Setting up a company in Croatia: d.o.o. vs j.d.o.o., process, costs and traps (2026)

In short: Setting up a company in Croatia means choosing between a d.o.o. (limited liability company, minimum share capital EUR 2,500) and a j.d.o.o. (simplified LLC, share capital EUR 1). Both give limited liability and are taxed identically. Croatian citizens with an electronic ID can form either online through the START system in days; foreign founders, contributions in kind and any customised articles go through a public notary (javni bilježnik). Formation is the cheap part. What costs money is what follows: monthly director contributions that run whether or not the company trades, a 30-day deadline to register the beneficial owner, mandatory e-invoicing and double-entry bookkeeping.

Most foreigners who ask us how to open a company in Croatia have already read the government portals and know the two forms exist. What they have not been told is why a j.d.o.o. with one euro of capital costs the same to run as a d.o.o., why the bank asks for a document nobody mentioned, why the online system will not let them in, and why the Tax Administration sends a contribution assessment for months in which the company issued no invoices. This guide walks through the process from choosing the form to the first deadlines after registration, with the governing law cited at each step.

D.o.o. or j.d.o.o.: the difference is structure, not capital

The only real advantage of a j.d.o.o. is the low entry threshold; the only real price is structural limits. Both forms are governed by the Croatian Companies Act (Zakon o trgovačkim društvima, ZTD) and in both the members are not liable for the company’s debts.

	d.o.o.	j.d.o.o.
Minimum share capital	EUR 2,500 (Art. 389 ZTD)	EUR 1 (Art. 390.a ZTD)
Minimum share	EUR 10, in multiples of 10	EUR 1
Founders	unlimited	max. 5 (max. 3 via START)
Directors (članovi uprave)	unlimited	exactly 1
Statutory reserves	none required	25 % of net profit until capital reaches EUR 2,500
Contributions in kind	allowed	only via a notary, not online

The j.d.o.o. reserve rule (Art. 390.a ZTD) means a quarter of profit after tax and after covering carried-forward losses cannot be distributed. Reserves may only be used to increase share capital, cover the current year’s loss or cover losses carried forward. Once capital reaches EUR 2,500 the obligation ends.

The j.d.o.o. still exists in 2026. A claim that circulates online – that the simplified company was abolished with the euro, or that existing ones must convert – is wrong. The euro amendments to the Companies Act merely redenominated the capital from 10 kuna to 1 euro, and a later amendment removed the deadline by which d.o.o. and j.d.o.o. companies had to convert their capital from kuna to euro. Conversion now happens at the first amendment of the articles, status change or transfer of a share.

Converting a j.d.o.o. into a d.o.o. is voluntary and never automatic. It is done by a members’ decision to increase share capital under the Companies Act; once capital reaches the d.o.o. threshold, d.o.o. rules apply, and the company may keep the “j.d.o.o.” suffix.

When a j.d.o.o. makes sense

A sole founder testing a business idea who wants limited liability, needs one director and contributes only cash. With the clear understanding that monthly obligations are no lower than for a d.o.o.

When to go straight to a d.o.o.

More than one director, contributions of property, equipment or IP, more than five founders, a supervisory board, or articles with bespoke terms – pre-emption rights, deadlock rules, exit mechanisms. Also when banks and partners expect the “serious” form; the perception of the j.d.o.o. as a start-up vehicle exists, fair or not.

Sole trader (obrt) as the alternative

A sole trader business has no share capital and no reserve obligation, but the owner is personally liable with all their assets. For very small turnover and minimal administration a flat-rate sole trader (paušalni obrt) is often the rational choice; for anything carrying risk towards third parties, limited liability is worth every euro of difference.

Share capital: what actually has to be paid in before registration

For a d.o.o., at least one quarter of the share capital must be paid in before registration, and each founder must pay at least a quarter of their own contribution. With the minimum capital of EUR 2,500 that means EUR 625 before filing; the balance is due within one year of registration. Cash contributions go to a temporary account at a bank or at Fina (the Financial Agency), which issues the payment certificate attached to the application.

Contributions in kind must be transferred in full before registration under an agreement drawn up or certified by a public notary. That automatically rules out online formation – through START and e-Osnivanje only cash contributions are possible.

