What General Counsels Need to Know About Doing Business in Croatia

Many companies may be looking at business opportunities in Croatia since it joined the European Union (EU) on 1 July, but Croatia has some laws that General Counsel of foreign companies are not aware of but should plan for, according to Jasmina Jasaragic, Attorney-at-Law, Zupic & Partners. Companies that will be investing in the country must seek legal advice before tax issues arise, she recommends. 

 

What should foreign investors know about Croatia?

 

I would suggest that companies that are planning to invest or establish themselves in Croatia seek the advice of legal firms that are based in the country. It might be too late to resolve certain problems once they arise. They need to be aware of their tax obligations. Essentially, the Croatian legal system is stable and in many fields is based on the continental legal system, but there are still some specific to Croatia, like in every other EU country.

 

Could you give an example of such a law?

 

Some specifics: environment protection by initiating investment in Croatia is very important and strictly ruled, labour law which is still conservative, and the details of the legal frame of laws.

 

To give you examples, shops need to put up a sign for the protection of customer rights that includes details of how customers can make a claim. Shops that do not have such a sign could get penalised. This is just one example of an obligation that foreigners fail to meet in Croatia.

 

What do General Counsel in Europe need to know about tax obligations in Croatia?

 

They need to be aware of the rates, corporate tax and VAT. Potential investors should know about different other financial impositions. Specific for Croatia are also deductions at source on which basis is financed pension and health insurance.

What employment laws should they be aware of?

 

It is not easy to terminate a worker’s contract in Croatia. If the company takes the wrong step in its attempt to terminate a contract without consulting lawyers, the worker may have the right to initiate a procedure before the court and request to return to his/her work place.

 

Croatian labour law regulates employment contracts for a definite time period as the exception of the rule.

 

 

Interview by Sarin Kouyoumdjian-Gurunlian, Press Manager, marcus evans

For more information, please contact Laurel Zevitz at l.zevitz@marcusevansch.com

 

 

 

 

 

 

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