Category: Investment

When starting a business in some countries, entrepreneurs have to choose between different legal forms for their company. In Croatia, for instance, two popular legal forms are d.o.o. (LLC) and d.d. (JSC) companies. While both offer limited liability for their owners, there are significant differences between the two that entrepreneurs should consider when making their decision.

 

A Limited Liability Company (LLC), or, in Croatian, Društvo sa Ograničenom Odgovornošću (d.o.o.) is a corporation in which one or more legal or natural persons invest in prearranged share capital the fundamental positions with which they engage. The minimum share capital for a d.o.o. is 20,000 kn, which can be invested in items (mandatory auditor assessment), but must be at least 50% in money when forming in money, and the remainder in matters and rights.

To retain the prudential balance sheet structure of the liabilities (source of financing), members of d.o.o. will invest tax-free in d.o.o. money, objects, and rights in unwritten capital (capital reserves) that are not reported in the court register – their must be a social contract on investment. Personal assets of d.o.o. members do not correspond to d.o.o. liabilities.

A limited liability partnership is formed based on a social contract that must be signed by all founders and sealed with a notarial deed. If a company is created by only one person, the company is formed based on a declaration of incorporation signed by the creator in the form of a notarial act. On the day of his entry into the Court Register, he gains legal personality.

On the other hand, a Joint Stock Company (JSC), or, in Croatian, Dioničko društvo (d.d.), is described by the Companies Act as a company in which partners (shareholders) have interests in the share capital divided into shares. A legally effusive individual who acquires legal personality by registering in the court registry is referred to as a joint-stock corporation. Both of the Company’s funds are used to cover its obligations. Shareholders are not responsible for the company’s debts.

A statute is a stock company’s fundamental act. It governs society’s internal structure. The minimum share capital required for the formation of a stock company is kuna equal to HRKZ 200,000.00. A joint-stock corporation is required to have a management and supervisory board, as well as a general meeting.

The key distinction is that d.o.o. has shareholders or owners, depending on the share of the share capital, and the founders are not liable for the company’s responsibilities. While d.d. has management, a supervisory board, and an assembly, the Company is financially responsible for all of its responsibilities.

As of 17th of June 2020., Scalable Global Solutions has successfully made the transition from LLC to JSC. The company capital was increased from 400.000 kunas to 800.000 kunas, and divided into 80.000 shares, with a nominal price per share of 10 kunas. Based on the investments in the company and further business growth, to become more attractive to investors and achieve greater market credibility, Scalable Global Solutions has an intention to accordingly proceed with raising the company capital and number of shares.

One of the advantages of being a JSC is the simplicity of the share transfer process, where the transfer is consumed by the execution of the share purchase/transfer agreement. On the other hand, ownership change in an LLC is more time-consuming, with a lot more bureaucratic procedures involved.

Also, the benefits of a JSC are that they have the stability of existence (not many companies make the transition from LLC to JSC), there is scope for further (and easier) expansion, public confidence, and tax benefits.

Conclusion

While both d.o.o. and d.d. companies offer limited liability for their owners, they have significant differences that entrepreneurs should consider when choosing the legal form for their company. The choice ultimately depends on the entrepreneur’s business plan, the size of the company, the desired ownership structure, and the resources available to meet the legal requirements.

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Sources:

https://www.rtl.hr/zivotistil/edukacija/3591293/razlika-izmedju-dd-i-doo/

https://www.petric-kajic.hr/preoblikovanje-d-o-o-a-u-d-d/

https://savjeti.novac.net/blogovi/razlika-izmedu-d-d-i-d-o-o/

https://www.economicsdiscussion.net/joint-stock-company/advantages-and-disadvantages-of-joint-stock-company/31501

Why You Should Invest Now: Forecasted Industry Growth and Market Analysis

 

The global SaaS (Software-as-a-Service) market is at an all-time high due to the pandemic, as companies need quick and easy solutions for their businesses, that can be rolled out immediately. The subscription-based model that SaaS offers is shifting the one-time payment model that license software has. Combined with the increasing demand for new tech solutions are the main reasons why SaaS is booming. In 2020, SaaS solutions generated approximately $105 billion, and the upward trend will continue in the coming years, with plans to reach $140 billion by 2022.

