How to Register a Branch Office of a Foreign Company in Croatia: A Step-by-Step Guide
Setting up a branch office in Croatia allows a foreign company to operate locally without forming a separate legal entity. Here is a practical guide to the process.
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Expanding into Croatia often starts with a branch office. Unlike a subsidiary, a branch is not a separate legal entity, but an extension of the parent company that can conduct business in Croatia while remaining wholly owned and controlled by the foreign firm. This guide outlines the registration process and practical considerations.
What is a Branch Office?
Under Croatian law, a branch office (podružnica) is an organisational unit of a foreign company through which it carries out business activities in Croatia. The branch may engage in the same activities as the parent company, but it is not a separate legal person. The parent company is fully liable for the branch's obligations.
Key Steps to Register
The registration process is handled by the Commercial Court (Trgovački sud) in the jurisdiction where the branch will be located. The main steps are:
- Obtain a decision from the parent company to establish a branch in Croatia, appointing a branch representative.
- Prepare certified translations of the parent company's registration documents (e.g., certificate of incorporation, extract from the foreign company register) into Croatian.
- Submit an application to the relevant Commercial Court, including details of the branch office, its activities, and the appointed representative.
- Pay the court registration fee and any notary fees.
- Once registered, the branch receives a registration number and is entered in the court register.
Required Documents
Typical documents include:
- Application form (usually available from the court or online).
- Notarised decision of the parent company to open a branch.
- Certified copy of the parent company's registration and articles of association, translated into Croatian.
- Proof of the branch's address in Croatia (e.g., lease agreement or owner's consent).
- Details of the branch representative, including identification documents.
After Registration
Once registered, the branch must register for tax purposes with the Tax Administration and may need to register for VAT if its turnover exceeds the statutory threshold. It must also keep accounting records in accordance with Croatian regulations and file annual financial statements.
Practical Considerations
A branch is often simpler to set up than a subsidiary, but it does not provide limited liability for the parent. Many foreign companies choose a branch for initial market entry, then later convert to a limited liability company (d.o.o.) once operations grow. It is advisable to consult a local lawyer or accountant to navigate language requirements and procedural specifics.
