Company Registration in Croatia: Comprehensive Guide for Entrepreneurs

Business Opportunities in Croatia

By 2030, Croatia will obtain more than $30 billion in EU funding, significantly contributing to the country’s economy. Good economic signs include the IMF’s autumn forecast, which predicted that Croatia’s economy would grow by 5.9% in 2022 and continue on that path in 2023, as well as forecasts that the country’s membership in the Eurozone would have an overall positive impact on the economy. This makes Croatia the perfect place to establish a business if you want.

In addition to having a robust tourism sector, Croatia has high solar coverage making it a desirable place for companies that provide Distributed Energy Resource (DER) solutions. These would primarily consist of intelligent grids, photovoltaic systems, and cutting-edge batteries for prosumers or homes and companies that generate energy for their own needs and occasionally resell the excess on the market.

Along with those above, privately run healthcare facilities are multiplying and growing in size in Croatia, offering a feasible alternative to the ailing public healthcare system. The growth of the medical tourism industry could accelerate this tendency further. Croatia has promising properties in this field due to the high caliber of its doctors, their comparably modest pay, and their allure as a vacation and retirement destination. Starting a business in Croatia can prove profitable if your business deals with medical products and service supplies. It could also assist Croatia’s private healthcare professionals in becoming significant, very lucrative enterprises. 

Read this guide to understand how to start a business in Croatia.

Benefits of Starting a Business in Croatia

Starting a business in Croatia offers several benefits, which are as follows: 

• Before beginning a business, a foreign corporation will primarily look for economic security in a dynamic environment. One of the safest nations in the world, Croatia provides such security. The political situation of this nation, a crucial element in the choice to do business, also provides an adequate balance.
• Croatia has straightforward and comprehensive access to significant markets in Asia and Eastern and Western Europe via well-known land, sea, and air routes. For instance, there are no obstacles or limitations to entering the markets of America or Australia. Additionally, the numerous seaports that led to the Adriatic Sea make things easier for businesspeople involved in import and export operations.
• Due to the numerous opportunities and high annual earnings, the tourism industry is a significant part of the Croatian economy. Among the most appealing sectors for international investment are the food, industrial, IT, pharmaceutical, and automobile industries.
• The Croatian government provides incentives such as the “Croatia Business Environment Reform” project that aims to assist Croatia in implementing different business reforms and other benefits to assist business owners in growing their enterprises in the best possible circumstances. Employers in Croatia who create jobs are given monetary incentives or tax rebates.
• International businesspeople value a good quality of life, so this factor is carefully considered before deciding to invest or find a company. Croatia has a top-notch climate, a rich history, a beloved culture, revered traditions, and a good standard of living. In this regard, Croatia has significant corporate potential growth and a straightforward and tranquil way of life.

Requirements for Starting a Business in Croatia

To start a business in Croatia, you need to fulfill certain conditions, which include:

• Minimum share capital: A minimum share capital of HRK 20,000 must be provided by a private limited liability business, whereas HRK 200,000 is required by a public limited liability company.
• Corporate bank account: The minimum share capital in Croatia requires all business types to obtain a local bank account. Typically, this temporary account can be later connected to the business’s financial activities. Entrepreneurs can select from various domestic and international financial organizations for their future banking needs. 
• Licenses and permits: Only a few industries require permits and licenses, which are telecommunication, insurance and banking, immigration and export, hunting and fishing, and air and ground transportation.
  Given the numerous regulations set forth by the Land Registry, the Fire Inspectorate, the Local Water Authority, the Sanitary Inspectorate, and numerous other bodies, the construction industry necessitates full attention. These licenses and permits are necessary for businesses registered in Croatia’s construction industry.

Types of Business Structures in Croatia

The following are the primary business structures global companies frequently employ to set up business in Croatia:

Private limited company

• A private limited corporation comprises one or more natural individuals or legal entities. These entities invest in the initially authorized stakes. 
• The aggregate amount of all stakes shall equal the Company’s Authorized Capital.
• Owners might be either natural beings or foreign or domestic legal entities. A single proprietor can also establish this kind of business.
• The minimum capital required to establish a private limited company is HRK 20,000.

Public limited company 

• The foundation of a public limited business is its capital, which is invested by owners (shareholders) in authorized capital divided into shares. 
• A public limited business may have just one shareholder and one owner upon its founding. 
• All of the firm’s profits are used to pay off its obligations. The company’s liabilities are not the shareholders’ responsibility.
• A minimum of HRK 200,000 in authorized capital is required. 

General partnership

• Two or more people can form a general partnership to operate under a similar corporate name. Each partner is personally liable for the total amount of the partnership’s debts.
• Any kind of organization or person, domestic or foreign, is eligible to join as a partner.
• The capital of a general partnership is not authorized. Unless the articles of association specifically state otherwise, partners should invest equally in the business. 
• Cash, material assets, rights, labor, and other goods and services could be included in the stakes.

Limited partnership

• In a limited partnership, two or more people join forces to run a business using the same identity as the corporation as a viable business. 
• As a general partner, at least one partner is jointly and severally liable for all company debts with all of their assets. At least one partner has limited liability based on the number of investments made (limited partner).
• A limited partnership can have domestic and foreign people or legal entities as partners. 
• Authorized capital does not exist in a limited partnership.

Branch

• According to Croatian law, foreign businesses and sole proprietors are permitted to operate in Croatia by establishing a branch office (Art. 612). 
• The same rules about establishing branches by domestic businesses also apply to opening and running branch offices owned by international companies. There is no such thing as a branch office.
• The founder, not the branch office, is responsible for the obligations and legal obligations resulting from its operations. 
• Under its name, the branch office conducts business. The name should also include the registered offices of the originator and the branch.

