How to open and close an obrt in Croatia: Guide for 2024
An obrt is a type of business in Croatia used for a trade or profession that requires particular skills and knowledge. It is considered a sole trader or sole proprietorship business. People most commonly open an obrt for small-scale production of goods, services, or their maintenance.
Obrt is a good match for beginner entrepreneurs and businesses that have limited income. In comparison to corporate structures like j.d.o.o. and d.o.o., obrt receive less oversight from the government and are cheaper to operate.
However, d.o.o. and j.d.o.o. are limited liability companies, so the owner and their assets are protected if anything happens to the company. With an obrt, the owner or owners are personally liable for the business.
In this post, we cover:
- Obrt ownership and business activities
- How to open an obrt trade business in Croatia
- Taxes and contributions
- How to temporarily pause obrt business activity
- How to close an obrt in Croatia
How to open and close an obrt in Croatia
In Croatia, there are two types of ownership for obrt (craft business):
- Sole ownership – You are the only owner of the business
- Zajednički obrt (joint trade) – You and your partners are owners of the business
An obrt can perform business activities:
- Trajno (permanent) – Within a whole calendar year
- Sezonski (seasonal) – For up to 9 months within a calendar year
Slobodni obrt (free trade business) requires no evidence of professional qualification, secondary vocational education, or master’s examination as a condition. You will need to provide proof that you hold at least a high school diploma, even though higher education is not required.
Examples: Window washing, cleaning services, ironing, consultancy
Vezani obrt (related or “tied” trade business) requires proof of professional qualification, secondary vocational education, or master’s examination.
Examples: Tour guiding, hairdresser, heating installation, bread production
Povlašteni obrt (Preferential trade business) may only be performed based on a license issued by the responsible ministry.
Examples: Security services, sea fishing, stone extraction
You can read more about the types of trades here.
When setting up an obrt, you have a variety of options and decisions you have to make about how you will operate the business. So far, we’ve talked about ownership and the types of trades. There are also two categories of an obrt. The owner can decide which is better suited for their business.
Those two categories are:
- Paušalni obrt (Flat-rate trade business)
- Obrt (Trade business)
Paušalni obrt is a great solution for people opening a business for the very first time. The owner is usually the only employee within the obrt.
Owners of paušalni obrt pay income taxes based on the flat rate principle called paušalno oporezivanje. They are not required to enter the PDV system, since their income is limited to under 40.000,00 euros.
[Read: PDV (Value Added Tax) in Croatia]
Paušalni obrt is very easy to manage. Even people who don’t like paperwork or aren’t good at the organization can manage it easily. It doesn’t require a legal accountant and the owner can issue invoices on their own.
The owner doesn’t have to manage books, but they must possess a knjiga prometa (traffic book). It includes all the traffic of the business – both ingoing and outgoing.
A standard obrt requires bookkeeping and a professional accountant. A standard obrt is a good option for businesses whose incomes exceed 40.000,00 euros. They are obligated to enter the PDV system and charge PDV on all of their invoices to clients.
These businesses often employ more than one person. You always have the option to start with paušalni obrt and then transfer to a standard obrt as the business grows.
Obrt is regulated by the Zakon o obrtu (Law on trade business). You can view the full law here.
An obrt can be opened:
- In person
- Online via e-Građani
First, we’ll take you through the steps of preparing to open an obrt, regardless of which method you choose for the actual registration. Then we’ll go through the steps of opening an obrt in person and online using e-Građani.
Note: 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.
#1 Check your qualifications
Remember that there are three types of obrt and some types require certain professional qualifications. Slobodni obrt doesn’t require a professional education, but vezani and povlašteni do.
If you don’t know whether your business activity requires professional education or not, you must find out before starting the obrt registration process.
To check what is needed for your trade, follow these two steps:
1. Define the class of your business
All business activities in Croatia are classified into groups and classes according to the Nacionalna klasifikacija djelatnosti – NKD (National Classification of Occupations). All groups and classes are defined with a certain number. For example, computer programming belongs to the class 62.01.
You can find business trade categories according to the NKD both in Croatian and English here.
