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Company Formation

Forming a company is an 8-stage process, as follows:

• Visit the financial agency and decide if the chosen company name is available, if it is the forms and payment slips will be provided. The founding capital will be deposited and court fees are paid, along with publication and State Office for Statistics fees. Information on main business activity is supplied, for registration with the State Office for Statistics. This takes 1 day and the total cost is approximately 21,300 HRK
• Notarise the memorandum of association, which takes one day. Costs vary dependent on the number of founders and the amount of founding capital.
• Submit the incorporation documents at the financial agency for the registration at the Commercial Court. This takes 16 days.
• Order the official seal from seal-making shops. This can be done on production of the court decision on the registration of the company. The company needs to also obtain a statistical registration number. This takes a day and costs approximately 210 HRK.
• Open a bank account, which takes a day and costs approximately 180 HRK.
• Obtain certification that health and safety laws are being observed. This takes 20 days at a cost of approximately 720 HRK.
• Register with the tax authority for VAT and employees' income tax. This takes one day and can be completed alongside stage 6.
• Registration with the Croatian Pension Insurance Fund within 15 days of the company's incorporation. This takes a day and can be completed at the same time as stage 7.

Types of Companies

There are several ways that a foreign company can become established in the Croatian market. The types of companies are a general partnership, a limited partnership, a limited liability company or a joint stock company. UK companies wishing to establish a company in Croatia are advised to do as much research as is possible.

The most common form of incorporation in Croatia is a limited liability company, with the abbreviation d.o.o (equivalent to ltd in the UK). A d.o.o company can have a sole shareholder, an individual or a company, owning 100% of the shares. A d.o.o is represented by its management, which must consist of at least one person who acts as director/president.

Types of Business Entities

A foreign company wishing to incorporate itself in Croatia may do so by establishing a branch office or a representative office.

Branch Office

Foreign companies may register a branch office in Croatia at the relevant court. The branch office remains part of the foreign parent company and therefore is not a separate legal entity.

Representative Office

You can register a representative office in the Register of Representative Offices at the Ministry of Economy. This type of entity does not have a legal personality and it may be used for the purpose of investigating the local market, advertising and marketing, but not for carrying out commercial activities.

Companies wishing to arrange local representation may find it useful to contact a local professional services provider for help and advice in areas such as tax, legal services, business consultancy, finance, insurance, and business advisory services. 

Offshore Companies

By choosing to incorporate an offshore company, business owners and  investors can set-up a business outside the jurisdiction of its operations. Offshore companies are traditionally, but not exclusively, incorporated for lower fees and taxes. Business owners must abide the regulations of the offshore jurisdiction, and must not trade within the jurisdiction.

The benefits are vast. As aforesaid, reduced tax and fees are often big factors when considering offshore incorporation. A company may also choose and offshore location to:

• Simplify set-up and maintenance - entrepreneurs may find bureaucracy and red tape less of an obstacle in offshore jurisdictions
  
• Assume anonymity - the names of owners and directors are not for public record, and references to the company may only be made in its registered agent
  
• Ensure legal protection - for instance, some jurisdictions favour corporate governance, meaning a company is only liable to offshore laws as opposed to those in its areas of operation
  
• Protect assets - business owners may opt to arrange their assets and transactions in such a way that protects them from liability
  

Characteristics of an offshore company:

• Memorandum and Articles of Association
  
• Certificate of Incorporation
  
• Registered Office/Agent
  
• Shareholders / Members
  
• Directors / Managers
  
• Company secretary
  
• Statutory Register
  
• Bookkeeping
  

Traditional locations for offshore incorporation are tax havens, such as the British Virgin Islands, Panama and Monaco. Other favoured areas include India, the Bahamas, Dubai, the Cayman Islands, Cyprus, Seychelles, Marshall islands, Delaware, Turks & Caicos Islands, Hong Kong, Jersey, Guernsey and the Isle of Man.

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