Types of Businesses in Croatia
If your planning to start a business in Croatia, the first step is deciding what kind of business to open. The type of business structure is critical to the success of your company, and should match your business goals.
In Croatia, there are 4 main types of businesses.
1. Udruga
An udruga is for non-profit organizations, whose primary function is to “protect their interests or for the protection of human rights and freedoms, as well as environmental, humanitarian, informational, cultural, national, pro-natalist, educational, social, professional, sporting, technical, medical, scientific or other beliefs and goals”. To start an udruga, you must have a minimum of 3 owners.
Good for: Non-government organizations, charities
2. D.O.O.
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, 20.000 kuna in start up capital is required. However, if you are a non-EU national, the start up capital required can be as much as 100.000 kuna.
Good for: All types of for-profit businesses
View our guide on how to open and close a d.o.o. company in Croatia.
3. J.D.O.O.
A j.d.o.o. is the same as a d.o.o. typically used for companies with limited start up capital. It only costs 10 kunas to start the company initially. However, after a specified period of time (typically 90 days), you must prove that you have taken in 20.000 kuna of revenue. This is proven by audit, the cost of which you need to subsidize. The cost of an audit is in the ballpark of €1000.
Good for: Businesses with low overhead and upfront start up costs such as online businesses
Bad for: Caffes, restaurants, manufacturing, retail
4. T.O.
A t.o., which stands for “trgovački obrt”, is not a company in the traditional sense and is instead connected to a specific person and the type of “craft” in which they specialize. For example, locksmiths, hair stylists, and carpenters would all fall into this category. While a t.o. can have employees like a company, the business lives and dies with the person unlike a company e.g. the entity cannot go on without the individual who has registered their “craft” as a t.o.
This type of business is slowly fading away, as more businesses opt for the more common and capitalism-friendly d.o.o. On the plus side, as a t.o. is not considered a traditional company, it does not require the standard 20.000 kuna of start up capital.
Good for: Individuals with a professional trade or craft
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October 15, 2014 @ 5:07 pm
Sara,
I've heard that with new laws you need to hire 3 full time Croatians if you are not an EU resident owning a business and are on a temporary VISA in addition to paying for an accountant. It also seams that getting VISAs as an American without a business is more difficult as well. Can you comment on this?
November 3, 2014 @ 1:43 pm
Hi Grant,
Yes, it is true that non-EU nationals who start a company in Croatia are required to hire 3 full time Croatians. You’ll also need to invest 100,000 HRK in start up capital.
Every business regrdless of the owner’s visa or citizenship status is required to pay for an accountant, or have one on staff.
Getting a visa as American without starting a business is very difficult. The only options other than starting a business are: volunteering (must be unpaid), going to school (student visa) or proving that you are financially independ (this one is rarely approved).
Great questions. Thanks for reaching out!
Sara
April 24, 2015 @ 9:07 pm
Hi Sara,
So as an American, starting a J.D.O.O for an online business is not an option? I have a Internet Marketing company were I provide marketing services to US businesses. All I need is a phone and an internet connection.
Thanks
April 26, 2015 @ 9:58 am
Hi James,
If you are doing an online business, then yes, a j.d.o.o. would be a good option. Keep in mind that as an American you’ll have to prove that you’ve invested 100,000 Kuna in the business through an audit at a later date.
Cheers, Sara
May 17, 2016 @ 2:27 pm
Hi Sara,
Thanks for providing simple information. Are there more details on T.O?
Is it still active way to register as business?
From resident permit perspective, does it works the same way as D.O.O?
If someone wants to provide private coaching services e.g. for badminton, tennis and related racket work etc, is that considered in this category?
Also, does this also need accountant ?
Regards,
Arundeep Singh
July 5, 2017 @ 1:45 pm
Hi Arundeep,
Thanks for reaching out!
Yes, we recently published an article all about opening and closing a T.O. (Trade Obrt): https://www.expatincroatia.com/how-to-open-and-close-a-trade-business-in-croatia/
I’m not sure that a T.O. qualifies for residency, but I will find out and update this thread.
Yes, private coaching services would qualify for this type of business. You do not need an accountant for a T.O.
Cheers,
Sara
July 26, 2017 @ 11:14 am
Hi Arundeep,
Opening a T.O. does qualify you for residency under the following conditions:
If you have at least 3 Croatian nationals employed
If your gross salary is at least the same amount as the average gross salary in the Republic of Croatia in the previous year
If your craft does not operate with loss If you submit proof of payment of tax debts and contributions in the Republic of Croatia.
Citizens of EU Member States are not required to meet these conditions.
We’ll have a more detailed post published about this topic as soon.
Stay tuned!
Regards,
Petar
November 7, 2016 @ 3:30 am
I have a really unorthodox question … Next year I am going to quit my job and build yachts to sail and sell and then repeat so the intent is to do it as a business. I have a manufacturers ID here in the USA but I have many friends in Croatia and could probably do it a little cheaper there and I long for a change of scenery. I would be paying rent for the location to build and wages to the mandatory number of people for the duration of build (about 1 year). Plus purchasing a variety of materials and services that would total around 450K … Would it be best to do this as a T.O? Once built it could take awhile to sell, I wouldn't want to maintain employee salaries and overhead until we do sell. Does that mean I lose my visa or any ideas?
November 7, 2016 @ 11:48 am
Hi Jorge,
Thanks for reaching out! You may not qualify for a visa as a T.O. If you are a non-EU national, you would need to start a j.d.o.o. or a d.o.o. and hire at least 3 Croatian employees to qualify. I can put you in touch with an immigration lawyer if you’d like personalized guidance. Feel free to email me at [email protected] for that contact.
Cheers,
Sara
February 23, 2017 @ 10:54 pm
Hi Sara,
I'm English and buying a property in Istria.
I'll be renting it for a month or two in the summer and occupying it for the rest of the year.
Should I buy it in my own name or form a Croatian company to own it ?
Waiting for your advice.
Thanks,
David
July 5, 2017 @ 10:52 am
Hi David,
Thanks for reaching out! Recommend discussing this with an attorney. You can contact me by email for a referral: [email protected]
Cheers,
Sara
March 30, 2017 @ 4:51 pm
Hi Sara
What are the conditions for a South African company to register a DOO in Croatia.
May 4, 2017 @ 9:42 am
Hi Andre,
Thanks for reaching out! I would recommend contacting a lawyer to discuss your specific situation. You may email me at [email protected] and I’ll provide you a reference.
Cheers,
Sara
November 14, 2017 @ 2:56 pm
Very Nice