Examine the Nacionalna klasifikacija djelatnosti here and determine which class your business activity belongs to. This classification was defined in 2007, which means that it is very old and unfortunately doesn’t include “modern” occupations.
For example, if your field of business is digital marketing, you have to find the class that most closely resembles it. In this case, the appropriate class would be 73.11 Agencije za promidžbu (reklamu i propagandu) – Advertising agencies (advertising and propaganda).
If you want to make musical instruments, the class is clearly defined. It is 32.20 Proizvodnja glazbenih instrumenata – Manufacture of musical instruments.
2. Define the type of trade
There is a second rulebook that defines all occupations that require a professional exam called Pravilnik o vezanim i povlaštenim obrtima (Rulebook on “tied” and preferential trade businesses).
The rulebook is available here.
If your occupation isn’t mentioned in this rulebook, then you can open a slobodni obrt without the need for professional qualifications. Occupations that are listed in the rulebook require a certain level of education or a professional exam.
The easiest way to check this information is to see whether the rulebook includes the same class number you found for your business within the NKD rulebook. You can also search by the name of the business activity from NKD.
For example, 73.11 Advertising agency (advertising and propaganda) isn’t mentioned in the Rulebook, which means there are no professional requirements. 32.20 Manufacture of musical instruments is mentioned in the Rulebook and requires 3 years of secondary education.
In this rulebook, the column složenost zanimanja (occupation complexity) defines the required type of professional qualification.
The types of professional qualifications include:
1 – Stručna osposobljenost prema Programu ispita o stručnoj osposobljenosti (professional qualification according to the Program of professional qualification exams)
1*- Stručna osposobljenost određena posebnim propisom (professional qualification determined by a special regulation)
2 – Niža stručna sprema (lower education)
3 – Srednja stručna sprema u trogodišnjem trajanju (three-year secondary education)
3+ – Osposobljavanje za trgovačko poslovanje (training for commercial business)
4 – Srednja stručna sprema u četverogodišnjem trajanju i srednja školska sprema (KV, SSS i SŠS) (four-year secondary education and secondary education)
4++ – Osposobljavanje za trgovačko poslovanje i poznavanje robe (training for trade business and knowledge of goods)
5 – Majstorski ispit (master exam)
5* – Trgovac (merchant)
If you are still not sure how to classify your business activity, contact or visit the Obrtni registar (Trade business register).
First, contact the Nadležni ured za registriranje obrta (Competent office for registration of trades) nearest to the sjedište (headquarters) of your future obrt. Here is the list of all of them classified by county.
The list includes the exact name of the office (as it varies, of course), address, phone, and email. Contact them and ask to be connected with the Obrtni registar. They will help you to determine the class of your business activity.
#2 Pick the business activity
It is necessary to define the primary business activity according to the NKD. You must pick only one activity as the main activity of the business. This will be the main product or service that you offer. In addition to your primary activity, you can pick as many secondary activities as you want.
#3 Define the name of obrt
You can pick any name for your obrt as long as it is written in Latin letter and Croatian language or the official language of one of the EU member states. Numbers can also be used.
An obrt’s name consists of three parts:
- Name (mandatory)
- Trademark (optional)
- Information about the owner (mandatory) – Name, surname, headquarters address
Here are examples of names:
Full name: Mala plava hobotnica, obrt za računalne djelatnosti i usluge, vl. Sara Dyson, SPLIT, Ulica slobode 33
Abbreviated name: Mala plava hobotnica, vl. Sara Dyson, SPLIT, Ulica slobode 33
#4 Determine the location of your obrt headquarters
Sjedište is the location of the business space. It is very important if running rental services. If the business has more than one business space, the owner must decide which one is the primary location. Sjedište can be in the ownership of the obrt’s owner or rented/leased from a third party.
Some businesses don’t require special business space, so their sjedište will be the address of the owner’s prebivalište. Other businesses may require special business space, equipment, and resources.
So, to start doing business, some business activities also require a document with the minimum technical conditions for the business space, i.e. a concession for performing the business activity or working license called Ishođenje Rješenja o minimalnim tehničkim uvjetima (Proof of minimal technical requirements).
