioning of the system according to this model is the contribution of these same companies to the stability, resilience and growth of the domestic economy,” Ćorić said.

Under the new rules, supervisory boards will be selected through public tenders and must include at least 33% independent members, according to State Secretary Matej Bule.

“The supervisory board will consist of at least 33 percent independent members,” Bule said, adding that strict independence criteria would apply.

Supervisory boards will also appoint management boards via public tenders, although the government will retain consultative influence over appointments in strategically important firms.

“We cannot expect that the supervisory boards or boards of special interest companies will be elected and function completely independently of the Government,” Ćorić said, defending the balance between professional governance and state oversight.

The reforms have drawn criticism from opposition parties over concerns of political appointments, which Ćorić rejected, saying the new framework “presupposes the transparent functioning of this process.”