With our assistance, and in conjunction with our
partner in Croatia, this process is straightforward. There are two different
ways under which you can become a property owner in Croatia. You may invest as an
Individual , or alternatively, a Company can be set
up on your behalf.
Individual Ownership
To acquire a property in Croatia as an individual, you will need to obtain authorization
from the Croatian Ministry of Foreign Affairs. This procedure is rather a matter of
formality. Providing you have no adverse history or record with the Croatian authorities
this should be quite straightforward.
It may however take 6 months or more for completion of all paperwork.
Under current Croatian legislation, mortgage facilities are not available for foreign
nationals, if purchasing property as individuals.
Company Ownership
There are numerous benefits, if you decide to purchase as a company owner. This again
is a very straightforward procedure. The company can then purchase the property immediately,
without having to obtain permission from the Ministry of Foreign Affairs. You can also
benefit from VAT deductions.
Incorporation
The legal team of our partner in Croatia will set up on your behalf,
a Croatian Limited Liability Corporation. You will nominate the shareholders and
the management (i.e. yourself). The cost to set up a "LLC" in Croatia is approximately 3.990 EUR (VAT included). This cost varies depending on the prevailing
exchange rate. Most of this amount remains at your disposal as a company account balance.
The average duration of the incorporation procedure is two weeks (ten working days).
Please read our FAQ's below ( Frequently Asked Questions ).
When buying a property in Croatia we strongly recommend you instruct a local lawyer to
ensure that all is in order. If dealing with a new development it must be checked that
the plot / land is suitable for building purposes, i.e. zoning restrictions, building
regulations, access to an official road, availability of water and electricity supply,
telephone lines etc. When buying an existing apartment or house the lawyer needs to check
building planning and other permits, the title of the property as well as the history,
reputation and reliability of a developer.
Financing for non-residents
Financing can be arranged through our partner company, through their own and
managed funds worldwide. For further
details contact us.
REAL ESTATE FAQ
Can a foreign citizen buy a property in Croatia ?
Yes, but after prior consent issued by the Ministry of Legal Affairs and
the Ministry of Foreign Affairs.
The statements of consent are issued to citizens of countries with which Croatia has signed
a contract on reciprocity and in extraordinary cases, to citizens of other countries as well.
2. Can a foreign citizen sell a property in Croatia ?
Yes, a foreign citizen as well as the companies owned by foreign citizen, can freely sell real
estates in Croatia.
3. I want to buy property immediately - how ?
Foreign citizens can establish a company in Croatia, which upon completion of the formation
procedure can immediately purchase the property.
4. What documentation has to be presented to obtain the statement of consent ?
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The original purchase agreement or a duly legalised copy |
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Seller's proof of title i.e. land registry certificate, in the original or a duly legalized copy, not older than six months |
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Original certificate (not older than six months) issued by the authorities of the local administration responsible for urban planning (county departments), confirming that the property is within the construction zone envisaged by the zoning plan |
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Proof of citizenship for the Buyer (certified copy of a passport) |
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Proof of citizenship for the Seller (a copy of his ID or passport will do) |
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Power of Attorney, in the original or a duly certified copy |
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Photo copies of all the enclosed documents |
In addition to these documents, it is also necessary to enclose the proof of payment for the
administrative fee :
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HRK 50.00 for the application |
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HRK 100.00 for deciding on property acquisition |
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HRK 20.00 for any subsequent supplement to the application (in case of incomplete application) |
Note : Administrative fees up to HRK 100.00 are paid in the form of
appropriate stamp duty, while the amounts exceeding HRK 100.00 must be paid by means of a
general payment order to the account of the National Budget of the Republic of Croatia.
How long does the procedure usually last ?
It may take over 6 months for completion of the procedure, but you can complete the purchase
meanwhile.
6. Does the agency provide legal support ?
Yes, our partner provides a complete legal service to our clients and cover all related paperwork.
7. How much down payment has to be paid upon conclusion of the contract ?
Down payment is normally 10% of the sales price.
8. Does the buyer need to verify his signature with the notary public ?
No, the buyer is not required to verify his signature, just the seller.
