April 04, 2025
Forming a company in Croatia can be done through several legal forms. The most common forms include crafts, limited liability companies (d.o.o.), joint stock companies (d.d.) and simple companies (j.d.o.o.). Each of these forms has its own specifics, advantages and disadvantages that are important to understand when choosing the most suitable structure for a particular business venture.
Forming a company in Croatia: Craft
A craft is an independent and permanent performance of permitted economic activities by a natural person with the aim of generating income or profit. The Crafts Act regulates this type of business in detail. One of the key characteristics of the craft is its simple and quick establishment, which does not require significant initial capital. Also, bookkeeping and administration is relatively simple. Crafts are often an ideal choice for freelancers and smaller business ventures that do not plan to expand significantly. The advantages of trades include fast registration, lower operating costs, and simpler procedures. Craftsmen have the option of withdrawing cash from a giro account, and family members can help them in their work without employment. Also, there is a possibility of temporary suspension of work for up to one year. On the other hand, a significant disadvantage of crafts is the unlimited personal responsibility of the owner for all obligations arising from the business.
Forming a company in Croatia: Limited Liability Company (d.o.o.)
A limited liability company (d.o.o.) is a capital company in which one or more legal or natural persons invest basic stakes. Unlike crafts, a limited liability company is liable for its obligations with all its assets. LLC is the most common form of company in Croatia. The advantages of this form include limited liability of the founder, easy transfer of ownership, easier access to sources of financing, and the possibility for the company to have multiple directors. However, the establishment of a limited liability company usually entails higher initial costs and requires a minimum share capital, which is currently EUR 2,500.00. The liquidation procedure of a limited liability company can be complex and expensive, but there is also a a cheaper short termination procedure.
Forming a company in Croatia: Simple limited liability company (j.d.o.o.)
A simple limited liability company (j.d.o.o.) is designed to make it easier to start a limited liability company with lower initial costs. The minimum share capital for a j.d.o.o. is only 1.00 euros. The advantages of this form include significantly lower incorporation costs and a minimum share capital. However, there are also some limitations. J.d.o.o. has the obligation to allocate 25% of the realized profit to legal reserves. Also, a j.d.o.o. can have only one director, and in the case of transformation into a d.o.o., additional audit costs are possible.
Forming a company in Croatia: Joint Stock Company (d.d.)
A joint stock company (d.d.) is a company with capital whose share capital is divided into shares. Members of the company are shareholders who participate in the share capital with their contributions. Stocks are securities that give owners voting rights and dividends. The advantage of d.d. is the possibility of raising significant capital by issuing shares. However, d.d. has a complex management structure that includes the General Assembly, the Supervisory Board and the Management Board.
Detailed Steps for Setting Up a LLC in Croatia
1. Selection of the name, address of the registered office and subject of business
The first step in the process of establishing a d.o.o. is to choose the name (company) under which the company will operate. The company must be written in Latin, Croatian or in the official language of one of the European Union member states, with the possibility of using Arabic numerals. It is recommended to check the availability of the desired name beforehand.
Setting headqarters address
After choosing a name, it is necessary to determine the official address of the company’s headquarters. The registered office determines the jurisdiction of the commercial court where the company will be registered. In addition to the registered office, it is also necessary to define the business address. Tax Administration may subsequently request a lease agreement. A business can theoretically register at any existing address.
Choosing businees activities
The third important element is to define the subject of the company’s business, i.e. the activity that the company will be engaged in. Activities are classified according to the National Classification of Activities. When registering, it is necessary to select one main activity and, if necessary, several secondary activities. The NKD code consists of the designation of the section, group and class of a particular activity.
2. Adoption of founding acts by a notary public
If the company is founded by only one person, the Declaration of Incorporation is adopted. This document contains all the essential information about the founder and the future company. If the company is founded by more than one person, the Memorandum of Association is drawn up and adopted. The memorandum of association defines in detail the mutual relations of the founders. A notary public will confirm the identity of the founders and certify their signatures.
3. Payment of share capital
After the articles of incorporation have been certified by a notary, it is necessary to pay the share capital of the company to a temporary account opened in a commercial bank. The minimum amount of share capital for a limited liability company in Croatia is currently EUR 2,500.00. Upon payment, the bank will issue a certificate of payment of the share capital. This certificate is a key document that is attached when submitting the documentation for the registration of the company with the Commercial Court.
4. Issuance of a decision on registration and assignment of OIB
The Commercial Court issues a Decision on the registration of a company. With this decision, d.o.o. officially acquires legal personality. Along with the Decision on Registration, the Commercial Court ex officio assigns an OIB (personal identification number) to the company. OIB is a unique identification number in the Republic of Croatia.
5. Application to the Croatian Bureau of Statistics and entry in the Register of Beneficial Owners
Once the company has been registered and assigned an OIB, there are a few more administrative steps that need to be taken. One of them is the application to the Croatian Bureau of Statistics (CBS). This is for the purpose of classification according to the National Classification of Activities (NKD). On the basis of the submitted application, the CBS will issue a Notice on the classification according to the NKD. This document contains the code and name of the company’s main activity. Also, it is necessary to make an entry in the Register of Beneficial Owners.
6. Opening a business bank account
After the registration of the company, it is necessary to open a regular business bank account. To open a business account, it is necessary to contact the selected commercial bank. Banks will require submission of all the above stated documents.
7. Registration in the Register of Taxpayers
After opening a business bank account, it is necessary to register with the Tax Administration. The application must be submitted within eight days from the date of commencement of the activity, and the RPO form is used. The form can be submitted in person at the competent branch office of the Tax Administration or electronically via the e-Porezna system. When applying, it is necessary to choose whether the company wants to operate in the Value Added Tax (VAT) system or outside it. The threshold for mandatory entry into the VAT system from 1 January 2025 is EUR 60,000.00 of annual turnover.
8. Logging in to the e-Communication system and obtaining a digital certificate
In order to communicate electronically with courts and other state bodies, it is necessary to log in to the e-Communication system. Access to the system is provided through the https://e-komunikacija.pravosudje.hr/ website or through the e-Citizens portal. Login is done through the National Identification and Authentication System (NIAS) using the appropriate credentials. For legal entities, registration is done by entering the e-mail address of the authorized person into the e-Authorization system.
9. Application to the Croatian National Bank (CNB) for foreign investments
In the case of the establishment of a limited liability company with foreign capital, i.e. if the founders are foreign legal entities or natural persons, there is an obligation to report it to the Croatian National Bank (CNB). This report is required to monitor the balance of payments of the Republic of Croatia and the international investment balance. Persons obliged to submit reports to the INOK-DEP are obliged to submit the report to the CNB exclusively electronically, using the application available on the CNB’s website (https://www.hnb.hr/hnbapp/).
Conclusion
Forming a company in Croatia in Croatia includes a detailed series of steps. For the successful completion of the entire process, it is crucial to be thoroughly informed about all legal regulations and procedures. Given the complexity of forming a company in Croatia, it is advisable to seek advice from legal and accounting professionals. This detailed guide provides a comprehensive overview of the necessary steps to establish a company in Croatia, with an emphasis on opening a company Croatia in the form of a d.o.o. Croatia, as the most common form for doing business in Croatia.
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