HOW TO START AN ENTREPRENEURIAL ACTIVITY IN CROATIA
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CROATIAN CHAMBER OF ECONOMY
HOW TO START AN
ENTREPRENEURIAL ACTIVITY
IN CROATIA
Zagreb, March 2015How to start an
entrepreneurial
activity in Croatia
The legal framework
in force and business
organization available to
a business start-up, the
procedures to follow when
registering a business
and starting business
operations, the list of
CROATIAN business activities requiring
CHAMBER OF
approval prior to company
ECONOMY
registration and other
matters of interest to a
Zagreb, March 2015 foreign investor in CroatiaHow to Start Up an Entreprise in Croatia 2
TABLE OF CONTENTS
Companies............................................................................. 7
Limited liability company (d.o.o.)....................................... 10
Simple limited liability company (j.d.o.o.)......................... 12
Joint stock company (d.d.)................................................. 14
General partnership (j.t.d.)................................................. 18
Limited partnership (k.d.)................................................... 19
Economic interest grouping (GIU)..................................... 20
Branch office........................................................................ 21
Starting a business activitiy............................................... 23
Representative office.......................................................... 30
Crafts.................................................................................... 33
Sole trader............................................................................ 34
Business activities requiring special licenses.................. 35
Important institutions and ministries in the Republic of
Croatia.................................................................................. 45
3How to Start Up an Entreprise in Croatia 4
The legal framework for foreign investment in the Republic of Croatia is
designed so as not to make a difference between domestic and foreign invest-
ment. All that is possible with respect to domestic investors is also possible
where capital is invested by foreign nationals.
Moreover, foreign investors enjoy additional guarantees that are not given
to domestic investors. The Croatian Constitution provides that the rights
acquired through the investment of capital shall not be infringed by law or
any other legal act and that foreign investors are guaranteed free transfer
and repatriation of profits and invested capital from the country following
the termination of investment activity and after having fulfilled all statutory
obligations.
When foreign investors form or participate in the formation of companies
in the Republic of Croatia, their position, rights and obligations are equal
under the principle of reciprocity which is presumed to apply to those of
domestic investors.
In the Republic of Croatia foreign nationals may invest capital:
■ on a contractual basis
■ in a company
■ in a bank or insurance
■ by starting a crafts business or by acting as sole traders
■ by obtaining a concession for the exploitation of natural and other resources
of interest to Croatia.
5How to Start Up an Entreprise in Croatia 6
I. COMPANIES
A company is a legal person Company’s legal personality
whose formation and organisation All companies are legal persons.
are governed by the Companies Act. A company acquires legal personal-
The registration of a company in ity upon its registration in the court
the court register is regulated by the register.
Court Register Act and the Ordinance Liability for the company’s
on the manner of registration in the obligations
court register. Under the Companies A company is liable for its obliga-
Act, in the Republic of Croatia it is tions with its entire assets. Members
possible to form either a corporation, of a limited liability company, share-
i.e., a company based on capital, or a holders of a joint stock company and
partnership*. limited partners in a limited partner-
Corporations include: ship are not liable for the obligations
of the company unless otherwise pro-
■ limited liability companies vided in this Act.
■ simple limited liability companies Members of a general partner-
■ joint stock companies ship and general partners in a lim-
Partnerships include: ited partnership shall have unlimited
personal joint and several liability for
■ general partnerships
company obligations with their entire
■ limited partnerships assets.
■ economic interest groupings. Firm name
The Act also regulates the setting Firm name is the name under
up of branch offices and the position which the company conducts busi-
of the sole trader. ness and under which it takes part
Certain general principles in legal transactions. A company’s
apply to the formation of firm name is specified in the deed of
all forms of companies: formation, the company agreement,
Founders or the company’s articles of associa-
A company may be formed by any tion. A company may also use the
domestic or foreign legal or natural abbreviated firm name which must
person. be registered in the court register
together with the company’s firm
name. A company’s firm name must
* Note: The Croatian Companies Act regulates be clearly distinguishable from the
business entities as including also categories firm names of other companies reg-
that, due to their different legal properties, are
istered in the court register with the
not always regarded corporate in some other
legal systems (e.g. partnerships, as defined same court of registration. In addition
by Croatian law). to specifying a company’s name, the
7How to Start Up an Entreprise in Croatia
firm name of a company must indi- invoices, etc.) must indicate his/her
cate the company’s object legal form, firm name, seat, court of registration
e.g., a joint stock company or “d.d.”. and number under which he/she is
The firm name of a company shall be registered in the commercial register,
in the Croatian language, expressed firm name and seat of the legal per-
in the Latin alphabet, or in the offi- sons holding his/her accounts and the
cial language of a member state of numbers of these accounts printed on
the European Union, expressed in the it. The same applies to the contents of
Latin alphabet, with Arabic numer- a company’s website.
als also being possible. Other parts of Company’s object
the firm name shall be in the Croatian A company’s object may be the
language and shall be expressed in undertaking of any allowed activity.
the Latin alphabet. Allowed activity means any activ-
The firm name of a company may ity that is not forbidden by law or
include individual foreign words contrary to the society’s morality.
where these constitute the name or A company’s object is specified in
the firm name of a company member the deed of formation, or the com-
or a member’s trademark or service pany agreement, or the company’s
mark registered in the Republic of articles of association and is reg-
Croatia or the trademark or service istered in the court register. Where
mark of a member’s company regis- law provides that certain activities
tered in the Republic of Croatia, or if may be undertaken only subject to
these are customary in the Croatian the approval, authorisation or some
language, or if there is no appropri- other act of a state body or an insti-
ate substitute for them in the Croatian tution, such activities shall be reg-
language, or if these are words of a istered in the commercial register
dead language. A translation or trans- only subject to prior approval from
lations of the firm name into one or or authorisation of the said body or
more languages may also be regis- institution.
tered in the commercial register. The Registered office
word «Croatia» and its derivatives, as A company’s registered office is
well as the flag and the national coat any place in the Republic of Croatia
of arms of the Republic of Croatia, in which the company’s management
including their imitations, may be in- board is located and from which the
cluded in a firm name only with the company’s business is run or any
approval of the Government of the place in which the company is per-
Republic of Croatia or a public body manently undertaking its activity. It
authorized by it, is indicated in the deed of formation,
The firm name and the abbreviated the company agreement, or the ar-
firm name used by a company must ticles of association. The company
correspond in form and content to the may have only one registered office
firm name registered in the court reg- which must be registered in the court
ister. A merchant’s letterhead (letters, register.
