Legal forms of business in Croatia: obrt, j.d.o.o. or d.o.o. in 2026

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You are about to invoice your first client from Croatia, take on a partner or open a Croatian arm of a foreign company. The form you pick decides your liability, your tax, your contributions and how much paperwork follows you abroad. After this guide you will know the 2026 numbers for each form and which one fits your situation.

Croatia legal forms of business in 2026: the key figures

What changed for 2026

• E-invoicing is live. Since 1 January 2026, VAT-registered businesses must issue and receive eInvoices. Every obrt and company outside VAT must be able to receive them, and must issue them from 1 January 2027.
• Corporate tax filing goes fully electronic. The 2026 Profit Tax Act amendments make e-filing mandatory for all corporate taxpayers and add an extra deduction for sponsorship costs.
• Flat-rate contributions rose. The 2026 monthly contribution base for a flat-rate obrt is EUR 797.20.
• Thresholds stay at EUR 60,000. The VAT and flat-rate caps both rose to EUR 60,000 on 1 January 2025. They are unchanged for 2026.

Is this guide for you?

Read on if you…

• are a freelancer or consultant choosing between an obrt and a j.d.o.o. or d.o.o.;
• are a founder setting up in Croatia, alone or with partners;
• run a foreign company and are weighing a Croatian subsidiary or branch.

Probably not your case if you…

• are an employee with no plans to invoice; the personal tax deductions and benefits guide covers you;
• want an association or foundation; these follow separate laws.

Which Croatian business forms exist, and how do they compare?

Partnerships and joint-stock companies (d.d.) also exist. They rarely fit a solo professional, so this guide does not cover them in depth.

Should you be an obrt or a company?

This is the question most freelancers ask first. Here's the straight answer.

The flat-rate obrt (paušalni obrt)

You pay income tax on a deemed income, not your real profit. The Tax Administration's flat-rate page sets seven bands for 2026:

You pay the tax quarterly, by the last day of each quarter. In Vukovar, assisted areas and Group I islands it is reduced by 25%, so you pay 75% of the band amount. You file the PO-SD report for the previous year by 15 January.

Contributions come on top. When the obrt is your main activity, the 2026 base is EUR 797.20 a month. You pay 15% first pillar (EUR 119.58), 5% second pillar (EUR 39.86) and 16.5% health (EUR 131.54): EUR 290.98 a month. If you are insured through a job, lower rates apply on the deemed income instead.

Pros: the lowest cost for receipts up to EUR 60,000 and almost no accounting. Cons: unlimited personal liability, no expense deductions and a hard cap. You must not be in the VAT system on the threshold basis.

The obrt keeping books

Same legal shell, real accounting. Income is receipts minus expenses from your books, taxed at your local council's rates. The bands run from 15%–20% and 25%–30% in municipalities up to 15%–23% and 25%–33% in Zagreb. If your receipts pass EUR 1,000,000, you must switch to corporate tax. Below that, you can opt in by written request before year end.

The j.d.o.o. and d.o.o.

A d.o.o. (društvo s ograničenom odgovornošću) is a limited company. The START portal FAQ gives EUR 2,500 as minimum capital, with at least a quarter of each share paid before registration. No limit applies to the number of members or directors.

The j.d.o.o. (jednostavno društvo s ograničenom odgovornošću) is the same company with EUR 1 of capital. It may have at most five members and one director.

The company pays 10% corporate tax on its profit if revenue is up to EUR 1,000,000, and 18% above. You then pay yourself a salary, taxed as employment income, or take dividends. Dividends to individuals are taxed at a final 12%, per the capital taxation page. The corporate income tax guide and the business expenses guide cover the base.

The decision rule

• Receipts under EUR 60,000, low expenses, low risk: flat-rate obrt.
• Receipts over EUR 60,000, real expenses, partners or liability risk: j.d.o.o. or d.o.o.
• A foreign company testing the market: branch or subsidiary, after a permanent establishment check.

How do you set up each form, step by step?

Setting up an obrt

1. Get your OIB (personal tax number) and a Croatian address.
2. Register the trade online through START or at the trade register office.
3. Register with the Tax Administration within 8 days of starting, choosing flat-rate or books.
4. Start invoicing. Since 2026 you must be able to receive eInvoices.

Setting up a j.d.o.o. or d.o.o.

1. Choose the route. START is open only to adult Croatian citizens with residence in Croatia and a high-assurance e-ID. Foreign founders use a notary.
2. Pay capital and fees. A j.d.o.o.'s capital is paid in full and in cash; a d.o.o. founder pays at least a quarter before registration and the rest within a year. On START the court fee is EUR 10 for a j.d.o.o. and EUR 55 for a d.o.o.
3. Court registration. A complete application is decided and registered within 5 working days.
4. Follow-on registrations. START can bundle VAT registration, a business bank account, HZMO registration and the beneficial owners register.
5. VAT. Register once supplies pass EUR 60,000 a year, or earlier by choice.

