News

Termination due to employee misconduct is a type of regular termination as prescribed in Article 115 of the Labor Act. It can be issued to an employee if the employer has a valid reason, such as when the employee violates their obligations under the employment relationship, or when the employee fails to follow the employer’s…

Personal-conditioned termination is a type of regular terminaton which is regulated under Article 155 of the Labor Act. It allows the employer to protect themselves from the negative consequences of the employment contract when an employee, through no fault of their own, is unable to perform their job duties properly. This type of termination is…

An employment relationship established through an employment contract can only be terminated in a manner prescribed by law. The termination of an employment contract can be either regular or extraordinary. The legislator, considering the interests of both the employer and the employee, has provided for the possibility of the employer terminating the employment contract due…

A creditor with the right of seperation, in accordance with Article 147 of the Bankruptcy Act, is a person who, based on their real or personal rights, can prove that a particular asset is not part of the bankruptcy estate. Thus, creditors with the right of seperation are not bankruptcy creditors, as their right to…

According to the Foreigners Act, a third-country national is a person who does not hold the nationality of a member state of the European Economic Area or the Swiss Confederation, but holds the nationality of a third country or is a stateless person. Third-country nationals in the Republic of Croatia can reside under short-term stay,…

Civil division represents one of the judicial methods of terminating co-ownership, which is applicable when physical or geometric division of co-ownership is not possible or permitted, or when it could not be carried out without significantly reducing the value of the property. It should be noted that the prohibition of the termination of co-ownership applies…

Each co-owner has the right to terminate co-ownership, if possible and permitted, and this right does not expire. Co-ownership can be terminated through an agreement (voluntary termination) or through the court (judicial termination). This is a non-litigation proceeding, and in the event of a dispute regarding the subject of the division, the scope of the…

Real estate enforcement is a procedure in which a creditor requests the competent court to estimate and sell the debtor’s real estate to satisfy their claims. According to the provisions of the Enforcement Act, which regulates the enforcement procedure in the Republic of Croatia, the subject of enforcement can only be real estate, determined by…

According to the Croatian Law on Inheritance, the right to a necessary share is an inheritance right, and the share that belongs to an individual necessary heir is called a necessary share. The necessary share of the descendants, adopted children and their descendants, and the spouse is one half, and the necessary share of the…

A contract on support until death (with simultaneous transfer of property) (hereinafter: a contract on support until death) obligates one party (the support provider) to support the other party or a third party (the support recipient) until his death, and the other party is obliged to transfer all or part of his property to the…

A contract on lifetime support (with transfer of property after death) (hereinafter referred to as: contract on lifetime support) obligates one party (the support provider) to support the other party or a third party (the support recipient) until his death, and the other party declares that he gives all or part of his property, with…

According to the Croatian Family Law, spouses can have matrimonial property and their own property. Matrimonial property is the property that the spouses have acquired through work during the duration of the marriage union or originates from this property. Therefore, the property owned by a spouse at the time of marriage is his own property.…

Tax supports are not the only supports provided by the Law on Investment Promotion, but there are also the following types of supports for beneficiaries. Supports for justified costs of new jobs associated with the investment project For example, a support beneficiary who ensures the creation of new jobs related to an investment project in…

Pursuant to the Law on Investment Promotion, the purpose of investment promotion is to stimulate economic growth and the realization of the economic policy of the Republic of Croatia, its inclusion in international exchange flows and the strengthening of the investment and competitive ability of Croatian entrepreneurship. Beneficiaries of support are entrepreneurs (micro, small, medium,…

Non-compete agreement A contractual non-competition agreement exists when the employer and the employee agree that for a certain period after the termination of the employment contract, the employee may not be employed by another person who is in market competition with the employer, and that he may not, for his own account or for the…

Extraordinary termination is termination without the obligation to comply with the prescribed or agreed notice period. The employer and the employee have a justified reason for the extraordinary termination of the employment contract concluded for an indefinite or fixed period, if due to a particularly serious violation of an obligation from the employment relationship or…

According to the positive regulations, foreign natural persons who are the apartment owners in Croatia still cannot categorise their apartments, neither rent them and pay tax for it. Therefore, foreign natural persons often use their apartments to host either their real friends or fictive friends, and that way illegally earn their weekly rent in cash.…