8Representation tions to their authority in their dealings with
The authority to represent a company third parties are registered in the court regis-
pursuant to law is vested with the persons ter. The law distinguishes between statutory
defined by the Companies Act as having representatives, representatives by power of
such authority with respect to each of the attorney, representatives by employment
company forms. The names of the persons and procurators.
representing the company and the restric-
9How to Start Up an Entreprise in Croatia
COMPANY FORMS
LIMITED LIABILITY COMPANY.
(Croatian abbreviation: d.o.o.)
The most frequent form of com- Share capital
pany in the Republic of Croatia is The share capital of the limited li-
the limited liability company. The ability company must be expressed
limited liability company is a com- in the Croatian currency – kunas
pany into which one or more legal (HRK). The minimum amount of the
or natural persons contribute to the share capital of the company may
share capital as set in advance. Con- not be less than HRK 20,000.00.
tributions need not be of the same The minimum par value of a share
amount. In the process of company must be expressed as a whole number
formation, a founder may subscribe that is divisible by one hundred. The
to more than one share. The sum of sum of par values of all shares must
all contributions must correspond to correspond to the total amount of the
the amount of the company’s share company’s share capital. Prior to the
capital. Shares may not take the form company’s registration in the court
of securities. register, each founder must pay up
Founders at least one-fourth of the contribu-
Members of the company may be tion for the assumed share payable
domestic and foreign legal and natu- in cash. In any case, the total amount
ral persons. The company may also of all payments in cash must equal at
be formed and have as its member least HRK 10,000.00, i.e. at least half
only one person. of the share capital must be paid in
The limited liability company is cash. Contributions to the company
a legal person. It acquires its legal may be made in the form of things
personality upon registration in the and rights. Such contributions, how-
court register. The company’s as- ever, must be fully effected prior to
sets are strictly separated from the the company’s registration in the
assets of the company’s members. court register. Cash contributions
The company is liable for its obli- must be paid into the company’s ac-
gations with its entire assets. Com- count at a financial institution in the
pany members are not liable for the Republic of Croatia.
company’s obligations. Exception- Company formation
ally, company members may be li- procedure
able for the company’s obligations The limited liability company is
if they abuse the said circumstance formed on the basis of the company
that they are not liable for the com- agreement which must be signed by
pany’s obligations. all founders and made in the form
10of a notarial deed or a private docu- constitutes his/her share in the com-
ment certified by a notary public. If pany. As a rule, a company members’
the company is formed by just one share is determined on the basis of
founder, it is formed on the basis the amount of his/her original con-
of the founder’s deed of formation tribution.
which must be made in the form of Formation costs
a notarial deed. Reimbursement to the founders of
Company agreement or expenses the founders have incurred
deed of formation must in connection with preparatory ac-
include the following: tivities or the formation of the com-
pany may not be effected from the
■ information about the founder share capital. It shall, in particular,
(name and surname or firm name, be prohibited to add the amount of
domicile or registered office, if the such expenses to the share capital as
founder is a natural person, his/her a contribution. Reimbursement of
personal identification number and expenses of the company’s forma-
if the founder is a legal person, the tion shall be approved only up to the
registration number of the entity, maximum amount of reimbursement
i.e. the corresponding particulars if set in the company agreement. Unless
the person in question is a foreign otherwise agreed upon, the founders
national or a foreign entity); shall meet the costs of the company’s
■ firm name and registered office; formation in proportion to their con-
■ company’s object; tributions.
■ aggregate amount of the capital; Company bodies
■ amount of the original contribu- Mandatory company bodies are
tion of each founder, if the contri- the management board and the gen-
bution consists of a thing or right, eral meeting.
a detailed description of such thing The management board comprises
or right and an indication of its val- one or more members (directors). A
ue, and the number and par value foreign national may also be a mem-
of the shares assumed by each ber of the management board. Com-
founder against payment; pany members appoint and revoke
■ provision on whether the company the appointment of the members of
is being formed for a definite or an the management board. The man-
indefinite period of time; agement board is responsible for
■ the rights and duties of members company management, company
vis-à-vis the company in addition representation, orderly keeping of
to making their contributions in the company’s books, preparation of
cash and the rights and duties of financial statements and keeping of
the company vis-à-vis its mem- the share register.
bers. The supervisory board is a manda-
The totality of each individual tory body only if the average number
member’s rights and obligations of employees over the year exceeds
11How to Start Up an Entreprise in Croatia
200, or if a special act provides for 200 (Art. 434). The supervisory
this in cases where a company en- board must comprise at least three
gages in a particular activity; or if the members and if there are more than
amount of the share capital exceeds three members, their number should
HRK 600,000.00 and the company be an odd one. A foreign national may
numbers more than 50 members, or if also be a member of the supervisory
the company manages as a unity joint board. Members of the supervisory
stock companies and limited liability board are elected by company mem-
companies that must have supervi- bers, unless some of them are to be
sory boards or holds a direct state of appointed by employees pursuant to
more than 50% of their share capital special statutory provisions.
and if in both cases the number of The general meeting is a man-
employees in any of the companies or datory body of the limited liabil-
all companies taken together is on av- ity company. In the general meeting
erage greater than 200, or if the com- company members pass resolutions
pany is a general partner in a limited to which they are authorised under
partnership and the average number the Companies Act and the company
of employees in both the company agreement.
and the limited partnership exceeds
SIMPLE LIMITED LIABILITY COMPANY
(Cro: j.d.o.o.)
