Government grants and loans for entrepreneurs in Croatia (for 2021)

Image by Christina Morillo

Let’s be honest. Croatia is not a super entrepreneur-friendly place. It’s easy to point to high taxes as the reason it’s not a great place to open a business and call it a day. However, it is likely more friendly than you would think.

There are certainly improvements to be made, but the situation for companies in Croatia is not all bad. The government, both at the state and city level, has a variety of financial incentives and loan programs available to both Croatian and foreign entrepreneurs who wish to do business in Croatia.

This post, we detail all of these available programs including:

  • Deadlines for applications
  • Who qualifies to apply
  • Purpose of the incentives
  • Funding amounts

If you want assistance figuring out which funding program is best for you, contact us.

This post includes:

Government subsidy and loan programs available to both Croatian and foreign entrepreneurs

While there are some incentive programs only offered to small businesses owned by Croatian citizens, the state as well as some cities offer funding programs for businesses owned by foreign citizens too. Below is a list of the programs offered to both Croatian and foreign business owners in Croatia.

#1 ESIF Mikro investicijski zajam (ESIF Micro Investment Loan)

Deadline: Until the funds are used, and no later than December 31, 2023

Available to: Croatian and foreign business owners whose company is registered in Croatia

ESIF Mikro investicijski zajam (ESIF Micro investment loan; ESIF stands for Europski strukturni i investicijski fondovi, i.e. European Structural and Investment Funds) is financed from the side of Europski fond za regionalni razvoj (European Regional Development Fund).

This loan is available via HAMAG-BICRO (Hrvatska agencija za malo gospodarstvo, i.e. Croatian Agency for Small Business, innovation and investment). It is a state agency that supports entrepreneurs during all the phases of their business, from idea development through launch to commercialization and marketing.

This incentive is intended for:

  • Existing micro companies
  • Existing small businesses
  • Individuals that don’t have a registered business, but want to open one

The aim of this loan is:

  • Establishment of crafts and limited liability companies (d.o.o. and j.d.o.o.)
  • Modernization and expansion of the existing businesses
  • Self-employment
  • Keeping the existing and increasing the number of new working positions

The lowest amount of incentive is 1.000 EUR and the highest amount is 25.000 EUR. These amounts are converted to kuna based on the middle exchange rate of HNB – Hrvatska narodna banka (Croatian National Bank) on the day of submitting the request. All loans are paid in kuna.

The repayment period of this loan is 1-5 years, and the loan interest rate is 0,1 – 0,5%.

All details about this program can be found here.

#2 ESIF Mali zajam (ESIF Small Loan)

Deadline: Until the funds are used, and no later than December 31, 2023

Available to: Croatian and foreign business owners whose company is registered in Croatia

ESIF Mali zajam (ESIF Small loan; ESIF stands for Europski strukturni i investicijski fondovi, i.e. European Structural and Investment Funds) is also financed from the side of Europski fond za regionalni razvoj (European Regional Development Fund). This loan is also available via HAMAG-BICRO, a state agency.

This incentive is intended for:

  • Existing small businesses
  • Individuals that don’t have a registered business, but want to open one

The aim of this loan is:

  • Establishment of craft businesses and limited liability companies (d.o.o. and j.d.o.o.)
  • Modernization and expansion of the existing business
  • Self-employment
  • Keeping the existing and increasing the number of new working positions

The lowest amount of incentive is 25.001 EUR and the highest amount is 50.000 EUR. The loan amount will be converted to kuna based on the middle exchange rate of HNB – Hrvatska narodna banka (Croatian National Bank) on the day of submitting the request. Loans are only paid in kuna.

The repayment period for this loan is 1-10 years, and the loan interest rate is 0,1-0,5%.

All details about this program can be found here.

#3 Poticaji pri zapošljavanju osoba s invaliditetom (Support for the sustainability of self-employment of people with disabilities)

Deadline: the program will be applied until December 31, 2023

Available to:

  • Disabled people registered with Očevidnik osoba s invaliditetom (A register of persons with disabilities). EU citizens must provide proof of invalidity from their home countries to register into Očevidnik.
  • Croatian and foreign business owners whose company is registered in Croatia

This incentive is intended for people with disabilities who plan to launch their own company and employers who want to employ a person with disabilities.