9. Can the contract be verified abroad and where ?
Yes, in such a case it is the best to have it verified in the Croatian embassy or consulate.
If you verify such a contract before a notary public, then this verification has to be translated
into Croatian by a certified interpreter.
10. Can the purchase tax be paid from abroad in foreign currency ?
The tax is to be paid by bank or post office money transfer. The amount is converted into HRK
at the middle exchange rate by the National bank of Croatia at the day of payment. Our partner
in Croatia provides our clients with full support concerning all kind of payments towards
individuals and government agencies.
11. What documentation has to be submitted to the Land Register in order to register the
property on buyers name ?
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Request for registration of ownership in the land register |
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A purchase contract signed and verified before notary public or abroad in Croatian embassy / consulate |
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A Statement of Consent from the Croatian Ministry of foreign affairs |
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A verified copy of the identification document or Power of attorney if the buyer is legally represented |
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A proof of payment of the administrative fee - HRK 250,00 |
12. When purchasing land what is the minimum plot size for
development ?
Minimum development plot size is 400 m2. The government has announced that a change in the
legislation will be made so new minimum development plot size is expected to be 500 m2.
13. What is a minimum development distance from the sea ?
The minimum distance from the sea is 70 meters measured from the highest point of the high tide.
The government has announced a new set of regulations concerning the development in the protected
area consisting of 1000 meters from the sea as well as on the islands. A potential investor
must pay attention to this when planning a construction by the sea and consult the authorities
before purchasing land.
14. What is a planning permit and how can it be obtained ?
The planning permit is a document issued by the county planning department, which enables
the applicant to legally build objects in a particular area. It is based on consent obtained
by several municipal and county agencies as well as the providers of the communal infrastructure:
electrical power, water supply, sewage. The county authority will issue a planning permit for
a particular project, after all the documentation has been submitted along with the proof of
the communal taxes payment.
15. Do our partners provide assistance with planning permits ?
Yes, our partners provide a complete service including all related paperwork.
16. What is the approximate cost of communal taxes required for obtaining the
planning permit ?
It varies according to local municipal regulations. 15-20 EUR per square meter for the average
family house in the Dubrovnik City area.
17. Once obtained, how long is the planning permit valid for ?
The planning permit is valid for 2 (two) years. The investor is required to start construction
within this period. After that an application for the extension of the planning permit can be made.
INCORPORATION FAQ
1. Who can form a company in Croatia ?
Any individual can form a company in Croatia including foreign nationals and foreign companies,
providing they have no adverse record with the Croatian legal and tax authorities.
2. Can a foreign company form a subsidiary company in Croatia ?
Yes, a foreign company can form a subsidiary company in Croatia. That company can carry the
same name as the parent company, but it is a separate legal entity operating under the Croatian
legislation.
3. What is the most common form of incorporation in Croatia ?
The most common form of incorporation in Croatia is a Limited Liability Corporation -
LLC (in Croatian - d.o.o.)
4. Can a single person form a LLC in Croatia ?
Yes, a Croatian LLC can have a sole owner, either an individual or a company.
5. What is the minimal starting capital for a LLC in Croatia ?
Minimal starting capital in Croatia is 20.000 HRK (app. 2.700 EUR). This value can be
represented in the form of a cash deposit, material goods or commercial rights.
6. What other costs have to be paid for incorporation ?
Additional costs include: solicitor's fees, registration tax with the relevant County Commercial
Court, ads in the Croatian Official Gazette and National Daily Newspaper (compulsory) and notary
fee.
7. What documentation has to be presented for incorporation ?
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A valid ID card or passport for foreign citizens |
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A statement from the Croatian Ministry of finances/Local tax authority confirming a clear record with the Croatian tax authorities |
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Proof of the start up capital payment |
Note : Upon completion and registration of the Incorporation agreement a
corporate account can be opened with any Croatian bank.
8. What are the minimal management staff requirements for a LLC in Croatia ?
A Croatian LLC is represented by the management. A management consists of at least one person
acting as Director/President. The manager can be either Croatian or a foreign citizen.