Gartner Inc. is suggesting that the global economic downturn has forced companies to cut costs and find solutions that are more affordable, easy to implement, highly adaptable and can be cancelled at any time.

Here are the revenue estimates for the global cloud service market:

SaaS vs the other	2019	2020	2021	2022
Cloud Business Process Services (BPaaS)	45.212	43.438	46.287	49.509
Cloud Application Infrastructure Services (PaaS)	37.512	43.498	57.337	72.022
Cloud Application Services (SaaS)	102.064	104.672	120.990	140.629
Cloud Management and Security Services	12.836	14.663	16.089	18.387
Cloud System Infrastructure Services (IaaS)	44.457	50.393	64.294	80.980
Desktop as a Service (DaaS)	616	1.203	1.951	2.535
Total Addressable Market (TAM)	242.697	257.867	306.948	364.062

 

The SaaS segment is the largest one in the cloud service market followed by IaaS (Infrastructure-as-a-Service). There are estimates that the SaaS market growth might slow down in the coming years, with plans to grow 12%. However, it will still generate significantly more revenue than its competition.

There are estimates that the SaaS market growth might slow down in the coming years, with plans to grow 12%. However, it will still generate significantly more revenue than its competition.

The following table presents the largest SaaS companies today ranked by their current market capitalization in $B.

The list does include Microsoft nor Oracle as most of their revenue comes from selling on-premises software.

All these established companies, and newer companies as well, often choose to re-direct their profits in the company, for further growth and market expansion and they do not pay out dividends. The re-directed profit is reflected in a rise in the price share and capital gains for the investors.

 

Sources:

https://www.datapine.com/blog/saas-trends/#:~:text=A%20Betterbuys%20report%20reveals%20that,significantly%20in%202021%20and%20beyond.
https://www.bmc.com/blogs/saas-growth-trends/
https://www.information-age.com/public-cloud-revenue-to-grow-6-3-in-2020-gartner-123490499/
https://www.gartner.com/en/newsroom/press-releases/2020-07-23-gartner-forecasts-worldwide-public-cloud-revenue-to-grow-6point3-percent-in-2020
https://finviz.com/

 

Croatia as a future for startups, after several years of mainly writing about tourism, the world of Croatian startups is fascinating to me and has infinitely more promise.

These young entrepreneurs are new generations, with less stigma from the past and a greater emphasis on entrepreneurship and the future than politics and tradition. The Croatian startup community and corporates can take a step forward and boost their global business positioning. Successful instances of startups valued over a billion euros and firms providing products/services utilized by the world’s most giant corporations tend to reinforce this. However, to generate more meaningful added value for the overall economy in the future, new support systems must be appropriately developed. Recommendations were developed based on the study results and observed patterns.

They should contribute to the continued growth of startup communities and the Croatian digital economy, and this should boost the global positioning of Croatian startups and businesses. According to StartupBlink, Croatia ranked 39th out of 200 countries on the global scale of startup ecosystem growth in 2020, up 11 positions from the previous year. This demonstrates that the Croatian startup scene is growing and getting more diverse, as shown by an increase in startup events and conferences. As soon as the first outliers achieved significant traction in the foreign economy, the general public began to talk about startups in Croatia. Development stages startups are in: One-third of startups have already created a product or service and are gathering business input to improve it.

On the other hand, 50% of startups are in the commercialization process, which means they generate profits, and some are also profiting. More than 57 percent of startups claim their product or service is used by big businesses, indicating the scope for collaboration in enhancing the companies’ corporate operations. Many of the so-called support systems, according to the respondents, may benefit from further development. Since support processes are critical to any enterprise, poor management of support processes will result in substantial financial losses for any organization.

As a result, they must be carefully managed and optimized, providing an incentive for entrepreneurs to assist big corporations with their solutions. 12 According to the report, most startup products/services can enhance market processes such as distribution, information and communication technology, logistics, and infrastructure. External funding/investment sources: The estimated amount of funding in startups under consideration exceeds EUR 42 million.

However, if we exclude an outlier contribution (which is significantly higher than the others), the overall investment amount is around EUR 25 million. If we exclude the outlier funding, the total investment per startup was about EUR 400,000. In 2016, for example, venture capital investments in startups in Croatia totalled between EUR 10 and 20 million. As a result, while there has been a substantial uptick in funding, it remains smaller than the overall level of investment in venture ecosystems in the early stages of growth.

