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Funds for Economic Cooperation

Funds for Economic Cooperation (hereinafter referred to as "FGS") are established under the Law on Investment Funds (NN150/05) and the Regulation on the conditions and procedure for the participation of the Croatian Government in the establishment of the Economic Cooperation Funds (National Gazette, 21/2010). This inspiring initiative of the Croatian Government for the Croatian economy, through the establishment of Economic Cooperation Funds where along with the private sector the Republic of Croatia will also invest funds, was designed to stimulate the development of Croatias economy on market principles. This initiative creates positive investment climate, shares risk with the "private" sector that has proved successful in creating new values, develops venture capital industry as a driver of new industries (internet, web, media, renewable energy, etc.) and encourages entrepreneurship and risk-taking with a professional corporate leadership and supervision.

Economic Cooperation Funds are open investment funds of venture capital with private placement. Monitoring of FGS is performed by national regulatory agency – HANFA. A prerequisite for participation of the Croatian Government in a particular fund was investments of "private" sector of at least 75 to a maximum of 300 million HRK. Croatian Government invested the same amount as the private sector. According to the Law on Investment Funds only qualified investors can participate as private investors in FGS. Lifetime of FGS funds is 10 + 2 years.

FGSs management is entrusted to the management companies that analyse potential investment opportunities and propose them to the Board of Trustees to decide. Board of Trustees is composed of representatives of all investors and makes decisions by a majority of ¾ of the total number of votes cast. FGS can invest only in companies that are registered in Croatia and which do majority of their businesses in Croatia as follows:
• Only in stocks and shares in companies
• A maximum of 33% in one company, a maximum of 40% in one sector
• It is not permitted to invest in securities that are listed on the stock exchange with the intention of short-term trading