Share capital is not a fee. It remains the company’s asset and can be used for business from day one. Founders who treat it as an untouchable deposit lose liquidity for no reason; founders who spend it without a paper trail before registration create a problem that surfaces at the first status change or due diligence.

Three ways to form a company: START, e-Osnivanje and the notary

Online formation through START is the cheapest and fastest route, but its conditions exclude most foreign founders. Which route applies depends on who is founding and with what.

START (start.gov.hr)

A single electronic procedure that in one application registers the company at the commercial court and the statistics register, opens a bank account with a chosen bank, applies for a VAT ID, files with the pension fund (HZMO), pays the capital and court fee, and optionally registers the beneficial owner. The court fee for filings made via START is charged at half the standard amount.

Conditions: every founder is a Croatian citizen with an electronic ID card (eOI) with activated certificates, logging in through the e-Građani portal; contributions are cash only; the articles are a fixed standard template; a j.d.o.o. may have at most three founders; no supervisory board. Typically a few working days.

e-Osnivanje (court register module)

A remote-formation module of the court register system, open also to EU/EEA citizens. Identification is by national electronic credentials of the highest assurance level, documents are signed with a qualified electronic signature, and every founder must already hold an OIB. Bank account and other registrations are done separately.

Public notary (javni bilježnik)

The classic route – and note that a Croatian public notary is a qualified lawyer whose deed carries public authority, not a US-style notary public who merely witnesses signatures. The notary draws up the founding declaration (izjava o osnivanju, one founder) or articles of association (društveni ugovor, several founders), the directors’ declaration accepting appointment and confirming no legal impediments, and the registration application. All founders and every person whose signature is certified must be present, in person or via a duly authorised representative. The notary files electronically with the commercial court, which issues the registration decision; the company’s OIB is assigned on registration. Usually one to two weeks.

This is the only route when there is a contribution in kind, a non-EU founder, more than five founders, a supervisory board or any bespoke content in the articles. Bespoke content in practice means: pre-emption rights over shares, what happens on a member’s death, quorum and majorities for key decisions, how a partner exits. The standard template has none of it – and nobody notices until the partners fall out.

We deliberately do not quote costs in euros: court fees are set by a government regulation that changes (most recently in mid-2026), and the notary’s fee follows a points-based tariff whose point value also changes. Orders of magnitude: the court fee for a j.d.o.o. is symbolic and for a d.o.o. a few tens of euros; a notary for a d.o.o. with several founders and signatures runs to a few hundred euros. Publication of the registration on the court register website is free, VAT registration is free, and a company stamp is not required by law.

Company name: why you prepare three options

The name must clearly differ from every company registered in Croatia and must not cause confusion about identity (Art. 14 ZTD). The distinctive element must be in Croatian or an official language of an EU member state, in Latin script, with Arabic numerals allowed (Art. 20 ZTD). Foreign words are permitted where they form a trademark or a member’s name, are common in Croatian, have no Croatian equivalent or come from a dead language – so an English brand name is generally fine.

The word “Hrvatska” (Croatia) and its derivatives may only be used with a decision of the competent ministry (Art. 15 ZTD). A name containing a person’s name requires that person’s express consent.

Availability is checked at sudreg.pravosudje.hr, including companies in bankruptcy. A name can be reserved with the commercial court for 30 days. The practical trap: a name that is free in the register can still be rejected by the court as insufficiently distinctive or non-compliant on language. Judicial practice varies, so applications list alternatives.

Business activities and NKD 2025

List every activity the company could realistically carry out at formation – adding activities later is a registered change that costs money and time. Activities are classified under the National Classification of Activities 2025 (NKD 2025, Croatia’s version of NACE), in force since the start of 2025. The number of activities is unlimited; watch only for those requiring a licence, consent or minimum technical conditions – registration does not replace a permit.

