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Croatian Commercial Code

Croatian Commercial Code

Updated on Sunday 02nd February 2020

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Power of attorney in CroatiaThe Croatian Commercial Code contains regulations concerning the foundation and administration of companies, taxes and other legal provisions connected to businesses and enterprises. We strongly recommend you to address your commercial related legal issues to a law firm in Croatia in order to be sure that your company will benefit from professional legal counseling.  We are at your disposal with complete legal assistance if you would like to set up a business in Croatia and need to understand the conditions imposed for foreign investors.

 

The main aspects concerning the Commercial Code in Croatia

 

As a member of the European Union coming from the ex-soviet bloc, Croatia has tried to bring its Corporate Law to the European standards, after its inclusion in the Union, in 2013. In many respects, Croatia made indeed substantial progress and improvements in this area, now having a similar legislation framework with other European countries. Some of the most important laws on which the Croatian commercial legislation relies are:
 
 
  • the Company Act amended in 1995 and continuously modernized; 
  • the Capital Market Act released in 2008 and revised in 2015;
  • the Credit Institutions Act, enacted in September 2008, revised and modified in 2015.  
 
 
The Company Act in Croatia is based on the German equivalent in matters of Corporate Law. The Act prescribes the establishment conditions and running regulations for commercial companies in Croatia. It introduces as well the one-tier system (a corporate body that undertakes both management and monitoring functions). The Capital Market Act prescribes the regulations for the investment activities and services, the operation of investment firms, and trading. Since the recent inclusion in the UE, the Croatian legal system is going through constant changes and transformations. Therefore, in view of your company development in Croatia, it is advisable to cooperate with our Croatian lawyers who provide updated information and professional legal support in commercial issues.  They can also help you obtain the EORI number.
 

Types of companies you can open in Croatia

 
According to the Commercial Code in Croatia, foreign investors can set up private and public limited liability companies, general and limited partnerships, and joint stock companies. The legislation is permissive for investors from abroad, and the authorities are strongly supporting the foreign investments in Croatia through varied types of encouragements. We remind that limited liability companies are mostly directed for small and medium entrepreneurs in Croatia and are the most popular business structures through which you can place your activities in this country.
 

How can I open an LLC in Croatia?

 
For the opening of a limited liability company in Croatia, the minimal investment capital for EU citizens is of around HRK 20,000. You may find in the Croatian law several provisions which are specially designed to encourage and protect the local development. The Commercial Code stipulates that non-EU investing companies have the obligation to employ a minimum of 3 to 10 Croatian workers, depending on the size and revenues of that company. According to the Croatian law, the foreign person which intends to work in Croatia must apply for a business permit and consequently obtain a residence permit in this country. 
 

Business regulations for foreigners in Croatia

 
The Commercial Code is applicable for both national and foreign investors willing to benefit from the business opportunities in Croatia and register companies in this sense. It is good to know that local and foreign entrepreneurs have the same business rights when talking about the investments in this country, meaning that they need to respect the same regulations and obligations. Foreigners can make investments in an already established company in Croatia, can act as sole proprietors or can set up the operations in the mining or related sectors on the base of a concession in this direction.
 

VAT in Croatia

 

The standard VAT rate in Croatia is 25%, and there are also reduced rates of 13% (for milk products and medicine) and 5% (for accommodation services and sugar products). The corporate income tax for a company that is registered in Croatia is 20%. In order to ensure an impeccable conformation to the commercial legislation, our Croatian attorneys are prepared to help you with the company formation procedures and to supply all other needed information regarding the Corporate Law in Croatia.  

 
Don’t hesitate to contact our Croatian law firm which will assist you in overcoming the bureaucratic difficulties and language barrier of a business activity in Croatia.