They can get an incentive from the state institution “Zavod za vještačenje, profesionalnu rehabilitaciju i zapošljavanje osoba s invaliditetom” – ZOSI (Institute for Expertise, Vocational Rehabilitation, and Employment of Persons with Disabilities).

This incentive is intended for:

  • Existing small, medium, and large businesses that employ persons with disabilities
  • Individual persons with disabilities who don’t have a registered business, but want to open one
  • Individual persons with disabilities who don’t have a registered business, but want to get a job in integrative workshops and protective workshops at small, medium, and large businesses

This non-refundable incentive includes:

  • Subsidized salary – the subsidy amount depends on the professional diagnosis of the employee and it is between 10% and 70% of the minimal salary
  • Co-financing of education costs
  • Co-financing the costs of adaptation to the workplace
  • Co-financing the costs of adjusting the working conditions
  • Compensation of the obavezno zdravstveno osiguranje (mandatory health insurance)
  • Co-financing the costs of professional support
  • Additional funds for the development of new technologies and business processes for people with disabilities
  • A support for the sustainability of self-employment of people with disabilities

More information about this incentive and mandatory documentation for the submission of the request is available here. A detailed program can be examined in this document.

#4 Potpore za pripravništvo (Employment grants for gaining first work experience / traineeship)

Deadline: None

Available to: Croatian and foreign business owners whose company is registered in Croatia who wish to an employ a young Croatian citizen

Potpore za zapošljavanje za stjecanje prvog radnog iskustva – pripravništvo (Employment grants for gaining first work experience / traineeship) from HZZ is a state incentive for young people who are Croatian citizens and are starting with their first job.

This incentive is intended for these existing business:

  • Private sector
    • Business owners who perform economic activity
    • Non-profit organizations
  • Public sector/state institutions
    • Health care sector
    • Educations sector
    • Social welfare sector
    • Culture sector

Incentives can be used for:

  • Private sector
    • 50% of the annual cost of brutto salary or 75% of the annual cost of brutto salary for persons with disabilities in kuna
    • transport costs (e.g. the costs of going to/from work) in kuna
  • Public sector
    • 100% of the cost of traineeship salary in kuna
    • Trainee education for employees in natural science-informatics and technical fields in kuna
    • Transport costs in kuna

The incentive (or a part of it) must be paid back in case that an employee stops employment or an employer stops paying salary to the employee during the term of the employment contract. In this case, an employer has 15 days to notify HZZ and return a portion of the subsidy.

More information on incentives for private sector is available here.

More information on incentives for public sector is available here.

#5 Subsidies from the City of Rijeka

Deadline: Reopens in September (recurring program)

Available to: Croatian and foreign business owners whose company is registered in the Rijeka area

The city of Rijeka annually offers non-refundable financial support to entrepreneurs living in the area of the city of Rijeka. The aim is to strengthen their appearance at the market and gain additional practical education.

This incentive is intended for:

  • Existing small businesses in private ownership with headquarters in Rijeka
  • Existing udruga (non-profit organizations) whose aim is to promote certain economic interests of the cluster. A cluster is a group of entrepreneurs who gather within one industrial sector in order to improve the placement of a certain product or service. At least one member of the cluster must have headquarters in Rijeka.

Incentives can be realized for:

  • Certification of products and processes
  • Building of the brand of products and services
  • Encouraging the association/gathering of economic entities
  • Implementing IT systems and applications in the business
  • Implementing industrial design
  • Purchasing and installing machinery and equipment
  • Costs of start-up businesses
  • Costs of making drafts for project proposals for co-financing from EU funds
  • Costs of professional training and development of employees

The costs of start-up businesses include :

  • Procurement of equipment, tools, inventory and protective equipment
  • Arrangement of the interior of business space
  • Development of the business plan
  • Consulting services
  • Training costs
  • Development of the web pages
  • Development of the visual identity of the company

A start-up business is considered to be a business that operates for up to 2 years from the day of submitting the request for the subsidy. The amount of the subsidy is 80% of the mentioned costs and the amount can be between 2.000 kuna and 30.000 kuna. Applicants of this measure can also receive a subsidy for the purchase of  protective equipment, related to protective measures against the coronavirus (disinfectants, protective masks, protective clothing,etc.) in the amount of 80% of the costs (excluding VAT), between 500 kuna to a maximum of 5.000 kuna.

