Introduction
In 2024, establishing a company in Croatia presents new opportunities for foreign businessmen due to several distinctive conditions. One such factor is Croatia's membership in the European Union, which enables businesses to leverage the upsides of the vast EU market. This facilitates trade operations and supports business expansion across the entire union, while also providing access to European grants and support programs.
Additionally, entrepreneurs establish businesses in Croatia due to the availability of affordable and skilled labor. This advantage significantly reduces production and operational costs, making the country an appealing destination for setting up manufacturing facilities and expanding various business ventures.
Another significant advantage lies in the option of acquiring real estate through incorporated entities. This streamlines the investment process in property, making it more accessible and secure for foreign investors.
Registering a company in Croatia unlocks a wealth of opportunities, including access to EU markets, tax incentives, advanced communication systems, and investments in real estate.
Choosing the optimal legal structure for starting a business in Croatia
Company type |
Description |
Main features |
DOO (Limited Liability Company) |
A popular form for small and medium-sized entities. |
Participants are liable solely within the limits of their investments. The initial capital is 20,000 HRK (approximately 2,660 EUR). At least 1 founder and 1 director are required, irrespective of residency. |
DD (Joint Stock Company) |
Suitable for large companies and those planning to go public. |
Initial capital requirement: 200,000 HRK (approximately 26,600 EUR). A minimum of one shareholder and three directors are mandated, with no residency restrictions for these positions. |
Branch of an international entity |
A continuation of a foreign entity is not a separate legal entity. |
No authorized capital is required. Responsibility lies entirely with the parent company and a local representative is required. |
Representation |
Created for marketing research and market research. |
No authorized capital is required. Cannot engage in commercial operations and does not generate income. |
JTD (General Partnership) |
A business in which 2 or more partners share responsibility and management. |
No authorized capital is required. Partners bear full responsibility for obligations. |
Enrolling a business in Croatia
There are a few basic procedures involved in establishing a corporation in Croatia, and each one calls for careful planning and compliance with all laws and regulations. The procedure includes drafting foundational documents, deciding on a business name, obtaining a legal address, and paying registration costs.
Creation of constituent documents
The main elements for registering a company in Croatia are the memorandum of association and the founding decree.
The memorandum of association serves as the primary document outlining the operational principles of the company. It delineates:
- company name;
- legal address;
- size and structure of authorized capital;
- rights and obligations of participants;
- the method for allocation of income and losses;
- entity liquidation procedures.
The founding decree establishes the establishment and structure of a company in Croatia. All founders must sign this document, which must be authenticated by a notary. It includes:
- full name of the entity;
- goals and activities;
- information about founders and directors;
- placement of capital and shares of each founder.
Selection and approval of the company name
When starting a business in Croatia, you need to choose an original company name that is either in Croatian or Latin script, ensuring it does not replicate any already registered names. The procedure includes:
- checking the availability of the name in the Commercial Court database;
- reservation of a name if it is available;
- approval of the name in the Trade Register.
Legal address
For the successful establishment of a business in Croatia, it is essential to have an official registered address, which is used for business correspondence and legal registration. This address can either be company-owned or leased. It is essential to furnish documentation confirming the entitlement to utilize the address, such as a rental agreement or a deed of ownership. The cost of renting commercial premises varies depending on location and size, but generally ranges from 500 to 1,000 EUR per month for a small office in central areas of major cities.
Registration fees and duties: the financial side of the issue
When enrolling a company in Croatia, it involves the payment of various fees and charges. The amount of these expenditures relies on the legal structure of the organization and the location in which the corporation is registered. The approximate costs include:
- Fees for enrolling with the Business Court fluctuate depending on the type of enterprise and the company's magnitude. For a restricted accountability corporation, the expense commonly spans from 400 to 500 HRK (equal to about 55 to 70 EUR).
- Notarial services: certification of constituent documents by a notary will cost from 200 to 500 EUR, depending on the amount of work and complexity of the documents.
- Publication in the Official Gazette: release of information about the inception of a company in official sources costs about 100–150 EUR.
- Chamber of Commerce membership: entry fees and annual Chamber of Commerce membership fees depend on the size and type of activity of the company and usually range from 150 to 300 EUR per year.
Official registration: starting a business in Croatia
To legally establish a business in Croatia, one must navigate several critical procedures involving various governmental bodies. These steps are mandatory to secure all required permits and licenses. The process entails registration with the Commercial Court Register, enrollment in the Financial Agency, joining the Croatian Chamber of Commerce, obtaining a personal identification number, and enrollment with the Croatian Bureau of Statistics.