Financial instability is present in European as well as in Croatian capital market. Therefore legal persons are much more careful when entering into new business. One must always bear in mind the possibility of bankruptcy of his/her business associate. Thereat, all legal persons must be aware of certain legal consequences of bankruptcy:

In February 2012, the Government of the Republic of Croatia adopted the whole package of tax law alterations that significantly change the taxpayer’s position. With the Value Added Tax (VAT) Act being changed and the current 23% tax rate increased on 25%, certain amendments to the Profit Tax Act, Income Tax Act and Contributions Act…

Act on the time limit for performance of a monetary obligation entered into force on 1st January 2012, and therefore, the provision from article 174 of the Civil Obligations Act, ceased to have effect. According to this, now invalid provision that refers to commercial contracts, the debtor was liable to fulfill his monetary obligation within…

As one of the ways of acquiring the ownership of real estate under the law is the acquisition by adverse possession. It is an institute based on exclusive possession for a statutory period, where the title to real property is acquired by the disseisor who holds the property lawfully, truly and in good faith for…

It is well known that some citizens hold large amounts of money in the bank accounts, while due to high inflation and low interest rates savings in the bank are currently not profitable. Namely, by holding money in the bank savers do not generate any returns, while inflation at the same time reduces the value…

Measures introduced as a result of the coronavirus epidemic (COVID-19) make it very difficult for people to move across borders, however the Croatian government has introduced some milder measures for people traveling for business reasons. Accordingly, from 28 February 2021, people traveling from countries / regions of the European Union / European Economic Area, although…

In the Republic of Croatia boundary lines are often a subject of legal disputes. A legal dispute with neighbor/s regarding boundary lines often emerges when, for example, an investor buys a building land and starts to build. These disputes can last several years.This also happens to the natural persons when, for example, they inherit building land and start with the building.These…

In the economic business operations, whoever breaches the duty to protect someone else’s property interests based on the law, decision of an administrative or judicial authority, legal transaction or a trust relationship, thereby obtaining for himself or another person unlawful material gain and by doing that or in some other way causes damage to one…

This article addresses the procedure for acquiring citizenship for personswho do not have some form of connection with the Republic of Croatia (suchas belonging to the Croatian folks). Acquisition of citizenship is regulated by the Law on CroatianCitizenship, and according to this law citizenship can be acquired in4 ways: A person who is not a…

In the Republic of Croatia, family law regulates the property relations of spouses. Here isan overview of marital and personal property and the significance of marriage contracts:

Inheritance law in Croatia regulates the transfer of assets after the death of a person,either by law or by will. Anyone can designate an heir and regulate their rights in a will.Here we explain why and how wills can be contested.

A loan often enables larger investments such as buying a house or an apartment. Such loans are almost always secured by a mortgage on real estate. The mortgage also serves as security for another claim against the debtor. Croatian law recognizes only a mortgage on real estate as a lien right. The mortgage can be…

According to the provisions of the (Croatian) Law on Obligations, the existence of certain defects of will when entering into a contract causes the legal transaction to be null or void. Voidance is a legal institute which, unlike nullity, does not act under the law itself, because it is necessary to determine the existence of…

Inheritance law in the Republic of Croatia is regulated by the Inheritance Act. All natural persons are considered equal under the same assumptions in inheritance. Foreigners are, assuming reciprocity, equal in inheritance to citizens of the Republic of Croatia. Reciprocity is presumed until proven otherwise upon the request of a person with a legal interest…

Building contract is actually a service contract whereby a contactor agrees to deliver building work according to the specific project within a certain deadline and a client agrees to pay a certain price in exchange. Each contract needs to include both subject and price. The subject of a building contract is a construction of certain…

By a Contract for Support until Death, one party (the support provider) undertakes to support the other party or a third person (the support recipient) until their death, and the other party undertakes, in return, to transfer all or part of their property during their lifetime. The support provider acquires property or rights that are…

With the lifetime support contract one party (the support provider) commits to support the other party or the third party (the recipient of the support) until his death, and the other party commits to giving all of its property or a part of it – with the acquisition of the property and rights being delayed…