All the details about last year’s competition can be found here.

#6 Financial support from Nacionalna zaklada za razvoj civilnog društva

Deadline: Varies.

Available to: Croatian and foreign business owners whose company is registered in Croatia

Nacionalna zaklada za razvoj civilnog društva (National Foundation for Civil Society Development) is a state institution that offers support to civil society organizations through financial support programs, co-financing EU projects, international programs, and EU programs.

Nacionalna zaklada supports programs that promote:

  • A non-profit sector
  • Cross-sectoral cooperation
  • Civil initiatives
  • Philanthropy
  • Volunteering
  • Democratic values of society
  • Other similar programs

Active programs of financial support and open applications can be found here.

#7 Subsidies from the city of Split

Deadline: Reopens in October (recurring program)

Available to: Croatian and foreign business owners whose company is registered in the Split area

The city of Split has given non-refundable subsidies to small businesses in order to support employment in the area of Split.

Companies that can apply for this incentive are:

The amount of the incentive is 30.000 kuna per employee for a period of at least 12 months. It can be used to cover the costs of the brutto salary (salary and doprinosi contributions). A business owner may seek this financial support for up to 2 employees.

All the details of the last application can be found here.

#8 Subsidies from the city of Osijek

Deadline: Reopens in October (recurring program)

Available to: Croatian and foreign business owners whose company is registered in Osijek area

The city of Osijek gives annual subsidies within the program “Opći program poticanja razvoja poduzetništva” (General program for encouraging the development of entrepreneurship).

In 2019 (before the coronavirus epidemic), Osijek was giving two types of subsidies:

  • A measure that supports the employment of new employees
    • More information is available here
  • A measure that supports the employment of new employees for entrepreneurs from the IT sector
    • More information is available here

This incentive is intended for:

One registered business can get subsidies for up to 5 new employees per year.

The incentive covers salary costs according to these amounts:

  • 30% of the salary costs for salaries up to 5.500 kuna
  • 40% of the salary costs for salaries from 5.501 kuna to 8.000 kuna
  • 50% of the salary costs for salaries above 8.8001 kuna (5.000 kuna per month maximum)

Government subsidy programs available to Croatian entrepreneurs only

Some incentive and loan programs are available exclusively to small businesses owned by Croatian citizens. Below is a list of the programs offered to Croatian business owners only.

#1 Cjeloživotno obrazovanje za obrtništvo (Lifelong learning for craft business)

Deadline: Recurring program (currently closed)

Available to: Croatian business owners whose business is registered in Croatia

Cjeloživotno obrazovanje za obrtništvo (Lifelong learning for craft business) is a state program under the Ministarstvo gospodarstva, poduzetništva i obrta (Ministry of Economy, Entrepreneurship and Crafts). It offers non-refundable incentives to craft businesses with quality employees to strengthen competitiveness and stimulate the productivity and development of the business.

The aim of this program is:

  • Acquisition of key skills and competencies for craft business activities
  • Encouraging employment and self-employment in craft businesses

Companies that can apply for this incentive are:

  • Existing micro, medium, and small companies (craft businesses, limited liability companies (d.o.o. and j.d.o.o.), and zadruga)
  • Individuals that don’t have a registered business, but want to open one

Incentives can be used for:

  • Education in the field of craft businesses
  • Performance of “tied” craft activities

The amount of incentive is up to 80% of financial costs in kuna for the following activities/programs:

  • A certain professional exam or a mortician exam – 1.200 kn/1.500 kuna
  • A preparation for the professional exam – up to 3.200 kuna
  • A master’s exam – 2.600 kuna
  • A preparation for the master’s exam – up to 5.400 kuna
  • A retraining program from the list of vezani obrt – scholarship costs
  • An assistant exam – 1.200 kuna
  • A license for performing of the practical part of assistance – actual costs

More information can be found here. The program for 2020 is available here.

