Company formation in Croatia

Before deciding to set up a new company in Croatia, read the information below to understand the characteristics of a Limited Liability Company (LLC) / Društvo s Ograničenom Odgovornošću (D.O.O.):

Shareholders: at least one shareholder.

Director: at least one director (can be a shareholder; can be Croatian or a foreign citizen).

Minimum share capital: HRK 20,000 (~€1,600).

Legal address: the company must have a registered address in Croatia, which can be virtual, but there must be a physical mailing address for documents.

Liability: shareholders’ liability is limited when it comes to the company’s debts and obligations and it is extended up to their own contributions.

Accounting: a D.O.O. is required to submit audited annual financial statements detailing its commercial activities and transactions, which need to be approved by authorized public accountants in Croatia.

The CIT is usually levied at a rate of 18%. A 10% rate applies to taxpayers whose income for the tax period does not exceed €1 million.

• 15% - 23.6% on monthly amounts up to €4,200 (€50,400 per year);
• 25% - 35.4% for monthly amounts above € 4,200 (€ 50,400 per year).

VAT is mandatory for Croatian companies with an estimated annual turnover of more than €40,000. Such companies must register for VAT and begin collecting and remitting VAT on taxable supplies.

The standard VAT rate is 25%.

• 13% - covers some food, hotel accommodation, cafes, restaurants, concert tickets, non-daily newspapers, periodicals, water supply (excluding bottled water) and electricity, etc.;
• 5% - this includes certain foods (bread and dairy products), books (including electronic books), medicines (with a doctor's prescription), some medical equipment, etc.);
• 0% - applies to intra-community and international passenger transportation (not including rail and road).

Double taxation avoidance agreements in Croatia: Albania, Armenia, Austria, Azerbaijan, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Canada, Chile, China, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iran, India, Ireland, Indonesia, Iceland, Israel, Italy, Jordan, Korea, Kuwait, Kosovo, Latvia, Luxembourg, Lithuania, Macedonia, Malaysia, Malta, Mauritius, Morocco, Moldova, Montenegro, the Netherlands, Norway, Oman, Poland, Portugal, Qatar, Romania, Russia, San Marino, Saudi Arabia, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Syria, Turkey, Turkmenistan, Ukraine and United Kingdom.