How to open and close a non-profit organization (udruga) in Croatia: Guide for 2023

UPDATED: 21.4.2023.

Udruga or union is a group of individuals who enter into an agreement, usually as volunteers, to form a body (or organization) to accomplish a non-profit purpose. It is actually a parallel to an NGO or non-profit or non-governmental organization.

Common examples of udrugas in Croatia include trade associations, trade unions, professional associations, schools (outside the public system), and environmental groups.

If you are considering opening an udruga in Croatia, this article is for you. If you are considering opening another type of business in Croatia, view this article.

In this post, we cover:

• Basics on an udruga
• How to open an udruga
• How to close an udruga

The facts are these…

Guide on opening and closing a non-profit organization in Croatia – udruga

What do you need to know about opening udruga in Croatia?

A Croatian union must be founded by at least 3 founders (members).

Udruga can sell goods from donations and donated goods for which it does not provide any counter-service to the donors. Such goods can be treated as their own product. However, udruga cannot sell goods for which part of the compensation must be paid to the donor.

Regardless of the amount of revenue, all newly founded unions are obliged to conduct double-entry bookkeeping and submit financial reports to the State Audit Office for at least the first 3 years of operation. Therefore, it is recommended to have an accounting service or a person who can manage your accounting.

Private companies often send scam emails to young entrepreneurs and currently open businesses, so be aware. Read received e-mails carefully and pay only the fees that must be paid to the state.

Udruga in Croatia is regulated by the Zakon o udrugama (Law on associations), which is available here.

How to open an udruga in Croatia

Below is a step-by-step guide for opening udruga in Croatia.

Step #1 Choose a name

First, you have to choose the name of the union. When selecting a name, it’s necessary to check if there is a union with the same name. The name must be in the Croatian language and the Latin script. However, it may contain certain words in a foreign or a dead language.

You may browse existing businesses on the portal Uprava.hr here.

Step #2 Create a statute

Once you select the union’s name, the next step is to create a statute. The statute represents the basic general act of the union.

The statute must contain the following information:

• Name and headquarters
• Representation
• Appearance of the pečat (stamp)
• Areas of activity in accordance with goals
• Goals
• Activities that achieve goals
• Economic activities in accordance with the law (if you intend to perform them)
• Method of ensuring the publicity of the association’s activities
• Conditions and method of joining and termination of membership, rights, obligations and responsibilities and disciplinary liability of members, and the method of keeping the list of members
• Bodies of the association, their composition and the method of convening meetings, election, recall, powers, decision-making method and term of office, and the method of the convening of the assembly in the event of the expiry of the mandate
• Election and recall of the liquidator of the association
• Termination of the existence of the association
• Property, method of acquiring and disposing of property
• Procedure with property in case of termination of the association
• Method of resolving disputes
• Method of resolving conflicts of interest within the association

After drafting the statute, the founding assembly is organized, followed by the registration of the union with the State Administration.

Step #3 Register an udruga

To register an udruga, you must enclose:

• Application form – download it here
• Minutes of the founding assembly
• Decision of the assembly to initiate the procedure of registration in the Register of Associations (unless the decision was made at the founding assembly)
• Statute (2 copies)
• List of founders (minimum 3)
• Names of people authorized for representation and liquidator’s name
• Copy from the company register or other registers for the foreign legal person acting as founder
• Approval of the competent state administration body for carrying out certain activities
• Extract from the court register for the founder of the union
• Notarized letter of consent by the legal representative or guardian (if a founder is an underage person from the age of 14 or deprived of legal capacity)
• Notarized statement of a natural person if the name of the person or a part thereof forms the name of the association, i.e., a letter of consent of the person’s heirs
• Notarized letter of consent by an international organization if its name or logo forms the association’s name
• Copy of the ID cards or passports of founders, liquidator, and people authorized for representation

[Read: How to apply for a national ID card (osobna iskaznica)]

All documentation must be verified by the representing person, most often the president of the organization. The prepared documentation must be submitted to the booth at the State Administration Office at the regional self-government unit in your area for registration in the union register. Alternatively, you can register an udruga online here.

If you want to register a foreign association, you can view more information here.

Step #4 Wait for a decision

Within 30 days, you will receive a decision on registering the union in the registry. If there is an error with the application or a particular document is missing, the person responsible for your application will contact you.

You can pick up your certified copy of the statute and an OIB number with the enrollment documents at the State Administration Office.

[Read: How to get an OIB – Croatian identification number]

Make multiple copies of the enrollment document once received. You should always have one safe filed away and at least one copy to submit with your ID number request. To create a stamp, a copy of the document on registration in the union register and a copy of the statutory page where the description of the stamp will be needed.

Step #5 Get an NKD number

Once the stamp is created, submit a request to the Državni zavod za statistiku (National Bureau of Statistics).

Within 15 days of receiving the decision on entry into the register, each person must apply to the Central Bureau of Statistics to determine the registration number according to the National Classification of Activities.

An ID number request is accompanied by a copy of the registration decision and a copy of the fee receipt in the amount of 7,30 euros.

Step #6 Open a bank account

Once the ID number is obtained from the Bureau of Statistics, you can open a bank account. If you plan to have a lot of transactions over the month, it is recommended to use Internet banking as it will save time and cost.

[Read: Do I need to open a bank account in Croatia?]

How to close an udruga in Croatia

An udruga may be closed in a few different ways. If certain criteria are met, you may qualify to close the udruga using the shortened procedure.

The shortened procedure for the termination of an udruga can be carried out if:

• Union board decides on the termination of its existence
• Regular session of the board was not held for twice as long as the time foreseen to do it
• Number of members falls below the number of founders needed to establish the union

In the shortened procedure, no liquidation proceedings are conducted. Members of the administrative (executive) body are jointly accountable for the possible obligations of the union in five years following the date of deletion from the register. This is based on a statement issued by the majority of members to the public notary that all obligations of the union are met and that the assets of the association are distributed according to the law.

[Read: How to get something notarized in Croatia]

The person authorized to represent the union must apply to the competent state administration office for the termination of the union. Changes in the register of unions are made after the application has been approved.

The union is removed from the register of unions. Still, the register keeps the personal names, residence, and OIB numbers of the body of the association who have signed the declaration, with the indication of their responsibility for any subsequent obligations of the union.

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Sources:
Vodič za osnivanje udruge i usklađivanje s novim propisima by Ured za udruge
Najčešća pitanja by Ured za udruge
Registar udruga by Ministarstvo pravosuđa i uprave
Establishment and registration of associations by eGrađani