#2 Potpore za samozapošljavanje HZZ-a (Self-employment incentive from HZZ)

Deadline: October 31, 2021 or until the funds are used

Available to: Unemployed Croatian citizens registered with HZZ and Croatian citizens returning from EU member states whom have been living in Croatia for at least 12 months

HZZ is a state institution that serves as a government unemployment agency also known as Hrvatski zavod za zapošljavanje (Croatian Employment Service). Potpora za samozapošljavanje HZZ-a (Self-employment incentive from HZZ) is intended for Croatian nationals who are recorded as unemployed with HZZ as well as Croatian returnees from EU member states who plan to launch a new business.

This support is financed from the state budget, Europski socijalni fond (European Social Fund), and Incijativa za zapošljavanje mladih (Youth Employment Initiative).

The amount of incentive varies depending on the city where the business will be registered. Amounts range from 55.000 kuna to 130.000 kuna.

To get this incentive, a group of people can team up into one business. In this case, only one person can receive the maximum amount of financial support that includes fixed and variable costs (40.000 for the registration of craft business with flat-rate taxation, 55.000 for the registration of all other types of business entities).

Qualifying businesses include zadruga (cooperative), trgovačko društvo (limited liability company – d.o.o. and j.d.o.o.), obrt (craft business) of slobodna profesija (free profession).

This incentive or just a part of it must be paid back if a business closes during the term of support, if financial reports aren’t submitted on time, or in other specific cases.

More information is available here.

#3 EU fondovi (EU Funds)

Deadline: Varies by application

Available to: Croatian business owners whose business is registered in Croatia

Europski strukturni i investicijski fondovi (European structural and investment funds) offer a large spectrum of support and non-refundable funds for all kinds of projects and businesses.

These funds include financing from Kohezijski fond (Cohesion Fund), Europski socijalni fond (European Social Fund), Europski fond za regionalni razvoj (European Regional Development Fund), Europski poljoprivredni fond za ruralni razvoj (The European Agricultural Fund for Rural Development), and Europski fond za pomorstvo i ribarstvo (European Maritime and Fisheries Fund).

All active applications can be found on the EU funds web site. It is recommended to check this page frequently to see the latest open applications.

#4 Poduzetništvo mladih, žena i početnika (Entrepreneurship of young people, women and beginners)

Deadline: None

Available to: Croatian business owners whose business is registered in Croatia

The aim of the program “Poduzetništvo mladih, žena i početnika” is to encourage the entrepreneurship of young entrepreneurs, start-up entrepreneurs, and women entrepreneurs.

The program offers loans provided by one of these institutions:

  • HBOR – Hrvatska banka za obnovu i razvitak (Croatian Bank for Reconstruction and Development)
  • Business banks
    • Addiko Bank d.d.
    • Agram banka d.d.
    • Banka Kovanica d.d.
    • BKS Bank AG
    • Croatia banka d.d.
    • Erste & Steiermärkische bank d.d.
    • Hrvatska poštanska banka d.d.
    • Istarska kreditna banka d.d.
    • J&T banka d.d.
    • Karlovačka banka d.d.
    • Kentbank d.d.
    • OTP BANKA d.d.
    • Partner banka d.d.
    • Podravska banka d.d.
    • Privredna banka Zagreb d.d.
    • Raiffeisenbank Austria d.d.
    • Sberbank d.d.
    • Slatinska banka d.d.
    • Zagrebačka banka d.d.

The loan amount is usually not lower than 200.000 kuna and the highest amount is 2.000.000 kuna.

The interest rate is 2% per year but it can be reduced in these situations:

  • Additional 0,2 percentage points for employment of youth (find more information here)
  • Up to 2 percentage points with the subsidy of the county, city, or municipality (find more information here)
  • Up to 1 percentage points for loans on the basis of Natural Capital Financing Facility loan line that regards to eco-friendly projects, green entrepreneurship and similar (find more information here)

The aim of this loan is:

  • Launching a new business
  • Encouraging the employment of new employees
  • Modernizing business practices
  • Implementing new technologies
  • Expanding business capacity
  • Developing new products and services

More information is available here and here.