If you prefer not to handle Croatian court forms yourself, Heavnn's team can run the full setup: heavnn.io/business-setup.

Can you run a Croatian company from abroad?

Legally, yes. The residence condition in the START FAQ restricts the online channel, not who may own or manage a d.o.o. As a foreigner you found it through a notary instead.

Tax is the harder part. Two risks matter.

Place of effective management. If you take all key decisions from Spain, Spain may treat the company as Spanish-resident and tax its profit. Under most treaties, the tie-breaker looks at where management actually happens. The international tax treaties guide explains the test.

Permanent establishment. The reverse applies to foreign companies. A director living in Croatia, or a Croatian employee who signs contracts, can create a permanent establishment: a taxable presence. Croatia then taxes the profit linked to it.

Leaving Croatia while keeping your obrt or d.o.o.? Read the guide to ceasing tax residency in Croatia first.

Withholding on payments abroad

A Croatian company paying a foreign company withholds 15% in general and 10% on dividends. A 25% rate applies to service fees paid to EU-blacklisted jurisdictions without a treaty. Treaties can lower these rates if the recipient files the forms before payment.

Common mistakes (and what they cost)

• Staying flat-rate after passing EUR 60,000 → you lose the flat-rate regime and must register for VAT, so 25% VAT on your later invoices eats into your margin if clients will not pay it on top.
• Opening a d.o.o. for a small freelance business → at Ana's level it leaves EUR 3,928.24 less in her pocket than a flat-rate obrt, before accounting fees.
• Assuming a foreigner can found online → START is limited to Croatian citizens with residence; plan a notary appointment.
• Running a foreign company from Croatia without registering → a permanent establishment assessment with Croatian corporate tax on the attributable profit.
• Ignoring e-invoicing → since 1 January 2026 VAT-registered businesses must issue eInvoices, and all businesses must be able to receive them.

Frequently asked questions

What is the minimum capital for a d.o.o. in Croatia in 2026?

The minimum share capital of a d.o.o. is EUR 2,500. Each founder must pay at least a quarter of their contribution before registration. The simple j.d.o.o. needs only EUR 1, but it may have at most five members and one director. Court fees through START are EUR 55 for a d.o.o. and EUR 10 for a j.d.o.o.

What is a paušalni obrt and who can use it?

A paušalni obrt is a flat-rate sole trade for receipts up to EUR 60,000. Instead of tracking expenses, you pay 12% on a deemed income fixed by band, from EUR 203.40 to EUR 1,080 a year. As a main activity, 2026 contributions are EUR 290.98 a month. You file the PO-SD report by 15 January.

How much tax does a Croatian company pay?

Corporate income tax is 10% when revenue in the tax period is up to EUR 1,000,000 and 18% above. Dividends to resident individuals are taxed at 12%. Dividends to foreign companies carry 10% withholding unless a treaty or EU rule reduces it. Other payments abroad carry 15% withholding in general.

Can a foreigner open a company in Croatia without living there?

Yes, but not through START, which serves only Croatian citizens with residence in Croatia. A foreign founder signs the founding documents with a Croatian notary. You need an OIB. Where you actually manage the company decides its tax residence, so check the treaty tie-breaker if you live abroad.

How long does it take to register a company in Croatia?

If the application is complete, the court must decide and register the company within 5 working days. START bundles the follow-on steps, such as VAT, bank account and HZMO registration, into one procedure. The notary route adds the time to book an appointment and prepare certified documents.

When must a Croatian obrt switch to corporate tax?

An obrt must pay corporate tax instead of income tax once its previous-period receipts exceed EUR 1,000,000. Below that, you can choose corporate tax voluntarily. You file a written request by year end, effective from the next calendar year. Joint owners must all sign it.

Related guides

• Corporate income taxes in Croatia
• Business expenses in Croatia
• Specific taxes in Croatia: VAT, property and more
• Ceasing your tax residency in Croatia
• Croatia tax landscape overview
• Legal forms of business in Austria
• Business forms and independent professional statuses in Malta
• All country tax guides

Sources

• START – frequently asked questions – Government of Croatia
• START – electronic business start-up service – Government of Croatia
• Flat-rate craftsmen (obrtnici paušalisti) – Porezna uprava
• Craftsmen (obrtnici) – Porezna uprava
• Corporate income tax (porez na dobit) – Porezna uprava
• Tax reform 2025/2026 – Porezna uprava
• Croatia: Income determination – PwC Worldwide Tax Summaries (secondary)

This guide is general information, not personalised tax advice. See how we research and review.