Business entities in Croatia
Healy Consultants will be happy assist our Clients starting doing business in Croatia with the right type of legal entity for their needs. The most commonly used one is the Croatian limited liability company, which is optimal for smaller businesses. This said, the Croatian joint stock company (JSC) can be also attractive, thanks to: i) formation costs similar to those of a LLC and ii) a paid-up capital of only €25,000.
The Croatia limited liability company (d.o.o)
- Croatian limited liability companies in can be registered with i) a single shareholder and ii) a single director, whom both can be of any nationality. At least one director is however required to be ordinarily resident of Croatia. The minimum capital required for Croatia company setup is low, at only HRK20,000 (€2,500);
- All Croatian LLCs are required to i) have their balance sheet and annual financial statements prepared by a certified accountant and ii) file the same with the Croatian Business Register every quarter.
The Croatia joint stock company (d.d.)
- A joint stock company (JSC) in Croatia can be incorporated with a minimum of one shareholder of any nationality;
- Other minimal requirements to setup a Croatia JSC include an initial share capital of at least €25,000 (HRK200,000), fully paid up at incorporation. Our Client must also appoint i) a Board of directors comprising at least three members who can be of any nationality and ii) a certified accountant (can be provided by our Firm if needed);
- Formation of a JSC allows entrepreneurs to raise capital in Europe in order to finance various expansions of their business, because i) Croatian corporate law does not restrict the issuance and transfer of shares by JSCs and ii) Croatian JSCs can be listed on multiple EU’s stock exchanges, including: i) Zagreb Stock Exchange; ii) EuroNext; and iii) Vienna Stock Exchange;
- After Croatia business formation and in accordance with Croatia General Corporate Taxation Act, Croatian JSCs are required to i) have their balance sheet and annual financial statements audited by a certified accountant and ii) file them with the Business Register every quarter.
The Croatia branch office (also known as p.o.)
- Foreign companies can do business in Croatia under their business name via a local branch office. Because branches are not considered as separate legal entities, their parent company will be subject to unlimited liability for losses incurred by the Croatian branch;
- The Croatia branch must i) appoint a resident legal representative and ii) have its annual financial statements filed with the Business Register every quarter.
The Croatia representative office (also known as p.o.)
A great alternative to a branch office is the Croatian representative office. This entity can be 100% foreign owned, but cannot pursue any commercial activities in Croatia. As a result, this entity can only operate in i) promote the business of the parent company; ii) market research and iii) liaison activities.