This document is not required for all businesses. It is required for caterers, traders, carriers, and similar occupations that can’t perform their business activity without proper resources. It is issued by the Nadležni ured za registriranje obrta nearest to sjedište.
Contact the office nearest to your sjedište here and they will come to check your space.
To register an obrt in person, you’ll need to prepare a variety of documentation.
Below is a list of required documentation:
- Residence permit and passport (or osobna iskaznica, if you’re a Croatian citizen)
- Completed forms depending on the type of trade:
- Prijava za upis u Obrtni registar (Application for the entry to the Trade register) – Download form here
- Prijava za upis izdvojenog pogona u Obrtni registar (Application for the entry of separated space to the Trade register) – Download form here
- Prijava za upis ortaka u Obrtni registar (Application for the entry of the partner to the Trade register) – Download form here
- Proof of the right to use business space, such as a lease agreement or land registry certificate
- Proof of education, as applicable for your trade (for more information you can contact firstname.lastname@example.org)
- Proof of minimal technical requirements, as applicable for your trade (for more information you can contact email@example.com)
- Health certificate, as applicable for your trade
- Background check for foreigners to show no illegal business activity from their last place of residence (only in some locations)
- Partnership contract (if you are opening zajednički obrt)
#2 Submit the request for an obrt
The request for opening obrt is submitted at either:
- Nadležni ured za registriranje obrta nearest to sjedište of the future obrt. Here is the list of all competent offices classified by counties.
- Hitro.hr nearest to sjedište of the future obrt. Hitro.hr is a mediator between you and the nadležni ured, view their website here. They collect your papers and deliver them to nadležni ured. BUT, not all Hitro.hr offices offer this service. This depends on the city. If you’d like to open obrt via Hitro.hr, call them before you go there. Here is the list of all Hitro.hr offices in Croatia together with contact information.
Some offices require that you book an appointment in advance. For example, in Split, you must book an appointment with one of the workers based at the office for državne uprave at the Općina building at Vukovarska 1, in the office for gospodarstvo.
If you go to Hitro.hr, all necessary payment slips are available, at no charge, at the HITRO.HR counter. Employees of HITRO.HR will help you fill out the forms and payment slips required for the registration of a trade. You can make all the required payments at Fina.
View all branch locations of Fina here.
If your application is accepted, the obrt will be registered in the Obrtni registar. You will also receive an official decision on the opening of the obrt, which is called Rješenje o upisu obrta u Obrtni registar (Decision on registration of trade to the Trade business register).
This “decision” serves as confirmation that your request has been approved and that obrt has been opened. Nadležni ured will issue the Rješenje within 15 days after submitting the request.
Together with the Rješenje, you will also receive a document called Obrtnica. Obrtnica is a legal document that is proof that an obrt has been open. The obrtnica contains:
- Obrt’s name
- Matični broj (ID number) of obrt
- Owner’s name
- Owner’s OIB
- Main business activity according to the NKD
- Date of entry to the Trade Register
- Date of starting the business activity
There is no cost for obrtnica, opening of obrt is completely free since September 2021. However, the cost for obtaining a decision regarding the acknowledgment of a foreign professional qualification acquired at the master’s degree level has been set at 39.82 euros. Also, the fee for obtaining a decision on the recognition of specific components of the foreign professional qualification at the master’s degree level is 19.91 euros.
It is possible to register an obrt without defining the exact start date of business activities. Still, the owner must start a business activity within 1 year after registration. The owner must register the exact date at nadležni ured at least 8 days before starting the performance of the business.
NOTE: Some steps may differ a bit from county to county. It is always good to check steps with nadležni ured or Hitro.hr before starting the procedure.
After your obrt is registered, you must set up a pension at HZMO and health insurance at HZZO. Županijski ured za gospodarstvo (County office for the economy) will automatically deliver the decision on your registration to HZMO and HZZO. Despite this, you must still submit applications for both pension and health insurance.
This can be done online or in person. If you have employees other than yourself, you must register each of them for pension and health insurance as well.
1. Register with HZMO
Registration with HZMO must be done within 8 days after starting the performance of the business. It can be done at the HZMO office nearest to the sjedište of the obrt, all the locations are available here, or yu can do it online.
