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Establish a Subsidiary in Croatia

Updated on Tuesday 26th June 2018

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Establish a subsidiary in Croatia.jpgCompanies from abroad have two important options for placing the activities in Croatia, as branches or as subsidiaries. The latter one is preferred because of the status of independent legal entity and for several tax advantages. Establishing a subsidiary in Croatia is subject to an easy incorporation with the institutions in charge, and furthermore, the entire procedure can be assisted by our team of company formation specialists in Croatia. Regardless of the type of business you intend to open in Croatia, our advisors can provide you with the necessary information and guidelines in this direction. 

 

How can a subsidiary be opened in Croatia?

 

Opening a subsidiary in Croatia requires the good knowledge of the Commercial Law of this country and a minimum share capital that has to be deposited before starting the business. A subsidiary is a company registered in Croatia but beneficiating from foreign capital, as a separate legal entity. The advantages of owning this type of business are numerous especially from a tax point of view; thanks to the vast network of double tax treaties, a subsidiary registered in Croatia must pay taxes on profits only in the country of origin and beneficiate from abolished or minimized taxes on dividends paid to those countries.
 
A subsidiary opened in Croatia has also the advantage that the shareholders’ liability is limited by their contribution to the capital. There are especially two forms of business adopted by the subsidiaries in Croatia, the private and the public limited liability companies.

 

Types of entities for subsidiaries in Croatia

 

A private limited liability company is formed by at least one founder that must provide a minimum share capital of at least 20,000 HRK, divided into shares. The liability of the stakeholder is limited to the amount of invested capital.
 
A Croatian public limited liability company is formed by at least one member with a minimum capital of 200,000 HRK, divided into shares. Just like in the case of the private limited liability company, the liability of a shareholder is limited by his contribution to the capital. The management of this form of business is assured by a management board (with at least one member) and a supervisory board (formed by at least three members).
 

What information is comprised by the Articles of Association of a subsidiary in Croatia?

 
The Articles of Association are the main documents of a subsidiary in Croatia which comprise complete information about the parent company which intends to set up such entity, the purposes and the activities of the subsidiary, the name of the representative agent, the board of managers, the capital contribution, the responsibilities of each member that forms the entity, and details about business address and the date of incorporation.
 
We remind that your company in Croatia can be represented by our team of company incorporation representatives in Croatia who can act on behalf of your firm, in compliance with the applicable legislation.
 

Who can set up subsidiaries in Croatia?

 
The investment legislation in Croatia is permissive for all foreign corporations which want to set up their operations in this state, under the rules of branches or subsidiaries in this case. All businesses in Croatia must respect the Croatian Company Act and the Commercial Code, two important sets of laws which supervise the activities of companies in this country.

 

How much does it take to register a subsidiary in Croatia?

 

The registration of a subsidiary in Croatia takes around one week and consists in the following steps: first of all, the company must be sure that its name is unique and not similar to one already registered. The articles of association must be notarized and then submitted to the Commercial Court. The registration is made electronically and takes around two days. As a result, the company will receive a certificate of registration.
 
Every company registered in Croatia must have a statistical number so the application for this number is the next step. This is based on the certificate of registration and the application is accepted in one day. The following steps are also part of the registration procedure of a subsidiary in Croatia:
 
  • the company seal must also be obtained in order to be used in the daily subsidiary’s operations;
  • a bank account for the company must be opened and the minimum share capital must be deposited;
  • registration at the tax authority for VAT and employee income tax is the next step;
  • enrolling at the Croatian Pension Insurance Fund is necessary at the time of incorporation.
 
If you want to know more about registering a subsidiary in Croatia, you may contact our company formation agents in Croatia.

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