SETTING UP BUSINESS IN CROATIA
General Aspects
The Republic of Croatia is situated in the southeastern part of Europe, surrounded by The Republic of Croatia is located in Southeast Europe and has been a member of the European Union since 2013. Due to its geographic position, Croatia is often described as a bridge between Central Europe and the Mediterranean, reflecting its strategic importance in trade and transportation.
Croatia has a population of approximately 3.85 million, and its capital city is Zagreb. The official language is Croatian, and as of 1 January 2023, the official currency is the euro (EUR).
Legal Forms of Business Entities
form Feature Remarks
Limited Liability Company d.o.o. Most common form; shareholders’ liability limited to their capital contribution; suitable for small and medium-sized businesses; minimum share capital (EUR 2,500)
Simple Limited Liability Company
j.d.o.o. Simplified form of d.o.o.; lower minimum share capital (EUR 1); typically used for start-ups and small businesses; Statutory obligation to allocate 25% of profits to reserves until the amount of EUR 2,500 is reached.
Joint Stock Company d.d. Share capital divided into shares; suitable for larger businesses and capital-intensive projects; minimum capital (EUR 25,000)
General Partnership j.t.d. Partners have unlimited joint and several liability for the company’s obligations
Limited Partnership k.d. At least one general partner with unlimited liability and one limited partner whose liability is limited to their contribution
Branch Office – Extension of a foreign company; not a separate legal entity; operates on behalf of the parent company
Sole Proprietorship / Trade – Individual entrepreneur who operates independently; may be a free, regulated, or privileged trade; owner is personally liable with all assets
Organizational Questions
Topic Feature
Incorporation Procedure Registration with Commercial Court, Tax authorities, and bank account opening
Minimum Share Capital d.o.o.: EUR 2,500
j.d.o.o.: EUR 1
d.d.: EUR 25,000
Management Structure Directors for d.o.o./j.d.o.o.; Management and Supervisory Board for d.d.
Accounting & Audit Accounting records in line with Croatian regulations; annual financial statements to FINA, Tax report to tax authority
Licenses & Permits Required for regulated activities; Examples: finance, insurance, energy, telecom, healthcare
Remarks
Process can usually be completed within a few days if documents are complete
Lower capital requirements for j.d.o.o. make it suitable for start-ups
Shareholders / Members Individuals or legal entities
Registered Office Must have a registered address in Croatia
Supervisory Board optional for small d.o.o.; one-tier or two-tier system possible for d.d.
Statutory audit is required for medium and large companies and is determined based on company size, revenue, total assets, and number of employees.
Crafts in Croatia are generally entered in the Crafts Register and in many cases require that the person meets general and, for certain activities, special conditions (such as vocational qualifications, specific health or technical requirements, or a licence for privileged crafts)
Ownership and voting rights defined in articles of association
Can be a physical office or virtual office, with real adress (if legally allowed)
Employment
Topic Feature
Employment Contracts
Written contracts required; can be for indefinite or fixed term
Working Hours Standard full-time: 40 hours/week
Minimum Wage A statutory minimum wage is in force (2026 gross amount: EUR 1,050), the existence of sector-specific collective agreements
Social Security Contributions Contributions for pension and health insurance
Termination of Employment Notice periods and severance payments regulated by law
Foreign Workers May require residence and work permits
Employee Benefits Paid leave, sick leave, maternity/paternity leave, possibility of granting tax-exempt payments
Foreign employer Foreign employer (foreign company) obtains a Croatian OIB and, in doing so, employs workers in Croatia. Employees become liable for paying contributions and taxes in Croatia, while the employer pays salaries and remits the corresponding taxes and contributions
Remarks
Defines rights and obligations of employer and employee
Overtime limited by law and requires additional compensation
Updated annually by regulation, by the government
The employer is obliged to calculate, pay, and report the contributions in the appropriate forms.
Can be by mutual agreement, ordinary notice, or extraordinary termination
EU/EEA citizens have simplified procedures; non-EU citizens subject to standard permits
Benefits are defined by the Labour Act and collective agreements
It is possible to register a foreign company in Croatia solely as an employer for the purpose of employing workers in Croatia.
Taxation
Topic Feature
Corporate Income Tax Standard rate: 10% for small companies (annual revenue ≤ 1,000,000 EUR), 18% for larger companies
Personal Income Tax Progressive: Lower income tax rate (for annual income up to €60,000): approximately 15 % – 23 %, with a common default of 20 % if no local decision is made; Higher income tax rate (for annual income above €60,000): approximately 25 % – 33 %, with a typical default of 30 %
Value Added Tax (VAT) Standard rate: 25%; reduced rates: 13% and 5%
Withholding Taxes
Dividends, interest, royalties, certain services paid to non-residents
Social Security Contributions Pension (I. & II. pillar), health insurance
Local Taxes Real estate tax, communal fees, tourist tax, consumption tax
Excise and Special Taxes Alcohol, tobacco, energy products, motor vehicles
Double Taxation Treaties
Croatia has treaties with over 60 countries
Remarks
Tax base calculated from accounting profit; certain deductions and incentives may apply (e.g., R&D, investment incentives)
The municipal surtax will no longer apply from 2024., Personal allowances are taken into account as a non-taxable portion of income for the purpose of calculating personal income tax
Businesses exceeding turnover threshold of 40,000 EUR must register; applies to most goods and services; companies that voluntarily want to charge VAT continue to register for VAT
Reduced rates may apply under double taxation treaties
Pension (I. & II. pillar) are part of the employee’s gross salary, but the employer is responsible for their payment, while health insurance is a cost borne by the employer
Varies by municipality; generally minor but must be accounted for
Applied in addition to VAT; rates set by government regulations
Helps prevent double taxation and clarifies tax jurisdiction on crossborder income
This guide has been prepared by KANCELARIJA, an independent member of Antea
KANCELARIJA
Ćiril-Metodova 20, 21000 Split, Croatia
Tel.: +38 5915656089
Mail: info@kancelarija.hr
Web: www.kancelarija.hr
Mallorca, 260 àtic
08008 – Barcelona
Tel.: + 34 93 215 59 89
Fax: + 34 93 487 28 76
Email: info@antea-int.com www.antea-int.com
SETTING UP BUSINESS IN CROATIA
This publication is intended as general guide only. Accordingly, we recommend that readers seek appropriate professional advice regarding any particular problems that they encounter. This information should not be relied on as a substitute for such an advice. While all reasonable attempts have been made to ensure that the information contained herein is accurate, not Antea Alliance of Independent Firms neither its members accepts no responsibility for any errors or omission it may contain whether caused by negligence or otherwise, or forany losses, however caused, sustained by any person that relies upon it. © 2026 ANTEA