#5 Potpore za samozapošljavanje HZZ-a (Self-employment incentive from HZZ)

Potpora za samozapošljavanje HZZ-a is a state-sponsored incentive offered by HZZ. HZZ is the Croatian employment service, whose full name is “Hrvatski zavod za zapošljavanje”. Under this program, they are offering two separate incentives to encourage entrepreneurship among Croatian citizens.

These two incentives are focused on:

  1. New business creation by unemployed citizens
  2. Expansion of existing businesses

We’ll now review each part of the program in detail

a) Potpora za samozapošljavanje (Self-employment incentive)

Deadline: October 31, 2021 or until the funds are used

Available to: Unemployed Croatian citizens registered with HZZ who plan to launch a new business

This measure is valid for 24 months. The amount of incentive varies by business sector according to the Nacionalna klasifikacija djelatnosti (Statistical Classification of Economic Activities).

Business sectors are divided into 4 groups:

#1 Businesses in the following sectors can get up to 130.000 kuna:

  • C – Manufacturing industry (sections 10-33)

#2 Businesses in the following sectors can get up to 100.000 kuna:

  • B – Mining (sections 05-09)
  • D – Electricity, gas, steam and air conditioning supply (section 35)
  • E – Water supply, wastewater disposal, waste management, environmental remediation (sections 36-39)
  • F – Construction (sections 41-43)

#3 Businesses in the following sectors can get up to 75.000 kuna:

  • G – Wholesale and retail trade (section 47.99 is excluded)
  • H – Transport and storage
  • I – Accommodation and food services (section 56)
  • J – Information and communication
  • Q – Health care and social welfare
  • R – Arts, entertainment and recreation (section 93.19 is excluded)
  • M – Professional, scientific and technical activities (section 69.1 is excluded)

#4 Businesses in the following sectors can get up to 55.000 kuna:

  • N – Administrative and support service activities (sections 77, 78, and 79 are excluded)
  • P – Education
  • S – Other service activities (section 94 is excluded)

*  An additional 2.000 kuna is possible if it is specifically allocated for osposobljavanje na radnom mjestu (training at work).

To get this incentive, a group of people can also team up into one business. In this case, only one person can receive the maximum amount of financial support that includes fixed and variable costs (40,000 for the registration of trades with flat-rate taxation, 55,000 for the registration of all other types of business entities) while the other co-founder can realize support in the prescribed amounts depending on the group and only for variable costs.

In case of establishment and employment in a company (trgovačko društvo), craft business with flat-rate taxation (paušalni obrt), income trade (dohodovni obrt) or self-employment the upper limit of the amount of self-employment support for a maximum of 2 persons is:

  • 1. group – up to 200.000,00 kn (130.000 + 70.000= 200.000 kn)
  • 2. group – up to 150.000,00 kn (100.000 + 50.000 = 150.000 kn)
  • 3. group – up to 110.000,00 kn ( 75.000 + 35.000 = 110.000 kn)
  • 4. group – up to 80.000 kn (55.000 + 25.000 = 80.000 kn)

This incentive or just a part of it must be paid back if the business closes during the term of support, if financial reports aren’t submitted on time, or in other similar situations.

More information is available here.

b) Potpora za proširenje poslovanja (Business expansion incentive)

Deadline: October 31, 2021 or until the funds are used

Available to: Croatian citizens who have received the incentive Potpora za samozapošljavanje in previous years (from Section A above)

This measure is valid for 12 months. The amount of the incentive varies by business sector according to the Nacionalna klasifikacija djelatnosti (Statistical Classification of Economic Activities).

