{"id":1891,"date":"2024-05-27T01:16:23","date_gmt":"2024-05-26T23:16:23","guid":{"rendered":"https:\/\/www.uaace.org\/?page_id=1891"},"modified":"2026-06-19T22:52:25","modified_gmt":"2026-06-19T20:52:25","slug":"%d0%bc%d0%be%d0%b4%d1%83%d0%bb%d1%8c-4-%d1%80%d0%be%d0%b7%d0%b2%d0%b8%d1%82%d0%be%d0%ba-%d0%b1%d1%96%d0%b7%d0%bd%d0%b5%d1%81%d1%83-%d0%b2%d1%96%d0%b4-%d1%81%d1%82%d1%80%d0%b0%d1%82%d0%b5%d0%b3%d1%96-2","status":"publish","type":"page","link":"https:\/\/www.uaace.org\/?page_id=1891&lang=en","title":{"rendered":"Module 4. Business Development: From Strategies to Resources."},"content":{"rendered":"

Click here to view the materials in English\/<\/span><\/a>
\nClick here to view the materials in English<\/span><\/a><\/p>\n

Features of the Business Environment in the Republic of Croatia<\/strong><\/span><\/p>\n

#1 Croatian businesses are advised to have an accountant<\/strong><\/span><\/p>\n

An accountant will file your tax returns, communicate with the government, submit VAT reports<\/ a> and calculate payroll for all your employees. They can also pay bills on your behalf. The cost of an accountant\u2019s services can range from 133 euros to 266 euros per month for a basic d.o.o. business<\/a>.<\/span><\/p>\n

The more active your business is and the more services you request (such as bill payment), the higher the cost will be. You may also have to pay for year-end accounting in addition to the monthly fee, which can cost at least 266 euros.<\/span><\/p>\n

#2 Know what the <\/strong>PDV system<\/strong><\/a> means before you register<\/strong><\/span><\/ p><\/p>\n

PDV is the Croatian VAT (value-added tax) system. It is a significant tax added to the sale of most goods. If you are registered in the PDV system, you are entitled to a refund of all PDV that your company pays to other companies. This also means that you are required to charge PDV on all outgoing invoices, which offsets the amount you paid in PDV. Sounds great, doesn\u2019t it? But don\u2019t be fooled. After registering with the PDV system:<\/span><\/p>\n

Your accountant must file the PDV on your behalf (which increases the cost of your accountant\u2019s services, which they will charge you for)<\/span><\/p>\n

Once you issue an invoice with PDV, you are required to pay the PDV amount on that invoice to the government, regardless of whether the invoice has been paid or not. Thus, if one of your clients pays an invoice late, you may pay the amount to the government in advance. Due to the pandemic<\/a>, this rule was temporarily changed so that VAT would not be paid until the invoice was paid, but the possibility of making this change permanent is currently being discussed. Fingers crossed!<\/span><\/p>\n

Once you\u2019ve registered with the PDV, you\u2019re required to remain in the system for 5 years.<\/span><\/p>\n

If your company has annual revenue of 39,816.84 euros or more, you are required to be in the PDV system.<\/span><\/p>\n

For companies that provide services or sell high-priced goods, you may encounter situations where customers are unwilling to pay PDV and instead either cancel the purchase entirely or pay in cash (so-called \u201cunder the table\u201d).<\/span><\/p>\n

#3 Changing your registered address can be expensive<\/strong><\/span><\/p>\n

When you set up a company, think carefully before choosing an official registered address. Changing your registered address later will require notarization and resubmission of your incorporation documents, which can be quite expensive.<\/span><\/p>\n

If you are changing your address within the same city where your company is registered, and your founding documents state that you may change the address, the only cost will be the notary fee, which is approximately 27 euros.<\/span><\/p>\n

However, if you change your company\u2019s address to a different city OR if your articles of incorporation do not allow for a change of address, you will need to resubmit your articles of incorporation. This costs approximately 266 euros.<\/span><\/p>\n

Most Croatians use the address of a home that belongs to them or their family. If you\u2019re an expat and don\u2019t own your own home, some accountants will let you use their address for your company and accept mail on your behalf for a monthly fee. The likelihood that their business will move is lower than the likelihood that you will move.<\/span><\/p>\n

To avoid this hassle, make sure that only the city is specified in the articles of incorporation, and that your physical address is listed in an appendix. That way, you\u2019ll only need to update the appendix, not the articles of incorporation.<\/span><\/p>\n

<\/p>\n

#4 You Can\u2019t Deduct Everything as a Business Expense<\/strong><\/span><\/p>\n

To claim a purchase as a business expense, the supplier must issue an R1 invoice to your company that includes the company\u2019s official name, legal address, and OIB. Make sure you keep all business receipts and provide them to your accountant.<\/span><\/p>\n