Average monthly revenue: When we compare the revenues produced by startups before and after March 2020, we can see that after March 2020, a more significant number of startups generated a monthly income of less than EUR 10,000. Before March 2020,61, percent of startups reported monthly sales of less than EUR 10,000, while this increased to 71 percent of startups after March. As a result, it is possible to say that 10% of startups see their financial position deteriorate. Globally, 74% of startups have seen a decrease in sales. Although these statistics show a markedly negative pattern in sales and can be discouraging, the revenue loss in most cases is less than 20%.

From this vantage point, the actual financial damage, both in Croatia and globally, is not as severe as expected at the start of the pandemic. The Croatian startup community and corporates can take a step forward and boost their global business positioning. Successful instances of startups valued over a billion euros and firms providing products/services utilized by the world’s most giant corporations just tend to reinforce this. As a result, you can be confident that they can contribute significantly to your market. Since labour costs are considerably lower, SGS takes advantage of the opportunity and reduces the cost of operating for clients by up to 60% whilst providing next-generation quality managed services to the industry. SGS is driving productivity and effectiveness in this area by providing added value.

Author: Karolina Vujnović

 

Sources:
https://investcro.virtualna-tvornica.hr/wp-content/uploads/2020/12/Digital-Footprint-Report-8-Dec-2020F.pdf 
https://investcroatia.gov.hr/en/research-on-the-transformation-of-croatian-start-ups-and-companies-in-new-market-conditions/

 

 

The role of location advantages in company profitability: the case of Croatia.

The importance of location and distance was known since the rise of civilizations. When the urbanization process spanned most parts of the northern and southern hemispheres, people started to be harshly aware of the still accepted fact – the location makes the difference. The question is, what differences does Croatia offer?

Plenty is the word that would describe it as the briefest. However, at SGS, the quality comes first and the speed after that. When urbanization started to be the science at the beginning of the 20th century, many questions and theories arose.[1]

One of them was Christelle’s Central Place theory that supported the idea of the cities spread into space. Depended on one of another as the points of the geometrical shape, where cities’ size would vary on their hierarchy range, and top of the hierarchy would be the cities that held the most important functions for the society[2]. Why was it essential to study the arrangement of the cities? The economy exists on the ground principle of the input and output model, without which it would not remain, nor economy, not society. Therefore, it is the main goal for the buyers to have easy access to the goods and sellers to sell their goods with minimum costs of operations for the maximum price. It is known that, in most cases, what the distance is further, the costs are higher, not only for the seller but also for the buyer. Overall, it is not convenient to sell chicken eggs from other parts of the world, especially if you have a local concurrent. Many theories were developed to be highly efficient in their functions, such as Burgess’s, Hoyt’s and Ullman’s Urban Area Models[3]. Only when familiar with the city’s importance and its development can it look at the bigger picture – the state.

Croatia built out of many cities, villages, and landscapes, including mountains, hills, valleys, beaches, islands, and many more. Croatia is the state thanks to which the particular type of landscape got its name, and it’s called – Doline & Polje – which are landforms of karst. Not only does Croatia have 718 islands, 389 islets and 78 reefs, but it is rich with 18 big harbours along its 5.835,1 km long coastline [4], and they can receive a container, liquid, bulk cargo etc. [5], it also has 50 marinas that attract numerous tourists, business people and see-lovers [6]. Through Croatia passes a few essential European corridors connecting Baltic and Adriatic, Main and Dunav and Budapest with southwest Europe, which is only when talking about land traffic! Croatia is in the southeast of Europe, yet in the middle of it, with countless possibilities of connection, open to countries of east and west, is only 22nd on the list of all European countries considering the costs of living, [7] which makes Croatia highly affordable to invest in and enjoy. It offers low prices of operations, but it ensures businesses, quality and comfortable life, and many possibilities for spreading the ideas since it has well-educated people and many experienced individuals. With a little more than 4 million citizens, it has more than 20 private Colleges and more than 10 Universities that collaborate with Hungarian, German, Austrian, Italian and many more European and Asian Universities for decades. Already the ancient Romans met the beauties and values of Croatian territory, and in the 19th century, Croatians island Vis is considered the Gibraltar of the Adriatic. [8]

Now is the time for new daring and ambitious conquerors to find their treasure gold in here!

