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First of all, citizens of many states outside of the European Union can not purchase and register properties directly in their name in Croatia, as their countries have not signed reciprocity agreements with the Republic of Croatia. However it is possible to incorporate a local Croatian company, which will become a legal proprietor of Croatian real estate. There are no limitations for foreign citizens to be members or directors of Croatian companies. There is no need to employ a local Croatian Director.
Secondly, if you are planning to purchase real estate with the subsequent purpose of renting out, it is far better to do it via a Croatian company. On top of that non-EU citizens are obliged to run a rental business via the local company, it can not be done in the name of the physical person.
Thirdly, you can save 25% VAT when purchasing new apartments or houses from a local Croatian developer, as VAT will be subsequently reimbursed to your company's account.
Finally, incorporation may facilitate the inheritance process as among your heirs there can be citizens of different states, including those with no reciprocity. It is much easier for them to inherit shares of a company than a property.
Opening a d.o.o. company in Croatia can be done through two methods:
To open a company in person, follow these steps:
The initial step involves selecting a name for your company. This can be done at the HITRO.HR counter at FINA, the tax agency. Refer to the map of HITRO locations to locate the nearest office. It is advisable to brainstorm several name variations in case your primary choice is not available. It is not permissible to choose a name that closely resembles an existing company. Existing companies can be explored on the Ministry of Justice website. Your company's name should be in Croatian or the official language of one of the EU/EEA member states, and it must be presented in Latin script. Arabic numerals can also be utilized.
The Croatian company must have a business address. The most convenient for the company is to use the business premises of their accountant for that purpose (accountants provide addresses for some additional payment). However, the address of the purchased property can also be an option (even if it is a residential property).
The founders should also choose the basic types of activities of the future company (please, note that some types of activities may require special licensing in Croatia). Companies can include as many different activities in a list as possible, combining renting, trading, travel services, etc.
Future company Directors and all founders should obtain local Croatian OIB (Tax number).
If the founder/member of the future company is another foreign company, the procedure will be more complicated: OIB should be received both for the founding company and its representative (Director) who normally comes to Croatia in person to visit a notary public. He should bring an up-to-date company register abstract (not older than 30 days) with an apostille and official certified translation into Croatian language.
A notary public, known as Javni bilježnik, is responsible for verifying an application intended for entry into the court register. To undergo document verification, individuals are required to present a valid ID card or passport, with foreign citizens obligated to provide their passports. In cases where there are multiple founders, the presence of all founders is necessary.
The notary public will authenticate the following documentation:
The set of documents to found a company is signed by Directors and Founders at a notary public office. The official notary fee is about 400 eur depending on the complexity of the structure, a presence of a certified court translator is needed to translate the whole set of documents into your native language (costs about 200 eur). The personal presence of Directors and Founders is recommended, otherwise, the procedure is quite long and rather difficult.
Following your visit to the notary, it is essential to pay share capital at FINA (tax office) and then submit an application for registration in the court register to FINA or HITRO.hr. It is essential to retain the receipt for the startup capital deposit along with your incorporation documents.
Submission of documents can also be executed by a notary public which is the most convenient and straightforward.
Subsequently, a decision on the registration will be issued by a commercial court. Usually, it is registered during a week. After that, you have to make a corporate stamp and get the company business account activated. Altogether it takes 2-3 weeks to get all the docs ready.
Within 15 days of receiving the decision, you are required to seek activity classification from the Državni zavod za statistiku (Central Bureau of Statistics). The necessary documentation includes:
Notification regarding the classification will be provided by FINA (Tax office).
Upon completion of all necessary paperwork, it is essential to obtain a company stamp, known as "pečat," which is essentially a rubber form used for endorsing documents. To request the stamp, you must furnish your notarized articles of incorporation.
You can acquire a company stamp at a tiskara (tiskarnica) - printing shop. The cost will vary depending on the size and shape of the stamp.
