1. What kind of business do you want to set up
Choosing the right company structure is crucial to achieving your business goals. Click here to view the 4 main types of Croatian businesses.
2. It’s very expensive to close a company
If you get to the point where you no longer want to have an open and active company, there are 3 options:
- Sell the company to another person – This is the least costly option. The buyer must have an OIB and be a registered person inside Croatia.
- Remove all activity – This means no income comes in and no expenses go out. You will still have to pay for an accountant to do your annual tax filings, which can cost around 2000 kuna.
- Close the company – This is the most expensive and time consuming option. Closing a company can cost upwards of 10,000 kuna and take 18 months to 2 years to dissolve.
If you started your company for the sole purpose of gaining residency in Croatia, it’s important that you know the cost implications once the company is no longer tied to your residency.
3. Multilingual can be mandatory
Owners of retail and tourism-based businesses (such as caffes, hotels and restaurants) are required to speak both Croatian and English by law. To fake it until you make it, just ensure that you can communicate with inspectors and government agents during your start up process.
4. Delays, delays, delay
The type of business you start will determine how much interaction you have with the government. Inevitably, the more interaction you have with the government, the more opportunity there is for massive delays in the start up of your business. You may be ready, but the government doesn’t care about your timelies or opening dates. Be prepared to wait for inspectors, licenses, registrations and anything else the government says you need to operate your business legally.
That being said….
5. It’s who you know
The Croatian bureaucracy is still a very manual and, much of the time, ledger-based environment inviting a lot of variance in information, processes and deadlines. There is little sense of urgency on the part of the government and rarely do departments communicate with each other. They’ve got all the time in the world and they don’t know you.
The best way to get through the bureaucracy is to find somebody to connect with personally. Bring them rakija. Tell them your story. Be courteous. It’s amazing what can be accomplished once that personal relationship is created.
How do you find somebody to connect with? It’s not easy. Ask around to find anybody who knows someone that works in the city government offices, starting with your accountant. Then work your way down the line until you get to the department you need.