In accordance with the Foreigners’ Act of the Republic of Croatia, a temporary residence permit for a third-country national can be obtained for the purpose of starting a business in Croatia (hereinafter: an applicant). Citizens of third countries are foreign citizens from countries not belonging to the European Economic Area (EU, Principality of Liechtenstein, Kingdom of Norway, Republic of Iceland) and the Swiss Confederation.

In order to start a business in Croatia, an applicant for the temporary residence must legally form a company (Ltd, simple Ltd, joint stock company, sole proprietorship or association). The most common form of starting a business is opening a limited liability company which has a minimal share capital in the amount of HRK 20.000,00 or EUR 23.000 with no limitations regarding the number of founders /managing directors, while the second most common form is a simple limited liability company which has minimal share capital in the amount of HRK 10,00 or EUR 1,6 and can have only one founder and managing director.

The following is the most common case of applying for a residence permit in Croatia through the company formation: an applicant forms a Ltd (usually remotely via special Power of Attorney), becomes the director (key staff) and enters to the employment relationship with the newly formed company, with the obligation to pay himself a gross salary that meets or exceeds the minimum wage for directors (gross salary for directors in 2020 is HRK 5.682,30 or EUR 757,00). 

However, there are some other legal obligations that must be fulfilled. Namely, third-country citizens must invest a rather large share capital to their company – the minimal sum of HRK 200.000,00 (around EUR 26.500,00), which is a company’s start-up capital and is used later for business expenses. Also, an applicant would have to employ at least three Croatian citizens full time and pay them a gross salary that meets or exceeds the minimum wage (gross salary for workers in 2020 is HRK 4.062,51 or EUR 542,00). All the above-mentioned conditions must be met at the moment of applying for a temporary residence permit.

An applicant submits a temporary residence application to the competent diplomatic mission or consular office of the Republic of Croatia. On the other hand, if an applicant does not need a visa to enter the Republic of Croatia, then may apply for temporary residence at a local police station according to intended place of work (registered seat of newly established company).

An applicant residing continuously in Croatia for five years based on a temporary residence permit can, when the period of five years passes, apply for the permanent residence permit. It is considered that an applicant resided continuously in the Republic of Croatia, if during a period of five years he/she was absent for up to 10 months, i.e. each year of temporary residence absent for two months of which one month in the first and one month in the second half of the year.

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