Here is the form that must be enclosed:
2. Register with HZZO
Registration with HZZO must be done 24 hours after starting business activities. It can be done at any HZZO regional office.
Here are the forms that must be enclosed:
Online registration to HZZO is possible via e-Građani service e-Zdravstveno.
#4 Register at Registar poreznih obveznika
Within 8 days of starting business activities, you must register with Registar poreznih obveznika (Register of Taxpayers).
This is done at the Porezna uprava (Tax administration office) nearest to the owner’s prebivalište or boravište (not according to the sjedište of the obrt) or online via ePorezna web application here.
If you expect that your income will be higher than 40.000,00 euros, you must also register with the Registar obveznika PDV-a (Register of VAT payers). Before registering in the PDV system, make sure you understand what this means. We have additional resources on PDV here and here.
#5 Make a stamp
A pečat is a stamp that is considered to be the legal signature for the obrt. It is used to verify invoices and other business documents.
You can have a pečat made at a tiskanica. Some papirnica also offer this service. To have the stamp made, you’ll need to bring a copy of the Rješenje.
#6 Open a business bank account
To open a bank account for the obrt, bring the Rješenje to your chosen bank along with your stamp and ID. If you are a third-country national, bring both your passport and your Croatian residence card.
View our detailed list of Croatia’s biggest banks and their services here.
The second way to launch an obrt is online via e-Građani START application. At this time, only Croatian citizens can use the START application.
You can access the START application here. To log in, you need a credential of security level 3 (an electronic ID card or FINA certificate).
We have a detailed post that explains everything you need to know about the START application. You can check it out here.
With START, you have access to the following obrt services:
- Registration of obrt to the Obrtni registar
- Opening a transactional account in a business bank – See our list of Croatia’s biggest banks here
- Registration of obrt to the Registar poreznih obveznika
- Registration at the tax administration for PDV or PDV ID number
- Registration of obrt to HZMO for pension
Here is the list of required documentation:
- Copy of an osobna iskaznica or passport
- Proof of meeting special health requirements (only for certain business activities)
- Proof of the right to use the business space (only when a business space is required for performing the business activity)
- Proof of professional exam (for vezani or povlašteni obrt)
- Certificate of registration of boravište for persons who have boravište
Rješenje for opening an obrt will be issued within 15 days. You will receive the Rješenje via the START application in digital form.
You can download the user manual for launching an obrt via the START application here.
Registering an obrt is also possible via the state e-Obrt application here.
The user manual for using the e-Obrt application is available here.
After you register your obrt, e-Obrt also allows you to change the address of the obrt. You can also change it at the competent Ured za gospodarstvo (Economy office) according to the address of your residence.
Owners of obrt pay taxes according to their annual incomes and chosen payment model. They can choose between three models. You may change models if you decide it would be more favorable for the business.
It is possible to pay taxes according to one of these three models:
- Paušalno oporezivanje (flat-rate tax)
- Porez na dohodak (income tax)
- Porez na dobit (profit tax)
Please note the amounts can change, so please check with your local office at the time of applying for the most up-to-date tax information. Hrvatska obrtnička komora (Croatian Chamber of Economy) offers a free informative calculator that calculates the most suitable tax model for your obrt.
The calculator can be downloaded here.
If you earn less than 40,000 euros annually and choose the flat-rate tax model for your business, you won’t be subject to PDV. With this model, you don’t maintain business books, except for recording turnover on the Obrazac KPR (KPR form), as per the Income Tax Act.
Artisans engaged in joint ventures or joint trades can also opt for flat-rate taxation. In this case, they must appoint a joint activity holder responsible for meeting obligations, provided each co-owner individually meets the specified conditions.
Learn more about the flat-rate tax here.
Income tax is paid on income that is earned from work, selling goods or services, using assets, and receiving insurance payments. If you’re self-employed, your income includes money from trades, business activities, agriculture, and forestry.
The income tax you pay depends on your earnings, with rates set by local government units within limits defined by tax laws.
You can check the rates here.
Profit tax rates are 18% for income equal to or exceeding 1.000.000,00 euro. For those earning up to 1.000.000,00 euro annually, the rate is 10%. The tax base is determined by accounting rules, representing the difference between income and expenses before profit tax calculation, adjusted according to the Profit Tax Law.