Here are a few examples of general expenses:<\/span><\/p>\n

If you work from home, you cannot deduct rent, water, electricity, or internet bills unless the relevant contracts are in your company\u2019s name and paid by your company.<\/span><\/p>\n

If you buy printer ink at a store using your business debit card, you must ask the salesperson to issue you an R1 invoice. Simply having a receipt is not enough. The good news is that once you register your business with the store, they\u2019ll save your information for future purchases, making it easier to get an official invoice.<\/span><\/p>\n

Your company may reimburse personal business expenses, such as meals and mileage, but there are many restrictions depending on the situation. For details, consult your accountant.<\/span><\/p>\n

#5 Accepting cash increases your reporting obligations<\/strong><\/span><\/p>\n

As of January 1, 2013, all businesses that accept cash payments or online credit card payments are required to purchase and use fiscalization software that automatically reports every cash transaction to the government in real time. Even accepting a single payment in cash or by credit card entails liability.<\/span><\/p>\n

Fiscalization software is not cheap and can be quite complicated to use. It is also strictly regulated, so don\u2019t risk drawing the attention of tax authorities by failing to comply with this requirement. Here\u2019s everything you need to know about fiscalization.<\/span><\/p>\n

#7<\/strong> What kind of business do you want to start?<\/strong><\/span><\/p>\n

Choosing the right corporate structure is crucial to achieving your business goals. In Croatia, there are various business structures, none of which are equal. It is important that the option you choose meets your needs.<\/span><\/p>\n

#8<\/strong> Closing a company is a specific process<\/strong><\/span><\/p>\n

If you\u2019ve decided that you no longer want to have an active company, you have three options:<\/span><\/p>\n

Sell the company to another person\u2014this is the least expensive option. The buyer must have an OIB and be a registered entity in Croatia.<\/span><\/p>\n

Cease all operations\u2014this means no income is generated and no expenses are incurred. However, you will still have to pay for the services of an accountant who will file annual tax returns, and you will still have to pay the director\u2019s salary.<\/span><\/p>\n

Closing a company\u2014There are two ways to close a company, depending on whether the company has debts that need to be repaid. If there are debts, the company must undergo a liquidation process, during which the director\u2019s salary must still be paid. <\/span><\/p>\n

If you established a company for the sole purpose of obtaining residency in Croatia, it is important to know what the costs will be once the company is no longer tied to your residency.<\/span><\/p>\n

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#9 Multilingualism may be mandatory<\/strong><\/span><\/p>\n

Owners of retail and tourism businesses (such as cafes, hotels, and restaurants) are required by law to be fluent in Croatian and English. To give the impression that you speak both languages, simply make sure you can communicate with inspectors and government officials during the startup process, and that you have Croatians on your staff who can assist with translation.<\/span><\/p>\n

#10<\/strong> Delays, delays, delays<\/strong><\/span><\/p>\n

The type of business you\u2019re starting will determine how much you\u2019ll interact with the government. Inevitably, the more you interact with the government, the greater the potential for significant delays in launching your business.<\/span><\/p>\n

You may be ready, but the government doesn\u2019t care about your timeline or opening dates. Be prepared to wait for inspectors, licenses, registration, and everything else the government deems necessary to operate your business legally.<\/span><\/p>\n

With that in mind….<\/span><\/p>\n

#11<\/strong> These are the people you know<\/strong><\/span><\/p>\n

Croatian bureaucracy remains very manual and, for the most part, based on paper records, which leads to a great deal of inconsistency in information, processes, and deadlines. The government doesn\u2019t feel any sense of urgency, and departments rarely communicate with one another. They have plenty of time, but they don\u2019t know you.<\/span><\/p>\n

The best way to navigate the bureaucracy is to find someone you can talk to in person. Bring them some rakia and candy. Tell them your story. Be polite. It\u2019s amazing what you can achieve by building personal relationships.<\/span><\/p>\n

How do you find someone to talk to? It\u2019s not easy. Ask around to see if anyone knows someone who works in the city administration, starting with your accountant. Then keep asking until you reach the department you need.<\/span><\/p>\n

If you\u2019re planning to start a business in Croatia, the first step is to decide what type of company to establish. The type of corporate structure is crucial to the success of your business and should align with your business goals.<\/span><\/p>\n

In this article, we\u2019ll review every type of business in Croatia and provide advice on each one, as well as guides explaining how to set them up. Be sure to review this guide before starting a business.<\/span><\/p>\n

