A company is, by definition, a business entity that independently and
permanently performs economic activity in order to make a profit by
producing, trading goods or providing services on the market.
The most common form of company that appears in Croatian practice is a
limited liability company, and the minimum share capital required for the
establishment of this company is 2.500,00 EUR.
Frequently asked questions when founding a limited liability company mostly
focus on the amount of the tax rate at which profits are taxed, and the
amount of the tax rate that is applied to the payment of profits paid to
Starting from January 2021, the Republic of Croatia applies one of
the lowest corporate income tax rates compared to the tax rates
applied in other EU Member States, as follows:
- 10% if revenues up to 995.421,06 EUR were generated in the tax period, or
- 18% if the revenues generated in the tax period are equal to or bigger than
In the calculation of income tax returns submitted to the tax administration
by the end of April, taxpayers can use a number of benefits (reductions of
the tax base) and benefits, including state aid for education and training,
state aid for research and development projects, and tax relief and
exemptions for entities operating in assisted areas. The tax loss can be
carried forward by law for 5 years and thus reduce the income tax base.
For companies from the manufacturing sector that are micro-entrepreneurs
and that in the Republic of Croatia invest a minimum amount of 50,000 EUR
in manufacturing facilitiesand equipment, and employ at least 3 workers,
are entitled in accordance with the Investment Promotion Act to reduce the
income tax rate by 50% in a period of 5 years.
Furthermore, the same Act prescribes incentive measures for labor-intensive
investment projects, and tax incentives for small, medium and large