The simple limited liability com- management board may comprise
pany is a subform of the limited li- only one person.
ability company as the most frequent Share capital
type of company in the Republic of The share capital of the limited li-
Croatia. The simple limited liability ability company must be expressed
company may be formed by means in the Croatian currency – kunas
of a simplified procedure and may (HRK). The minimum amount of the
comprise no more than three mem- company’s share capital may not be
bers and one member of the manage- less than HRK 10.00 and the lowest
ment board. par value of a share HRK 1.00. Con-
Founders tributions for assumed shares shall
Members of the company may be only be made in cash. Each HRK
domestic and foreign legal and natu- 1.00 par value of a share shall grant
ral persons. There may be no more one voting right until the company’s
than three founders or members of share capital increases to at least the
the company, while the company’s amount of HRK 20,000.00, when the
12provisions of the Act pertaining to the Company’s business
classic form of the limited liability The company must have statutory
company start to apply. reserves into which it must transfer a
Company formation quarter of its profits as stated in the
procedure annual financial statements reduced
Limited liability companies may by the amount of the loss carried
be formed by means of a simplified forward from the previous year. The
procedure. In any such case, the forms statutory reserves may be used for the
of the minutes drawn up by the public following purposes:
notary and annexed to the Act amend- 1. to increase the share capital by
ing the Companies Act (Official means of conversion of the re-
Gazette 111/12) must be used. The serves into the company’s share
filled-in form of the minutes serves capital;
the same purpose as the list of com- 2. to cover a loss recorded in the an-
pany members and the list of persons nual financial statements for the
authorised to manage the company, year for which such statements
and contains the statement whereby have been prepared to the extent
a member of the management board such loss is not covered by profits
accepts his/her appointment and the carried forward from the previous
management board member’s signa- year; and
ture which is to be filed with the court 3. to cover a loss carried forward
register. from the previous year to the ex-
If the company is formed by just tent such loss is not covered by an-
one founder, it is formed on the ba- nual profits recorded in the annual
sis of the Statement on the Forma- financial statements for the year
tion of a Simple Limited Liability for which such statements have
Company which is given in the form been prepared. If the company
of a minutes of the formation of a is under threat of insolvency, the
single member simple limited li- company’s general meeting must
ability company. If the company is be convened immediately.
formed by more than one member, it If the company increases its share
is formed through the conclusion of capital in such a way that it amounts
the company agreement which takes to or exceeds the amount of HRK
the form of the minutes of the for- 20,000.00, the provisions pertaining
mation of a simple limited liability to the classic form of the limited lia-
company comprising no more than bility company apply to the company.
three members.
13How to Start Up an Entreprise in Croatia
JOINT STOCK COMPANY (Cro: d. d.)
A joint stock company is a compa- provisions of the Bills of Exchange
ny based on capital in which members Act apply analogously to the form of
(shareholders) participate with their the endorsement, legitimation of the
shares in the share capital divided into holder and his/her obligation to sur-
shares. A joint stock company may render. Shares issued in non-material
also be formed by only one person, form are transferred as set forth in the
i.e. it may have only one shareholder. act on non-material securities (Art.
The joint stock company is a legal 227).
person. It acquires its legal personality Depending on the rights they con-
upon registration in the court register. fer, shares may be ordinary or pre-
The company is liable for its obliga- ferred. Ordinary shares confer the
tions with its entire assets. Sharehold- right to vote at the general meeting,
ers are not liable for the company’s the right to the payment of a portion of
obligations. the company’s profits (dividend) and
The basic act of the joint stock the right to the payment of a portion
company are the articles of associa- of the remainder of the company’s
tion. They regulate the company’s liquidation estate or bankrupt’s estate.
organisation. Preferred shares confer certain
Share capital preferential rights, such as the right
The share capital and shares must to a dividend expressed as a predeter-
be expressed in par value in kunas mined cash amount or as a percentage
(HRK) (Art. 161). The minimum par of the par value of the share, prefer-
value of the share capital is HRK ential rights to dividend payment and
200,000.00. The company may issue payment of the remainder of the liq-
either par value shares or no par value uidation estate or bankrupt’s estate,
shares. The par value of a share may and other rights pursuant to law and
not be less than HRK 10.00. Share the company’s articles of association.
par values higher than HRK 10.00 Company formation
must be stated in multiples of HRK procedure
10.00. The percentage of the author- The Companies Act provides for
ized capital is determined in the case simultaneous and successive forma-
of par value shares by the proportion tion of joint stock companies. Com-
between their par value and the par pany founders are the shareholders
value of the authorized capital, and that adopt the articles of association.
for no par value shares by the number A joint stock company is
of shares. formed simultaneously
Shares may be registered shares when:
(Art. 165). The transfer of shares, ex-
cept of those issued in non-material ■ the company founders acquire all
form, is effected by endorsement. The company shares and make a nota-
rised statement of this fact
14■ establish and sign the company’s i.e. all executive directors and all
articles of association and make a members of the board of directors
notarised statement of this fact shall file the company to the court
■ make a notarised statement of their for registration in the commercial
establishing a joint stock company register.
