Subsidiary vs. Branch in Croatia

Foreign investors can establish a branch or a subsidiary in Croatia, the latter one being recognized as a separate legal entity. The legal aspects of how these business forms can be registered in Croatia can be entirely explained by our Croatian lawyers. Our team of advisors is at your disposal with legal support regardless of the chosen form of company in Croatia, with respect to the Commercial Code, the Companies Act, and the modifications added in 2026.

The attributes of a branch and a subsidiary in Croatia

A branch in Croatia can be established by the parent company willing to operate in this country under this type of entity. Complete liability of a branch is a matter of the parent company, which is why this business form is not considered a legal entity. As for a subsidiary in Croatia, this is considered a legal entity with full liability in the chosen territory for business, and furthermore, the taxes on profits are paid in Croatia (corporate income tax of 10% or 18%), with dividends to the parent subject to withholding tax rules.

A branch in Croatia can be incorporated in approximately 2 weeks. Even so, the foreign entrepreneur needs to wait for the opening of the bank account, and such a procedure might take another 3 weeks, considering the formalities involved. The branch in Croatia can start the activities once all the procedures are completed.

Steps in registering a branch in Croatia in 2026

A branch is registered in Croatia in 2026 with all the features and attributes of the parent company, meaning that it will activate under the same name, trademarks, and rules. One should bear in mind that for establishing a branch in Croatia, a local individual or another company must be appointed as the legal representative. When opening a branch in Croatia, several documents must be submitted to the Court Register (Trade Register) at the competent commercial court, such as:

the Articles of Association of the parent company with details about the owners, share capital and the activities;
the business domicile of the foreign branch in Croatia;
the name of the legal representative;
the balance sheets of the parent company for the previous business year.

Branch registration requires a local representative in charge of varied tasks. Among these, the representative must register the documents of branch incorporation, including a declaration with detailed information about the tasks and responsibilities linked to the branch and the fact that he/she does not own any business in Croatia.

From a legal point of view, these documents must be notarized and translated into the Croatian language. It is suggested to avoid the language barrier and related issues and complete the registration procedure with complete assistance offered by our attorneys in Croatia.

Steps in opening a subsidiary in Croatia

In Croatia, there are two types of subsidiaries available on the market: the public one, which can be set up with a minimum share capital of EUR 25,000, and the private one, which can operate if a minimum share capital of EUR 2,500 is provided in a Croatian bank account. Even though it is considered a separate legal entity with liability on the capital contribution, a subsidiary in Croatia must respect the purposes of the parent company. The following documents are necessary when registering a subsidiary in Croatia:

the notarized Articles of Association;
details about the business address, the shareholders, and the legal representative in Croatia;
bank statements proving the deposited minimum share capital.

It is good to note that shareholders of subsidiaries in Croatia are accountable for the obligations and activities of this kind of structure. Moreover, Croatian subsidiaries can establish and develop different economic operations under the name of the foreign company, based on the business plans for Croatia.

The advantages of branches in Croatia

Most branches in Croatia are active in the banking system, but are not limited to this. The benefit of establishing branches is that such an entity can develop rapidly and can have a wide range of activities. Likewise, the losses can be counterbalanced by the profits registered by other similar branches. The revenues of a branch can be invested or can be transferred to other branches,which can make use of such profits.

The benefits of subsidiaries in Croatia

Subsidiaries in Croatia can benefit from several tax incentives but pay corporate income tax in Croatia, not in the country where the parent company is established. Minimized taxes on dividends are also the advantages related to a subsidiary in Croatia. The registration of these entities in 2026 can be discussed with our specialists.

A subsidiary in Croatia can be controlled by at least one director, plus, where required by law (e.g. a d.o.o. with more than 200 employees on average), a supervisory board of at least 3 members. The decision to appoint the board members can be made by the shareholders of the structure formed in Croatia.

About the economic direction of Croatia in a few lines

Foreign entrepreneurs find Croatia a fairly stable and internationally appreciated business destination. With a multitude of investment opportunities, incentive measures, and more, Croatia opens its doors and remains constant in front of high-caliber businessmen. The economic direction also plays an important role here. Here are some interesting data in this regard:

Household consumption and foreign investments largely supported Croatia’s economic growth in 2024. The GDP growth registered here was about 3.8% in 2024.
In 2024, an increase of around 15% in average nominal net salaries was recorded. On the other hand, about 3.7% was the GDP growth in Q4 of 2024 in Croatia.
Croatia enjoys a credit ranking raised to the A category by all 3 leading global rating agencies.
Croatia's GDP grew by about 3.2% in 2025 (DZS first estimate).

Business updates in Croatia in 2026

Interested in opening a subsidiary or a branch in Croatia? Here are a few interesting business updates to consider in 2026:

The minimum share capital for limited liability companies under which a branch will activate in Croatia is EUR 2,500. Nevertheless, company managers from overseas will have to apply for a work permit and invest at least EUR 26,544.56 in the company to obtain a stay-and-work permit.
Fiscalization 2.0 applies in Croatia from January 1, 2026. As such, branch owners must issue domestic B2B invoices as structured e-invoices (EN 16931) via an information intermediary and fiscalize them, if VAT-registered.
Subsidiaries that are VAT-registered in Croatia are obliged to report (fiscalize) the data of issued and received e-invoices to the Tax Administration in real time.
Subsidiary owners must send and receive B2B electronic invoices for all domestic transactions. If such companies do not execute the new obligations, authorities can impose various fines.

Please contact our law firm in Croatia and ask for more details about branches and subsidiaries. Additionally, if interested in immigration to Croatia and relocation of employees, do not hesitate to collaborate with our local experts.