Go to business type:<\/span><\/p>\n

d.d. (public limited company)<\/span><\/p>\n

TzOV (limited liability company)<\/span><\/p>\n

GIU (limited liability company)<\/span><\/p>\n

TzOV (limited liability company)<\/span><\/p>\n

full partnership (limited partnership)<\/span><\/p>\n

k.d. (limited partnership)<\/span><\/p>\n

\u0422\u0437\u041e\u0412 (commercial partnership)<\/span><\/p>\n

OPG (family farm)<\/span><\/p>\n

predstavni\u0161tvo (branch)<\/span><\/p>\n

udruga (nonprofit organization)<\/span><\/p>\n

The facts are as follows…<\/span><\/p>\n

Types of Businesses in Croatia<\/span><\/p>\n

#1 d.d. (limited liability company)<\/span><\/p>\n

Dioni\u010dko dru\u0161tvo (d.d.) is a limited liability joint-stock company in which shareholders participate through contributions to the authorized capital, divided into shares. This type of company may have only one shareholder. It is a legal entity and is registered in the court registry. The company is liable for its obligations with all of its assets. Shareholders are not liable for the company\u2019s obligations.<\/span><\/p>\n

Advantages: This is an excellent way to establish protection against liabilities and debts<\/span><\/p>\n

Not suitable for: As a shareholder, you have full control over the company only if you are the sole shareholder<\/span><\/p>\n

#2 TzOV (limited liability company)<\/span><\/p>\n

A d.o.o. is the equivalent of a limited liability company and is the most common form of business in Croatia. A d.o.o. can be owned by one or more individuals.<\/span><\/p>\n

To establish a company, you need a minimum of 2,500 euros in start-up capital. However, if you are not an EU\/EEA citizen and plan to use the company as a basis for obtaining a residence permit, the required start-up capital may be 26,544.56 euros or more. You can open the company in person or online.<\/span><\/p>\n

Suitable for all types of commercial businesses<\/span><\/p>\n

#3 GIU (Economic Interest Grouping)<\/span><\/p>\n

A Gospodarsko interesno udru\u017eenje (GIU) is a legal entity established by two or more individuals or legal entities to facilitate and promote the economic activities that constitute their business, but in such a way that the legal entity itself does not generate a profit.<\/span><\/p>\n

Benefits: This is a great way to promote your business and build relationships with other professionals<\/span><\/p>\n

Not good for: You do not make a profit from a GIU, although your company may benefit from your networking<\/span><\/p>\n

<\/p>\n

#4 TzOV (limited liability company)<\/span><\/p>\n

A J.d.o.o. is similar to a d.o.o., but is typically used for companies with limited startup capital. The required startup capital to establish a J.d.o.o. is only 1 euro. It can have up to 5 founders and can be established in person or online.<\/span><\/p>\n

Suitable for: Businesses with low overhead and startup costs, such as online businesses<\/span><\/p>\n

#5 J.T.D. (General Partnership)<\/span><\/p>\n

A general partnership (Javno trgova\u010dko dru\u0161tvo, J.t.d.) is when two or more individuals join together to conduct business on a permanent basis as part of a joint company. Each partner bears unlimited liability to the partnership\u2019s creditors with all of their assets. A partner may not dispose of their interest in the partnership without the consent of the other partners.<\/span><\/p>\n

Pros: You share knowledge with your partners, and you have an extra pair of hands when needed<\/span><\/p>\n

Cons: If you want to leave the partnership, you need the consent of the other partners<\/span><\/p>\n

#6 k.d. (limited partnership)<\/span><\/p>\n

A limited partnership (k.d.) is a business entity in which two or more individuals join together to conduct business on a permanent basis as a joint venture. A limited partnership requires that at least one partner bear unlimited liability for the partnership\u2019s obligations with all of their assets. This person is called a general partner.<\/span><\/p>\n

In addition, at least one partner is liable for the partnership\u2019s obligations only to the extent of a specific capital contribution to the partnership. This person is called a limited partner.<\/span><\/p>\n

Good for: If you need a \u201csilent\u201d partner with assets, this is a great way to start a company with a partner<\/span><\/p>\n

Not suitable for: As the general partner, you bear greater responsibility for the risks<\/span><\/p>\n

#7 obrt (commercial business)<\/span><\/p>\n

An obrt is not a traditional company; instead, it is tied to a specific person and the type of \u201ctrade\u201d in which they specialize. For example, mechanics, hairdressers, and carpenters fall into this category. Certain types of obrt require professional qualifications, while others do not.<\/span><\/p>\n

Although an obrt may have employees, just like a company, the business lives and dies with the individual, unlike a company. The business entity cannot exist without the person who registered their \u201ccraft\u201d as an obrt. <\/span><\/p>\n

<\/p>\n

The Role of Ethics in Corporate Decision-Making<\/strong><\/span><\/p>\n

Among the numerous factors shaping an organization\u2019s corporate culture, ethical and psychological cultures are key. Therefore, let us first consider the issue of institutionalizing the ethical and psychological foundations of organizational activities.<\/span><\/p>\n

The development of ethical and psychological foundations for business and management must begin with a specific organization. Increasingly, organizations and companies for which public perception of honesty and integrity takes precedence over the desire to maximize profits by any means are developing codes of ethics<\/em>, which<\/span><\/p>\n