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Croatia’s digital nomad (not exactly a) visa

Nikolina Kukoč

Nikolina Kukoč

18.02.2021.

passport with visa stamps
Residence permit, not a visa

First of all, let’s get one thing straight before we begin: we’re talking about a temporary residence permit, not a visa. While the term “digital nomad visa” has a nice ring to it, it’s easy to abbreviate (DNV, everyone!) and its hashtags are present all over social media, it is not a visa. At least not in Croatia. If a person wishes to stay in Croatia beyond the amount of time covered by a possible tourist visa they need to even enter the country, he or she needs to apply for a residence permit.

The law itself never refers to any type of visa in its wording. Therefore, in Croatia you apply for a temporary residence permit based on living and working as a digital nomad. No matter how wordy and difficult it is to say it.

How it all began

It all began on social networks. Proving once again, that these platforms can be a source of good things if we use them wisely and ethically.

Dutch-born entrepreneur Jan de Jong wrote an open letter to Croatia’s Prime Minister via LinkedIn on July 11th, 2020 asking him to consider introducing a temporary residence permit in Croatia for digital nomads. On August 26th, Croatia’s PM Plenković announced via Twitter that Croatia would adjust its Aliens Act to legally regulate the residence of digital nomads. A proposed Amendment to the Aliens Act was then introduced to the Parliament for approval.

On November 25th, the legislation passed voting in the Parliament, was then approved by the President of Croatia on November 27th and published in Croatia’s Official Gazette on December 2nd, 2020. The law is in effect as of January 1st, 2021 and digital nomads can now apply to get their temporary residence permit.

Let us tell you one thing: this kind of speed in the implementation of changes in Croatia’s laws is really novel. It’s a very good thing and solid proof it can be done in the future for other laws and regulations as well.

So, while 2020 kind of slowed the whole world down, Croatia sped up in a way. There’s still a long road ahead in some aspects, of course. But – we’re moving!

The law

All the Croatian laws are available to the public via the Official Gazette. However, they are in Croatian (with some exceptions that pertain to the international laws), so understandably are impossible to read by a foreigner, unless you have a really good Croatian friend who is willing to read through a lot of legal lingo to explain it to you. For the purpose of this article, we’ll be that friend for you by translating the important points in the law itself and giving some explanations.

In the Aliens Act, digital nomads are mentioned twice: in Article 3 about the glossary of the law and Article 57 about temporary residence.

Article 3:

“(1) Certain terms, in the sense of this Act, have the following meaning:

43) digital nomad is a third-country national who is employed or performs work through communication technology for a company or his own company that is not registered in the Republic of Croatia and does not perform work or provide services to employers in the Republic of Croatia.”

Article 57:

“(1) Temporary residence is granted to a third-country national who intends to reside or resides in the Republic of Croatia for the purpose of:

11. residence of digital nomads

(4) An application for the regulation of temporary residence for other purposes or purposes of residence of digital nomads may be submitted by a third-country national after the expiry of six months from the expiration of temporary residence granted for other purposes or purposes of residence of digital nomads.”

The first thing we would like to explain is the term “third-country national”. By Croatian law, a person is a third-country national if they are not nationals of EEA (EU, Iceland, Lichtenstein, Norway, and Switzerland), but have citizenship of a third country or are without citizenship. Now that we got that definition out of the way, let’s tackle the meaning of the law itself.

The majority of the basic requirements needed for applying to get your digital nomad residence permit are already known and we will go over them in more detail below when we discuss the practical implementation of the law. What we know from the word of the law itself is this:

 – After getting approved, the duration of your residence permit is one year. It is not possible to extend it and you have to leave Croatia when this time passes.

 – You are allowed to re-apply after 6 months have passed since the expiration of your previous digital nomad residence permit. This means that you have to leave Croatia for a minimum of 90 days. You can then come back for another 90 days on a tourist visa and submit your application for a second digital nomad residence permit when the time comes.

 – A temporary residence permit based on being a digital nomad does not lead to permanent residence or Croatian citizenship. To qualify for permanent residence in Croatia, a third-country national must live continuously in Croatia for at least 5 years. Because the digital nomad residence permit requires you to leave the country after it expires, it will not qualify you for permanent residence and subsequently Croatian citizenship.

 – To qualify for the temporary residence permit based on being a digital nomad you cannot legally work for any Croatian company nor can you or the company you work for provide services to employers in the Republic of Croatia.

 – Family reunification will apply. The reunification of a spouse is possible with the marriage certificate and reunification of children with the birth certificate of the child supplied as proof.

