Why Choose Croatia for Business Expansion?

Croatia offers a stable political and economic environment, making it an attractive destination for foreign investors. According to the U.S. News and World Report, Croatia ranks high among the world’s most politically stable countries. This stability, coupled with favorable tax incentives, makes Croatia a preferred choice for international business development.

Advantages of an Employer of Record (EOR) in Croatia

Using an EOR in Croatia can streamline your expansion process. Here’s how:

• Experienced Workforce: Croatia boasts a skilled workforce with a significant number of English-speaking professionals.
• Simplified Business Registration: The business registration process in Croatia is straightforward, reducing bureaucracy and ensuring a quick market entry.
• Strategic Location: Croatia provides direct access to prime markets in Western Europe, Eastern Europe, and Asia via land, air, and sea routes.

Employment and Payroll in Croatia

Wages and Salaries

• Minimum Wage: As of 2023, the minimum gross monthly wage in Croatia is EUR 700. This figure is reviewed annually.
• Probation Period: While not mandatory, probation periods in Croatia can last up to six months.
• Bonus Payments: Although not required by law, bonuses are common and should be detailed in the employment contract.

Onboarding Process

When hiring in Croatia, an employer must provide a written employment contract that includes:

• Employer and employee details
• Place and type of work
• Start date and duration of employment
• Paid leave entitlements
• Notice period
• Salary, bonuses, and payment frequency
• Working hours

Termination and Notice Periods

Notice periods in Croatia depend on the employee’s length of service:

• Less than one year: 2 weeks
• One year: 1 month
• Two years: 1 month and 2 weeks
• Five years: 2 months
• Ten years: 2 months and 2 weeks
• Twenty years: 3 months

Termination can occur due to mutual consent, the death of the employer or employee, or by court declaration. Severance pay is mandatory after two years of service unless dismissed for misconduct.

Taxation and Social Security

Tax Rates

• Personal Income Tax: Income up to EUR 4,000 is taxed at 20%, while income over EUR 4,000 is taxed at 30%.
• Corporate Tax: The corporate tax rate in Croatia is 18%.
• Social Security Contributions: The total social security contribution rate is 36.5% of the employee’s monthly wage, with 20% paid by the employee and 16.5% by the employer.

Health Insurance

All employed residents and their employers must contribute to health insurance. The Croatian Ministry of Health oversees this system, ensuring coverage for general and urgent care, workplace injuries, and maternity leave.

Benefits and Leave Entitlements

Annual Leave

Employees in Croatia are entitled to a minimum of four weeks of annual leave. Additional leave is granted to employees in hazardous jobs.

Parental and Maternity Leave

• Maternity Leave: Employed women are entitled to 28 days before the expected birth and up to 70 days after childbirth.
• Parental Leave: Parents can take up to eight months of leave, with four months allocated to each parent.

Sick Leave

Employees must provide a physician’s note within three days of taking sick leave. They are entitled to a minimum of 70% of their average salary, with potential full pay depending on the employer’s policy.

Overcoming Challenges with an EOR

Using an EOR in Croatia can help navigate the local judiciary system, which is known for its backlog and lengthy dispute resolutions. An EOR ensures compliance with local laws and helps mitigate property ownership challenges and other legal hurdles.

Ready to Expand Your Business in Croatia?

Partnering with an EOR in Croatia can simplify your expansion, allowing you to focus on growth while ensuring compliance. Stipenda offers expert EOR services to facilitate your business operations in Croatia.

Contact Us

• Email: sales@stipenda.com
• Europe: +44 (0) 330 380 0161
• US: +1 800 910 7847

Discover how Stipenda can support your successful market expansion in Croatia. Contact us today!

For more information on the benefits of hiring in Croatia and our EOR services, visit Stipenda.