During the past couple of years business offices were being built all over the place, with even more of them announced before the crisis. Then the recession came and all plans were put on hold.
All investors should consider themselves very lucky with the fact that most of their office spaces were already rented out when the crisis struck and that companies which now operate in them are bound with long term contracts. This left a rather small number of unused offices on the market and the demand for them also dropped because of the financial crisis. It may seem a little bit weird, but this situation is actually good for the market of commercial real estate in Croatia, which is now stable. If it had not come to this, the offer would eventually be much higher than demand and prices would drastically fall. Something like this already happened in some European markets.
Currently the development of new projects is put on hold because banks announced more strict conditions for getting loans, so now investors have to come up with their own source of financing. Despite all these problems, it is expected than the regional market of commercial real estate will continue to develop in the near future.

We recently gave some information about how foreigners can buy property in Croatia and we stated how one way was to start a company. Now we are going to give you more detail on this subject.

It is best that you get a Croatian lawyer to do the registration of your company with the Commercial Court, Central Bureau of Statistics, Tax Administration, Croatian Pension Insurance Institute and Croatian Institute for Health Insurance.

Every company in Croatia must of course have an address in the country to be registered, so you should probably take care of this first. Then you should get to work on certifying all the documents to make them legally authentic. You do this in the office of a public notary, which will be explained to you by your lawyer. You also have to translate any document written in some other language.

Now we get to the part of opening a bank account for the company. First of all, it should be noted that opening a private limited company is the cheapest way of getting a company in Croatia as it requires only 20,000 Kunas, while anything else would be much more expensive. You can have more accounts in more banks if you believe you could need them, but you must specify which account will be used for which specific purpose.

After this you must register with the court that resides over the area your company is located. First you submit the notarized application which must contain company name, office, business, account, capital, statement by board members, names and identification data of all owners, document of establishment, list of managers and statements that prove how the company or it’s owner have no debts towards the Croatian institutions or any other liability.

When you take care of all the legal details you should make a stamp which has the name of the company and the court registration number, after which you also must get the company number given by the Central Bureau of Statistics and a tax number issued by the Tax Administration.

If you plan to have some employees in your company you must take care of their pension and health insurance.

As you see, starting a company in Croatia is not easy at all, but if you have a good lawyer who can get it done as fast as possible, than you should be able to move into your Croatian real estate without any unnecessary problems!

Real estate market is by its characteristics same as any other market and as such is subject to all laws of supply and demand.
This year a lot has changed in the Croatian real estate market. Employment in the country fell, there is a great fear of national currency dropping, jobs are uncertain and loans are impossible to obtain at reasonable interest rates. These circumstances have resulted in falling demand for real estate, especially for apartments. At the same time the number of apartments is very high and is expected to grow even more for some time. To make everything a bit more interesting, many ordinary citizens began to rent flats for they simply no longer have enough money to maintain these apartments in a state of “idle” mode waiting for a sale. This creates a very large offer in relation to demand.
All of this would have to result in falling prices of real estate according to economic laws. In the long term prices should begin to grow again, so you can expect that investors will wake up again.

There are two separate roads to making a real estate investment in Croatia. One is to buy as a private citizen and the other is to buy as a business company. Both ways have their advantages and disadvantages, which will be explained in this text.

If you go for private ownership, you must first be aware that EU citizens have the same rights as Croatians, while non-EU citizens have to come from a country that has a reciprocity contract with Croatia and must also get an approval from the Croatian Ministry, which means the whole process can last for a couple of months, depending on the circumstances. Private ownership has it’s advantages in the fact that once you buy your property in Croatia, you no longer have any more problems with book keeping, company accounts, taxes, and VAT returns. On the other hand, you can not get your VAT back after buying furniture or anything else you need to make your real estate representable, and you also need to wait a couple of months to get the Ministry approval, although you will not be rejected and you are practically the owner of your property.

Another way to buy real estate in Croatia is to open your own company, which is especially useful if you are not a EU citizen. All you need is the name of your company, an accountant, a bank account with an initial deposit of 20,000 Kunas, a company stamp and a contract with your company’s function that has to be notarized in the public notary office. This can take up to 2 months and the best way to do this is to authorize a lawyer to do it instead of you. Advantages of investing in property through a company are the fact you don’t need to wait for a Ministry approval, you can claim your VAT return, when you decide to sell the property you actually transfer your company to a new owner and 5% land tax does not have to be paid and the last thing you should know and can be very profitable is the fact that as a company you can rent out the property and earn some money, which would not be possible for a private foreign citizen. The only bigger disadvantage of this way of buying property in Croatia is that you need an accountant for your company who will charge you a monthly fee of approximatly 100 Euros.