Open a branch office in Croatia
Open a branch office in Croatia
Foreign companies are considered equal in commerce on the territory of the Republic of Croatia with domestic companies, under the conditions prescribed by the Croatian Company Act (Official gazette: 111/93, 34/99, 121/99, 52/00, 118/03, 107/07, 146/08, 137/09, 125/11, 152/11, 111/12, 68/13, 110/15, 40/19 hereinafter: the “Company Act”). According to the Company Act, a company is considered foreign if its registered seat is located outside of the territory of Republic of Croatia and if it was properly established according to the laws of the country in which its registered seat is located.
Foreign companies cannot permanently conduct economic/business activities in Republic of Croatia until they establish and register a branch office there in accordance with the Company Act and other applicable regulation (permanent conducting of economic activities is not considered for example, occasional or one-off performance of an activity or performance of an individual job). Whether it is a matter of permanent or occasional performance of activities, it is assessed according to the circumstances of every particular case.
The procedure
The procedure itself is primary regulated by the Company Act and also by the Croatian Court Registry Act and other applicable laws and bylaws (accounting, tax, regulatory and etc.).
Decision on incorporation of a branch office
First step which is required for a foreign company (hereinafter: the “Founder”) to establish a branch office in Republic of Croatia is to made a formal Act - Decision on incorporation of a branch office (hereinafter: the “Decision”).
In the aforementioned Decision, the following information shall be stated: 1. Name and seat of the Founder; 2. Share capital of the Founder; 3. Business activities of the Founder; 4. Name and seat of the branch office; 5. Business activities of the branch office 6. Name(s) and surname(s), personal identification number(s) and residence(es)of the person(s) who are authorized to represent the Founder in the business activities of the branch office (hereinafter: the “Representative”).
Furthermore, it is important to point out that the Decision shall be in accordance with the Founder Articles of association. After the Founder has made the Decision, this Decision must be register with a competent local court registry.
Documents
In order to register the branch office with the competent court registry, the Founder has to submit a valid application (along with necessary documents).
According to the Company Act, the following documents are necessary in order to successfully register the branch office:
- Extract from the court registry for the Founder (not older than 30 days as of the day of submission of registration),
- Articles of associations of the Founder,
- Founders last annual financial report,
- Decision on appointment of the representative;
- Acceptance of appointment of the representative.
The aforementioned documents have to be enclosed with the application in their original form and translated into Croatian language by a local court interpreter.
Personal information number
In order for the Founder to successfully register a branch office, it has to acquire Personal information number, for the Founder and for the Representative of the branch office. The personal information number can be acquired in Croatia at the competent office of Tax administration.
Public Notary
Before going to the public notary, the Founder has to appoint a Representative who will be authorized to represent the founder in the branch office’s legal transactions and activities.
The appointed branch representative has to sign a declaration that he accepts the appointment as a branch office Representative (this declaration must be signed in the front of a public notary). The appointed branch representative also signs a declaration that he does not own other companies in Croatia and that he has no outstanding debt on the basis of taxes and contributions for pension or health insurance.
Furthermore, it is important to mention that the Decision and a registration form for the branch office shall be signed in the front of the public notary. In practice these documents can be signed by local Croatian Lawyers or Law Firms with appropriate Power of Attorney.
In addition to the attorney costs (which depend on the circumstances of the case and the needs of the client), average public notary fees for the process range between 200,00 and 250,00 EUR.
Registry application
After all the necessary documents were signed and notarized, it is possible to submit the registry application to the competent registry court.
In the registry application the following information has to be explicitly stated: 1. Name and seat of the Founder; 2. Share capital of the Founder; 3. Business activities of the Founder; 4. Name and seat of the branch office; 5. Business activities of the branch office 6. Name(s) and surname(s), personal identification number(s) and residence(es)of the Representative.
However, if the founding company’s subject of business include activities which according to Croatian laws can only be performed on the basis of a special permit, consent or other act of the competent authority then those activities also have to be stated in the registry application including the name of the registry in which the founding company is registered and its registry number, or a note that the founding company was established in a country where such registration is not required.
The founding company also has to pay a registry fee in the amount of about 46 EUR.
If everything is in order the Registry court will accept the application and register the branch office in the national court registry. After the registration, the local branch office is ready for business in Croatia.