A joint stock company is The filing for registration
established successively in the court register must
when: contain the following:
■ the company founders establish 1. firm name, registered office, ad-
the articles of association dress of the company in the Re-
■ the company founders acquire a public of Croatia and object of the
portion of the shares company;
■ the company founders issue an in- 2. price at which shares have been is-
vitation to the public to subscribe sued;
to shares (prospectus) on the basis 3. total amount paid in for the shares
of which the shares are to be sub- issued and the form of considera-
scribed. tion therefor;
The share subscription deadline 4. members of the management
may not exceed three months from board, i.e. executive officers, shall
the date set as the subscription start certify that they have been advised
date. If not all shares are subscribed of their obligation to make full dis-
to and paid as provided for in the pro- closure to the court and that they
spectus within this period, the found- have not been convicted of the
ers may themselves, within 15 days criminal offence of abuse of bank-
after the expiry of the said time limit, ruptcy proceedings, abuse within
subscribe to or acquire unsubscribed the framework of bankruptcy pro-
shares. If they fail to do so, it shall ceedings, preferential treatment of
be deemed that the formation has a creditor, violation of the obliga-
been unsuccessful. In such case the tion to keep the books and records
founders shall issue within the next referred to in the Criminal Act of
15 days a new announcement invit- the Republic of Croatia or imposed
ing subscribers to collect the paid-in the safety measure of prohibition
amounts. to engage in a line of occupation
Where share subscription is suc- that is in whole or in part encom-
cessful, the founders shall distribute passed by the company’s object,
shares among subscribers within 15 which exclusion applies for the
days from the expiry of the time limit duration of such prohibition;
for the subscription of shares. 5. list of members of the manage-
Filing for the registration of ment board and the supervisory
a joint stock company in the board, i.e. the executive directors
court register and the members of the company’s
All members of the management board of directors, stating each
board and the supervisory board, member’s name and surname,
15How to Start Up an Entreprise in Croatia
permanent address and personal i.e. the executive directors and the
identification number; members of the board of directors;
6. where the company has one share- 6. the formation report and the for-
holder who is a natural person, his/ mation audit reports together with
her first name and surname, per- underlying documentation;
manent address, personal iden- 7. where the provision on the com-
tification number (in the case of pany’s object or any other provi-
foreign nationals, the number and sion of the company’s articles of
designation of his/her personal association required the consent,
identification document and the authorisation or some other act of
state that issued it); if the single a state body or an institution, the
shareholders is a legal person, the act of this body or institution.
firm name or the entity’s name and The following is entered
registration number and if the legal in the court register:
person is foreign, the correspond-
ing particulars; 1. the company’s firm name;
The following must be 2. the company’s registered office
appended to the filing: (address);
3. the company’s object;
1. the company’s articles of asso- 4. the amount of the share capital or
ciation and the documents serv- authorised capital;
ing as the basis for the adoption 5. the date of establishment of the
of articles of association, as well articles of association;
as underlying documents used 6. the names and surnames, personal
by founders to take possession of identification numbers and perma-
their shares; nent addresses of the members of
2. if a special benefit is to be granted the management board, the chair-
at formation or if a thing or right is person and the members of the su-
to be contributed or acquired, the pervisory board;
agreements on which the stipula- 7. the duration of the company;
tions are based or which were en-
8. the authority of the members of the
tered into in execution thereof;
management board to represent
3. proof of amount paid, contribu- the company;
tions of things and rights, and of
9. if the company has one sharehold-
the company’s right to use them
er and he/she is a natural person,
freely (proof of amount paid shall
his/her first name and surname,
be provided by the authorised
personal identification number
credit institution);
and permanent address (in case he/
4. an itemised account of the forma- she is a foreign national also the
tion expenses, including total ex- state that issued the personal iden-
penses; tification document). If the single
5. the documents relating to the ap- shareholder is a legal person, the
pointment of the management firm name or the entity’s name and
board and the supervisory board, registration number.
16Bodies of the joint stock ■ preparation of decisions and gen-
company eral acts of the general meeting
■ the management board ■ drafting of contracts
■ the supervisory board ■ execution of decisions of the gen-
■ the board of directors eral meeting
■ the general meeting. ■ reporting to the supervisory board
The management board comprises on issues relating to company
one or more persons (“directors”) as management.
provided for in the articles of associa- The supervisory board must com-
tion. If the management board com- prise at least three members. The arti-
prises more than one person, one of cles of association may provide for a
them shall be appointed chairperson. specified higher number which, how-
Any natural person with full trans- ever, must be an odd number. A for-
actional capacity may be a member eign national may also be a member
of the management board. A mem- and there is no obstacle to all mem-
ber of the management board may not bers being foreign nationals. The
be a person who has been convicted members of the supervisory board are
of the criminal offence of abuse of elected by the general meeting for a
bankruptcy proceedings, abuse with- period not exceeding four years and
in the framework of bankruptcy pro- may be re-elected.
ceedings, preferential treatment of a The supervisory board supervises
creditor, violation of the obligation to the management of the company and
keep the books and records referred has the right to inspect and examine
to in the Criminal Act of the Republic the company’s books and records and
of Croatia or who has been imposed any other company documents. The
the safety measure of prohibition to board reports to the general meeting
engage in a line of occupation that is on the performed audit.
in whole or in part encompassed by Board of directors – The articles of
the company’s object, which exclu- association may provide that a com-
sion shall apply for the duration of pany shall have a board of directors
such prohibition. instead of a management board and a
Both Croatian and foreign nation- supervisory board. The board of di-
als may sit on the management board. rectors must comprise at least three
Members of the management board members. The articles of association
are appointed by the supervisory may, however, provide for a speci-
board for a period not exceeding five fied higher number. The members of
years. the board of directors are elected, i.e.
