Croatia Routes to Market

So you've decided to expand a business in Croatia and researched your market. Now it's time to decide how you will register or expand a business Croatia. What is the best, most viable option for your company, your products, and yourself? Which is the path of least resistance?

Here are your typical options when expanding a business into Croatia. Under the new laws, domestic and foreign companies conduct their business activities under equal conditions. The establishing of a company process is being harmonized with the EU standards. Expanding a business in Croatia has never been as easy as it is now.

It is possible to found the following types of companies:

Limited Liability Company: A company in which one or more legal or physical persons invest an equity with which they share the predetermined original stock. The equities do not have to be equal. One of the founders cannot, upon founding the company, take over more equities but he can gain them later. The business shares cannot be expressed in securities. The original stock of the Limited Liability Company must be expressed in the national currency of the Republic of Croatia Kuna (HRK). The lowest amount if the original stock cannot be lower than HRK 20,000 (approx. EUR 2,700), provided that at least HRK 10,000 (approx. EUR 1,350) must be paid before the company is registered.

Joint Stock Company: A capital company in which the members (shareholders) take part with shares in the original stock divided into shares. The Joint Stock Company can be founded by one person only, i.e. the company can have only one shareholder. This type of company is a legal person receiving that status with the registration into the register of companies. The company is liable with all of its property. The shareholders are not liable for the company. The value of the original stock and of the shares must be denominated in the national currency of the Republic of Croatia. The lowest amount of the original stock is HRK 200,000 (approx. EUR 27,000). The company can issue denominated shares or non-denominated. The denominated value of the share cannot be lower than HRK 10 (approx. EUR 1.35). The denominated values of shares must be amounts multiples of HRK 10.

Public Limited Company: The Public Limited Company is a company in which two or more persons join for the performance of the activity under a joint company, and each member of the company is liable to the companys creditors unlimitedly and with solidarity with all the property. The same legal provisions applicable to partnerships are applicable to the public limited companies.

Limited Partnership Company: The Limited Partnership Company is a company into which two or more persons join to perform the activity under the same company, of which at least one is liable for the company unlimitedly and with solidarity with all of his property (general partner), and at least one is liable for the company up to the set amount invested into the company (limited partner).

Exporting

Exporting in Croatia

Licensing

Licensing in Croatia is the permission for someone else to use your intellectual property rights: either a patent, trademark, trade secret, or copyright. Different types of license include:

Non-Exclusive License - A non-exclusive license implies that your intellectual property rights can be awarded to more than one licensee.

Exclusive License - A little more complex because, although the license may not be exclusive to one licensee, it may be exclusive to a geographic location, a certain product, or limited area of use. For instance, you may grant a licensee exclusive use of the rights in France, yet grant another licensee its use in Germany.

Patent License in Croatia - The allowance of another party to use your patented product, design or process.

Trademark License in Croatia - Trademark licensing means permission is awarded to a licensee to sell a product or service. However, the licensor retains more control in order to ensure that quality is maintained. Quality control is in place to uphold the image of the brand / product / service / licensor, and therefore sustain customer confidence and satisfaction.

Franchising In Croatia

Franchising is the licensing out of a business name, product, technique, philosophy, trademark, etc, for a percentage of the income. Instead of setting up new outlets as part of your expansion, you license your existing business blueprint out to franchisees who then set up and manage it for you.

The benefits of franchising your business in Croatia include: more freedom, as the franchisee takes on major responsibilities; minimal expense; lower cost and higher profits; potential for fast growth; brand building.

Disadvantages of franchising a business in Croatia: although few, rely predominantly on your franchisees. They include: poor quality franchisees; franchisees not declaring all income; poor performance.

The doors are open for franchising in Croatia. However, the franchising formula is yet to become well-known and widely used business concept in the country. Popularization and promotion of franchising in Croatia with visible and tangible results is ongoing. A company expanding a business in Croatia may take advantage of the current condition of franchising in Croatia. The legal framework, with the candidature to the accession to the European Union, has been harmonised.