Taxes and finances

While there was a lot of talk regarding the changes made to the Aliens Act, one other important change in the Croatian law came with the amendments to the law on income taxes. The specific article about digital nomads is Article 9 and it states the following:

“(1) Income tax shall not be paid on:

26. receipts of natural persons realized based on performing non-independent work or activity for an employer who is not registered in the Republic of Croatia based on the acquired status of a digital nomad in accordance with a special regulation.”

Kristina Grbavac from KPMG Croatia was really helpful regarding the understanding of this law and what it means for digital nomads. We’re very thankful to her for being very detailed in her responses to our questions and pointing out some things to pay attention to. As it states in the law, the income digital nomads earn for their work or activity performed for their employer who is not registered in the Republic of Croatia is exempt from income tax in Croatia.

The term “employer” in this case signifies anyone you as a digital nomad are working for: it could be your employer in terms of a certain company; your business partner; you, if the company is yours; someone who has contracted you as an external operator to provide a certain service, etc. Keep in mind that this tax exemption in Croatia does not mean you don’t have to report said earned income to your home country.

Another important thing to keep in mind is that the law is discussing income earned from work activity or service provided as a digital nomad, so any other type of income you might be earning can still be taxed in Croatia if you are considered a tax resident in Croatia. If you are not considered a tax resident in Croatia, Croatia has no right to tax you for your income earned outside of its borders.

We’ll give an example to clarify: let’s say you live in New York and you plan on coming to Croatia on a digital nomad visa. You rent out your New York apartment to someone else for a year and come here. The rent that person pays to you for living in your apartment while you’re not there is eligible for income tax in Croatia because that is not an income you’ve earned from your activity as a digital nomad.

This is just an example we gave to illustrate the point and make it easier for you to understand which types of income you should pay more attention to if you are earning them. Needless to say, this is very individual and it might not even apply to you, but it is something to be aware of.

To apply for the temporary residence permit as a digital nomad, you also need to prove that you are capable of supporting yourself financially during your stay in Croatia. The exact amount you need to have access to can vary as its calculation is based on the salary average of the previous year. The proof of sufficient funds is a statement from the bank showing you have access to the required amount.

To prove you are a digital nomad, which is also one of the application requirements, you will need employment or a freelance contract by your employer or business partner. The documents vary depending on your individual circumstances, but all have the same purpose: to prove to the local authorities assessing your application that you perform work through communication technology.

Regarding taxes in general, you should be aware that Croatia taxes on a cash basis: for example, it taxes the income received from your arrival to Croatia and/or from the moment you become Croatian tax resident – which is after 183 days.
Croatia will not tax income received by individuals before they first enter our country. However, what can be taxed, for example, are the employer’s payments to private health and pension insurance. When it comes to digital nomads, it is clear that the income they earn based on the activity by which they were granted a digital nomad residence permit will not be taxed in Croatia. However, as we mentioned above, the issue of taxation of other types of income they earn remains open.

With the whole issue of possible double taxation, you need to be aware that Croatia has provisions in its local legislation that allow avoiding double taxation, but for that to be applicable the person should be a tax resident of Croatia and it should be foreign income – meaning not income earned by working in Croatia. In cases like these, it is always better to hire an expert in international tax laws to handle everything for you, or at least get your case assessed by one.

Health insurance

To apply for the digital nomad temporary residence permit you need proof you have valid health insurance which must not expire before the end date of the residence permit you are applying for – so it must be valid for at least one year. This health insurance does not need to be set up with a Croatian company, so any health insurance you might already have will do.

As with other laws that underwent the necessary changes to adapt to digital nomads, the Law on mandatory health insurance and health protection of foreigners in the Republic of Croatia has also been changed to align with the changes already made to the Aliens Act. The changes were approved by the Parliament on the 5th of March 2021, were made official by the President on March 9th, 2021, and published in the Official Gazette on March 12th, 2021. The law itself is in the effect 8 days after being published – so as of the 20th of March 2021.

The change that was made that specifically relates to digital nomads is the added Point 12 to Article 6 that states:

“The application for mandatory health insurance is not required to be submitted by a third-country national on temporary residence in the Republic of Croatia, who resides in the Republic of Croatia for the purpose of residence of a digital nomad, and is obliged to bear the costs of using the healthcare services in a healthcare facility, or at a private healthcare practitioner, or any other healthcare provider in the Republic of Croatia on his/her own.”

This means that all third-country nationals, who have applied and were successfully approved for the temporary residence permit in Croatia based on being a digital nomad, are not obliged to apply for mandatory health insurance with Croatia’s state health insurance provider (HZZO).