Rights and obligations of appointed, for a period specified in
the management board the articles of association, which may
include: not, however, exceed six years. They
may be re-elected, i.e. re-appointed.
■ company management The general meeting is a company
■ representation body at which the shareholders exer-
17How to Start Up an Entreprise in Croatia
cise their rights with respect to the the supervisory board, i.e. the board
company. All shareholders are entitled of directors, appropriation of profits,
to participate in the general meeting. amendments of the articles of asso-
The competence of the general ciation, increases and reductions in
meeting is defined by law and the the share capital, dissolution of the
articles of association. The general company, etc. Decisions are gener-
meeting in particular resolves on the ally taken by a simple majority of
election and removal of members of votes.
GENERAL PARTNERSHIP (Cro: j.t.d.)
A general partnership shall mean company members have to contrib-
a company of two or more persons ute equally. A member may invest in
who have joined in order to perma- the company money, things, rights,
nently engage in an activity under a labour and other services or goods.
common firm name, whereby each Partnership management is en-
member of the company has un- trusted to all partners. The company
limited joint and several liability to agreement may provide that only (a)
company creditors with all his/her particular company member(s) is/are
assets. A company member may not authorised to manage the partnership.
dispose of his/her interest in the com- Each partner is authorised to repre-
pany without the consent of the other sent the partnership.
company members. Formation procedure
Founders A general partnership is formed by
A company member may be any the adoption of the company agree-
natural or legal person, be they do- ment which need not be a notarised
mestic or foreign. Legal relationships document. Thereupon a notarised fil-
between company members are gov- ing for registration in the court regis-
erned by the company agreement. In ter is submitted.
this respect company members enjoy
maximum freedom because the pro-
The filing for registration
visions of the Companies Act apply
in the court register
in so far as relationships between
contains the following
company members have not been
particulars:
regulated otherwise by the company ■ the firm name, registered office
agreement. and object;
Share capital ■ the company members (first name
The general partnership does not and surname, personal identifica-
have share capital. Unless otherwise tion number and permanent ad-
agreed in the company agreement, dress, i.e. the firm name and reg-
18istered office of each company The filing must be accompanied
member); by the agreement on the company’s
■ the names and powers of the per- formation (company agreement).
sons authorised to represent the
company.
LIMITED PARTNERSHIP (Cro: k.d.)
A limited partnership is a com- agreement shall assign to one or
pany of two or more persons who more company members the posi-
have joined in order to permanently tion of general partner(s) and to one
engage in an activity under a com- or more company members the posi-
mon firm name, of which at least tion of limited partner(s)..
one has unlimited joint and several The filing for registration
liability for the company’s obliga- of the company in the
tions with all his/her assets (general court register contains
partner) and at least one is liable for the following particulars:
the company’s obligations up to the
amount of assets contributed into the ■ the firm name, registered office
company (limited partner). and object;
Founders ■ the first name and surname, per-
A member of a limited partnership sonal identification number and
may be any natural or legal person, permanent address, i.e. the firm
be they domestic or foreign. A lim- name and registered office of each
ited partnership is a legal person that company member;
upon registration in the court register ■ the names and powers of the per-
acquires its legal personality. sons authorised to represent the
Share capital company;
A limited partnership does not ■ information on the limited part-
have share capital. ners;
Formation procedure ■ the amounts agreed upon and paid
The company is formed by the by each limited partner.
adoption of the agreement on the Company management and repre-
company’s formation (company sentation are entrusted to the general
agreement), which need not be a partners.
notarized document. The company
19How to Start Up an Entreprise in Croatia
ECONOMIC INTEREST GROUPING.
(Cro: GIU)
An economic interest association ■ the name of the grouping, its reg-
is a a legal person formed by two or istered office and the object for
more natural and legal persons in or- which it is formed;
der to facilitate and develop the per- ■ information on the members of the
formance of economic activities con- grouping (firm name, first name
stituting their object in such a manner and surname, legal form, regis-
that such legal person does not make tered office or permanent address
profits for itself. Members of a group- as well as the number and place of
ing may be persons carrying on an registration of each member of the
economic activity. Persons practicing grouping);
a liberal profession may also become ■ the duration of the grouping, ex-
members of a grouping. cept where this is indefinite.
Share capital The grouping acquires legal per-
An economic interest grouping sonality upon its registration in the
is formed without any share capital court register. The filing for the group-
and the rights of members may not ing’s registration and any amend-
be expressed in terms of securities. ments to such registration (Art. 588)
The activity of the grouping must be must be made by all members of the
related to the economic activities of grouping’s management board.
its members and must not be more Along with the grouping itself, the
than ancillary to those activities. members have subsidiary unlimited
Formation procedure liability for the grouping’s debts and
An economic interest grouping is liabilities. The management board of
formed by the conclusion, in the form the grouping, which may comprise
of a notarial deed, of the contract for one or more natural persons that are
the formation of the grouping. The appointed by the members of the
said contract must contain the fol- grouping, manages the grouping’s af-
lowing: fairs and represents it.