It is mandatory to enroll the company with the Tax Administration (Porezna uprava) based on the company's registered address/office. This enrollment is necessary for registration in the Register of Income Tax and VAT obligees. The company should get its Tax number (OIB) and statistical number. In the case of existing employees, their registration for pension insurance at HZMO and health insurance at HZZO is required. See info how to get OIB - http://www.porezna-uprava.hr/en/Pages/PIN.aspx
The Company Director should also be registered for pension insurance at HZMO and health insurance at HZZO, if he is not insured as a Director/employee elsewhere in the EU. The Company Director is considered officially employed, he is obliged to receive a salary (not less than prescribed by law) and pay monthly pension and health insurance payments.
The amount of minimum director salary and insurance payments are subject to annual adjustments (they are rising every year for cca. 5-10%).
Please, note that Croatia has an open register of Croatian companies where any person can see the names of shareholders and directors of the company, its listed types of activities, share capital, address and other data.
You will need to open a company bank account.
It is advisable to keep all paperwork in a secure and well-organized location, as no document is considered insignificant in the eyes of the Croatian government.
The specific requirements for opening a bank account vary based on each bank's internal business policy and your case.
Generally, the required documents include:
For foreigners, additional information may be requested to establish trust. This may involve inquiries about residence in Croatia, any connections to the country, the purpose of company establishment, a list of business partners in Croatia, the source of funds, and the business plan. Some banks may facilitate the process if you own property in Croatia.
Regardless, be prepared for detailed explanations as part of the account opening procedure.
The start-up/share capital can reach up to 26,544.56 eur for non-EU/EEA nationals when applying for a work permit through ownership of the company.
The most common legal entity form in Croatia is a company with limited liability (d.o.o.) with a share capital of approx. 2700 euro (20 000 kn). To incorporate a company the founders and directors of the future company should determine shares in the start-up capital, and define the authority of Directors (i.e. whether they will make decisions jointly or separately).
Being registered, Croatian companies should decide whether they are interested in entering the VAT zone or not. It can enter the VAT zone right after registration or at the end of the current year for the next one. Every company in Croatia is obliged to submit accounts and financial reports. If you are in a VAT zone, they are submitted on a quarterly basis. If not, they are submitted yearly, every next March for the previous year (till May 1st). The companies can be completely dormant for some time but if they own real estate, we would recommend they have some income of 2000-3000 eur at least per year to avoid any questions from tax authorities. You will need this amount anyway to cover utilities and other expenses.
If you have reimbursed VAT, then your company should conduct a rather active commercial activity to justify such compensation from the budget. If you do not know the Croatian language and are not familiar with the Croatian norms of accounting, it will be hardly possible for you to do proper accounting for your Croatian company. The only way is to conclude an agreement with a specialized certified Croatian accounting company. A simple company that just owns real estate and does not conduct active commercial activity will pay approx. 100 eur per month for accounting services. In top locations of the seaside like Opatija and Dubrovnik, the fee of accountants may be as high as 200-250 eur per month. Please, take into account that it is not so easy to find an English-speaking or German-speaking accountant and you will certainly need a recommendation from your agent.
Please, be advised that your company will pay a small membership fee to the Croatian Chamber of Commerce of cca. 8 eur and may be subject to slightly higher electricity and water payments per corporate tariffs. You are welcome to get familiarized with the system of taxation in Croatia: www.porezna-uprava.hr/en/EN_porezni_sustav/Stranice/THE-CROATIAN-TAX-SYSTEM.aspx
The incorporation procedure is quite common for our real estate agents and they will advise you on all the details and assist in the incorporation process.
Croatian citizens have the option to establish a d.o.o. online without the need for a lawyer or notary public. This can be accomplished through the START application, accessible here. Access to the site requires the use of either your osobna iskaznica or FINA's digital certificate, exclusive to Croatian citizens. The total expense for initiating a d.o.o. through the START application is only 26.55 eur, and your company will be officially registered within 3-5 days.
Through the START application, you can:
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