Company Registration Process

Refer to this section to understand how to start a company in Croatia:

Step 1: Company name selection and reservation

• The firm name is chosen through HITRO.HR entrepreneurial service window at one of the Fina (Croatian Financial Agency) branches. 

Step 2: Document certification

• A notary public must certify the following papers:

1. 1. Application to request entry into the court register
   2. The Memorandum and Articles of Association signed by all founders, or a statement outlining how the firm was created
   3. A statement from the members appointed to speak on the company’s behalf after accepting their position
   4. The Director’s signature or the signatures of the Management Board members or the Supervisory Board members, as well as the decision regarding the selection of board members (where there is one)
   5. Company’s procurator’s appointment and their signature 
   6. Company’s address
   7. Foreign nationals require a passport or identity card.

• The presence of the founders and other individuals whose signatures must be validated is required.
• The total cost of certification depends on the share capital amount of a company. It generally amounts to HRK 2,500.

Step 3: Registration in the court register

• Initiating the commercial court register process involves submitting the application for registration in the court register. This is done through HITRO.HR window at the Financial Agency, along with any required supporting documentation. 
• The resultant judgment is forwarded to you by the commercial court after being entered into the court registry.

Step 4: Publication of company registration

• The registration information is immediately posted on the register’s website upon the issuance of the decision to register in the court register.

Step 5: Classification of business activity

• The Central Bureau of Statistics receives an application for classification by activity per the National Classification of Business Activities. The registration number and activation code are provided within 15 days of receiving the judgment on registration in the court register, the registration number and activation code are provided. 
• At the HITRO.HR portal at the Financial Agency, you will receive the notice regarding categorizing your business operator under the CBS National Classification of Business Activities.

Step 6: Opening a bank account

• Open a giro account at a bank or through the HITRO.HR window. 
• You can open an account at the bank where the Financial Agency coordinates or creates accounts on your behalf at the HITRO.HR portal. 
• At the time of the company’s registration, the share capital must be put in the bank account with a deposit certificate.

Step 7: Registration with the tax administration

• The company must be registered with the Tax Administration at the office with purview in conformance with the main office. This is done after being enrolled in the court register and with the Central Bureau of Statistics to sign up the corporation in the Registry of Corporate Taxpayers and the Registry of VAT-Registered Persons.

Step 8: Decision of the competent administrative body

• The commercial court shall be provided with the administrative body’s judgment demonstrating conformity with the technological, health, environmental, and other standards for implementing the relevant activities (County Office for Economic Affairs).

How Much Does it Cost to Incorporate a Company in Croatia?

You should know the following Croatia company registration fees, whether you’re a local or foreign businessperson. Here are the incorporation cost details you need to know if you are planning to start a business in Croatia: 

• Companies must pay about EUR 90 (692.5 HRK) for registration in Croatia.
• If you have a well-known registered office and help with future tasks, a virtual office costs roughly $300 per month.
• For a private LLC, the required share capital is HRK 20,000 (about EUR 2,700), while for a public limited liability company in Croatia, the required share capital is HRK 200,000 (about EUR 277,000).
• The price to register a corporation in Croatia is expected to be EUR 834. For accounting needs, tax advice, and various additional services, accounting costs begin at EUR 100.

Are Foreigners in Croatia on Certain Passes Allowed to Start a Business in Croatia?

You must obtain a Croatian business visa to conduct business-related operations in Croatia or intend to start a business in Croatia. With this permit, you can run other business activities, consult, attend business conferences, or go to a branch office or sister business meeting. It is a form of short-term visa, offers 90 to 18 days of initial validity, and can be renewed. Nevertheless, a 90-day stay is permitted for each visit. 

Ensure you have all the necessary documentation before applying for a business visa to Croatia. A current passport and any other documents required by the embassy must be presented. You must confirm that your goal complies with the criteria established by the Croatian Embassy. 

Government Assistance for Foreign-owned Businesses 

Croatia is usually open to international trade, and the government is still working to bring in foreign capital by offering financial incentives. The law guarantees equitable treatment for all entrepreneurs, domestic and foreign, with the few exclusions listed below.

• The “Croatia Business Environment Reform” project aims to assist Croatia in implementing different business reforms. The government has partnered with the World Bank through the European Commission Directorate-General for Structural Reform Support to support this project.
• The Directorate for Internationalization of the Ministry of Economy and Sustainable Development helps investors by providing services like data on investment options, support throughout all stages of business advancement, organizing tours of investment locations and setting up meetings, and trying to promote Croatia as a destination for foreign investment.
• The Croatian government provides two 24-hour-connect e-government choices for internet business registration: www.hitro.hr and start.gov.hr. With easy-to-access online services, start.gov.hr offers a complete registration process for a limited liability company, basic limited company, or general business. The process ensures prompt response to requests and specifies dates the business can anticipate being registered. It deals with expenses for official notaries, proxies, stamps, and seals and cuts court registration costs in half. Although hitro.hr has locations in 60 Croatian towns, it also offers online services for people who prefer to register their company in person.

How Multiplier Can Help

Starting a business in Croatia requires abiding by all relevant laws and regulations in a foreign nation like Croatia. The incorporation procedures and tax laws differ depending on the nation where you intend to base your firm. To start a business in Croatia, all applicable tax laws and regulations must be obeyed. Multiplier and other global PEO service providers can be beneficial in this regard.

Multiplier maintains the infrastructure required to staff your company without setting up a local subsidiary. You might emphasize creating teams in other countries and researching new markets. This allows you to hire more quality people at lower costs.