20BRANCH OFFICE
Under Croatian legislation foreign registered office is located;
companies and sole traders may en- 4. publicly certified summary of the
gage in economic activities by set- founder’s last annual financial
ting up branch offices (Art. 612). The statement.
statutory provisions relating to the The court of registration
setting-up of branch offices by do- will allow registration if
mestic companies shall apply to the the founder proves that:
setting up and operation of foreign-
owned branch offices. ■ it was validly formed in the coun-
A branch office is not a legal try of its registered office;
person. The rights and obligations ■ persons from the Republic of
resulting from its business activities Croatia may set up branch offices
are not vested with the branch office in the founder’s country under the
itself but with its founder. A branch same conditions as those applica-
shall operate under its own firm name. ble to the founder in the Republic
In doing so, it must specify both its of Croatia.
seat and the seat of its founder. The founder is required to file to
in order to register the court of registration any change
a branch office, it is of particulars.
necessary to append Where a single founder sets up a
the following documents number of branch offices, a separate
in original and certified formation procedure shall be fol-
Croatian translation to lowed for each of the branch offices.
the filing for registration: In such case the filing for registra-
tion in the commercial register shall
1. an excerpt from the register in specify the principal branch office
which the founder is registered and designate the other by ordinal
clearly indicating its legal form, numbers.) The founder shall appoint
date of formation of the branch one or more persons in each branch
office’s foreign founder, number office to represent him/her. He/she
of registration, object. particulars may appoint the same persons in sev-
on the persons with representative eral branches to represent him/her.
authority and the scope of their As they are not legal persons,
powers (Art. 613); branch offices may not independ-
2. the decision of the founders on the ently acquire legal rights and take on
setting-up of the branch office; commitments in legal transactions.
3. copy of the founder’s deed of for- All rights and obligations resulting
mation, company agreement or from the branch office’s activities
articles of association, publicly are vested with the founder. Where
certified pursuant to the laws of a dispute arises with third parties, a
the country in which the founder’s
21How to Start Up an Entreprise in Croatia
party to it is not the branch itself but ■ the Court Register Act (NN 1/95,
the company or the sole trader that 57/96, 45/99, 54/05, 40/07, 91/10,
owns it. 90/11, 148/13, 93/14)
Branch offices are required to keep ■ the Ordinance on the manner of
business books and records accord- registration in the court register
ing to the regulations applicable in (NN 22/12, 127/14)
the Republic of Croatia, namely the ■ the Decision on the manner of and
Accounting Act, International Ac- conditions for access to court reg-
counting Standards and tax regula- ister information (NN 138/02)
tions. ■ the National Classification of Eco-
Regulations governing nomic Activities Act (NN 98/94)
company formation: ■ the Decision on the national clas-
sification of economic activities
The applicable regulations are
(NN 58/07, 72/07)
available at the Official Gazette’s of-
■ the Ordinance on the classification
ficial website:
of business entities according to
http://narodne-novine.nn.hr/de-
the National Classification of Eco-
fault.aspx
nomic Activities – NKD 2007 (NN
■ the Companies Act (Narodne no- 80/07, 45/09, 16/12, 8/13).
vine [Official Gazette; abbrevi-
ated: NN] 152/11, 111/12, 68/13)
22II. STARTING A BUSINESS ACTIVITY
The formation of a company in the a foreign national, passport. All the
Republic of Croatia requires registra- founders and other persons whose
tion with the commercial court, the signatures need to be certified must
Central Bureau of Statistics, the Tax be present. Under Croatian law the
Administration, the Croatian Pension notary public is authorised to draw
Insurance Institute and the Croatian up notarial acts, minutes and notarial
Institute for Health Insurance. It is certificates having the force of public
customary to hire a domestic lawyer documents. The notary public is also
or some other legal representative to authorised to represent parties in non-
oversee the procedure of company contentious matters before courts and
formation. other public bodies where such mat-
Firm name of the company ters are directly related to the docu-
Prior to registration, it is neces- ments drawn up by him/her.
sary to check with the commercial Certified translation
court whether the desired company If any of the documents is written
name has already been registered in in a foreign language, it is necessary
the court register of the same court of for registration purposes to provide
registration. It is recommended that the document in original and certified
in addition to the chosen company copy of its Croatian translation.
name alternative names be prepared Company bank account
if any of the proposed names has al- The share capital (HRK 10.00 for
ready been taken. In order to be able a simple limited liability company,
to use the word Croatia or any of its HRK 20,000.00 for a limited liability
derived forms in the company name, company and HRK 200,000.00 for a
the founders must obtain special ap- joint stock company) must be paid
proval from the Government of the into a bank account, while the receipt
Republic of Croatia or the state au- of deposit must be appended to the
thority authorised thereby. filing for the company’s registration.
Business premises Accounts used by legal and natu-
In order to be able to register, a ral persons for the conduct of pay-
company must have its official ad- ment transactions are opened and
dress in the Republic of Croatia. managed by banks on a contractual
Certification of documents basis and in line with the relevant
The filing for registration in the regulations (Payment Transactions
court register and all accompany- Act, NN 133/09, 136/12). A business
ing documentation must be certi- entity may hold accounts with several
fied by a notary public. It is neces- banks of its own choice. When open-
sary to present to the notary public ing an account the following must be
one’s identity card or, where one is enclosed:
23How to Start Up an Entreprise in Croatia
1) the Decision on registration in the names, of company members. If
court register (a copy is to be en- company members are natural per-
closed, while the original is to be sons, also their personal identifica-
presented only for inspection); tion numbers. If they are legal per-
2) the notification of business entity sons, their registration numbers,
classification issued by the Central i.e. the corresponding particulars
Bureau of Statistics (a copy is to be if they are foreign persons.
enclosed, while the original is to The following must be
be presented only for inspection); appended to the filing:
3) the seal;
1. the founding act (company agree-
4) the identity card.