For resident taxpayers, the base includes domestic and foreign profits. Non-residents are taxed only on profits made in the country. The tax base also covers gains from liquidation, sale, or changes in legal form, determined by the property’s market value.
Please note: If you have employees, then the contributions are calculated differently. Check this post for more information.
If an individual earns income from certain trades and related activities, they must switch from income tax to profit tax if their total income in the previous tax period exceeds 1.000.000,00 euro.
This change needs to be reported to the Tax Administration by January 15 of the following year through a written statement. Switching to profit tax entails changes in bookkeeping, financial reporting, determining the tax base, and the obligation to pay profit tax.
PDV (Value Added Tax) is paid by individuals and businesses conducting economic activities in Croatia. It’s a fee for delivered goods or services, with rates of 5%, 13%, and 25%.
A trader is liable for VAT if their goods and services, excluding exempted transactions, exceed 40.000,00 euro in the previous calendar year. Once this threshold is reached, the trader must register for VAT at the Tax Administration office based on their residence or habitual residence.
View our guide to PDV here.
Owners of an obrt are required to make contributions according to the Law on Contributions. If you’re self-employed in trades, professions, sports, agriculture, or other activities, you’re responsible for your own contributions to the state.
These contributions, calculated at fixed rates, include 15% for pension insurance, 5% for individual capitalized savings (for those insured under that category), and 16.5% for health insurance.
The business activity of an obrt can be temporarily paused. This pause can last for up to 1 year. During the pause, owners must still pay pension and health insurance.
They can freeze paying pension and health insurance in these cases:
- If they use bolovanje (sick leave) from HZZO – after the 43rd day
- If they use porodni dopust (maternity leave)
- If they use benefits for children with disabilities
- In case of the military service
However, owners must pay taxes. They must pay an advance for porez na dohodak or porez na dobit. It is possible to submit the request for the suspension of tax payments to the Tax administration.
There are some exceptions when a pause can last for more than a year.
It is possible to request an extended pause:
- If the owner uses parental leave – until the child turns 3 years of age
- If a child of the owner has serious health disabilities – until the child turns 8 years of age
- If the owner has an illness
- In certain emergency cases
A temporary pause of obrt can be done at Nadležni ured za registriranje obrta nearest to sjedište. Here is the list of all of them classified by county.
Pause can be requested for the headquarters or other locations of the trade.
Obrt can be closed at the nadležni ured according to the sjedište. You’ll go to the same office where you set up the obrt, if you registered it initially in person. If you opened the obrt online, you can close it in person.
To close an obrt, you need to enclose:
- Completed form – Download it here
Nadležni ured will issue the Rješenje o prestanku rada obrta (Decision on the termination of trade) within 2-3 days. They will also delete obrt from the trade register.
You can pick up the Rješenje at nadležni ured or they can send it to your home address.
After this procedure, it is recommended to check with the Tax administration to see if there are any debts. If there are no debts, they will issue the Potvrda o nepostojanju duga (Confirmation that you have no debts).
Furthermore, you must unsubscribe from the HZMO. For this, you must enclose:
In addition, inform HZMO how many days you were employed with the obrt. You will need the Potvrda o nepostojanju duga that you got from Porezna uprava.
After HZMO, you must unsubscribe from HZZO. Enclose these 2 forms:
Online registration to HZZO is possible via e-Građani service e-Zdravstveno.
View more obrt resources
**This post was created in cooperation with T4C Razred, a free business consultancy service running from September 2020 until June 2021 that is available to anyone not born in Croatia.
As part of a European project, T4C offers free business support to any foreigner or returning Croatian born abroad. The service is free to anyone living in Split Dalmatia County and can help you with things such as business planning, marketing, financial planning, strategy and product development.
Please note: Information provided by Expat in Croatia is only for the purposes of guidance. It does not constitute legal or financial advice in any form. Croatian laws and bureaucratic rules often change, and each personal case is individual, so different rules may apply. For legal advice, contact us to consult with a licensed Croatian lawyer. For financial advice, contact us to consult with a licensed Croatian tax advisor or accountant.