After registration: the deadlines that actually hurt

Entry in the court register is the beginning of the process, not the end. In order:

1. OIB is assigned on registration. A business bank account is opened with the registration decision and the statistics classification notice; via START it is reserved automatically. Expect the bank to run its own KYC on foreign founders.
2. Tax status. Companies do not file the RPO form – that is for sole traders and freelancers. The company is recorded with the Tax Administration as a corporate income tax payer after registration.
3. HZMO and HZZO. Registration of the director for pension and health insurance – or proof of insurance on another basis (see contributions below).
4. Register of Beneficial Owners (Registar stvarnih vlasnika, kept by Fina). Under the Anti-Money Laundering Act, a newly formed company must register its beneficial owner within 30 days of formation. Registration is free; missing it is an offence with fines running to tens of thousands of euros for the company and a separate fine for the responsible person. It is the deadline founders most often miss, because nobody mentions it during formation.
5. Fiscalisation 2.0 and e-invoicing. Under the Fiscalisation Act, from the start of 2026 every taxpayer must be able to receive e-invoices, and VAT payers must issue them in domestic B2B transactions; from 2027 the issuing obligation extends to businesses outside VAT. An e-invoice is a structured electronic record under the European standard – a PDF sent by email is not an e-invoice. A new company needs an information intermediary or its own solution from day one; the Tax Administration offers a free application for receiving.
6. Bookkeeping and annual accounts. The company keeps double-entry books under the Accounting Act and files annual financial statements with Fina, whether or not it traded.

Taxes and contributions: where the real cost is

Corporate income tax is 10 % for companies with revenue up to EUR 1,000,000 in the tax period and 18 % from that threshold upwards (Corporate Income Tax Act). The return is filed by the end of April for the previous year; advance payments are monthly.

Profit distributions to members are taxed as capital income at a flat 12 %, withheld at source (Personal Income Tax Act). The municipal surtax was abolished from 2024, so the rate no longer depends on where the member lives. Effectively, a small company distributing all its profit pays roughly a fifth in total; no personal allowance applies to dividends, and cash distributions are prohibited. Non-resident members should check their double tax treaty – the treaty rate may be lower.

VAT. The threshold for mandatory registration is EUR 60,000 of supplies (VAT Act). The company becomes a VAT payer from the day after the threshold is crossed – not from the first of the following month, as used to be the case. Voluntary registration pays off when customers are mostly VAT-registered, because it unlocks input VAT recovery.

Director contributions – the part that wrecks business plans. A director (član uprave) who is not employed by the company and not insured on another basis is compulsorily insured as a director and pays pension and health contributions on a base linked to the Croatian average salary, set each year by ministerial order. The amount is the director’s personal obligation and runs whether or not the company has any income. Any shortfall is assessed by the Tax Administration with default interest. Three scenarios:

• Director employed by the company – contributions are paid on salary, subject to a statutory minimum base for full-time work that is higher than the minimum wage.
• Director insured elsewhere (e.g. full-time employment with another employer, in Croatia or in another EU state with an A1 certificate) – no additional contributions as director. This is why people set up companies “on the side”, and why it stops being cheap when they quit the day job.
• Director with no other insurance – contributions on the prescribed base every month, from registration until deletion.

This applies equally to a d.o.o. and a j.d.o.o. A one-euro company is not a cheap company – only its formation is.

Liability: how much “limited” actually protects

Members of a d.o.o. and j.d.o.o. are not liable for the company’s obligations (Art. 10 ZTD). That is the reason to form a company rather than trade as a sole proprietor. There are two exceptions, and both are real.

Piercing the corporate veil (proboj pravne osobnosti). Whoever abuses the fact that they are not liable for the company’s debts cannot rely on that protection (Art. 10 ZTD). The Act gives examples: using the company for a prohibited purpose or to harm creditors, managing the company’s assets as one’s own, and depleting its assets knowing it will be unable to pay. Liability is then unlimited and joint. Case law is consistent that veil-piercing requires strict proof of abuse, and after bankruptcy opens only the trustee can bring the claim – but mixing personal and company accounts and paying yourself while creditors wait sit squarely within the statutory examples.

Director’s liability. A director is liable to the company for damage caused by failing to act with the care of a prudent businessperson, and towards creditors for a late bankruptcy filing. A holder of a commercial power of attorney (prokurist) is not a director and cannot replace one.

