Starting A Small Business (j.d.o.o.) in Croatia

Constant Change, Ancient Culture

Since gaining independence in 1995, Croatia has gone through some major growth.  Next step - EU membership.
Since gaining independence in 1995, Croatia has gone through some major growth. Next step - EU membership. | Source

Glossary of Terms:

  • Javni Bilježnik = Notary Public. An important function, this person is a go between for the court, police and tax departments. Many speak excellent English.
  • Porezna Uprava - the local Tax Office. You will need to register your business here.
  • Sudski Tumać - Court Appointed Translator.This person is legally appointed to translate and/or verify translated documents in the language(s) for which they are registered. With their official stamp, the documents will be admissable for your company's registration.
  • HZMO - Social Security. Standing for the Croatian Association for Pension Insurance, your business will need to be registered here as well.


The Time is Right

Since Yugoslavia split up in the early 1990s, Croatia has often been in world news. The War ended in 1995, leaving Croatia will damages and debt, but from the ashes rises the Phoenix. In the past 20 years, new improvements, bridges, services and a boom in tourist activity have predicted that Croatia is fertile ground for business investment, one of Europe's hot spots.


The political and business center is Zagreb, with a million inhabitants. Its second largest city is Split, to the south, known for its ancient Greek and Roman contributions dating back to the 4th century B.C. Split is a tourist based economy, whereas Zagreb is a combination of banking, industrial, service related and promotional. In many ways, they seem like complete opposites.


Many, if not most, Croatians speak at least two or more foreign languages, including English which is taught from nursery school onwards. Translation of documents is another legal expense, but communication is not a barrier to doing business in the Republic of Hrvatska (Croatia).

If you love Croatia, and want to start a business here, you need to know a few facts:

The European Union (EU)

Politically

Croatia has been slated to be the 28th member state of the European Union. At this time, procedures may be less complicated than they may become once Hrvatska is officially admitted into the EU.

Economically

It's a good time to make a business in Croatia. Since the Domovinska Rat (War for the Homeland) ended in the 1990s, the political and economic climate for foreign investment is very favorable.

Of 183 European countries, Croatia is among one of the easier to work with. Ranked as #103, it takes a minimum of 3 business days to file all the paperwork. This does not including drafting the articles for your business in your native language and having them translated into Croatian for submission. Bring them to Croatia, then have a court appointed translator - or sudski tumać - verify their meaning in Croatian. He or she will stamp them with their official circular stamp. Then, and only then, can they be submitted for your company registration.

The expense of starting a business comes to a little more than $1000. Procedures here are quite strict - you name must be properly spelled and the documents must match. Anthony is not Tony, for example. Even so, once you are set up you are free to begin your (profitable) business.


The D.O.O. Option

Capital Reserves

Until 2012, those who wanted to start d.o.o. needed 20,000 Croatian Kuna, or HRK. This amount of money was a major barrier for most people. As a conversion tool, use the XE link below to plug in your local currency at the current rate. This has been modified.


Now, a person can open a j.d.o.o. which means "simplified" d.o.o. with only 10 kn! The legal fees around registration come to about 750 HRK, which is a far cry from the previous 20,000 requirement. In order to step up to the formal d.o.o. level, assets of 20,000 need to be accumulated - either in cash or property (co-ownership of a house, for example).


UPDATE IN PROGRESS...

What
How Long?
Expense in Kuna
Choose an Available Company Name
1 day
- -
Register Your Company:
 
 
Articles of Association
1 day
+ 25% VAT
Application Fee
same day
220 + 25% VAT
Acceptance of Appointment
same day
160 + 25% VAT
Signature Verification (each person)
same day
46,60 + 25% VAT
Court Fees (to Register)
same day
400 + 25% VAT
Publication in the National Gazette (Narodne Novine)
same day
+ 25% VAT
Grand Total ( assuming one owner)
 
 
 
 
 
Company Seal or Stamp
1 day
150
 
 
 
Company Bank Account
1 day
10
Registration with the Tax Department (Porezna Uprava)
same day
- -
Register with HZMO (similar to Social Security)
same day
- -
GRAND TOTALS:
3 business days
about 750 kn or 100 €
As of May 2012, the US dollar converts to 5.75 Croatian Kuna (HRK) or slightly more. For an updated conversion from Dollars or another foreign currency, use this handy link: http://www.xe.com/ucc/ The term VAT refers to Value Added Tax, or Sales Tax

When in the Mediterranean....

The expression is "when in Rome do as the Romans do". Well the entire Mediterranean is a little laid back at times, except for when it comes to paperwork accuracy.

If you want to accomplish a lot in the least amount of time, you need to be in position no later than Monday night. Not always, but less work is done on Mondays and Fridays. The majority of work gets done Tuesday, Wedsnesday, and Thursday, between 8:30 am and noon. After noon, anything is possible, but not to be bargained on.

Try to be the first one at the door of the bilježnik on Monday or at the very latest, Tuesday. Get the wheels turning. With a little luck, you may be able to complete your transactions by the end of the week! Be smart and be prepared with all the identifications you will possibly need - better too much than not enough. US Passport, Social security card, two photo IDs like a drivers' license and anything else you can think of.

Where is Croatia located, anyway? In the Center:

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DDE profile image

DDE 2 years ago from Dubrovnik, Croatia

Interesting about opening a business in Croatia. i have started my own business and had to got through many procedures and still not in the right track.

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