SGS is stationed in Croatia to hand the clients admirable solutions for an affordable price. Our workforce consists of skilled and accomplished enthusiasts who are ready to strive for their best. Our location allows us to be at the reach of the hand to Budapest, Ljubljana, Vienna, Munich, Venice and many more. We are focused on technological development and the usage of state-of-the-art programs. Nevertheless, we are connected with our clients, both concerning the physically and the virtual distance. That makes us reliable, trustworthy, and profitable. The great thing is, if you are ready to achieve, even more, we are looking for a partner that will keep growing with us! Will you grab the chance?

Visit The One Pager and find out more.

 

Sources:

[1] https://www.sciencedirect.com/topics/earth-and-planetary-sciences/urban-geography
[2]https://www.amazon.co.uk/Economic-Geography-Contemporary-Introduction-2007-06-25/dp/B01FJ0HNGO
[3] https://geography.name/urban-geography/
[4] https://www.searates.com/maritime/croatia.html
[5] https://www.lexology.com/library/detail.aspx?g=51aeefec-2770-409c-a773-21c76ddfa265
[6] https://www.croatia-yachting-charter.com/en/destination-guide/marinas-in-croatia
[7] https://www.numbeo.com/cost-of-living/rankings_by_country.jsp?title=2018®ion=150
[8] http://www.croatianhistory.net/etf/britain.html

 

 

WHY INVEST IN CROATIA’S STARTUP?

Croatia has a Knowledgeable, well-educated, hard-working, and affordable workforce.

49% of the population speak English, 34% German and 14% Italian.

Croatia is the home of world-class inventors such as Nikola Tesla, Slavoljub Penkala and Rimac who started as Croatian Startup!

Since labour force costs are substantially low, SGS uses the opportunity and decreases the cost of operations for clients up to 60% while delivering next-generation managed services to the industry. Invest in Croatia’s startup, has multiple benefitions and opportunities.

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Transparency and reliability are things that companies do not try to improve each day because the benefits of being transparent and reliable are not immediately visible. Being transparent and reliable to your clients is one of the best competitive advantages in these times because customers can have a firm they not only rely on but a firm they trust. Having trust between a firm and a customer is something you cannot put a price tag on.

Therefore, the question arises, why is it important to be transparent and reliable?

Transparency builds trust and strengthens relationships, which leads to a more pleasant experience for everyone. Being reliable to your clients means that they know what they can expect from you, and that is the deciding factor between you and your competitors. Being trustworthy also builds trust with the customer, which can only improve the relationship between the two.

That is why here at SGS, we are dedicated to being as transparent as possible and as reliable as possible because we see the vision of working with our clients long-term. We are not looking for short business transactions that have little to no meaning. We want to move forward with our customers and provide them the best service possible.

For that reason, and by support to our clients, we strive to ensure data transparency, which is essential to our clients, and provide fully managed services. SGS solutions present an innovative approach to the modern business environment. Therefore, if you are willing to find out more about our business optimization solutions and investment opportunity, do not hesitate to reach us.

Trust is built over time but can lose in a moment, and that moment can be anything. It is essential to trust a business and a client because it is difficult to maintain a healthy relationship, which is fruitful for both parties if there is no trust. Trust needs to be a constant, and having confidence from your clients means that they believe in your product/service, and that gives you the drive to keep moving forward and improve day-in and day-out.

When it comes to ethics, it is easy to think that we behave ethically, and everything that we do is the right way to do it, but unfortunately, that is not the case. Many people act in unethical practices without even being aware of the fact that they are working unethically. Ethics in business has become a rising issue in today’s society, given that we have access to technology and an infinite number of ways to use it unethically.

That is why here at Scalable Global Solutions, we take the matter of ethics and trust as seriously as possible. We are looking to make long-lasting relationships with our clients that will have more than just an impact on the business but our lives.

By business optimization and innovative IT solutions, our clients have the most significant impact on their business. They are creating and managing their team as well as continuously developing their business. Together, we are making positive effects, raising loyal relationship and building long-term trust with effective results.

More about SGS company and services we are providing can find at our corporate website www.s-gsg.com