Expand Business in Croatia

Croatia

Global Upside helps businesses expand into Croatia by providing talent acquisition, human resources, accounting, payroll, tax, incorporation, and professional employer organization (PEO)/employer of record (EOR) services. Our comprehensive offerings create an end-to-end solution that helps you establish your business and optimize your operations, all while maintaining compliance with Croatian laws and regulations.

The hiring and incorporation processes in Croatia are often complex, time-consuming, and involve numerous legal and compliance challenges. Global Upside simplifies these processes and lifts the compliance burden from your business. Our teams have the experience and expertise required to help you establish a legal entity in Croatia. We also offer PEO/EOR solutions to companies interested in hiring employees quickly, without setting up a legal entity in the country.

Capital City

Zagreb

Currency

Croatian Kuna (HRK)

Language

Croatian

Government

Parliamentary, Representative Democratic Republic

Country Overview

Croatia is situated on the northwestern border of the Balkan Peninsula in southern Europe. The nation is flanked by five countries: Hungary, Slovenia, Bosnia and Herzegovina, Serbia, and Montenegro and also shares its sea border with Italy.

  • Croatia mainly exports wood, medicaments, and petroleum oils.
  • The country imports petroleum oils and crude oil, motor cars, and electrical energy.
  • The tourism sector is among the crucial segments of the Croatian economy.

Options for setting up a legal entity in Croatia include:

Limited Liability Company

A limited liability company, also known as Drustvo s Ogranicenom Odgovornoscu (DOO), requires at least one investor, and the liability is limited to their contributions.

Joint-Stock Company

A joint-stock company, also called Dionicko Drustvo (DD) requires at least one investor and the shares can be transferred according to the law.

Branch Office

A branch office can be set up by foreign companies that are open to start a business in Croatia. Since a branch office is not considered as a separate structure, all obligations and activities are the parent company’s liability.

Representative Office

A representative office is a form of an entity set up that cannot engage in any activities which involve commercial activities and income generation. It can only engage in market research and advertising the business of the parent company.

It takes a minimum of two weeks to establish a legal entity set up in Croatia.

Under the Labor Law, employment agreements must be in writing and contain at least the following information:

  • Names and addresses of both parties
  • Place of work
  • Work position or a list of tasks an employee will be performing
  • First day of work
  • Expected duration of the agreement (provided it is being entered into for a definite period)
  • Duration of paid annual leave
  • Notice periods
  • Remuneration, wage increments, and time of payment
  • Duration of workday or workweek

There are 14 national holidays in Croatia:

  • Jan. 1: New Year’s Day
  • Jan. 6: Epiphany
  • Easter
  • Easter Monday
  • May 1: International Workers’ Day
  • Corpus Christi
  • June 22: Fascist Resistance Day
  • June 25: National Day
  • Aug. 5: Homeland Thanksgiving Day
  • Aug. 15: Assumption
  • Oct. 8: Independence Day
  • Nov. 1: All Saints’ Day
  • Dec. 25: Christmas
  • Dec. 26: St. Stephen’s Day

The payroll frequency, in Croatia, is monthly.

The 13th salary which is the Christmas bonus, though not mandated by law, is common.

Croatia has implemented the International Financial Reporting Standards (IFRS) for the preparation of financial statements for big companies. All other firms can prepare financial reports as per the rules set by Croatian Committee for Financial Reporting Standards.

Corporate Tax

The corporate tax rate in Croatia is 18%.

Value Added Tax (VAT)

The VAT in Croatia is 25%.

There are reduced rates of 5% and 13%.

On April 27, 2018, the Act on the Implementation of the General Data Protection Regulation, known as Zakon o provedbi Opće uredbe o zaštiti podataka, was enacted in the Croatian Parliament. It came into force on May 25, 2018 (the ‘Act’).

Anti-Bribery & Anti-Corruption Law

The Croatian Criminal Code regulates bribery and corruption offenses in the private sector.

Bribery of Private Officials:

For Individuals:

i) Imprisonment of up to eight years

For Businesses:

i) For companies: confiscation of the benefits received

ii) A monetary fine of up to HRK 12 million

Additionally, corruption is also addressed in separate laws:

  • Corporate Criminal Liability Act
  • Civil Servants Act
  • Conflict of Interest Prevention Act
  • Code of Conduct for Public Officials
  • Money Laundering and Terrorist Financing Act
  • Code of Judicial Ethics