Prospera MundiInternational companies · Legal presence
Representative office or branch — the distinction is operational
The first question is not which ledger to use. It is whether the foreign company will only represent itself in Croatia or actually carry on business here. That determines whether it may invoice, keep Croatian books and become liable for Croatian corporate income tax.
| Representative office | Branch | |
|---|---|---|
| Business activity | May not carry on business. It may research the market and represent the founder. | May carry on business. A foreign company may not permanently conduct business in Croatia without an appropriate registered presence. |
| Legal personality | None. | None. Rights and obligations belong to the foreign founder; the branch operates under its own registered name together with the founder's registered office. |
| Formation | Conditions are set by government regulation. Foreign documents are filed in the original and with a court-interpreter-certified translation. | The founding decision is notarised. The company-law rules that apply to Croatian branches also apply to a branch of a foreign company. |
| Accounting records | Not a trading vehicle. | Kept under Croatian rules. The Accounting Act treats a branch as an entrepreneur, whether the founder is from another EU Member State or a third country. |
| Corporate income tax | Not applicable while no business is carried on. | A Croatian business unit of a foreign entrepreneur is taxable on the profit attributable to Croatia. |
The Trade Act provisions on representative offices concern persons from outside the European Union and European Economic Area.
If you form a Croatian company instead
The minimum share capital is €2,500 for a d.o.o., with a minimum business share of €10; €1 for a j.d.o.o.; and €25,000 for a d.d.. Corporate income tax is charged at 10% where revenue in the tax period is below €1 million and at 18% where it is €1 million or more.
A separate obligation
Foreign equity investment can trigger Croatian National Bank statistical reporting on forms IU-IPP, IU-IP, IU-T2 and IU-P. It is separate from tax filings and therefore easy to miss during the first months.
Illustrative situation
A German company that only presents its products and researches the Croatian market is not in the same position as a team that signs contracts and invoices Croatian customers. The second activity requires the legal and tax position to be determined before invoices are issued.
Primary legal basis
- Trade Act amendments — Article 52 provisions on representative offices.
- Companies Act — Articles 7, 162, 389–390.a and 612–618.
- Accounting Act — Article 4(2), treatment of a branch as an entrepreneur.
- Corporate Income Tax Act — taxpayer, attributable profit and tax rates.
- Croatian National Bank decision — statistical reporting on foreign direct investment.
Verified as at 2 August 2026. Check the current text before relying on a threshold, rate or procedure.
Next step
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