The first stage in founding a business in Croatia begins with submitting paperwork to the Commercial Register at the local commercial court. This submission should include the company's bylaws, the internal rules of the company, proof of share capital payment, and certified copies of the personal documentation of the founders and directors.
The subsequent phase entails the settlement of registration charges, the sum of which is established by the category of corporation and the magnitude of its equity capital. For an LLC, the fee ranges between 400–500 HRK (approximately 55–70 EUR).
Subsequently, the court reviews the submitted documents, a process which may take 5–10 business days. Should any errors or deficiencies be detected, the documents are returned for revision. If everything is in order, the court issues a certificate of registration, confirming the company's inclusion in the commercial registry.
Establishing a business in Croatia mandates compulsory registration with HZMO. This registration is essential to ensure the provision of pension insurance for the company's employees.
After registration with the Commercial Court, the company must, within 15 days, submit an application to HZMO. For this, the following will be required:
- a copy of the company's charter;
- decision on company registration;
- copy of registration in the commercial court;
- list of all employees with their personal data (first name, last name, date of birth, personal identification number - OIB);
- employee employment contracts.
An application can be submitted in person, by mail, or via the electronic portal. Registration with the HZMO takes approximately 5 business days. Post-registration, the company is mandated to make monthly pension insurance contributions for each employee. These contributions amount to 20% of the employees' gross wages.
The next step in the process of setting up a company in Croatia is registration with the Croatian Institute of Health (HZZO). Registration with HZZO provides mandatory health insurance for all employees.
To register with HZZO you will need:
- a copy of the company's charter;
- decision on company registration;
- copy of registration in the commercial court;
- personal data of employees (first name, last name, date of birth, personal identification number - OIB).
The registration procedure is analogous to that of HZMO. The application is submitted to the local branch of HZZO in person, by mail, or through the electronic portal. The registration period takes approximately 5 business days. Following registration, the company is obligated to monthly contribute insurance premiums for each employee. Medical insurance contributions amount to 16.5% of employees' gross wages.
For the full functioning of a business, it is advisable to register with the tax authority, obtain an OIB, and, if necessary, become a VAT payer.
After registering the company in the Trade Register of Croatia, you have 8 days to submit an application to the local tax authority. You will need the following documents:
- a copy of the company's charter;
- the decision to register a company;
- certificate of registration in the Trade Register;
- information about the bank and bank account of the company;
- personal data of the director and shareholders.
The application can be submitted either in person or through the electronic portal. The procedure takes approximately 5 business days, after which the company obtains an OIB and, if necessary, becomes a registered VAT taxpayer.
In general, establishing a business in Croatia under standard conditions takes between 4 to 6 weeks, though this period may be extended if errors have occurred in documentation or in the procedure of its submission.
Opening a corporate bank account in Croatia
Starting a business in Croatia requires not only company registration but also opening a corporate bank account. This account is essential for financial management and conducting commercial operations. The account opening process involves several steps and requires the submission of specific documents. It is also important to select a bank that offers the most advantageous terms and services for your business.
Business account opening process
To open a corporate bank account in Croatia, several stages must be completed. Each one plays a vital role in adhering to legal mandates and achieving a successful outcome.
Before opening an account, it is imperative to meticulously select a bank. Consider factors such as service costs, access to online banking, credit availability, and the institution's reputation.
- Certificate of registration of the company in the Trade Register;
- Articles of incorporation and memorandum of association are the company's constituent papers;
- Confirmation of holding the positions of directors and authorized persons (minutes of the meeting of founders or decision of the founder);
- OIB of the company and its representatives;
- Representatives' passports or ID cards.
After assembling all required paperwork, representatives from the company proceed to submit an application for establishing an account at the selected bank. The submission process may require personal attendance to submit paperwork and finalize the application.
The bank is reviewing the application that was filed and confirming all of the supporting documentation. Several days to two weeks may pass during this procedure, depending on the bank and the application's complexity.
After approval of the application, company representatives sign a contract with the bank outlining account servicing terms, tariffs, as well as rights and obligations of the parties.
The bank opens the account after the contract is signed, allowing the business to start using it for business purposes. The bank makes bank cards, internet banking, and other account management tools available.
Famous banks in Croatia for business clients
When starting a business in Croatia, it is crucial to choose a reliable financial institution that offers optimal conditions for your company. Here are several popular banks providing a comprehensive range of services for corporate clients.
