Why Your Western Business Plan Won’t Work in Croatia — And How to Fix It
TL;DR: A copy-paste Western business plan won’t fly in Croatia. Banks, tax authorities, and incentive bodies insist on Croatian-specific forecasts, NKD activity codes, OIB identification, UBO registration, and compliance with PDV, fiscalization, and (soon) e-invoicing mandates. Localize your plan and you’ll open accounts faster, qualify for incentives, and avoid costly delays.
Image Description
Expanding Your Business to Croatia: Context Is Everything
Croatia is a strong landing pad into the EU single market, but it isn’t a clone of the U.S., U.K., or your home EU country. Formats, assumptions, and compliance expectations that worked elsewhere break down here. A Croatian-specific plan is not a “nice to have”—it’s the difference between bank delays and approvals, and between missing and securing incentives.
Why Croatian Banks Demand a Localized Plan

Opening a corporate account in Croatia is a regulated, evidence-based process. Expect banks to perform rigorous KYC/AML checks and request a tight “purpose and nature of business” package. In practice, that usually means:

  • A concise business plan tailored to Croatia (who you serve, how you operate, suppliers, and fund flows).

  • Forecasted monthly transaction volumes and counterparties.

  • Sample invoices/contracts aligned to your services.

  • Proof of company OIB (Croatian tax ID), UBO registration, and identification of directors/authorized signatories.

Croatian banks operate under strict AML rules set by national law and the Croatian National Bank; they routinely verify company identity, representatives, and beneficial owners. Some banks also ask for your NKD activity code on onboarding forms—build it into your plan and documents from day one.

Government Incentives: Structured Plans Unlock Real Money

Croatia actively promotes investment through its Investment Promotion Act. Incentives apply to manufacturing, development & innovation, business support activities, and high value-added services. Your plan should map your activity to this framework, evidence headcount and capital expenditures, and present 3–5-year financials aligned with Croatian tax rules. Amendments entered into force in late 2024—use the current provisions when scoping eligibility and timelines.

What reviewers expect to see in your plan:

  • Project type & NKD alignment (what you do, under which activity code).

  • Capex schedule (what, when, and where in Croatia).

  • Hiring plan (roles, wage assumptions, and training).

  • Tax & compliance posture (PDV/VAT, corporate income tax, fiscalization, e-invoicing readiness).

  • Regional footprint (Zagreb/Split/Dubrovnik/Zadar if relevant).

Taxes, Payroll, and Operating Costs: Calibrate Your Assumptions

  • Corporate income tax (CIT): 18% standard; 10% for taxpayers with annual revenues under €1 million.

  • PDV (VAT): Standard rate 25%. From 1 January 2025, the mandatory registration threshold increased to €60,000 in annual taxable turnover; model your monthly sales to know exactly when you cross it.

  • E-invoicing & fiscalization: B2G e-invoicing is already mandatory. Croatia has confirmed a domestic B2B e-invoicing mandate from 1 January 2026—if you sell to businesses in Croatia, plan your systems now.

  • Payroll & contributions: Wages must include employer contributions to pension and health. Rates change periodically; index your payroll model to current minimum bases and revisit annually.

    • Activity Codes, OIB, and UBO: The Compliance Trio

    Your plan must reflect Croatia’s classification, identification, and transparency requirements:

    • NKD activity code: Croatia is transitioning from NKD 2007 to NKD 2025. Ensure your chosen code(s) are current and consistent across your founding documents, plan, and bank onboarding materials.

    • OIB (tax ID): Every company and founder needs an OIB; it’s required for banking, tax filings, and contracts.

    • UBO Register: Disclose ultimate beneficial owners via the public registry (maintained by FINA). Banks and authorities will check this.

    Entity Choices: Build Your Plan Around the Right Vehicle

    Croatia’s common vehicles:

    • d.o.o. (limited liability company): Minimum share capital €2,500; the mainstream choice for most foreign investors.

    • j.d.o.o. (simple limited liability company): Minimum capital €1; front-end cheap, but with practical constraints.

    • Obrt (sole trade/craft): Personal-tax regime; often used for small local operations and regulated trades.

    Your business plan should justify the chosen entity with respect to capital, hiring, and banking. Some immigration strategies or bank risk policies favor well-capitalized d.o.o. structures.

