The Foreigners Act and the employment of foreign workers in Croatia
For companies that wish to employ workers from third countries, the most important regulation in Croatia is the Foreigners Act. It determines when a residence and work permit may be requested, when a labour market test must be carried out, which conditions the employer must satisfy and in which cases exceptions apply. In practice, most problems arise when the employer starts the procedure too late or assumes that it is enough simply to open a company and find workers. It is not. In most cases, it is first necessary to check whether the employer satisfies the conditions under the Act itself.
When a labour market test is required and what applies to shortage occupations
The basic rule is simple: if an employer wishes to employ a third-country national, in a large number of cases a labour market test must be carried out through the Croatian Employment Service (HZZ) before applying for a residence and work permit. That test checks whether there are persons on the domestic labour market who can perform that work. If there are none, after receiving the HZZ notification the employer submits an application for the specific foreign worker.
It is important, however, to know that a labour market test is not required in all cases. Exceptions for certain shortage occupations are particularly important, as are extensions of a permit with the same employer and for the same work, and special categories for which the Act prescribes an exception. That group includes, among others, key personnel in companies, self-employment in a company or craft business in which the foreigner holds at least a 51 percent share, the EU Blue Card and intra-company transfer. Precisely for that reason, it is not enough to look only at the general rule; it must first be checked whether there is a statutory exception that makes the procedure faster and simpler.
Special rule for key personnel and self-employment
The special rule is important for directors, management board members, procurators, persons authorised to represent a company and foreigners who wish to regulate their residence and work through their own company or craft business. The point is that such persons are not treated as ordinary workers. The Act requires from them a higher threshold of seriousness: an actual investment, employment of domestic workers and a sufficiently high own salary or income.
For key personnel in a company, branch or representative office of a foreign company, the general conditions for the permit must be satisfied, as well as additional conditions for this regime. The company must have share capital or assets exceeding EUR 26,544.56. In addition, at least three Croatian nationals must be employed for an indefinite period and full time, in positions that are not the positions of procurator, management board member or supervisory board member. Their gross salary must be at least equal to the average gross salary in the Republic of Croatia according to officially published data.
A foreigner treated as key personnel must also have the prescribed salary level. His or her monthly gross salary must amount to at least 1.5 times the average monthly gross salary in the Republic of Croatia. If the same employer wishes to have several foreigners performing key duties, the condition regarding domestic workers increases: for each such foreigner, at least three Croatian nationals satisfying the stated conditions must be employed.
For self-employment, the rule is even more practical: merely opening a company or craft business is not enough. A foreigner who is self-employed in his or her own company or craft business must prove an investment of at least EUR 26,544.56, the employment of at least three Croatian nationals for an indefinite period and full time, and his or her own gross salary of at least 1.5 times the average monthly gross salary. If it is his or her own craft business, instead of gross salary, the generated income from independent activity is assessed separately, and it must reach at least 1.5 times the average monthly net salary.
The most important practical consequence is the prohibition on circumventing the stricter regime. If a third-country national is a person authorised to represent a company, branch or representative office, he or she must proceed under the rules for key personnel. If he or she holds at least a 51 percent share in a company or craft business, he or she must proceed under the rules for self-employment.
Conditions the employer must satisfy today
When a positive opinion of the HZZ is required for the issuance of a permit, the Foreigners Act looks not only at the worker but also at the employer itself. Today, under the rules in force, a legal person must, as a rule, have turnover of at least EUR 10,000 per month in the last six months. In addition, it must also have a certain ratio of domestic and foreign workers. For standard occupations, the number of employed Croatian nationals and nationals of EEA Member States and Switzerland, employed full time, must be at least 16 percent of the number of employed third-country workers. For shortage occupations, that threshold is more lenient and amounts to 8 percent.
Put simply, this means that today, under the regular regime, approximately one domestic worker is required for at most six foreign workers, and for shortage occupations approximately one domestic worker for at most twelve foreign workers. In addition, the law requires continuity: the employer must have at least one and the same domestic worker employed for an indefinite period and full time during the last year. For that reason, a new company or newly established branch often cannot immediately proceed with a larger number of applications for foreign workers, even though it has already been formally established.
What could change and why it matters for companies
According to the proposal for amendments to the Foreigners Act from February 2026, the conditions for employers should become stricter. Instead of the current criterion of turnover of EUR 10,000 per month in the last six months, a condition of total inflows of at least EUR 100,000 on the transaction account in the last 12 months has been proposed for legal persons. Therefore, it is not only a higher amount, but also a different criterion and a longer observation period.
The same proposal would also increase the required ratio of domestic workers. Instead of the current 16 percent, the general threshold would be 20 percent, and for shortage occupations it would be 10 percent instead of 8 percent. In other words, the direction is towards a stricter review of the employer’s stability before the employer is approved to employ a larger number of workers from third countries. It is important to emphasise that, at the time of writing, those amendments have not yet been finally adopted, but they clearly show the direction in which the legislator’s practice is moving.
For employers, the best approach is therefore the same regardless of whether it is an existing company, a new company or a branch of a foreign company: before starting the procedure, a legal review of the employment model should be carried out. This shows at the outset whether a labour market test is needed, whether a statutory exception exists, whether the employer satisfies the statutory conditions and how many workers can realistically be brought in legally in the first phase. This is precisely where legal support saves the most time, money and unsuccessful applications.
