How to Set Up an Entity in Croatia

Setting up a legal entity in Croatia offers companies a gateway to a stable EU-member market with access to the wider European Union and Eurozone (Croatia adopted the euro from 1 January 2023). The country’s location, skilled workforce, and improving business environment make it appealing for international expansion. Recent reforms have simplified registration via the electronic “START” service

Nevertheless, the process still involves registration steps, notarial formalities (for some structures), capital deposit obligations, and ongoing compliance with tax, accounting, and employment rules. The key benefits include limited liability, full foreign ownership in most structures, and the ability to control income and operations locally. The main challenges revolve around navigating Croatian-language documentation, opening a bank account (especially for non-residents), and staying compliant with Croatian and EU regulatory frameworks.

Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult official sources before acting.

What does “opening an entity” mean in Croatia?

In Croatia, “opening an entity” involves registering a legal business structure (such as a limited liability company) with the Commercial Court Register, obtaining tax and social registrations, and being formally authorized to trade under Croatian law. Foreign investors typically use a local company (subsidiary) rather than just a branch.

Entity overview in Croatia

Here’s a concise overview of how the registration process works in Croatia, highlighting the most commonly used structure by foreign investors (the limited-liability company, or “d.o.o.”). Registration requirements, minimum capital, and timing differ by entity type, but the d.o.o. is favored.

Step-by-step guide: How to open an entity in Croatia

Step 1: Choose the right structure

The most common structure for Croatian entrepreneurs is the private limited-liability company (“d.o.o.”), which provides limited liability protection and straightforward governance. Smaller domestic ventures often choose the simple limited-liability company (“j.d.o.o.”), a streamlined variant with minimal share capital requirements. Larger enterprises seeking to raise public funds typically form a joint-stock company (“d.d.”).

For foreign investors, the d.o.o. is also the preferred structure—it allows full foreign ownership, offers operational flexibility, and is recognized across the EU. Other options, such as general partnerships (j.t.d.) and limited partnerships (k.d.), are available but less commonly used for cross-border or foreign-controlled businesses.

Step 2: Verify business name availability

You must check and reserve your company name via the commercial court register system. The name must be unique, in Croatian or an EU official language and Latin script, and must include the legal form (e.g., “XYZ d.o.o.”). If the name includes “Croatia” or its derivatives, a special authorization from the Ministry of Public Administration may be required.

Step 3: Prepare incorporation documents

You will typically need to prepare:

• Notarised Articles of Association (for more than one founder) or a Declaration of Incorporation (for single-founder companies)
• Statement on acceptance of the appointment of the directors
• Proof of payment of share capital (or in-kind contributions if applicable) where required
• Registered office address in Croatia and business activity specification
• For foreign shareholders/directors: certified passport copies and translations where necessary, plus notarisation

Step 4: Register with the Court Register

Submit your documentation through the commercial court register system (electronically via the “e-Court Register” for EU/EEA citizens or physical submission for non-EU founders) at the competent commercial court. Once approved, you will receive a certificate of registration and the company’s unique registration number (MBS) and OIB (tax identification number).

Step 5: Register for tax and social security

Immediately after registration, you must register the company with the Croatian Tax Administration to obtain a tax identification number (OIB) and determine VAT registration, if applicable. If you have employees, you must register with the Croatian Pension Insurance Institute (HZMO) and the Croatian Institute for Health Insurance (HZZO) for pension and health insurance contributions.

Step 6: Open a corporate bank account

You will need a Croatian bank account to deposit share capital and carry out operations. Most banks require at least one director to visit in person and provide proof of registration, identification, and corporate documents. Non-residents may face additional due diligence and delays. After the bank account is operational, the share capital can be released (where required) and business operations can begin.

Step 7: Set up payroll and employment compliance

If you plan to hire employees, you must ensure that employment contracts comply with the Croatian Labor Act, register employees via the social security system, calculate and withhold payroll tax and social contributions correctly, and maintain records. Employers must follow rules for paid holidays, sick leave, and other labor rights under Croatian law.