9. Can a foreign citizen be the owner and the manager at the same time ?
Yes, the foreign citizen can be a sole owner and a member of the management at the same time.
The management can issue a Power of Attorney and appoint another person to represent the
company as well.
10. How long does it take to complete incorporation procedure ?
It usually takes from 7 to 15 days - average 10 working days.
11. Are there any limitations regarding the name of the LLC ?
The new company name must be distinctive and unique. It must not, in any way,
infringe or confuse with names already in use by other Croatian companies. The foreign
company incorporating in Croatia, is entitled to use a corporate name as a part of the
new company name, providing that it is easily distinctive from the original corporate name.
To avoid possible delays in the incorporation procedure it is highly recommended to
search the Croatian Register of Companies and check that your desired name is not already taken.
12. Can Team Abroad provide support with incorporation ?
Yes, through our partners in Croatia we can offer a complete service to our clients and
cover all related paperwork. International clients will get the documentation delivered by
courier service and they need to be present locally only for signing at the Notary.
TAXATION FAQ
1. How much is the real estate transfer tax rate in Croatia ?
The Republic of Croatia has a tax rate of 5% for all types of real estate transactions.
The tax is defined as a percentage of the property sales price in the sales/purchase contract.
The local tax authorities conduct their own evaluation of the property after they receive the
notification of the property sale. It is on their entire discretion whether they will accept
the amount defined in the contract or conduct their own evaluation.
2. How much is the real estate transfer tax rate when trading the properties ?
When trading the properties both parties are considered as buyers and they
both pay tax at the rate of 5%.
3. Does the seller have to pay transfer tax when selling the property ?
According to Croatian regulations, the buyer pays the tax, unless
stipulated differently in the sales/purchase contract. The contractual parties may agree,
that the seller pay the tax on behalf of the buyer.
4. When must the transfer tax be paid and to whom ?
After conclusion of the sales contract, the customer is obliged to register the
purchase with the Local tax authority, within 30 days of the conclusion of the contract. Notary
public submits one copy of the sales contract to the tax authorities. The customer is obliged
to pay respective transfer tax within 15 days after he received the exact tax amount notification.
5. Can the transfer tax be paid from abroad in foreign currency ?
The tax can be paid by bank or post office money transfer. The amount is converted
into HRK at the middle exchange rate by the National bank of Croatia at the day of payment.
Our partners provide our buyers with full support concerning payments and government agencies.
6. Are there any other taxes to pay concerning the purchased property ?
Local communes and cities charge a Holiday House Tax. This tax is paid by every
individual (including the foreign citizens) or legal entity that is the owner of a holiday home.
The base for taxation is a square meter of useful space in the holiday house. The annual amount
of taxation varies from 5 to 15 HRK (0,65 - 2,20 EUR) per square meter of used.
7. How much is the VAT rate in Croatia?
The Croatian Value Added Tax rate is 22%. No tax is applied with for organised tourist arrivals
when a foreign agency/tour operator pays for the services in advance.
8. How can a company claim the VAT refund for the property purchased ?
If the property was purchased from the Croatian corporation, 22% of the purchase price can be
deducted from the company's next VAT obligation. Since the VAT was already paid within the total
purchase price of the property, the next VAT statement will show the overpay of 22%. The company
can then decide if it wants to withdraw the amount overpaid or use it for the future VAT payments.
In case that company decides to withdraw the overpaid VAT, local Tax authority will conduct a brief
inspection and finally credit the company's bank account with the overpaid VAT amount.
9. How can a company benefit from VAT refunds when investing in the purchased property ?
The new company is not required to declare itself as a VAT taxpayer unless its total revenue
exceeds 80.000 HRK (app. 11.000 EUR). However, it is convenient for a company to become a VAT
taxpayer immediately after the incorporation procedure has been completed, since they can
deduct 22% from any expenses for goods purchased or services provided, while renovating or
redecorating the purchased property. The only limiting factor is that the supplier must also
be a VAT taxpayer and his invoice must show the VAT entry clearly stated. The company will
then get the refund of the overpaid amount when it files for next VAT statement.
10. How much is the income tax rate in Croatia ?
Croatian corporate income tax rate is 20%. The income tax on profits gained by capital
investment is paid by withholding at a rate of 15%.