A supervisory board (Art. 434 ZTD) is mandatory for a d.o.o. only in statutory cases – on average more than 200 employees, share capital above EUR 80,000 together with more than 50 members, a special statute, or control over companies that must have one. Irrelevant for a typical new company. The members’ assembly (skupština) is the highest body.

Foreign founders: EU and non-EU

EU/EEA citizens form a d.o.o. or j.d.o.o. on the same terms as Croatian citizens. They need a Croatian OIB, issued by the Tax Administration on application (a passport and a short form; a representative can apply under a power of attorney), and foreign documents need a translation by a sworn court interpreter.

Non-EU citizens can also be founders and directors. Under the Aliens Act, preparatory acts for forming and registering a company are not considered work, so registration itself needs no permit. Actually running the company as a paid director is work: a non-EU director must obtain a residence and work permit, and for founders holding a majority stake the Ministry of the Interior and the Employment Service apply additional conditions on capital, salary and hiring local staff. Those conditions sit in regulations amended frequently, so they must be checked against the current text before you commit. Foreign public documents generally need an apostille or full legalisation in addition to translation, depending on the country.

A common structure for non-EU nationals: form the company through a notary using a power of attorney (so no travel is needed for the formation itself), appoint a director who is already insured in Croatia or the EU, and deal with the founder’s own permit separately. Buying real estate through a Croatian company is also the standard route for citizens of countries without reciprocity.

For every foreign founder the route is the notary – START is closed to anyone without a Croatian electronic ID.

The most common founder mistakes

Underestimating monthly costs. Formation costs less than one month of director contributions. A plan built on “zero cost until we start trading” is a plan for a tax assessment with interest.

Missing the beneficial-owner deadline. Thirty days pass while the bank account is opened and an accountant is found. The fine is out of all proportion to the omission.

A standard template for non-standard partners. Two friends forming a 50/50 d.o.o. via START on a template with no exit, pre-emption or deadlock clause – the classic dispute, avoidable with ten minutes at the notary.

Unpaid balance of capital. A quarter before registration, the rest within a year. Forgotten balances surface at the first capital increase, share sale or due diligence.

The company that “shuts itself down”. It does not. While registered, contributions, bookkeeping and annual accounts keep running. Exit means liquidation and deletion, or – for companies with no liabilities – a shortened winding-up on the members’ declaration, with the members personally liable if the declaration proves false.

Not ready for e-invoicing. A VAT-registered company emailing PDFs in 2026 is not issuing invoices within the meaning of the law.

Company formation step by step

1. Choose the form. More than one director, contribution in kind or a foreign founder → d.o.o. through a notary. Sole founder testing an idea → j.d.o.o., via START if eligible.
2. OIB. Every founder and director obtains one before anything else.
3. Name. Check sudreg.pravosudje.hr, prepare two or three options, reserve if useful (valid 30 days).
4. Activities. All realistic activities under NKD 2025; check which need licences.
5. Capital. D.o.o.: at least EUR 625 (a quarter) to a temporary account before filing, certificate from Fina or the bank. J.d.o.o.: EUR 1.
6. Articles and application. START (standard template, fully online) or notary (founding declaration / articles of association, directors’ declaration, application, powers of attorney and apostilled documents for foreign founders).
7. Registration and OIB. Commercial court decision, publication on the register website.
8. First 30 days. Bank account, director’s insurance registration, beneficial owner registration, accountant, e-invoicing intermediary.
9. Thresholds to watch. EUR 60,000 of supplies → VAT from the next day. EUR 1,000,000 revenue → 18 % corporate tax. J.d.o.o.: capital at EUR 2,500 → reserve obligation ends; consider converting to a d.o.o.

Three rules for setting up a company in Croatia

First: choose the form by structure, not by entry cost – a j.d.o.o. saves on formation, not on operation. Second: the standard template is for one founder; with two, articles without exit clauses are a postponed dispute. Third: the deadlines after registration matter more than registration – thirty days for the beneficial owner and the first month of contributions arrive faster than the first client.

---

This article is general information and does not constitute legal advice. Court fees, notary tariffs, contribution bases and the conditions for non-EU founders change through regulations adopted annually; verify the current position or consult a lawyer before forming a company.