Croatia is open to foreign investors. Foreigners can own 100% of a Croatian company, and directors don’t need to be residents. The most common structure is the d.o.o. (društvo s ograničenom odgovornošću), which is Croatia’s equivalent of a limited liability company.

• Minimum share capital for a d.o.o.: €2,500 (at least 25% must be paid before registration)

• Minimum share capital for a j.d.o.o. (simple limited company): €1, but it must build reserves until it reaches €2,500

Most serious investors choose the standard d.o.o. because it’s more credible for banks, clients, and business partners.

Company formation can be done in person or online through Croatia’s government “one-stop-shop” system. You’ll handle name checks, court registration, statistical codes, and basic administrative steps all at once. Notary fees, court fees, and share-capital deposits apply, but the process is straightforward when documents are properly prepared.

Foreign individuals and companies can own both commercial and residential property in Croatia. The main limitation applies to agricultural and protected land, which generally cannot be purchased directly by foreigners.

To bypass this, most investors set up a Croatian company (d.o.o.), which can freely acquire such properties under local law. Before purchasing, always confirm title ownership, encumbrances, and zoning compliance.

1. Corporate Income Tax (CIT)

Croatia has a two-tier system:

• 10% CIT for companies with annual revenue up to €1 million

• 18% CIT for companies earning more than €1 million

Capital gains are included in corporate income.

2. Value Added Tax (VAT / PDV)

• Standard rate: 25%

• Reduced rates: 13% and 5% for specific goods and services

• VAT registration is mandatory once annual turnover exceeds €40,000.

VAT applies to the purchase of new real estate from developers. For resale properties, transfer tax applies instead.

3. Real Estate Transfer Tax (RETT)

For resale (used) properties, buyers pay 3% of the property’s market value. This tax is separate from VAT and typically applies to second-hand real estate transactions.

4. New Annual Property Tax (Effective 2025)

Croatia will introduce an annual property tax on residential properties starting January 1, 2025. The rate will range from €0.60 to €8.00 per square meter, depending on the municipality.

• Exemptions: First homes and long-term rentals (10+ months per year)

• Affected properties: Vacant or short-term rental apartments

While office spaces are generally exempt, mixed-use or employee-housing properties may fall under this new tax. Businesses holding staff housing should plan ahead for this change.

Leasing: Flexibility First

Leasing is often the smarter move for new entrants testing the market. It conserves cash and allows quick adjustments as your team grows.

Advantages:

• Lower upfront capital investment

• Predictable monthly costs

• Easy relocation or scaling

Key lease terms to review carefully:

• Fit-out permissions and customization rights

• Maintenance and repair obligations

• Indexation clauses (common in Zagreb and Split)

• Make-good obligations at lease end

Owning: Control and Long-Term Value

Purchasing property secures your base of operations and provides more control over the layout, subleasing, and long-term planning. However, it requires more administrative steps and capital outlay.

Costs to consider:

• 25% VAT for new builds (recoverable in most cases)

• 3% real estate transfer tax for resales

• Notary, registration, and due diligence fees

Best for:

• Long-term operations with stable staff

• Businesses customizing or renovating premises

• Companies planning to build equity through real estate

Croatian banks are conservative with new entities. Access to credit cards, loans, and overdrafts usually improves after 12–24 months of operation and the filing of local financial statements.

New companies often rely on parent-company guarantees, leasing, or cash reserves during the first year. Demonstrating genuine operations — an office, staff, and tax registration — significantly improves bank onboarding.

Zagreb

• Croatia’s financial and administrative hub

• Largest concentration of professionals and service providers

• Competitive office market with modern spaces in demand

• Ideal for companies needing proximity to government agencies, embassies, or headquarters functions

Split

• Croatia’s second-largest city, known for its mix of tourism and tech growth

• Lower average operating costs, but seasonal fluctuations affect rental markets

• Increasingly popular among startups and digital service providers

• Businesses with coastal or hospitality ties benefit from proximity to tourism infrastructure

Other promising locations include Rijeka, Zadar, and Osijek, depending on logistics or industry needs.

Croatia is an accessible and investor-friendly EU market, but success here comes from planning, not speed. The systems are transparent, yet procedural. Establish your entity, align VAT and transfer-tax implications before purchase, and coordinate banking early.

Done right, both Zagreb and Split can serve as excellent bases for expansion — each with its own rhythm and opportunity set.

If you’re serious about expanding into Croatia, schedule a consultation with Relocation Croatia. Our team can help you plan your business registration, tax strategy, and office setup so your entry into the Croatian market is smooth, compliant, and profitable.