11. Does Croatia offer a tax free residence to foreign Boat owners ?
Croatia is not a member of the European Union as a result, foreign boat owners can avoid
VAT on the purchase price of their boats if they are residents in Croatia. Boats owned by a foreign
citizen or foreign company can be kept in Croatian marina indefinitely without paying Croatian VAT.
Spare parts and additional equipment are tax and customs duty-free if the boat is under a foreign
flag. Boat owners with Croatian residence permit can enter EU waters for up to 18 months in any
24 months period without paying the VAT. (Some EU members have different regulations).
12. Does Croatia have double taxation treaties signed with other countries ?
After gaining independence the Republic of Croatia has assumed the obligation to apply
all international agreements concluded by the former state. Procedures were initiated to conclude
new agreements, and currently 21 of these are being applied. All Agreements concluded by the Republic
of Croatia are based on the Croatian Draft Agreement on the Avoidance of Double Taxation, in
compliance with the model provided by the Organization for Economic Cooperation and Development
(OECD).
13. What is the Capital Gains Tax on the sale of a property ?
On the sale of a property within three years of purchase Capital Gains Tax at a rate
of 35% is levied on the profit between the purchase and sale price. After three or more years
of ownership no Capital Gains Tax is payable.
14. What is the tax on rental income ?
Tax at a rate of 25% is payable on the declared profit of any rental income received.
It is the owner's responsibility to notify the tax authorities.
15. Does the agency provide taxation assistance and accounting
services ?
Our partner in Croatia does not directly offer tax consulting and accounting, but
can recommend other companies who provide these services.
IMMIGRATION FAQ
1. How can Croatian citizenship be obtained ?
Croatian citizenship can be obtained by birth on the territory of the Republic of Croatia, by
origin, and by naturalization.
2. Who can obtain Croatian citizenship by birth ?
A person who is born on the territory of the Republic of Croatia can obtain Croatian citizenship
provided that before the filing of the petition he/she had a registered place of residence for a period of not less than five years constantly in Croatia.
3. Who can obtain Croatian citizenship by origin ?
A child can obtain Croatian citizenship by origin if :
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Both of parents were Croatian citizens at the time of birth |
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One of his/her parents was a Croatian citizen at the time of his/her birth, and the child was born in the Republic of Croatia |
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One of his/her parents was a Croatian citizen at the time of his/her birth, while the other was a stateless person or a person whose citizenship was unknown, and the child was born abroad |
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One of his/her parents was a Croatian citizen at the time of his/her birth, and the child was born abroad, and if the child by the age of eighteen is signed up for registration as Croatian citizen by the authorized body of the Republic of Croatia abroad or in the Republic of Croatia or if he/she establishes residence in the Republic of Croatia. |
A child who is a foreign citizen or is stateless person can also obtain Croatian citizenship by
origin, if he/she was adopted with kinship legal effect by Croatian citizens according to the
provisions of a special Law.
4. Who can obtain Croatian citizenship by naturalization ?
An emigrant (a person who has emigrated from Croatia with the
intention to live permanently abroad), as well as his/her descendants can obtain Croatian
citizenship by naturalization provided that a conclusion can be derived from his/her conduct
that he/she is attached to the legal system and customs persisting in the Republic of Croatia
and that he/she accepts the Croatian culture.
A foreign citizen who is married to an emigrant who has obtained Croatian
citizenship according to this provision can also obtain Croatian citizenship.
A minor can obtain Croatian citizenship by naturalization if:
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Both parents obtain citizenship by naturalization |
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Only one parent obtains citizenship by naturalization and the child lives in the Republic of Croatia |
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Only one parent obtains citizenship by naturalization, the other one is a stateless person or a person of unknown citizenship and the child is living abroad. |
A foreign citizen who is married to a Croatian citizen can obtain Croatian
citizenship by naturalization provided that he/she has permanent residency in Croatia.
A foreign citizen whose admission to Croatian citizenship would be of interest
for Croatia can obtain Croatian citizenship by naturalization. Croatian citizenship can also
be obtained by the spouse of this person. The Ministry of the Interior shall issue an opinion
on the existence of an interest in the admission to Croatian citizenship.
