Official name: The Republic of Croatia
Government: Parliamentary democracy
Official language: Croatian
Territorial organization: 20 counties and the City of Zagreb
Capital: Zagreb
Population: 4.1 million
Land Area: 56,594 km2
Local time: GMT+1

GDP (2020): 49.32 bn EUR
GDP per capita (2020): 12,186 EUR
Inflation (2020): 0.1%
Unemployment rate (ILO, 2020): 7.5%
Average net salary (2020): 898 EUR
Export (2020): 14.9 bn EUR
Import (2020): 22.9 bn EUR
FDI (1993-2020): 33.04 bn EUR
Exchange rate HRK (2020): EUR 7.53
Exchange rate HRK (2020): USD 6.61

Source: Croatian National Bank, Croatian Bureau of Statistics

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.

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.

Private limited company (d.o.o.)
A private limited company is one in which one or more legal entities or natural persons invest stakes (not necessarily of the same amount) in the total authorized capital as contractually set beforehand. The total amount of all stakes must correspond to the amount of the company’s authorized capital. Owners may be either domestic or foreign legal entities and natural persons. Just one owner may also establish this type of company. A private limited company is a legal entity. This status is established by entry into a court register. Company assets are strictly separated from the property of owners. The company is liable for its debts with all its assets. Owners are not liable for company debts. The initial authorized capital of a private limited company must be shown in Croatian currency – kuna (HRK), and the minimum amount of initial authorized capital may not be below HRK 5,000. A company must have a management board and a general meeting. The company management board may have one or more members (directors). A foreign national may also be a member of the management board.

Simple limited company (j.d.o.o.)
A simple private limited company is a subtype of the private limited company as the most frequent type of company in Croatia. A simple private limited company can be founded in a simplified manner and it can consist of a maximum of five members and one member of the management board. The minimum amount of initial authorized capital may not be below HRK 10.00, and the lowest nominal amount of the stake amounts to HRK 1.00. Stakes must be provided in cash only. Each amount of HRK 1.00 of the nominal stake gives the right to one vote, until the company’s initial authorized capital increases to a minimum amount of HRK 5,000 and the provisions of the Act pertaining to the classic private limited company start applying to it.

Public limited company (d.d.)
A public limited company is based on capital, with owners (shareholders) investing in authorized capital divided into shares. A public limited company may be started by a single owner, i.e. it may have only one shareholder. The company is liable for its debts with all its assets. Shareholders are not liable for the debts of the company. The minimum amount of authorized capital is HRK 200,000. The company may issue shares with an indication of their par value or shares without such indication.

General partnership (j.t.d.)
General partnership is a business entity where two or more individuals join in order to conduct business as a going concern and under a common company name. Every partner has unlimited and joint liability to cover the partnership’s debts with all his/ her assets. Any legal entity or individual, both domestic or foreign, may become a partner. A general partnership does not have authorized capital. Unless otherwise provided by the articles of association, partners should bring equal stakes into the company. The stakes may consist of cash, tangibles, rights, labor and other services and goods.

Limited partnership (k.d.)
A limited partnership is a company where two or more individuals associate together in order to conduct business as a going concern under the same company name. At least one partner has unlimited and joint liability for company debts with all his/her assets (general partner), and at least one partner has limited liability proportional to the assets invested (limited partner). Both domestic and foreign individuals and legal entities may be partners in a limited partnership. A limited partnership does not have authorized capital.

Economic interest association
An economic interest association is a legal entity established by two or more natural persons or legal entities for the purpose of facilitating and promoting their business activities, but in a way that the legal entity earns no profit for itself. Members of the association may be persons who perform any economic activity as well as free-lance employed persons. An economic interest association is established without authorized capital, and the rights of members may not take the form of securities. The business activity of the association must be related to members’ business activities as an activity that supports them.

Branch office
Under Croatian legislation, foreign companies and sole traders may conduct business in Croatia by setting up a branch office (Art. 612). The start-up and operation of branch offices owned by foreign companies are governed by the same regulations that apply to the establishment of branches by domestic companies. A branch office is not a legal entity. The liabilities and rights stemming from its operation do not belong to the branch office but to the founder. The branch office operates under its own name. The name should also indicate both the branch’s and the founder’s registered office.

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.

01. Name of the company

  • 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.

02. Verification of documents

  • 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.

03. Submission of documents/fee payment

  • 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.