Business in Croatia

The Croatian legal framework governing foreign investment has been designed in a way that does not make any difference between domestic and foreign investors. All possibilities in relations between domestic investors are also open to foreigners investing capital in Croatia, provided reciprocity principle is met.

Moreover, foreign investors enjoy additional guarantees that are not given to domestic investors. The Constitution of the Republic of Croatia provides that no law or other legal document shall reduce the rights granted to a foreign investor at the time of investment in Croatia. It also guarantees the free repatriation of profits or capital upon fulfillment of all legal obligations. 

STARTING UP A BUSINESS ACTIVITY

Foreign legal entities and persons may:
  • Invest capital on a contractual basis

  • Invest in a company

  • Invest in a bank or insurance company

  • Set up as craftspeople or do business as sole traders

  • Obtain a concession to exploit natural resources or other assets of interest to Croatia

Companies

A company is a legal entity established and organized in accordance with the Companies Act. All companies are registered in a court register following the Court Register Act and the Rules of Court Register Entry Procedures.

The law also regulates the establishment of branch offices and the position of sole traders.

A company is liable to settle its debts with all its assets. Owners/ shareholders in private and public limited companies and partners in a limited partnership are not personally liable for the obligations of the company, unless the Companies Act provides otherwise.

Partners in general partnerships and general partners in limited partnerships have unlimited liability to cover the debts of their partnership jointly, severally and with all their personal assets.

Founders:

A domestic or foreign legal entity or natural person may establish a company.

Company name:

A company name must consist of a proper name and an indication of the company’s business activity as well as abbreviation which clearly indicates the legal form of a specific company, for example Ltd or Inc.

It must be written in the Croatian language and Latin script, or in official language of member state of the European Union. Arabic numerals may also be used. The company name may contain foreign words if these are:

  • Part of the name/company name owned by a partner/owner/shareholder, or

  • The trade-/service mark, (protected in the Republic of Croatia) of a partner/ owner/shareholder or their company registered in Croatia,

  • In cases when such words are common in the Croatian language or

  • Where there is no appropriate corresponding word in the Croatian language, or

  • Where words of a dead language are used.

The company name may be entered in a court register also in a translation in one or more foreign languages. If the word Croatia or any word form derived from it is to be used in the company name, special consent from the Government of the Republic of Croatia or by state authority authorized by the Government is a requirement.

COMPANY FORMS
FINANCING A BUSINESS ACTIVITY

Business activities in Croatia can be financed either through standard loans of commercial banks or institutions offering more favourable interest rates or issuing guarantees for bank credits. Consisting of 21 banks and 3 housing savings banks, a traditionally stable and highly developed sector, the Croatian banking system offers high diversification and good quality of financial products and services. The list of commercial banks in Croatia can be found here.

An important role in helping companies in their further developing and exporting activities has the Croatian Bank for Reconstruction and Development (HBOR). Through its specialized programs HBOR provides support to start-ups, exporting companies, new production and companies from different sectors of economy such as industry, tourism, environmental protection and energy efficiency, agriculture, etc. More information about HBOR programs can be found on its web site www.hbor.hr.

Additional support to business activities is provided by the Government Agency for SMEs, Innovations and Investments (HAMAG-BICRO). HAMAG-BICRO issues guarantees for bank credits approved by credit institutions and other legal entities approving loans to SMEs and makes direct financial contributions to SMEs in a form of grants. More information about HAMAG-BICRO guarantees and grant schemes can be found on its web site www.hamagbicro.hr.

There is an additional financing option for entrepreneurs and investors in developing their projects in Croatia, and that are EU funds. As 27th full member state of the European Union, the Republic of Croatia has possibility of using the assets from the Structural Funds and Cohesion Fund.

Establishing a company

Name of the company

01

FINA

HITRO.HR counter

First it is necessary to choose a name for you company. When chosing a name for your company, it is advisable to use the website of the Ministry of Justice: https://sudreg.pravosudje.hr in order to check whether the name of your choice or similar name has already been chosen and used by another company. For this reason it is advised to prepare alternative names in addition to the proposed company name.

Verification of documents

02

NOTARY

public

The Application for Entry in the Court Register (PO Form) and some of its enclosures have to be verified by a notary public. When paying a visit to the notary public, you should take your ID or passport (obligatory for the foreign citizens). The presence of all founders and other persons whose signatures sholuld be verified is obligatory. N.B. – If you are a foreign national and don’t speak Croatian, a presence of court interpreter for the language is required.

Submission of documents/fee payment

03

FINA

NITRO.HR counter

Registration documentation sealed by the Public notary is submitted to the HITRO.HR counter that can deliver documents for court registration and the National Bureau of Statistics for you. You can make the payment of court fees and the initial capital at FINA’s branches.

If the delivered documentation is correct and complete, the Commercial Court shall register the company in the court register within 24 hours, and electronically deliver the Decision on the establishment and Confirmation of OIB (Personal identification number) of the newly formed company to the Office HITRO.HR.

At the HITRO.HR counter you will receive an RSP Form which you will have to fill out in order to obtain a Notification of Classification pursuant to the National Classification of Activities of the Central Bureau of Statistics. HITRO.hr will, after receiving the Court’s decision on the establishment automatically and electronically obtain a Notice of classification of the business entity within 1 day period

After registration is completed it is necessary to make an official company stamp and open a business account so that the initial capital could be transferred into company account. That, as well as the necessary first registrations of the company, its owner and employees with the Croatian Pension Insurance Institute (HZMO) and the Croatian Health Insurance Institute (HZZO) can be arranged and executed electronically at the HITRO.HR counter.

COST OF DOING BUSINESS

Starting and conducting a business activity requires an insight and estimation of costs that will result from this activity. Here you can find examined six different cost components: oil, gas, electricity, water, utilities and salary costs.

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