Therefore, as a digital nomad, you are exempt from registering with HZZO and from paying healthcare insurance contributions to HZZO. Important to note is that, because of this exemption, digital nomads will have to finance any necessary medical treatment they might possibly need while in Croatia on their own.

Practical implementation

Practical implementation of any law in Croatia is always easier if there is a Rulebook in place for local municipalities to use. It equalizes the procedure for the government workers and eases the whole process and availability of information regarding the documents needed for the applicants. It will definitely take some time to equalize this procedure and for all its details to be known.

However, the Ministry of Internal Affairs (MUP) did publish a guideline and we do have some information regarding the basic requirements for submitting your application. We have listed all of that below, but as of March 1st submitting an online application is also possible via MUP’s website.

It’s still helpful to be informed beforehand, so this is what you will need to apply:

 – Application for Temporary Stay: It’s a standard application form for third-country nationals.

 – Identification number (in Croatia: OIB): OIB itself is not required for residence. However, it is needed for rental agreements, so this should be your priority. You can get one via email.

 – Background check: Depending on your native country, this document might be easier to get while there and not in Croatia. It needs to state that you have not been convicted of criminal offenses from your home country or the country in which you have resided for more than one year immediately before arriving in the Republic of Croatia.

 – Valid passport: The validity of your passport must be three months longer than the period of validity of the permit you’re applying for. If your travel document is not in English, it will need to be translated into Croatian and notarized.

 – Proof you are a digital nomad: Called “Proof of purpose” whose requirements you can check in the MUP guideline. But keep in mind that what might be required will be determined by each individual case. Above we have mentioned some of the documents you might use, but some other ones might be needed as well. MUP has listed the documents on their website, but once you submit your application they will be the ones who determine if they need additional documents from you.

 – Valid health insurance: For the application to get the residence permit your private health insurance or travel health insurance is enough. But keep in mind that it has to cover the territory of the Republic of Croatia.

 – Valid rental contract: You must register your address with the police. Once you reach an agreement with your landlord, you need to have a lease contract for the duration of the permit you’d be applying for. The contract needs to be signed by both parties and must be notarized by a public notary.

 – Proof of sufficient funds: As stated above where we discussed finances, this is a bank statement. Lately, MUP was accepting statements from foreign banks. However, they might request that you have the funds in a Croatian bank account. In that case, you need to open a bank account and deposit the amount needed in one lump sum. You can check the amount required by MUP here.

 – Passport photos: It is best to get them done in Croatia as photo sizes might vary in different countries. There is usually a photo shop near the police station that does these types of photos.

 – Application fee: MUP provided a really detailed overview of the costs on their website, as well as instructions on how to pay them even via internet banking.

All this information was confirmed by Split’s MUP and also published on MUP’s website. However, until there are more applications for this particular residence permit and the government collects enough practical information from individual cases, there might be some variations in requirements when it comes to other municipalities.

Still more questions than answers, however…

As you can see from this article, we’ve left the questions we don’t know the answer to unanswered and are not even willing to speculate and guess possible answers. We consider any type of residence permit a serious matter that influences real people and has real-life implications.
Therefore, we strived to be open and transparent with you regarding the things we know and the ones we don’t know and inform you accordingly.

However, all these everyday unknowns regarding the digital nomad residence permit can only be resolved by future applications that will generate a more practical implementation of laws in effect. Sometimes only through trial and error, mistakes and blunders, can you learn and move forward.

If you’re a digital nomad considering applying for our “visa that is not a visa” – don’t be discouraged! Apply! Master Yoda said: “Do or do not. There is no try.”

So, do! And we will be here to offer support: a coffee or a beer to chill out after dealing with bureaucracy, a listening ear to vent any possible frustrations, a Croatian friend full of tips and tricks patient enough for reading tongue-tying law-lingo, a cheering squad as you set foot at Split’s MUP to hand in your application. This community is here for you!

We jokingly say we know way too much about this topic for permanent residents of Croatia and not nearly enough if we were digital nomads. So feel free to email us if you want to share your practical experience with this type of residence permit to better inform future applicants or you have a question only a Croatian can answer because of our magical power of being able to speak and read Croatian. We’ll be happy to help!

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About author:

Nikolina Kukoč

Researching is woven into my DNA, but I'm a musician at heart. Interested in too many things and always curious. Forever in love with Split and enchanted by people who teach me new things. When I'm not writing about Split's tech community, you will find me somewhere in nature, in the theatre, or with my head stuck in a book. I do my best to live by the verse from the opera "Fedora" by Umberto Giordano: "Love forbids you not to love."

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