Expanding your business to Croatia is an exciting time for your company. Amidst all the hustle of hiring new team members, allocating resources, and traveling back and forth to Croatia, you’ll also have to learn all of the country’s subsidiary laws. While you may think navigating the challenges of setting up a subsidiary is the only option for expanding your business, G-P offers a hassle-free alternative.
How to set up a Croatia subsidiary
The process to set up a subsidiary in Croatia can take anywhere from a few weeks to a few months. You must establish a subsidiary before you hire employees or begin operations. The steps involved include:
- Registering with the Commercial Court.
- Getting a statistical registration number from the Croatian Bureau of Statistics.
- Registering for VAT through the Tax Authority.
- Registering for pension (HZMO) and health insurance (HZZO).
- Creating a local bank account.
- Designating a legal representative which can be a natural person or a company registered in Croatia.
In order to set up the subsidiary, the following documents need to be provided to the Croatian Trade Register: the founder’s decision to establish a subsidiary, the memorandum of association, the financial report on the previous year, a proof mentioning the name of the business, the type of entity, the type of activities, and the date of the foundation.
A limited liability company is a common form of entity established in Croatia. Under this corporate structure, the shareholders’ liability is limited by their contribution to the capital.
There is no restriction in terms of business activities of subsidiaries in Croatia, as long as they respect the applicable legislation and avoid any state-owned operations or companies.
Croatia subsidiary laws
You must follow all of the steps above for your company to remain compliant. Two primary bodies of law — the Croatian Company Act and the Commercial Code — compose Croatia’s subsidiary laws. These sets of laws and regulations govern all the activities of subsidiaries in the country and are essential if you plan to set up a subsidiary in Croatia.
Once you have all the documentation in place, it takes about 1 week to register your subsidiary. During that time, the Articles of Association are notarized and submitted to the Commercial Court. Every registered subsidiary in Croatia also needs a certificate of registration and a company seal to use for daily operations.
Benefits of setting up a Croatia subsidiary
A limited liability subsidiary has the unique advantage of operating independently from the parent company. Shareholders’ capital contribution limits liability, which helps the parent company avoid any litigation or losses.
This kind of structure also allows a subsidiary to create its own brand. You can determine the culture and workplace practices you want to establish in Croatia. It’s a great way to tailor your business communications to Croatia’s culture and business customs.
Instead of spending months waiting for your subsidiary to open before hiring, G-P makes it possible to begin building your team in Croatia in just minutes. Our market-leading platform helps you find, hire, and manage talent quickly and easily, allowing you to avoid the costly and time-consuming processes required to set up your own subsidiary.
Other important considerations
If you choose to set up a Croatia subsidiary on your own, expect to spend a lot of time, money, and valuable resources traveling to Croatia.
What you need to set up a subsidiary in Croatia depends on what form of company you choose — a private or public limited liability company. Private subsidiaries need at least 1 founder with a minimum share capital of EUR 2,500. This capital is divided into shares in which each stakeholder’s liability is limited to the amount of their invested capital.
If you want to form a public limited liability subsidiary, you’ll need at least 1 member and a minimum capital of about EUR 26,500. Like a private company, its capital is divided into shares, and the shareholders’ liability is based on their contribution. You must maintain a management board with at least 1 member and a supervisory committee of at least 3 members to run your public limited liability subsidiary.
Enter new markets with G-P — no new entities required.
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