Setting up a company in Croatia

Foreign investor, under the condition of reciprocity which is assumed, establishes or participates in the establishment of companies in the Republic of Croatia, acquires the rights in them and assumes the obligations under the same conditions and has the same position as a national of Croatia. The condition of reciprocity does not apply to foreign investor with a headquarters or a permanent residence in the member state of the World Trade Organization, or if he is its national. Foreign company, which has its headquarters in a country which is not a Member State of the European Union nor the Contracting Party to the Agreement on the European Economic Area, and which is personally liable for the company’s obligations, can be a member in the company with a registered headquarters in the Republic of Croatia only if there is at least one more member of the company beside it which has its registered headquarters in the Republic of Croatia, or a Member State of the European Union or a state that is a Contracting Party to the Agreement on the European Economic Area or if it is a natural person who is a citizen of the Republic of Croatia, or of the Member State of the European Union or of a State which is a Contracting Party to the Agreement on the European Economic Area and who is personally liable for those liabilities.

Foreign companies and sole traders, under the conditions prescribed by law, are considered to be domestic legal entities with all rights and obligations as applied to Croatian nationals. However, they cannot permanently perform activities on the Croatian territory until they have established a subsidiary in Croatia. The activities shall not be considered as permanent if they are occasional or one-time performance of the activity, or a particular work (in accordance with the concept of freedom to provide services in accordance with the EU’s acquis communaitaire).

Foreign investors can acquire ownership and shares of joint stock companies. The lowest amount of initial capital for establishing a joint stock company is HRK 200,000 and the nominal value per share cannot be less than HRK 10 HRK. Minimum initial capital for establishing a limited liability company is HRK 20,000, while individual representation per investor cannot be less than HRK 200. The founder has to pay at least one fourth of initial share capital entered in money (i.e. minimum 5,000 HRK) before the company is entered into the Company Register. The total amount of all payments in money must be no less than one fourth of the initial share capital. The total amount of initial share capital in money has to be paid no later than one year after the company has been entered into the Company Register.

A company that has no more than five members and one Board member may be established through a simplified procedure as a simple limited liability company. The minimum initial amount for the establishment of such a company is HRK 10, while individual representation per investor cannot be less than HRK 1.

In order to accelerate and simplify the procedure for establishing a company, the government of the Republic of Croatia has established service HITRO.HR which, with more than 60 offices, fully covers Croatian territory. HITRO.HR accelerates the procedure, making the state administration more efficient, flexible and transparent, enabling the investor to establish a company within 8 working days. With the entry into force of the Ordinance on the manner of registration in the court register via service e-Company, starting a limited liability company with a share capital in cash and a simple limited liability company is possible from any notary’s or HITRO.hr office in the Republic of Croatia at any of commercial courts within 24 hours.

source: www.investcroatia.gov.hr