ment, deed of formation, decision
Filing for registration in of the general meeting, or the like)
the court register accompanied by all appendices,
Registration in the court register including the powers of attorney
is within the competence of the court of the proxies certified by a notary
of registration with jurisdiction over public;
the area in which the registered of- 2. the decision on the appointment
fice of the entity to be registered is of members of the management
located. The registration procedure is board, the decision determining
instituted by submitting the filing to the address of the company;
the commercial court. relevant regis- 3. a list of company members or gen-
ter court an application for entry into eral partners or founders specify-
the court register. ing their first names and surnames,
The filing for registration permanent addresses and personal
in the court register must identification numbers, in the case of
include the following: foreign nationals, passport numbers
and the states that issued them, or
1. the firm name, seat and address of the firm names or names, registered
the company in the Republic of offices and the entities’ registration
Croatia and the object of the com- numbers (Cro: MBS), with an indi-
pany; cation of the courts of registration
2. the amount of the company’s share and the numbers under which they
capital; are registered in the commercial
3. the members of the management register, amount of the share capi-
board, i.e., the executive direc- tal, and the ordinal numbers and par
tors, shall certify that they have values of the shares the founders
been advised of their obligation to subscribed to and the amounts of
make full disclosure to the court the contributions effected;
and that no circumstances prevail 4. statements by members authorised
that would be contrary to the pro- to represent the company that they
vision of Article 239, paragraph 2, accept their appointments;
of this Act; 5. proof of payment of the funds
4. first names and surnames, i.e. firm required for the company’s for-
24mation, proof of contribution of 11. the license document of a gov-
things or rights, including a list of ernment body if required by law
such things and rights, their iden- for the purpose of the company’s
tifying descriptions and appraised formation and registration in the
values, and in case of real estate, commercial register;
excerpt from the land register; 12. signatures of the members of the
6. proof of payment of court fees for management board certified by a
the registration and first-instance notary public and deposited with
decision on registration in the the commercial register;
court register of the commercial 13. explanation of the company’s firm
court and proof of advance pay- name, if the firm name is foreign.
ment of the costs of publication of In addition to the prescribed docu-
the said registration in the Official ments, the founder of the company is
Gazette; required to append a statement certi-
7. proof of appointment of manage- fied by a notary public that neither he/
ment board members with repre- she nor the company in which he/she
sentative authority, including an has shares has any outstanding debts
indication of their powers or proof or liabilities that have become due,
of appointment of procurators, in- as well as a certificate issued by the
cluding an indication of their pow- authorised legal person conducting
ers, their certified signatures, and payment transactions stating that nei-
personal identification numbers ther he/she nor the company in which
(OIB), and in case of foreign nation- he/she has shares has an outstanding
als, their passport numbers and the payment order on their accounts, and
countries that issued the passports; certificates of the Tax Administra-
8. if during the company’s formation tion, the Croatian Pension Insurance
special benefits are conferred or Institute and the Croatian Institute for
things and rights are invested, the Health Insurance stating that neither
audit report on the company’s for- he/she nor the company in which he/
mation and on the formation audit, she has shares has outstanding tax,
where an audit was performed; pension insurance or health insurance
9. a list of persons authorised to man- liabilities. The statement must not be
age the company, their first names older than eight days from the making
and surnames, dates of birth, of the filing.
personal identification numbers, The court register is open to the
permanent addresses, scope of public. Consequently, anyone, irre-
authority and statements, given spective of whether he/she has a legal
before the notary public, that they interest, may inspect the particulars
accept their appointments; contained in the main register and the
10. if the company has a supervisory collection of documents and demand
board, list and signatures of the that he/she be issued an excerpt or a
chairperson and members of the certified copy.
said board, showing their dates of Court fees for the company’s reg-
birth and permanent addresses; istration in the commercial register
25How to Start Up an Entreprise in Croatia
total HRK 400.00 (HRK 100.00 for 3. a copy of the money order certify-
the filing + HRK 300.00 for the for- ing to the payment of the admin-
mation). istrative fee.
Publication of company’s Contact - Central Bureau of Statistics:
registration Državni zavod za statistiku
10000 Zagreb, Ilica 3
Upon registration in the court reg- Tel.: +385 (0)1 4806-111
ister, the commercial court delivers www.dzs.hr
to the Official Gazette and the daily Tax number
newspapers the particulars concern- The tax number request is filed with
ing the registration. The publication the Tax Administration office having
of registration in the Official Gazette jurisdiction over the area where the
costs HRK 900.00. registered office is located. The deci-
Contact - Official Gazette: sion on registration in the court regis-
Narodne novine - Odjel oglasa i pretplate
Savski gaj, XIII. put 6, 10020 Zagreb
ter, the notification of business entity
Tel.: +385 (0)1 6652-777 classification issued by the Central
Fax: +385 (0)1 6652-770 Bureau of Statistics, and the signature
www.nn.hr registration card must be presented
Company seal for inspection. The application must
After receiving a positive decision be filed for the purpose of its registra-
on registration in the court register it tion in the register of persons liable to
is necessary to have a stamp made. A profit tax and VAT.
copy of the decision on registration in Contact - Ministry of Finance/Tax
the court register must be appended Administration:
to the seal order form. The seal must Ministarstvo financija – Porezna uprava
10000 Zagreb, Josipa Ruđera Boškovića 5
specify the company’s firm name and Tel.: +385 (0)1 4809-000
the number under which the company Fax: +385 (0)1 4809-530
is registered in the court register. www.porezna-uprava.hr
Registration number Pension insurance
A request for the classification by Employers, legal and natural per-
activity under the National Classifi- sons, persons under obligation to pay
cation of Activities, i.e. a request for contributions are required to deliver
the issuing of a registration number within 15 days from the start of busi-
and activity code, is made to the Cen- ness the following documents to the
tral Bureau of Statistics within 15 regional office of the Croatian Pen-
days from receipt of the decision on sion Insurance Institute with jurisdic-
the registration in the court register. tion over the employer’s registered
The following is to be appended office:
to the request: ■ registration form M-11 P relating
1. the decision on registration in the to the start of business of the per-
court register; son under obligation to pay contri-
2. form RPS-1 (available in Official butions
Gazette (Narodne novine d.d.) ■ registration form M-1 P for each
shops); new employee.
