-Market Entry Services and Business Climate in Croatia (risks, political & business situation) -Tax, Legal and Baking Aspects (system and benefits) -Labor Issues: Hiring New Staff vs Relocation of Existing People and Work Permits -Residency

1. Business and Personal Migration
CROATIA
David Jakovljević,
Tax & Legal Advisor, CROATIA

2. Croatia Brief statistical data
(source: World bank & CRO and MN statistics bureau)
General Overview
Croatia

3. Croatia Real GDP growth rates in %
General Overview
Croatia

4. General Overview
Croatia
Doing business scale - 189 Economies – World bank statistics
Croatia – 65th

5. Frequent obstacles for foreign investments - CROATIA
• Frequent amendments of legislation and overregulation
(general problem of complying with EU directives compared
to other World markets)
• Labor costs in terms of gross – net difference
• Fear of future State Government policies due to current
situation State budget deficit of 4,1 % of overall GDP
-Public debt amounts to 90% of GDP
-Country’s external debt 108% of GDP
• Administrative and regulation obstacles are usually
successfully bypassed by the investors if they are properly
informed
General Overview
Croatia

6. Attractive Investment Factors
• Access to EU funds (especially in agriculture) – from 2014 – 2020
Overall available amount is 10,676 billion € out of which
– - 4,3 bn € for regional l development
– - 2 bn € for agriculture
• Renewables – governmental subsidies
• EU single market 500 milion consumers + political stability
• Many governmental subsidies for opening new business
• Strong historical and business connection with neighboring
countries i.e. Italy, Slovenia, Austria, Hungary and strong export
presence in former Yugoslav Republics
• Food, Pharmaceutical and IT industry is very competitive
General Overview
Croatia

7. Attractive Investment Factors - TOURISM
• One of the World’s top tourist destinations (10% growth in 2014)
• Over 13 million tourists and 73,6 million overnight stays
• Political stability compared to competitive tourism markets (Tunis,
Morocco, Turkey, Greece etc.) + One of World’s lowest crime rate
• Coastline is excellently preserved compared to France, Spain and
Italy as main EU and World competitors
• Coastline is 6278 km in length, (comparison: India has 7,517 km)
• 1244 islands and 8 UNESCO heritage sites
• Highly developed infrastructure (Airports, highways)
• Huge interest in hotels and land development in general (golf course,
camps, marinas generating high yield percentage
General Overview
Croatia

8. Market entry
Croatia

9. Market entry
Croatia
TAX RATES

10. Market entry
Croatia
BRIEF CORPORATE TAX EXEMPTIONS

11. Market entry
Croatia
GENERAL LEGAL OVERVIEW

12. Labour issues
Hiring new staff and work permits
David Jakovljevic,
Tax & Legal Advisor, CROATIA

13. Minimum requirements for employment contract
Labour issues
Croatia

14. Labour issues
Croatia
Important notes on labour issues

15. Labour issues
Croatia
Important notes on labour issues

16. Residency issues
Croatia
• Croatian Foreigners Act is relatively restrictive on non-EU residents.
– Depending whether it is within annual quota or outside annual quota
• Croatian government is issuing annual quota for non-EU nationals
for work permits. For 2015 – only 215 permits for new hires, out of
which in tourism – 106.
• Overal annual quota for exsisting permits is 1.500.
• Relatively complicated procedure for work permits outside annual
quota.
• Special procedure for highly educated workers - EU regulation, any
non-EU resident can obtain work permit provided that his salary is
1,5 of average salary of same occupation in CRO.
Residency Permits

17. Residency issues
Croatia
• Permits outside annual quota are available for:
– Daily migrants under condition of reciprocity
– Foreigners who conduct managing function in companies,
subsidiaries or representative offices*
– Foreigners who are self employed in its own company or craft
having business share of 51% or more*
– Foreigenrs who conduct business on behalf of foreign company who
does not have right of establishment in EU states
– Teachers who teach language of minorities admited in Cro, artists who
work in cultural institutions, profesional sport players, university
profesros who teach their native language, scientific reaserches emplyed
in scientific workplaces
– Carriers of investment subsidies obtained by the Government (previous
slide in tax relief).

18. Residency issues
Croatia
• *Foreigner who conduct managing function in companies,
subsidiaries or representative offices (directors, managers
etc.)
– Initial share capital of the comapny is above HRK 100.000 (€13.227)
– At least 3 Croatian citizens are employed
– Gross salary of director amounts to Croatian average salary (€ 1.271
gross)
• *Foreigner who is self employed in his own company or craft
having business share of 51% or more
– Investment of min. HRK 200.000 (€26.455)
– At least 3 Croatian citizens are employed
– Gross salary amounts to Croatian average salary (€ 1.271 gross)
– Company is not generating loss.

19. Residency issues
Croatia
Important note for directors/owners of the companies who do not have
work permit:
• They can easily manage business from abroad
• Bank payments and financial control can easily be done from abroad
• Companies usually appoint domestic person thru special PoA if
necessary for urgent signature of documents/contracts
• A1 certificate is needed in order to be exempted from CRO social
security and tax payments.

20. Few words on Eurofast
Regional business advisory organization employing over
200 people in South East Europe & East Mediterranean.
Our team of professionals is capable of efficiently
addressing all client needs in one single meeting, using
one single language for all the countries in the Region.
Eurofast Profile

21. What we are
good at…
Our Services
•International Tax
•Mergers & Acquisitions and
Transactional Advisory
•Transfer pricing
•Accounting services
•Financial services
•Outsourced Payroll and
Employment solutions
•Corporate services
•Citizenship & Residency
services
•HR administration
•Banking and Financial services
•Business Restructuring &
Insolvency
•IT specialized services
•Tax Planning & Tax
Compliance
•Real Estate tax
•Shipping Tax
•Energy Tax
•Intellectual property
•market entry services
Bringing value to
clients
with our service
Eurofast is Taxand
Cyprus

22. Where can you find us
Single point of Contact,
Many Points of View
▪ Lefkosia
▪ Athens
▪ Thessaloniki
▪ Sofia
▪ Bucharest
▪ Belgrade
▪ Tirana
▪ Skopje
▪ Pristina
▪ Banja Luka/
Sarajevo
▪ Zagreb
▪ Cairo/ Alexandria
▪ Podgorica
▪ Kiev
▪ Moscow
▪ Tbilisi
▪ Beirut
▪ Erbil

23. Eurofast
in numbers…
Over
200people across
South East
Europe and East
Mediterranean
21Offices in SEE
and East
Mediterranean
5-
35Team members
in every office
1Reference point;
1 meeting
handles all!

24. Thank You!
Q & A
David Jakovljević,
Tax & Legal Advisor, CROATIA