Privredna banka Zagreb is one of Croatia's largest banks, offering a comprehensive range of business services including corporate account creation and management, lending, currency operations, and online banking. As part of the Intesa Sanpaolo group, PBZ has access to international financial markets and maintains a high level of reliability.
Zagrebačka banka, part of the UniCredit Group, is the leading entity in Croatia's banking sector, providing an extensive range of services. These encompass account creation, lending, leasing, and insurance. ZABA also offers convenient and secure internet banking, facilitating financial transaction management.
Erste Bank is part of the Austrian group Erste Group, one of the largest financial institutions in Central and Eastern Europe. The bank offers a variety of business solutions, such as account creation and management, credit lines, investment services, and consultations. Erste Bank is renowned for its client-centric approach and high level of service.
Raiffeisenbank Hrvatska is part of the international group Raiffeisen Bank International. The bank offers a comprehensive range of financial solutions for businesses, including corporate accounts, financing, asset management, and online banking. Raiffeisenbank has a strong reputation in business banking and provides personalized solutions for its clients.
With a particular emphasis on the ease of use and openness of its offerings, Addiko Bank is a provider of services for small and medium-sized businesses. The bank offers favorable terms for opening and maintaining corporate accounts, financing, as well as modern digital solutions for financial management.
Setting up a company in Croatia and opening a corporate bank account requires careful preparation. The foundation for a successful business launch lies in selecting a reliable bank and correctly processing all necessary documentation.
Taxation and financial reporting
When starting a business in Croatia, it is crucial to consider tax obligations and accounting requirements. Company registration in this country involves paying various taxes, including corporate tax, VAT, taxes on dividends, and royalties. Investors, especially in special economic zones, benefit from tax incentives and exemptions, enhancing the investment climate's attractiveness even further.
Main types of taxes
Organizations registered in Croatia are obliged to pay corporate income tax, with a rate of 18%. Enterprises with annual revenue below 1 million EUR benefit from a reduced rate of 10%. Corporate income tax payers include:
- Companies conducting independent commercial activities for the purpose of making a profit;
- Branches of foreign companies;
- Companies that own shares in the capital of other companies if they do not pay CIT;
- Individuals who have elected to pay CIT instead of personal income tax.
The VAT rate in Croatia has a standard rate of 25%. However, reduced rates of 13% and 5% apply to certain categories of goods and services. The reduced rate of 13% applies to specific food products, water, electricity, hotel accommodation, and catering services. The 5% rate applies to essential medicinal products, books, and certain medical services. Companies registered as VAT taxpayers are required to submit monthly or quarterly VAT returns depending on their turnover.
Taxes on dividends paid to non-residents are subject to a 10% rate. In certain cases, depending on double taxation avoidance agreements, the rate may be reduced to zero.
Royalties paid to non-residents are subject to taxation at a rate of 15%. This rate applies to payments for the use of patents, copyrights, trademarks, and other intellectual property rights.
Taxation in special economic zones
Special Economic Zones (SEZs) in Croatia provide substantial tax benefits for investors. Companies investing in the infrastructure of these zones may be exempt from corporate tax and VAT for up to five years. After this period, companies continue to benefit from a reduced corporate tax rate of 10%. Goods supplied to the SEZs are also not subject to VAT.
The major SEZ in Croatia encompass Rijeka, Split, Vukovar, and others. Each zone offers distinct conditions and incentives tailored to the type of business and the scale of investment.
Contact our experts and get answers to your questions.
Doing business in Croatia: key features
Starting a business in Croatia offers entrepreneurs numerous opportunities for growth within a thriving economy. Key considerations include adhering to labor regulations and the potential for acquiring real estate.
Labor laws and hiring
When starting a business and recruiting staff in Croatia, business owners need to take into account the extensive labor laws that regulate every facet of employment contracts in the nation. The necessary execution of a formal employment contract between the employer and the employee is one of the main prerequisites. The main terms of employment, including job duties, working hours, pay, length of vacation, and termination procedures, must be outlined in this contract. Depending on the demands of the business and the employee, the agreement may be formed for a set term or an indefinite one.
The minimum wage in Croatia is subject to regular review by the government. For 2024, the minimum wage is set at approximately 700 EUR per month. Employers are mandated to comply with this requirement, ensuring that their employees receive remuneration not less than the prescribed minimum. Additionally, employees are entitled to paid leave, the duration of which is contingent upon their tenure and typically amounts to 20 working days per year.
