setting up a croatian company for buying croatian property

What is my Croatian company used for

When we at Bez Brige or the public notary prepares the contract for you to open the company one of things that you will need to discuss are the functions of the company. It is advised that you try and include as many possibilities as you can as its easy to do now rather that at a later date as more expense on your behalf will be incurred. If you are setting up the Croatian company to rent property you must make sure that the correct vocabulary is used for you to later get categorisation and to rent the property. For example you cannot just write real estate business, that is far to vague and will not cover you should you wish to apply for permission to rent the property. As long as you explain to us clearly what you intend the company to be used for then we along with the public notary can prepare the correct Croatian vocabulary and text for the Croatian company purpose.

What do I need to have for a Croatian company

Name of the company, an accountant, (You will need to employ an accountant on a full time basis to take care of all bookkeeping. Croatian law requires that you produce quarterly returns for your company ) Croatian bank accounts with an initial investment of 20,000 Kuna, A Croatian company stamp, a contract stating what your company is to be used for and then public notarised. To open a Croatian company you will also need valid passport identification, which again is public notarised.

How long does it take to set up a company in Croatia

Setting up a company usually takes 2 visits to Croatia. Both visits require 1 day each with a 4 week gap between visits. Day 1 can take from 5 hours to a full day. Day 2. Will take a maximum 4 hours. It is possible for only one visit if you give us written ,public notarised power *punomoc* to collect the documents and to apply for the company stamp.

On your first visit 1 day is required for signing papers going to public notary, getting translations and setting up private and company bank accounts. However for the Croatian company to be active, registered with the relevant courts, having an MBS number (Each company has a unique number assigned to it, the number is called an MBS number) you will have to wait approximately 3 -4 week while the paper work is processed. If you are here and present in Croatia all the time the process can be done in 4-5 weeks maximum. But as you live abroad then then the 2nd visit travel arrangements will have to be made or a *punomc* signed. After approximately3- 4 week the tax office notifies us that your company number has been granted . At this time you will be required to return here for another day of signing documents. Although on your first trip here we can open the bank accounts the Croatian Company bank accounts cannot be officially opened and active until you receive the MBS number and you have your company stamp. On your 2nd visit here there is still paper work to sign but a lot less. First you will go to the tax office and sign to confirm receipt of your MBS number. Then to the shop that is authorised to manufactory company stamps and order your Croatian company company stamp, which takes approximately 1 hour to be made. With the new Croatian company stamp we go back to the banks and officially open the Croatian company Business bank account.

What shall I call my Croatian company

The name of the company must be in Latin or in the Croatian language and is then followed by the letters d.o.o .A simple way is to use the initials of your family for example A.B.C .d.o.o and this is usually acceptable. However over the last few years there have been many companies set up like that and you may need to add some numbers A.B.C.123 d.o.o for example. We then check the given name and if the name is available we can start registering the new company name. When you are signing the documents at the public notary to open your Croatian company you will be asked why you have chosen the name and you will sign a document stating the reasons.

What bank accounts do I need to open a Croatian company

As a foreign citizen you will need to open 3 bank accounts in total for the purpose of opening and running a Croatian company.

1.Private Croatian Kuna account

2.Business foreign currency account

3.Business Kuna account

To open a Croatian business bank account first you will have to open a private Croatian Kuna account .You will need to provide a current passport and proof of address of your Uk residence. Although it is not possible to activate your business account until you have your MBS number and company stamp, it is possible to prepare all the paper work at the bank in readiness. Your Croatian company business bank account will consist of a foreign currency account and a Kuna account (Although the banks are constantly revising there banking procedure and this may soon change to one business account that serves both functions ). Most banks in Croatia offer internet banking facilities.

If there is more than one director of the Croatian company that you have formed then additional private bank accounts will be required to be set up by each director. In each of the foreign directors private Kuna bank account there should be placed enough funds to represent their share in the 20,000 Kuna needed to open and be transferred to the Croatian company bank account. When the transfer of the 20,000 kn is placed into the Business account it will come form all the directors private account on an equal amount.

When your Croatian company is officially up and running then we can return to the bank with your company stamp and stamp all the relevant paper work and then transfer 20,000 Kuna form your private Croatian Kuna account to your Business Kuna account. Your Business Kuna account is now active and can be used to make a company purchases. You can now also take out your initial investment of 20,000 Kuna.

What is a company stamp

If you own a Croatian company you can't live without your company stamp. Your accountant will need one for doing your quarterly returns and you will need one for when you are invoicing clients for your services and sometimes when you make purchases on behalf of your company, the list is endless. A Croatian company stamp will cost approximately150 -200 Kuna per stamp. You will need the M.B.S number of your company and it takes approximately1 hour to make. It is advisable to leave a spare company stamp with your property management agent.

What are the Advantage of buying property in Croatia using a Croatian company

1. Often NOT mentioned by other estate agents and real estate companies here in Croatia is probable the most important reason for you to know. A PRIVATE FOREIGN CITIZEN IS NOT PERMITTED TO RECEIVE MONEY FROM RENTING THEIR PROPERTY.

2. Which means that if you are a foreign citizen and you intend to rent the property the ONLY way to do this is via the Croatian company route

3. According to the new laws which came into force from Feb 2009, as a private citizen you can buy a property in Croatia without having to wait 2 - 4 years for permission from the Ministry in Zagreb. However You can still NOT rent the property out as a private foreign citizen until Croatia is physically IN EUROPE, Until that time the only option for you to rent the property is via a Croatian company or to rent the property on a long term lease policy.

4. One of the advantage is that you do NOT have to apply and wait for approval by the Ministry of Foreign Affairs in Zagreb. Although the new laws brought out in Feb 2009 have now reduced the wait to a few weeks. Your company will have ownership of the property as soon as it is opened and you have made the final payment. You can become owner of the property within 10 - 12 weeks

5. Claiming the vat back.

6. If you have bought a newly built property you will have been charged 23% vat. If your company if vat registered you can now claim this back.

7. When and if you come to sell your property and your company together, then you are in fact selling a company and the 5 % land tax does NOT have to be paid as you will be just transferring ownership details of the company. This can be a huge advantage and an added selling point to the intended new investor as they have just saved 5 %.

What are the disadvantages of setting up a Croatian company to but property in Croatia

1. Money. You will need to have an accountant full time and the accountant will charge between 70 and 150 Euro per month.

2.The Public notary will have to prepare the contracts and hence additional costs. The cost of setting up a Croatian company are between 1000 - 1500 Euro

3. Initial cost of opening a bank account although the 20,000 Kuna is yours and is returnable

4. Translation. Relatively small amount but due to a company contract being written this will have to be translated. Most company contracts are 3 - 5 pages with each page costing between 150 Kuna - 200 Kuna to translate

If you would like us to set up a Croatian company for you then just contact us by or telephone for more details.

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