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Post-registration obligations

Once the entity is running, you must maintain compliance with Croatian governance, tax, and employment law. Typical requirements include:

• Tax and financial reporting: File corporate income tax returns with the Croatian Tax Administration (within four months of the tax year end) and VAT returns as required (monthly or quarterly, depending on turnover).
• Corporate registers: Keep up-to-date records of directors, shareholders, and beneficial owners and report changes via the court registry within the prescribed timeframe.
• Compliance tracking: Monitor all filing deadlines (tax, financial statements, payroll) through a compliance calendar or managed service provider to avoid penalties.
• Licenses and renewals: If your business is in a regulated sector, you may need trade permits or municipal licenses, which must be renewed regularly.
• Recordkeeping: Retain accounting records, payroll files, HR records, and invoices for the minimum period defined by law (generally five years for tax purposes).
• Employment law compliance: Maintain compliant employment contracts, ensure contributions to pension and health insurance are paid, and adhere to data-protection and health & safety rules under Croatian and EU law.

Taxes and financial considerations

Here are the key tax and financial obligations to bear in mind:

• Corporate income tax: 10% rate applies to companies with revenues up to EUR 1,000,000 in the tax period; 18% rate applies if revenues exceed that threshold.
• VAT: Standard rate is 25%; reduced rates apply at 13 % and 5 % for specific goods and services. The compulsory registration threshold is approximately. EUR 60,000 annual turnover.
• Payroll/social contributions: Employers and employees must make contributions to pension and health systems. As an employer, you must register and comply with deductions and remittances.
• Accounting standards: Companies must prepare annual financial statements in line with the Croatian Accounting Act; larger companies may need to comply with IFRS. Losses can typically be carried forward for up to five years.

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Expand internationally with Deel

Whether you’re hiring through an EOR or establishing your own local entity, Deel’s all-in-one platform gives you everything you need to expand into Croatia—quickly, compliantly, and with confidence. From market entry to ongoing operations, Deel helps you hire, onboard, and manage teams seamlessly from day one.

With Deel, you can:

• Test new regions using Deel’s local entities through our Employer of Record service—hire employees compliantly, delegate payroll and taxes, and access localized employment contracts.
• Open entities with Deel Entity Setup, where our team manages everything—from incorporation and tax registration to coordination with local experts.
• Centralize your compliance and records with Deel Entity Management, including automated filings, calendar reminders, and visibility across all entities.
• Integrate with Deel Payroll and Deel HR for compliant payments, benefits, and workforce oversight—all in one platform.

For companies transitioning from the EOR model to owned entities, Deel ensures a smooth handover and consistent compliance every step of the way. Enter new markets, onboard talent, and manage your global workforce—all through one unified platform.

FAQs

How long does it take to open an entity in Croatia?
The process typically takes 2–4 weeks, assuming all documents are in order and the bank account is opened promptly.

What is the minimum capital required?
For a standard d.o.o., the minimum capital is HRK 20,000 (≈ $2,600 USD); for a simplified j.d.o.o. The minimum capital can be as low as HRK 1 (≈ $0.13 USD).

Can foreign companies own 100% of an entity in Croatia?
Yes. Foreign individuals or legal entities can generally own the company entirely, with no requirement for local partners.

Do I need a local director or representative?
No statutory requirement mandates a local-resident director; however, practical matters such as banking may favor someone locally present and eligible for KYC.

How much does it cost to register an entity?
Basic registration fees and notary costs start from around €100-150 (≈ $110-165 USD), plus the share-capital deposit and any professional service fees. Typical full setup cost may vary depending on complexity and service provider.

Can I hire employees before the entity is fully registered?
Typically, no—you should only hire employees once the entity is legally registered, tax and social registrations are completed, and a bank account is active. Alternatively, you can use an EOR model to hire and pay talent while your entity setup is underway.

Can Deel help me open an entity in Croatia?
Yes. Deel Entity Setup manages the end-to-end process—from registration to payroll compliance—in over 100 countries, including Croatia.

Does Deel offer ongoing compliance and payroll support?
Yes. Deel offers both managed services and self-service tools to help you stay compliant.
For teams managing their own entities, Deel Compliance Hub makes staying compliant simple by providing real-time regulatory updates, risk alerts, and workforce insights across 150+ countries. Proactively manage compliance with our Compliance Monitor, Workforce Insights, and an AI-powered Worker Classifier, staying ahead of changing employment laws.

Can I switch from Deel EOR to my own entity later?
Yes. Deel supports seamless transitions when you’re ready.