Split Tech City is a community composed of well-intentioned and progressive companies, startups, associations, initiatives, institutions and individuals. Together we encourage and develop the IT sector of Split and the surrounding region.

Support our community

Wondering what you need to know about setting up a business in Croatia?

Nikolina Kukoč

Nikolina Kukoč

24.07.2021.

If you are, then you’ve come to the right place!

We hope this short guide through the basics of Croatia’s bureaucracy will help you out. The first tip we’d like to offer is this: get a licensed Croatian lawyer and accountant.

No matter how helpful, all information provided in this overview is here only for the purposes of advice and guidance. It does not constitute legal advice in any form. Starting a business is a serious matter and we’re approaching it in that way. While the Internet is great for getting basic information about a variety of topics, including starting a business, anything else is best discussed with experts in the field.

Now, without further ado, sit back, relax – and read on!

Things to know about taxes, costs, and regulations

The Croatian tax system has a similar structure to most European countries. Some government services are available online and new solutions that ease this process of dealing with the government and with bureaucracy, in general, appear constantly. We are far from done with the improvements, of course. However, the whole process is much easier than it was before.

The basic taxes and contributions that a company owner needs to be aware of are these:

  • VAT – the largest source of government income. Its rate is generally 25%. However, on certain products or services, it can be lowered to either 13% or 5%.
  • Income tax – either 24% or 36%, after the tax deduction of 4,000kn per month is applied. Be aware that some towns and municipalities charge additional surtax on income tax (up to max. 18%). Income tax also needs to be paid for dividends and profits paid out to shareholders.
  • Contributions for pensions and health insurance – their rates are 20% for pension funds, and 16.5% for mandatory health insurance. Businesses can get tax deductions for additional health insurance policies paid for their employees.
  • Corporate income tax rate – two rates: 12% up to HRK 7.5 million of company income and 20% on all amounts that are higher than that.
  • Yearly administrative fees to governmental agencies – fees such as tourist and forest fees (the tax on non-market forest functions).
  • Possible additional fees by the local government (regional or municipal) – depending on company office or factory location, there can be additional costs such as utility charges, rent fees, etc.
The basic steps for setting up a company in Croatia

There are a few basic things you will need to decide upon and do before your company is fully set up. Here is a list of steps to go through:

  • Company structure – Select your company structure. Will it be limited liability or a public company? How many owners or shareholders will be included? What type of business activities you will register for? What will be the address of your company’s registered office? These are all the questions you need to have an answer to before starting the registration process as this information all needs to be registered, and some things, like the local taxes and charges, will depend on them.
  • Company name – Decide on the company name. While doing this, you need to keep the following things in mind: the name you chose can be in any of the EU languages, as well as Latin or Greek. If it is a non-Croatian word, the court might ask you to list a source during the registration process. Additionally, you should make sure that a company under this name does not already exist, which can be done via the official Court registry.
  • Visiting the Public notary – All documents necessary for the official registration of any company must be sealed by the Public notary. When visiting one, make sure to take your ID card or passport with you. All founders and other persons whose signatures need to be verified must also be present during this visit. For foreign nationals who do not speak Croatian, an officially registered court interpreter for their language of choice must be present as well.
  • Paying the fees and submitting the documents – Registration documentation sealed by the Public notary can be submitted to the HITRO.HR government agency. They deliver your documents to the court for registration, as well as to the National Bureau of Statistics. You can also make the payment for the court fees and the initial company capital at HITRO.HR. They will also provide you with an RPS Form which you will have to fill out to obtain the registration from the National Bureau of Statistics. Once the registration of your company is approved, the HITRO.HR staff will contact you to claim your documents.
  • Opening a business account at a bank – After the registration process is completed and you are in the possesion of your company’s documents, you need to open a company business account at a bank of your choice, so that the initial capital you provided for registration can be transferred into your company’s account.
  • Registering with the Tax Authority – After your company has been added into the Court Register and the Register of the Central Bureau of Statistics, you must also register your company with the Tax Authority. The jurisdiction of the Tax Authority you need to report to is determined based on your company’s address you provided at the time of the registration.
You know the basics – now what?!

Hopefully, these basic steps give you a general idea of the process behind setting up a business in Croatia. Like we stated in the beginning – a good lawyer and accountant will do wonders for this process and be of great help to you. After all, these professionals are better help than the Internet will ever be.

However, the Internet is a good starting point. Croatian government also realizes this and has its own (albeit a bit limited) “how-to” website.

And while the bureaucracy of any country can be tedious to deal with, we hope this doesn’t discourage you from starting a business in Croatia. The internationals that already live here and some of whom have gone this route have many positives to list about life and work here. They are the proof it can be done.

Therefore, we wish you courage and good luck with starting and nurturing your business right here!

Share


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."

Related News