Establishing a company

A foreign investor, under the condition of presumed reciprocity, establishes or participates in the establishment of companies in the Republic of Croatia, acquires rights and assumes obligations in them under the same conditions and has the same position as a domestic person. The condition of reciprocity does not apply to a foreign investor who has its registered head office or permanent residence in a member country of the World Trade Organization, or is a citizen of it. A foreign capital company, which has its seat in a country which is not a member of the European Union, nor is a party to the Agreement on the European Economic Area, may be members that the obligations of society is personally responsible in the company of people with registered office in the Republic of Croatia only if it is with him in the company at least one other member of a capital company having its registered office in the Republic of Croatia, a Member State of the European Union or a State party to the Treaty on the European Economic Area or a natural person who is a citizen of the Republic of Croatia, a Member State of the European Union or a State Party the European Economic Area, which is personally responsible for these obligations.

Foreign companies and individual traders, under the conditions prescribed by law, are equal with domestic persons in terms of business in the territory of the Republic of Croatia. However, foreign companies and foreign individual traders may not permanently perform activities in the territory of the Republic of Croatia until they establish a branch office. Performing an activity is not considered, for example, occasional or one-off activities, i.e., carrying out a particular job (the notion of freedom to provide services in accordance with the acquis).

Establishment of a company

Foreign investors may acquire ownership and shares in joint stock companies. The minimum amount of share capital for establishing a joint stock company is HRK 200,000, where the nominal value per share may not be less than HRK 10. The minimum share capital for establishing a limited liability company is HRK 20,000, where the nominal amount of a business share may not be less than HRK 200. Before registering a company in the court register, every founder must pay at least one quarter of share capital in cash, where the total amount of all payments in cash may not be less than one quarter of the share capital. Cash deposit must be entered in full within one year of entering the company in the court register.

The company with a maximum of five members and one member of the management board may be established in a simplified manner as a simple limited liability company. The minimum amount of share capital of such a company is HRK 10.00, and the lowest nominal amount of the business share cannot be less than HRK 1.00. To establishment this type of company, incorporation must be in the form of minutes drawn up by a notary public, which such minutes become annexes to the Articles of Association.

START – electronic business start-up

The Ministry of the Economy and Sustainable Development has launched the START system enabling users to electronically start up a business, i.e., establish of a limited liability company (Ltd.) and a simple limited liability company (simple Ltd.) with one or more domestic founders and also sole proprietorships. The new system allows entrepreneurs to launch a business in just a few days, at significantly lower costs.  

Currently, the following services are provided in the start system:
– Registration of the company in the court register,
– Registration of sole-owner busines in the sole proprietorship register,
– Registration in the register of business entities (Central Bureau of Statistics),
– Registration in the register of taxpayers, VAT register and/or assignment of a VAT ID number (Tax Administration),
– Request to open transaction accounts for business entities (banks),
– Registration in the Croatian Pension Insurance Institute (HZMO) system,

– Electronic payment of fees and share capital.

 

The system will be continuously upgraded and developed, and in the second phase, the possibility of establishing a company and a sole proprietorship with one or more foreign founders is envisaged.

As before, entrepreneurs can use the HITRO.hr system, a service established by the Government of the Republic of Croatia, to speed up communication between entrepreneurs and state administration, and through which it is possible to establish a limited liability company or a simple limited liability company.