DOC ID: SCAI-V1.0

Swiss-Croatian Arbitrage Index (SCAI)

A quantitative framework for measuring structural value asymmetries between DACH-region capital markets and Adriatic technology asset classes.

01. Core Thesis

The SCAI posits that the valuation gap between Swiss and Croatian technology assets is not merely a function of market maturity, but a quantifiable structural inefficiency. By correlating Swiss capital cost-basis with Croatian operational velocity, the index identifies arbitrage opportunities where value is mispriced due to information asymmetry and historical perception lags.

02. The Model

The Index ($\text{SCAI}$) is calculated as a weighted composite of three primary sub-indices: Fiscal Efficiency, Human Capital Density, and Regulatory Friction.

$$ \text{SCAI} = \frac{ \alpha(H_c) + \beta(F_e) }{ \gamma(R_f) } \times \text{M}_a $$

Where:
$H_c$ = Human Capital Yield (Engineering Output / Cost)
$F_e$ = Fiscal Efficiency (Corporate Tax Differential + Div. Withholding)
$R_f$ = Regulatory Friction (Bureaucratic Velocity Score)
$M_a$ = Market Access Multiplier (EU Passporting Status)

03. Component Vectors

Alpha: Human Capital Yield ($H_c$)

Measures the “Engineering Value-Add” per Euro spent.

Data points: Senior engineering comp (Zurich vs. Zagreb), STEM tertiary education density, and English proficiency rates. Current reading shows a 3.4x yield multiplier in favor of Croatian assets.

Beta: Fiscal Efficiency ($F_e$)

Comparative analysis of effective tax rates (ETR).

Data points: Croatian corporate profit tax (10-18%) vs. Swiss cantonal averages. Analysis includes JITSIC treaty benefits and double-taxation avoidance agreements between CH and HR.

Gamma: Regulatory Friction ($R_f$)

The “Time-to-Value” coefficient.

Data points: While Swiss entities benefit from stability, Croatian entities suffer from administrative latency. The SCAI discounts Croatian assets by a factor of 1.2 to account for judicial slowness, ensuring conservative valuation.

Multiplier: Market Access ($M_a$)

The EU Passporting premium.

Data points: Swiss bilateral treaties vs. full EU Single Market access. For fintech and data-heavy sectors, Croatian domicile provides frictionless scaling across the 450M consumer bloc.

Current SCAI Reading: 7.7 (Buy Signal)

The spread is currently wide. Swiss Franc (CHF) strength combined with Croatian Eurozone integration (2023) has created a “Golden Corridor” for deployment.