Business sectors are divided into 3 groups:

#1 Businesses in the following sections can get up to 100.000 kuna

  • C – Manufacturing industry (sections 10-33)

#2 Businesses in the following sections can get up to 75.000 kuna

  • B – Mining (sectors 05-09)
  • D – Electricity, gas, steam and air conditioning supply (section 35)
  • E – Water supply, wastewater disposal, waste management, environmental remediation (sections 36-39)
  • F – Construction (sections 41-43)
  • J – Information and communication (section 62.01)

The incentive is awarded for businesses who are planning to expand their business into the above sectors. Businesses who already perform activities within these sectors are excluded.

#3 Businesses in the following sections can get up to 55.000 kuna:

  • G – Wholesale and retail trade (section 47.99 is excluded)
  • H – Transport and storage
  • I – Accommodation and food services (section 56)
  • M – Professional, scientific and technical activities (section 69.1 is excluded)
  • N – Administrative and support service activities (sections 77, 78, and 79 are excluded)
  • P – Education
  • Q – Health care and social welfare
  • R – Arts, entertainment and recreation (section 93.19 is excluded)
  • S – Other service activities

The incentive is awarded both for businesses who are planning to expand their business into the above sectors and businesses who already perform activities within these sectors.

This incentive or just a part of it must be paid back if a business closes during the term of support, if financial reports aren’t submitted on time, or in other similar situations.

More information is available here.

#6 Samozapošljavanje nezaposlenih hrvatskih branitelja 2021. (Self-employment of unemployed Croatian veterans 2021)

Deadline: Until the funds are used and no later than October 31, 2021

Available to: Unemployed Croatian citizens registered with HZZ who are veterans of the Croatian War of Independence or are their children

The aim of this state measure is to open new working places within this target audience by giving a subsidy for self-employment.

This incentive is intended for:

  • Unemployed veterans of the Croatian War of Independence called “Domovinski rat”
  • Unemployed children of deceased of missed veterans of the Croatian War of Independence
  • Unemployed children of volunteers of the Croatian War of Independence
  • Unemployed children of war invalids of the Croatian War of Independence

The amount of the subsidy is up to 80.000 kuna. The subsidy is non-refundable as long as it is used according to the contract. After the submission of the request and before signing the contract for the subsidy, it is necessary to register a business in Croatia.

The requirements for the business are:

  • It is registered as a craft business, limited liability companies (d.o.o. and j.d.o.o.), or free profession
  • It is 100% owned by the person who submitted the request or it is in co-ownership of the person who submitted the request (in amount of at least 50% of co-ownership)

More information and the list of required documentation is available here under the section Javni poziv za dodjelu potpora za samozapošljavanje u sklopu EU projekta “Samozapošljavanje hrvatskih branitelja, djece smrtno stradalih ili nestalih hrvatskih branitelja, djece dragovoljaca iz Domovinskog rata i djece hrvatskih ratnih vojnih invalida iz Domovinskog rata”. The whole program is available here.

#7 Subsidies from the city of Zagreb

Deadline: Currently paused due to coronavirus. It is a recurring program, so will reactivate in the future.

Available to: Croatian citizens who wish to register a new business in the area of Zagreb

This is a state self-employment subsidy for new entrepreneurs provided by the city of Zagreb in cooperation with Plavi ured.

Zagreb gives two types of subsidies:

Subsidy for opening paušalni obrt, i.e. paušalni trade businesses

The maximum amount of the subsidy is 20.000 kuna. This includes costs of business registration, contributions for a period of 12 months, accounting services, and fiscal cash desk.

A subsidy for opening a business for proizvodne djelatnosti (manufacturing activities)

Users of this subsidy must attend Plavi ured’s self-employment workshop before applying for this subsidy.

Manufacturing activities include all businesses from the section C of NKD – Nacionalna klasifikacija djelatnosti (Statistical Classification of Economic Activities) except for:

  • Production of beverages
  • Production of tobacco products
  • Production of coke and refined petroleum products
  • Production of weapons and ammunition
  • Repair and installation of machinery and equipment

The maximum amount of the subsidy is 75.000 kuna. The subsidy can be used for performing the main activity of the business.

More information about the previous application is available in this document.

 

Have you received funding for your business through one of these subsidies? Share your experience in the comments.

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