    What Croatian Banks, Tax, and Incentive Bodies Expect in Your Plan

    Include these, in this order:

    1. Executive Summary (Croatia-specific): Who you serve, what you sell, why Croatia (market proof), and where you’ll base operations.

    2. Activity & Licensing: NKD code(s); note any regulated activities requiring special permits.

    3. Operating Model: Customers, suppliers, payment flows (SEPA), and transaction volumes.

    4. 12–24-Month Cash-Flow: Tie revenue to PDV thresholds; model net cash under both VAT-registered and non-registered scenarios.

    5. 3–5-Year Forecast: Revenue, COGS, OPEX, payroll with employer contributions; CIT at 10% vs 18% scenarios.

    6. Compliance Readiness: OIB obtained, UBO registered, e-invoicing roadmap (B2G in place; B2B by 2026), fiscalization, e-Porezna setup.

    7. Investment & Hiring Plan: Capex timeline, headcount by role/wage band; align to incentive thresholds where applicable.

    8. Risk & Controls: Currency, supplier concentration, and AML/KYC controls; show counterparties and typical invoice flows.

    Common Mistakes Foreign Companies Make (Croatia Edition)

  • Copy-pasting a Western plan without NKD, OIB, and UBO details.

  • Ignoring PDV dynamics, causing cash-flow crunches once you cross €60,000 and must charge VAT.

  • Under-specifying banking flows, leaving KYC/AML questions unanswered.

  • Skipping the incentive map, missing grants or tax relief under the Investment Promotion Act.

  • Waiting on e-invoicing, instead of preparing your ERP/POS and e-Račun connections now for the 2026 B2B mandate.

    • Real-World Scenarios

  • EU SaaS rolling into Zagreb: Built dual tax cases (10%/18%), mapped NKD to high-value services, and staged PDV registration to the sales ramp. Bank onboarding cleared in days due to complete KYC pack.

  • Light manufacturing near Zadar: Qualified under the Investment Promotion Act; used a headcount-tied grant and planned e-invoicing/fiscalization roll-out to align with 2026 requirements.

  • Boutique consultancy in Split: Selected d.o.o. with €2,500 capital to meet bank comfort and immigration posture; forecast emphasized non-cash expenses and service-based margins.

    • Why You Need a Croatia-Specific Plan—Now
    A localized plan demonstrates to Croatian banks and authorities that you understand how business is done here: NKD codes, OIB/UBO readiness, PDV thresholds, and the e-invoicing timetable. In return, you get confidence from reviewers, shorter timelines, and higher odds of incentive approval.
    FAQ
    Frequently asked questions
    We have put together some commonly asked questions.
    Can I use my Western business plan to open a company in Croatia?
    No. Banks and authorities expect NKD activity codes, OIB/UBO registration, PDV modeling, and Croatian-specific forecasts.
    What is the corporate tax rate?

    18% standard, or 10% if your annual revenue is under €1,000,000.
    When do I need to register for PDV?
    Once your taxable domestic turnover exceeds €60,000 within the last 12 months (effective 2025). You can also register voluntarily earlier if it benefits your input VAT position.
    Is e-invoicing mandatory?
    B2G has been mandatory for years. Domestic B2B e-invoicing becomes mandatory on 1 January 2026—plan your systems and providers now.
    Which entity should I choose (d.o.o., j.d.o.o., obrt)?
    Most foreign investors choose a d.o.o. (min. capital €2,500) for banking and scale. A j.d.o.o. (€1 capital) exists but comes with constraints; obrt is more personal-tax oriented. Your plan should justify your pick.
    What do banks look for during onboarding?
    A clear plan of operations, realistic transaction forecasts, sample invoices, and full KYC: OIB, UBO, IDs for directors/signatories, and your NKD code.
    Conclusion: Localize the Plan, Accelerate the Move

    Croatia rewards businesses that do their homework. When your plan speaks the local language—NKD, OIB, UBO, PDV, fiscalization, and incentives—you reduce friction, unlock approvals, and set the stage for sustainable growth.

    Ready to make it real? Book a paid consultation with Relocation Croatia and we’ll draft a Croatia-specific business plan that meets bank, tax, and incentive standards—end to end.