Temporary Employment Agency The operation of temporary employment agencies in the Republic of Croatia is regulated by the Labor Law. According to Article 44, paragraph 1 of the aforementioned law, a temporary employment agency is an employer who, based on a worker assignment agreement, posts a worker to another employer (the user) for the temporary…

Third-country nationals who have a regulated residence in the Republic of Croatia can apply for long-term residence or permanent residence after a certain period of time. Long-term Residence Long-term residence may be granted to a third-country national who, on the day of submitting the application in the Republic of Croatia, has continuously held an approved…

Third-country nationals (citizens of non-EEA countries) in the Republic of Croatia can obtain the right to short-term or temporary residence, as well as long-term and permanent residence. This text will focus on short-term and temporary residence. Short-term Residence Third-country nationals can stay in the Republic of Croatia on a short-term residence for up to 90…

In the context of legal relationships, changing the subject of the obligation on the part of the debtor can be done in several ways. The obligation of a debtor under a contract can be transferred to a third party – by assuming debt, accessing debt, or assuming fulfillment. Debt assignment and assumption agreement By assuming…

Foreign nationals, i.e. foreign natural and legal persons, may acquire property on the territory of the Republic of Croatia. To be able to do so, certain legal requirements must be met. The difference between EU and non-EU citizens Citizens of EU member states can easily purchase real estate in the Republic of Croatia. Since Croatia’s…

Limited liability companies are subject to corporate income tax. The difference between the increased or reduced revenue and expenditure according to the provisions of The Corporate Income Tax Law is used as the basis for tax assessment. There are several ways to reduce the tax basis. One of the best ways to do this and…

The procedure of calculating and dividing the assets of a company in which the reasons for termination have appeared is called liquidation, and it is carried out if the members do not agree on a different method of calculation and division or if the company is not declared bankrupt. It is carried out by all…

Establishment of a simple limited liability company (j.d.o.o.) is a procedure by which a legal entity is established that enables owners to operate under the protection of limited liability. This type of company is often a preferred option for small and medium-sized enterprises, as it provides some certainty and flexibility in the conduct of business.…

Limited liability company is the most common form of company in the Republic of Croatia. It is defined by Article 385 of the Law on companies as a company in which one or more legal or natural persons contribute to the pre-agreed share capital. The minimum amount of the share capital of a limited liability…

This article lists the tax specifics, i.e. the differences between the FederalRepublic of Germany and the Republic of Croatia in terms of real estatelevies, inheritance taxes and tax liabilities depending on the taxpayer’sresidence. The differences in the tax arrangements of these two countriesare not negligible, thus we present some of them. Real estate levies In…

The insolvency proceedings (bankruptcy) in general shall be initiated by thedebtor or creditor’s proposal. If all the conditions for opening insolvencyproceedings have been met, then the court is seised of the order of openingof insolvency proceedings to be published on the e-board of the court. Thatorder must include an invitation to insolvency creditors to lodge…

A company is, by definition, a business entity that independently andpermanently performs economic activity in order to make a profit byproducing, trading goods or providing services on the market. The most common form of company that appears in Croatian practice is alimited liability company, and the minimum share capital required for theestablishment of this company…

If you, as citizens of the EU Member States, intend to acquire ownership of avacation home or other real estate property in the Republic of Croatia,whether for private or business purposes, your sale and purchasetransaction in the Republic of Croatia is subject to a certain tax liability,about which you can find out more below. Natural…

There are several ways of acquisition of ownership in the Republic of Croatia,namely: For the acquisition of ownership, the general requirements prescribed by theAct on Ownership and Other real Rights must be met – that is, the ability ofthe property to be the object of ownership, the ability of the acquirer toacquire the right of…

In today’s practice, it is often the case that companies doing business in theRepublic of Croatia are owned by natural or legal persons resident in theRepublic of Germany. The following is an overview of the tax rates applicable to the taxation ofdividend payments in case where the owner of a Croatian company is a legalor…

The realized net profit that the company established in the Republic ofCroatia realizes by performing activities/services and decides to pay to themembers of the company / founder is taxable by corporate tax afterwithholding (for legal persons) or the income tax from the capital (fornatural persons). Members of the company who are tax residents of the…