In Croatia, the standard working time is set at 40 hours per week, distributed across five working days. In certain circumstances, flexible working hours or overtime may be implemented as necessary. Overtime hours must be compensated at an enhanced rate, typically 50% higher than the standard hourly wage. Employers are also mandated to comply with labor regulations, including the provision of safe and healthy working conditions for all employees.
Incorporating a business in Croatia entails adhering to social security requirements. Employers are required to enroll their employees in the social insurance system and make the necessary payments. These contributions cover pension, healthcare, and other social charges, which form a significant portion of the payroll fund. Pension contributions are divided between the employer and the employee, with the employer bearing the larger share of the contributions.
In the event of terminating an employment contract, employers are obligated to adhere to the procedures established by labor legislation. The employer must notify the employee in advance of the intention to terminate the contract, depending on the duration of the employee's service. In certain instances, such as collective redundancies, employers are required to consult with employee representatives and notify governmental authorities of the impending layoffs. Employees who are dismissed without sufficient grounds have the right to challenge the decision in court and may seek compensation for wrongful termination.
Establishing a company in Croatia also entails fulfilling obligations related to employee training and professional development. Employers are required to provide their staff with opportunities for professional growth and skills enhancement, which in turn leads to increased labor productivity and the enhancement of the enterprise's competitiveness. Employers can collaborate with educational institutions and organizations offering professional training programs to ensure the continuous professional advancement of their employees.
Purchasing real estate when starting a business in Croatia
An essential aspect for foreign businessmen aiming to register a business in Croatia is the ability to acquire real estate. Both foreign companies and individuals enjoy the same rights as local citizens in purchasing property, whether it is commercial or residential. This provision allows them to freely acquire office buildings, manufacturing facilities, warehouses, or residential properties.
The initial stage of real estate acquisition involves selecting a property that meets your requirements and signing a preliminary purchase agreement. This document records key transaction terms such as price, payment schedule, and transfer details. To ensure legal protection for both parties, the agreement must be notarized.
If a real estate purchase necessitates special authorization, the buyer must obtain it. Citizens and companies from EU countries are typically exempt from this requirement. However, buyers from non-EU countries may require approval from the Ministry of Justice of Croatia.
Following is the payment of the agreed property price and the conclusion of the main purchase agreement, which also requires notarial certification and registration in the land register. Registration confirms ownership rights and ensures buyer protection. Upon finalizing registration, the purchaser becomes the rightful proprietor of the property and may utilize it for commercial purposes.
When acquiring real estate in Croatia, the purchaser must consider various taxes and fees:
- The property transfer tax is 3% of the market value of the property and must be paid within 30 days after registration of the transaction.
- Notary services and registration fees are also included in the buyer's expenses.
- If necessary, the services of a lawyer or real estate agent.
In addition, property owners are required to pay an annual property tax, which varies from 0.1% to 2% of the market value of the property depending on its location and type.
Starting a business in Croatia requires not only conformance with national labor legislation but also adherence to all procedures related to real estate acquisition. A profound understanding of these aspects and fulfillment of all obligations will assist entrepreneurs in effectively managing their business and harnessing all advantages offered by Croatian jurisdiction for company growth and development.
Conclusion
Croatia presents unique opportunities for entrepreneurs aiming to access the European market and develop their businesses under favorable conditions. Registering a company in this country unlocks a range of significant advantages, from advantageous tax policies to accessible and highly skilled workforce. SEZs provide additional tax incentives, enabling operational cost reduction and enhancing competitiveness.
Successful business operation in Croatia requires a profound understanding of local labor legislation and adherence to all social obligations towards employees. Key aspects include timely company registration, accurate tax payments, and full compliance with regulatory acts. These measures guarantee steady advancement and expansion of your business in the long-term view.
Croatia appeals to international investors because of its secure and encouraging business atmosphere. Flexible fiscal policies and access to highly skilled labor make this jurisdiction ideal for entrepreneurial development. Additional tax incentives in special economic zones further contribute to cost reduction and profitability enhancement.
If you intend to establish a business in Croatia, our team of experts is prepared to offer full assistance throughout every phase of the procedure. We provide consultations, aid in preparing required paperwork, and comprehensive support until your business is successfully registered. To contact us, please choose a convenient method in the "Contacts" section.
Start your business in Croatia today and discover all the benefits of this dynamically developing European country.