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INFORMATION ABOUT ACQUIRING REAL ESTATE PROPERTY IN THE REPUBLIC OF CROATIA FOR FOREIGN CITIZENS AND ENTERPRISES
According to the Law of property and other real estate rights - Article 356 paragraph 2 (Official Gazette of the Republic of Croatia Nos. 91/96, 68/98, 13 7/99, 22/00 and 73/00), foreign citizens and enterprises, who want to become owners of real estate in the Republic of Croatia need to obtain previous consent from the Minister of Foreign Affairs of the Republic of Croatia. In order to apply for consent, applicants must submit a request written in Croatian, either personally or through an attorney, to the Ministry of Foreign Affairs, Consular Department, Meduliceva 34, 10.000 Zagreb, Croatia. In addition, applicants must enclose the following with the application:
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basis on which the property is acquired (contract of purchasing the property, gift contract etc.), - original or duly legalized copy;
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proof of title (land registry certificate etc.) - original not older than six months,
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certificate issued by authorized authorities for urban planning which proves that the particular real estate is located within the zone in which construction is allowed, according to the zoning plan, - original not older than six months;
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proof of buyer's citizenship (legalized copy of passport, for instance), - original or duly legalized copy;
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power of attorney for the attorney - original or duly legalized copy;
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copy of each document filed with the request.
The applicant shall deliver other necessary documents on request. The fees for the application includes HRK 20.00 application fee pursuant to Article 1 of the Croatian Law on Administrative Fees (Official Gazette of the Republic of Croatia Nos. 8/96, 77/96-Decree, 131/97, 68/98, 66/99-Decree, 145/99-Decree, 30/00-Constitutional Court Decision, 23/02 and 91/02); plus, pursuant to Article 2 of the above mentioned law, HRK 50.00 per applicant for the decision. If the fee exceeds HRK 100.00, it shall be payable directly to the national budget of the Republic of Croatia (account No. 100 1005-1863000160, reference No. 24, first adjacent field No. 5002, plus first and last names and address of the applicant, pursuant to Article 13 of the above-mentioned law. If the fee is paid from abroad, according to Article 15 of the above-mentioned law, the payment shall be effected in foreign currency at the mean exchange rate determined by the Central Bank of Croatia. After the application has been completed and submitted, it shall be referred for regular procedure to the Ministry of Foreign Affairs that shall decide on each application individually. Pursuant to Article 357 paragraph 2 of the above-mentioned law, the administrative procedure requires previous opinion from the Ministry of Justice of the Republic of Croatia, particularly focusing on the following:
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Foreign citizens and enterprises cannot acquire ownership of agricultural land, pursuant to Article 1 paragraph 3 of the Law on Agricultural Land (Official Gazette of the Republic of Croatia Nos. 66/01 and 87/02);
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Foreign citizens and enterprises cannot acquire ownership of forests and forest land, pursuant to Article 1 paragraph 32 of the Law on Forests (Official Gazette of the Republic of Croatia Nos. 54/83, 32/87, 47/89, 41/90, 52/90 - final version, 51/91, 61/91, 26/93, 76/93, 29/94, 8/00 and 13/02);
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If the object of acquisition is a protected cultural monument, it shall be offered to the authorities first (Republic of Croatia, Municipality, City, County), and only if they decline to exercise their pre-emptive right may the property be offered to foreign citizens and enterprises, pursuant to Article 37 paragraph 1 of the Law on Protecting and Preserving Cultural Monuments (Official Gazette of the Republic of Croatia No. 66/99)
In deciding on each individual application, the Ministry of Foreign Affairs shall determine whether there is reciprocity between the Republic of Croatia and the applicant's state in real property matters. The Ministry of Foreign Affairs collects and examines foreign laws concerning reciprocity with respect to foreign nationals. Interested parties can contact the Ministry of Foreign Affairs for information on reciprocity between the Republic of Croatia and other states. For any additional information regarding reciprocity between the Republic of Croatia and other states please contact the Ministry of Foreign Affairs, Consular Department.
Acquisition of Immovable Property in Croatia - Incorporation of a Croatian Company Information on Legal Requirements and Costs Related to Acquisition of Immovables in Croatia
1. When a natural (or legal) foreign person purchases immovables in Croatia - A foreign person (either natural or legal) may acquire the ownership of an immovable property in Croatia only - if the Croatian citizens may acquire ownership in that person's homeland (mutuality), and - subject prior approval of the Croatian Ministry of Foreign Affairs. Before the approval of the Ministry of Foreign Affairs is given, a positive opinion of the Croatian Ministry of Justice has to be obtained. Following documentation has to be presented to both Ministries: - Sale and Purchase Contract (which, until we get the approval is not legally valid), - Extract from the Land Register for the property in question, - Evidence of Citizenship for both the Buyer and the Seller(s), - Evidence that the land is not for agricultural use If the land is for agricultural use, it cannot be acquired by a foreign person.
2. Running business activities in Croatia - A Croatian company may acquire immovable property in Croatia without limitation, not withstanding the origin of the company's capital (i.e. even if it is fully owned by foreign legal or natural persons). The exception is the land for agricultural use, where the companies with foreign capital may not acquire ownership. Foreign entrepreneur can run business activities in Croatiaeither by establishing a registered branch office of a foreign company, or by incorporation or investment in an existing Croatian company. 3. Incorporation of a Croatian company (CC) There are four types of company, but we shall mention only the two ones with the limited liability (company limited by shares) and the company with limited liability, leaving the two others (partnership and limited partnership) out of the consideration.
a. Company limited by shares, is a company with the strictest legal regime. It is a company the basic capital of which is divided into shares, which are, more or less available for public trade.
b. Company with limited liability Members' liability is limited to the investment quote in the company's capital, which is stated in the Act of Incorporation, but the company is not entitled to issue shares. The company may be incorporated by and can have only one or more members. Once all documents are prepared, it may take approximately one month to complete the registration. Since the Act of Incorporation has to be a Croatian notarial deed, the Buyer has to come to Croatia to sign it before a Croatian Notary Public in the presence of a sworn Court interpreter. If the Buyer does not want to travel to Croatia, he may execute a special power of attorney (specifying all details of the company such as name, scope, capital etc.) authorising an attorney to execute the Act of Incorporation in Croatia on his behalf. The special POA has to be notarised and apostilled in the Country of issue and translated into Croatian. If a corporation is the founder of CC, then an original extract from the registry of the domicile country has to be provided, certifying the authority of the corporation's representative to sign the POA and other corporate papers for CC. To draft the special power of attorney and prepare the incorporation the following is needed: - Proposals for the name of the Company. The name needs to be in Croatian or ancient languages. The use of the incorporator's name is permitted. - Address of the Company. - Names, address, passport nos. of all the incorporators (I have your name and passport no, but not the address, and I understood that you would not be the sole incorporator). - Name, address, ID no. of the director of the Company (a foreign person may be the director, and you can authorise another person with the domicile in Croatia to effect the transactions on behalf of the Company, which have to be done on day by day basis). - activity of the Company - capital amount .
USEFUL INFORMATION FROM THE GOVERNMENT OF THE REPUBLIC OF CROATIA
You can visit HITRO.HR which is a service of the Government of the Republic of Croatia intended for quick communication of citizens and business subjects with the state administration. HITRO.HR will enable the citizens and entrepreneurs to have quicker, simpler access to information and services in one location. The link to their website is:
http://www.hitro.hr/index_en.htm
Here are some interesting documents that you can download:
Guide to Establishment of a Limited Liability Company in PDF.
Download PDF file to your computer (158 kB)
Workflow for Establishment of a Limited Liability Company.
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