Setting up company
Setting up company

COMPANY FORMATION IN CROATIA

Croatia has a great potential to implement business ideas and ambitions. A contributory factor is the fact that Croatia is a full member of the European Union, which was recognized not only by domestic but also by foreign investors. More than 15 thousand foreign companies have been opened in Croatia in the recent years.

Economic opportunities in Croatia

Croatia is a member of United Nations, Organization for Security and Cooperation and the Council of Europe. The currency is stable, and the industrial production is continuously growing.

Foreign investments are constantly encouraged to strengthen trade and business relations especially between Great Britain and Croatia. This can only present numerous advantages to those who consider running a business and register a company in Croatia.

Legislation in Croatia

Croatian legal framework is based on Austrian and German models. The Constitution of the Republic of Croatia guarantees free capital transfer and repatriation of profit free of charge to all investors, and Croatian law ensures equal rights for domestic and foreign physical and legal entities.

Opening and registration of a company in Croatia is in compliance with EU standards. Accordingly, starting a business in Croatia has never been easier and simpler.

Different types of businesses in Croatia:

Limited liability company

Simple limited liability company

General partnership

Joint-stock company

Limited liability company

It is a company in which one or more legal or physical entities want to do business under one common name. Accordingly, they invest in the capital together. This is generally the most common form of a company in Croatia. It is important to mention that stocks i.e. basic investments in the limited liability company do not have to equal. One of the founders cannot take over more stocks upon starting a company, but they can acquire them later. Business stocks cannot be expressed in securities. The source fund of the limited liability company must be expressed in national currency of the Republic of Croatia; kuna (HRK). Share capital cannot be less than 20.000,00 kn.

Simple limited liability company

This type of company can be registered even without a single employee. There are no impediments for starting a company even if the person is employed.

The number of services in a simple limited liability company is not restricted by the Corporations Act

Simple limited liability company is a trade association and as such cannot be an agricultural estate

According to the same Act, a company can have only one board member and their number is not subject to increase

Foreign citizens can set up a company under the same conditions as every citizen of the Republic of Croatia

In order to dissolve a company, company members’ decision is required, and the process is regulated by the Corporations Act

General partnership

Company that has been founded by joining two physical or legal entities for the purpose of performing activities under one name and company. Every member of the company is personally liable to its creditors.

The share capital of the company is distributed to equal shares, i.e. all stocks are of the same value. But, without the consent of other members, a single member of the company cannot freely dispose of its chare in the company

Joint-stock company

Presents a company where the share capital is distributed on stocks, and hte members (stockholders) can participate with their shares.

Joint.stock company can be founded by a single person, i.d. a company can have one stockholder

Joint-stock company can be entered into a court’s register, after which it acquires a legal capacity

Stockholders (company members) are not responsible for company liabilities, while the company itself is responsible for all liabilities with its assets.

The least share capital of the company is 200.000,00 kn

Company formation procedure in Croatia

1. Selecting the name of the company: the name under which the company is to do business should be decided upon before the registration procedure. Considering the fact that a company must not have a name similar to an existing one, the name of the future company is something that needs special attention.

Notes regarding the selection of the company’s name and activities:

General partnership must be different from a company of the same type entered into the court’s register

All data about the company should be authentic; respecting the authenticity principle

The company must contain an additional note explaining the name of the company and its activities

The company must be different from other companies; the constituent parts of the company should not create confusion during activities performance nor affect intellectual or industrial property rights

In case of similar names of two different companies, further information should be added according to which these two companies will clearly be distinguished

The word “Croatia” and its derivatives as well as the national flag and coat of arms can be entered into the company exclusively with the consent of the government of the Republic of Croatia or the Ministry of Public Administration

The company must not contain coat of arms, flags or names of other countries and international organizations.

A personal name or a part of the personal name can be used exclusively under the consent of the person included

A personal name of a historical person can also be used only under the consent of the person itself or its descendants (if the person is deceased) and only if used appropriately.

The company can be registered only if there exists an address where the company can be situated

The company can also be registered if translated into one or several foreign languages

2. Collecting all the necessary documents translated into the Croatian language

3. Registration with the Commercial Court/ notary public

4. Opening a bank account for investing share capital

5. Registration with Tax administration

6. Registration with Pension and Health insurance

7. Membership in Croatian Chamber of Commerce

What do you need to know before registering a company in Croatia?

Croatian law states that companies need to have a person (accountant) that will submit tax declaration, communicate with the government, do payroll accounts, etc.

Get to know the VAT system; VAT in Croatia is 25%. If your company is registered in the VAT system, you are entitled to a tax refund

Company’s address: once you have registered a company in Croatia, we advise you not to change its address. The change of address is done in the presence of a notary public after which the process is reported to the government of Croatia. Depending on the notary public, all the costs can run up to 4000 HRK

Fiscalization: as of 1 January 2013 every company needs to have a fiscalization software which automatically informs the authorities of every cash transaction.

Our service of company formation in Croatia

This service is dedicated to foreign companies or citizens that are interested in starting or expanding their business in Croatia. We provide the assistance with setting up a limited liability company in just 3 days (upon receiving all needed documents from the client) and we familiarize our clients with Croatian tax regulations . Our program can be modified to every aspect of our clients’ needs whether it is a project company or a branch company with prospects of expending in the future.

Facts:

  1. Founding capital needed for setting up a company is 20.000,00 HRK or approximately 2.700,00 EUR which can be used for all company activities once the process of setting up a company has been completed. In case of setting up a simple limited liability company the founding capital is 10,00 HRK.
  2. Setting up a company can be done in 2 ways:

a) Upon client’s arrival in Croatia – the client’s passport is needed for getting a tax number.

A client needs to appoint the director of a company. The owner, that is, a client is usually a person responsible, but director can also be the third party.

b) Without a client being present in Croatia – a copy of the client’s passport and a special notarized accreditation is needed.

Upon receiving a client’s application, we send a special accreditation by mail, which must be notarized in the client’s country along with two other documents to be signed. The client sends these documents by post back to us. Upon receiving these documents, the setting up of a company can begin.

3. The Service of setting up a company includes:

a) name check
b) preparation of registration forms
c) notarization of Memorandum of Association and registration of a company with the Commercial Court
d) opening a bank account
e) ordering official seal and applying for statistical registration number
f) registration with the tax authority (porezna uprava) for VAT and employee income tax withdrawals
g) registration with Croatian Pension Insurance Fund (Hrvatski zavod za mirovinsko osiguranjem, HZMO) or FINA
h) preparation of Employment Agreement, Employee Nondisclosure Agreement, Employee Invention Agreement
i) providing a head office address for a year
j) accounting services free of charge for the first two months

Setting up a Limited Liability Company: 1.900,00 € + VAT

Setting up a simple Limited Liability Company: 1.500,00 € + VAT

Difference between simple Limited Liability Company and Liability Company

 

 

If you have any question about setting up company in Croatia, please contact us on e-mail [email protected].

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