Setting up a Sole Trader in Croatia

Setting up a Sole Trader in Croatia

Updated on Thursday 04th May 2023

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Setting-up-a-Sole-Trader-in-Croatia.jpgThe sole proprietorship is the simplest business form available on the Croatian market and it can be established in a fast and reliable manner with complete assistance offered by our team of lawyers in Croatia. The Crafts Act and the Companies Act are the main set of laws which oversee the Croatian sole traders activities. Legal advice can be offered on request by our team of advisors who can guide foreigners in different types of company structures available for business in this state.

The Crafts Act in Croatia

Sole traders in Croatia can perform varied independent activities as long as they respect the Crafts Act or the Handicraft Act in Croatia. This law comprises several provisions which observe the operations of sole proprietorships on the market from a legal point of view.  The Crafts Act stipulates that a sole trader is a natural person (national or foreigner) who may carry out different activities in his/her own name and who can have the possibility of hiring staff at any time.
Sole traders or craftsmen as they are mentioned in the Handicraft Act in Croatia can run seasonal activities for at least 6 months per year, in complete agreement with the Minister of Crafts, Small and Medium Enterprises and the Croatian Chamber of Trades. The legal aspects of how a sole proprietorship is established in Croatia can be entirely explained by our attorneys in Croatia.

The tax benefits of sole traders in Croatia

Placing the activities in Croatia through a sole proprietorship may represent the suitable form of doing business in a competitive and appealing market. It is good to know that sole traders are subject to low taxes compared medium and large companies in Croatia. For example, if a sole proprietorship registers profits of at least EUR 3,500 a 12% income tax rate will apply. Moreover, sole proprietorships in Croatia must register for VAT purposes, the rate being set at the moment to 25%, but with lower rates imposed on certain goods and services. A sole trader in Croatia can temporarily close the activities without having to pay such taxes. The good part is that the operations can be reestablished at any time the owners consider.
If you want more details about setting up a sole trader in Croatia, do not hesitate to contact our Croatian law firm.