A foreign citizen can obtain Croatian citizenship by naturalization
provided that :
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He/she has reached the age of eighteen years and that his/her legal capacity has not been taken away; |
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He/she has had his/her foreign citizenship revoked or that he/she submits proof that he/she will get a revocation if he/she would be admitted to Croatian citizenship. If the foreign country does not allow revocation or is asking for prerequisites which cannot be met, a statement stating that he/she will renounce foreign citizenship if he/she obtains Croatian citizenship is sufficient; |
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He/she had a registered place of residence for a period of at least five years constantly in Croatia before the filing of the petition; |
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He/she is proficient in the Croatian language and Latin script. |
5. How long can a foreign citizen stay in Croatia without obtaining the residence permit ?
A foreign citizen can stay for up to 90 days without obtaining the residence permit.
Citizens of many countries can enter Croatia without obtaining the visa in advance. A
valid passport or ID card will do for citizens of all EU countries and other countries
with which Croatia has agreement on visas. Citizens of other countries must obtain the
tourist (visitor) visa. These visas can be obtained in Croatian diplomatic missions as
well as on border crossings, airports and harbors which are open for international traffic.
The procedure is simple and fast. Although Croatia is open to the world and has treaties
with many countries, there are limitations in specific situations.
6. Who must obtain a temporary residence permit ?
Foreign citizens who intend to stay longer than 90 days in the Republic of Croatia must obtain
a residence permit. To obtain the temporary residence permit, it is sufficient to have a yacht
moored in Croatia, rented or owned accommodation, or an investment in a Croatian company.
The temporary residence permits are issued for period of one year, and can be easily renewed.
7. To whom and where, must the application for the residence permit, be submitted to ?
In order to obtain the temporary residence permit, a foreign citizens must apply to Croatian
embassy or consular mission in a country of her/his residence. Citizens of countries who have
treaties on visas with Croatia and who do not need a visa to enter Croatia, can apply to a
locally relevant police station.
8. Which documentation is needed in order to obtain the temporary residence permit ?
Required documentation includes: 2 photos, a photocopy of valid passport, birth certificate,
proof of sufficient funds as required by Croatian immigration rules (150 EUR/day or possession
of credit cards). In addition to these documents, when applying for the first time, a foreign
citizen must present a prove of clear record with legal authorities of her/his country of residence,
not older than 6 months.
9. Does a foreign citizen with temporary residence permit have to pay taxes in Croatia ?
Foreign nationals (holders of the temporary residence permit) who are physically present
in Croatia for more than 182 days/year are considered tax-residents and generally taxed
on world-wide income. Possession of a resident permit does not necessarily mean you are
tax resident. You are tax resident in Croatia based on your physical presence if you stay
for at least 183 days under circumstances that indicate your visit is not temporary. This
period may overlap calendar years. You are tax resident based on maintaining a home in
Croatia if you have accommodation there at your exclusive and continuous disposal for at
least 183 days and you intend to keep and use that accommodation further.
10. Does a foreign citizen, acting as a manager of the Croatian corporation need to obtain work
permit ?
Under certain circumstances foreigners can work in Croatia without obtaining the work
permit. The work permit is not required for the foreign nationals such as: founders, procurers,
management staff and members of the board working in Croatian corporations, providing that they
have not signed the permanent employment contract with the company and that the work they do is
temporary i.e. not longer than 3 months per year.
11. To whom can a permanent residence permit be granted to ?
A permanent residence can be granted to the following persons :
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A foreigner who has stayed in Croatia with temporary residence/work permit for a period of not less than five years continuously |
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A foreigner who has a temporary residence/work permit and who is married to a Croatian citizen at least three years |
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A foreigner who has a temporary residence/work permit and who is married to a foreigner with the permanent residence permit at least three years |
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A child under 18 years accompanying the parent holder of the permanent residence permit. |
12. Does the agency provide assistance with immigration issues ?
Yes, our partner in Croatia provides a complete service to our clients and cover all related
paperwork. |