26The following is to A legal person is required
be appended to the to append to Forms 1 and
registration forms: 2 the following:
In case of registration form M-11 P: 1. the decision on registration in the
1. the decision on registration in the court register (for inspection only)
court register; 2. the notification of business entity
2. the notification of business entity classification issued by the Central
classification issued by the Central Bureau of Statistics;
Bureau of Statistics; 3. the registration form of the
3. the signature registration card; Croatian Institute for Health Insur-
4. the seal. ance (copies M-1P and M-11P);
In case of registration form M-1 P 4. proof of permanent address (cer-
1. the employment contract; tificate from the Ministry of the
2. identity card or passport (in case Interior or the personal ID card);
of foreign nationals); 5. the employment contract.
Contact – Croatian Institute for Health
3. residence and work permits (where Insurance:
required for a foreign national); Hrvatski zavod za zdravstveno osiguranje
4. HZMO electronic record. Margaretska 3, 10000 Zagreb
Contact - Croatian Pension Insurance Tel.: +385 (0)1 4806-333
Institute: Fax: +385 (0)1 4812-606
Hrvatski zavod za mirovinsko osiguranje www.hzzo-net.hr
Mihanovićeva 3, 10000 Zagreb Certificate of fulfilment
Tel.: +385 (0)1 4891-666 of minimum technical
Fax: +385 (0)1 4577-063 requirements
www.mirovinsko.hr
http://e-prijave.mirovinsko.hr/ep-prijave/ A company may start engaging in
Health insurance an activity or activities that constitute
Legal persons under obligation to its object after having submitted to
pay contributions are required to reg- the commercial court the certificate
ister for basic health insurance with of compliance with the technical,
the competent regional office of the health, environmental and other legal
Croatian Institute for Health Insur- requirements laid down for the per-
ance within 15 days from the start of formance of this activity or activities
business. The registrant must submit (relating to the business premises,
the following forms: equipment and means of production)
1. the contribution payer registration issued by the competent administra-
– Form 1 (Tiskanica 1) tive body (County Office for Eco-
2. the basic health insurance registra- nomic Affairs).
tion – Form 2 (Tiskanica 2) Simplified procedure for
3. the family member basic health the formation of a simple
insurance registration – Form 3 limited liability company
(Tiskanica 3). 1) Firm name
The first step is the choice of the
company’s firm name. In order to
27How to Start Up an Entreprise in Croatia
check whether the desired firm name the filing is complete and correctly
is available, i.e. that the same or simi- filled-in, the commercial court hav-
lar firm name is not already taken, it ing jurisdiction is required to send
is necessary to use the portal sudreg. electronically the decision on the
pravosudje.hr. It is therefore recom- registration of the simple limited li-
mended that in addition to the cho- ability company in the court register
sen firm name alternative names be within 24 hours. The filing may also
prepared. After the availability of the be personally delivered to the com-
firm name is verified, it is possible to mercial court. In such cases, how-
reserve the name. ever, the registration procedure lasts
2) Notary public from 3 to 7 days.
The notary public draws up the The documents necessary for reg-
minutes of the company’s forma- istration in the court register:
tion, the filing for the company’s a. the filing for the registration of the
registration in the court register, and company’s formation;
the no-outstanding-debt declaration. b. the minutes of the formation;
The said documents must be signed c. the list of company members;
and certified by a notary public. All d. proof of share capital payment;
founders and other persons whose e. proof of court fee payment;
signatures need to be certified must be
f. proof of payment for the publica-
present during the certification. The
tion in the Official Gazette (NN);
amounts to be paid include the cost of
g. the no-outstanding-debt declara-
the notary public (HRK 500.00) and
tion.
the cost of the no-outstanding-debt
5) Croatian Bureau of
declaration (HRK 47.50).
Statistics
3) Bank account
The request for classification by
The founders of the simple limited
activity under the National Classifi-
liability company must open a bank
cation of Activities, i.e. the request
account into which the following
that the business entity be given a
payments must be made:
company registration number and
a. the amount of the share capital activity code, is made to the Croatian
(HRK 10.00); Bureau of Statistics. The following
b. the court fee for registration in the must be appended to the request:
court register (HRK 60.00); a. the decision on registration in the
c. the publication in the Official court register;
Gazette (Narodne novine) (HRK b. RPS-1 form (can be bought at the
200.00). Narodne novine d.d. shops).
4) Registration in the court 6) Activities immediately
register preceding the start of
A notary public or HITRO.HR business
makes the filing for the formation Among the last steps to be taken
of a simple limited liability com- is the making of the stamp and reg-
pany through the e-Tvrtke system. If istration of the owner and employees
28in the pension and health insurance registration procedure, the Govern-
systems. ment of the Republic of Croatia has
The company needs to be regis- established the HITRO.HR service.
tered with the Tax Administration Most of the steps within the company
office having territorial jurisdiction formation procedure may be taken
over the company’s registered office via the HITRO.HR service or elec-
for the purpose of its registration in tronically.
the register of persons liable to in- All Financial Agency’s (FINA)
come tax and VAT. The decision on HITRO.HR counters that are located
registration in the court register, the in all major towns of the Republic of
notification of business entity classi- Croatia act as one-stop shops speed-
fication under the National Classifi- ing up and simplifying the procedure
cation of Activities and the signature for the formation of limited liability
registration card need to be presented companies and the starting of crafts
for inspection. businesses and provide all the neces-
sary information.
HITRO.HR HITRO.HR
Info phone: 0800 0080
In order to simplify and acceler- E-mail: info@hitro.hr
ate as much as possible the company www.hitro.hr
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