Guide to All Types of Businesses in Croatia
If you plan to start a business in Croatia, the first step is deciding which business to open. The type of company structure is critical to the success of your business and should match your business goals.
In this post, we will go over each type of business in Croatia and provide tips on each and guides explaining how to open them. Before you open a business, view this guide.
Jump to a type of business:
- d.d. (public limited company)
- d.o.o. (limited liability company)
- GIU (economic interest association)
- j.d.o.o. (simple limited liability company)
- j.t.d. (general partnership)
- k.d. (limited partnership)
- obrt (trade business)
- OPG (family farm)
- predstavništvo (branch office)
- udruga (non-profit organization)
The facts are these…
Types of Businesses in Croatia
Dioničko društvo (d.d.) is a public limited company where shareholders participate with contributions in the share capital divided into shares. This type of company can have only one shareholder. It is a legal entity and acquires registration in the court register. The company is responsible for its obligations with all its assets. Shareholders are not responsible for the company’s obligations.
Good for: It is a great way to establish protection from liabilities and debt
Bad for: As a shareholder, you only have complete control of the company if you are the sole shareholder
A d.o.o. is the equivalent of a limited liability company and is the most common business in Croatia. A d.o.o. can be owned by one or multiple persons.
To set up the company, 2.500 euros in start-up capital is required. However, if you are a non-EU/EEA citizen planning to use the company as a basis for a residence permit, the start-up capital required can be as much as 26.544,56 euros or more. It can be opened in person or online.
Good for: All types of for-profit businesses
Gospodarsko interesno udruženje (GIU) is a legal entity founded by two or more individuals and companies to facilitate and promote the performance of economic activities that are the objects of their business, but in such a way that the legal entity does not acquire profit for itself.
Good for: It is a great way to promote your business and establish connections with other professionals
Bad for: You do not earn profit from GIU, although your own company may benefit from your networking
A j.d.o.o. is similar to a d.o.o. but is typically used for companies with limited start-up capital. The required start-up capital for launching j.d.o.o. is only 1 euro. It can have up to 5 founders and be opened in person or online.
Good for: Businesses with low overhead and upfront start-up costs, such as online businesses
Javno trgovačko društvo (j.t.d.) is when two or more persons join together for the permanent performance of activities under a joint company. Each company member is liable to the company’s creditors unlimitedly and jointly with all its assets. A company member cannot dispose of his share in the company without the consent of the other members.
Good for: You are sharing the knowledge with your partners, and you have an extra pair of hands when needed
Bad for: If you want to exit the company, you need agreement from other partners
Komanditno društvo (k.d.) is a commercial company in which two or more persons join together to permanently perform activities under a joint company. A limited partnership requires at least one partner to be responsible for the company’s obligations unlimitedly and jointly with all its assets. This person is called a general partner.
Also, at least one is responsible for obligations of the company only up to the amount of a certain property contribution to the company. This person is a limited partner.
Good for: If you need a silent partner with assets, this is a great way to establish the company together
Bad for: As a general partner, you have a larger responsibility for risks
Obrt (trade business) is not a traditional company; instead, it is connected to a specific person and the type of “craft” in which they specialize. For example, locksmiths, hairstylists, and carpenters would all fall into this category. Certain types of obrt require professional qualifications, and others don’t.
While an obrt can have employees like a company, the business lives and dies with the person, unlike a company. The entity cannot go on without the individual who has registered their “craft” as an obrt. This also means that the owner carries the liability for the obrt personally. The owner doesn’t have protections like they would with limited liability companies like d.o.o. and j.d.o.o.
Since the obrt is not considered a traditional company, it does not require start-up capital like with a d.o.o. Obrt can even be temporarily paused for up to 1 year.
If residency is not a concern of yours, the obrt is a very favorable way of opening a legit business. Your tax obligation is much lower overall than with a d.o.o. or j.d.o.o, and you can choose between 3 tax models. There is also a lot less oversight as long as you make your contributions on time.
Good for: Individuals with a professional trade or craft
Bad for: Companies with revenue from multiple categories of business, Non-EU/EEU citizens that want to get residency through opening a company (as it requires an investment of 26.544,56 euros)
Obiteljsko poljoprivredno gospodarstvo – OPG (family farm) is an agricultural business that includes members of the same family or a household. It is based on using its own or leased production resources and family members’ skills, knowledge, and work.
The activities that an OPG may perform are strictly defined. They include agricultural activities such as plant breeding, cattle breeding, growing of annual or perennial crops, breeding of livestock and poultry, and similar.
Start-up capital isn’t needed to open an OPG. Members of OPG can be permanently or occasionally employed.
Good for: Families who own production resources or would like to open an agricultural family business
A branch office in Croatia called predstavništvo can be established by a foreign person performing economic activity and a national or international business association. Like other registered Croatian companies, the branches are required by the Croatian Accounting Act and the International Accounting Standards to maintain records of their financial activities.
Additionally, they must open a bank account to conduct financial transactions and deposit the initial money. Foreign companies can open as many branches as needed, but each must be registered separately.
Good for: It is a great way to enter the market with less paperwork than if you established a company from scratch in Croatia
Bad for: Branch office opening is expensive, and if you as a company plan to open several new locations, it may be a pricey journey
An udruga (union, non-profit organization) is a form of business operated by a group of individuals (usually volunteers) who want to form a legal organization to accomplish a non-profit purpose.
Their primary function is to protect human rights and freedoms, as well as to further environmental, humanitarian, informational, cultural, national, pronatalist, educational, social, professional, sporting, technical, medical, or scientific interests and goals.
To start an udruga, you must have a minimum of 3 members (founders).
Good for: Non-government organizations, charities, volunteering
Bad for: For-profit businesses
View other Croatian business posts
- 3 types of obrt
- 5 more things to know before starting a business in Croatia
- 5 things to know before starting a business in Croatia
- All the coworking spaces in Croatia (perfect for remote workers and digital nomads)
- Another 5 things to know before starting a business in Croatia
- Croatian business buzzwords to know
- Government grants and loans for entrepreneurs in Croatia
- How to get residency by opening a Croatian business
- How to open and close an obrt
- How to open and close OPG (family farm)
- How to open and close an udruga
- How to open and close a j.d.o.o.
- How to open and close a d.o.o.
- Yet another 5 things you should know before starting a business in Croatia
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.