Any foreign company may establish its subsidiary in Croatia as a commercial company. Croatian Company
Act defines the following forms of commercial companies:
- Joint-stock company – Dioničko društvo in Croatian (abbreviation d.d.)
- Limited Liability Company – Društvo s ograničenom odgovornošću in Croatian (abbreviation d.o.o.)
- Simple Limited Liability Company – Jednostavno društvo s ograničenom odgovornošću in Croatian (abbreviation j.d.o.o.)
- General partnership – Javno trgovačko društvo in Croatian (abbreviation j.t.d.)
- Limited partnership – Komanditno društvo in Croatian (abbreviation k.d.)
Joint-stock company and limited liability company are corporate types which imply contribution of capital by shareholders. These types are legal entities, meaning that the holder of rights and obligations is not the individual shareholder but the company itself. These companies are liable to corporate income tax, while their owners are also liable to capital income tax. Currently there is no capital gains tax in Croatia. Both legal entities imply limited personal liability for shareholders. As such, minimum share capital is required.
General and limited partnerships imply personal commitment of the partners to their working efforts to the partnership. In this case partners have unlimited personal liability and minimum share capital is not required.
Joint-stock company may be formed by one or more stockholders which have their equity divided into stocks, either tradeable or not. There is a HRK 200,000 minimum equity required for incorporating a joint-stock company in Croatia. This legal type, as part of its internal structure, requires executive board, supervisory board and general shareholders’ meeting.
Limited Liability Company
Limited liability company is formed by one or more shareholders which have their equity divided into commercial shares. These commercial shares cannot be securities. Minimum equity for incorporating a limited liability company in Croatia is HRK 20,000.
Simple Limited Liability Company
In general limited liability company and simple limited liability company are similar legal entities, although there are some differences. As such, simple limited liability company may be incorporated by paying in a minimum HRK 10 of equity but it does not allow more than 3 company members, nor more than 1 board member.
Two or more partners may form a general partnership in order to establish a permanent business under the mutual legal name. Every partner has unlimited personal liability for all commitments of this legal entity.
Two or more partners may form a limited partnership in order to establish a permanent business under the mutual legal name. In this case, at least one partner needs to have unlimited liability for all commitments of the legal entity. Also at least one partner needs to have its liability limited up to the amount of its paid-in capital.
For detailed information on steps for company registration please visit HITRO.hr.