A liaison office in Croatia can be set up by foreign companies which are not resident in this country in order to promote their commercial interests. The Trade Act in Croatia stipulates that foreign persons carrying out business activities may set up a liaison office in Croatia for the purposes of representation, promotion, market research and dissemination. Our specialists in company formation in Croatia can give you detailed information about the procedure of establishing a liaison office.
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Activities performed by a liaison office in Croatia
A liaison office in Croatia is subordinated and dependent upon the foreign company which established it and it cannot develop its own activity. The liaison office is not a legal entity in Croatia and its activities are completed upon the founder’s request. It acts as an intermediary between the foreign company and its business partners in Croatia, supporting the activities of the parent company. These activities may include the following:
- promotional activities,
- providing information for scientific research for foreign company.
- creating and maintaining collaborators with local agents or contractors.
Most businessmen choose to establish a branch instead of a liaison office due to its legal status and the fact that it cannot generate any kind of income. Our agents in company registration in Croatia can advise you on the types of activities to undertake if you want to set up a liaison office in this country.
How to register a liaison office in Croatia
If you want to promote the business interests of your company in Croatia and establish a liaison office, there are several requirements to consider. A liaison office in Croatia has to be registered with the Ministry of Economy. The documents needed for the registration of a liaison office in Croatia include the following:
- an application form – it contains the name of the parent company, the address of the liaison office, information about the person in charge of the liaison office (his/her name, passport number or citizen ID number);
- the certificate of incorporation of the company issued by the competent authorities in the company’s country of origin;
- the decision of establishing a liaison office in Croatia and the appointment of the person in charge of the liaison office management;
- brief description of the activities undertaken by the liaison office;
- proof of payment of the administrative fee of registering a liaison office.
Local and foreign entrepreneurs have at their fingertips various options for opening a company. But it is important that, after choosing the right structure, the services offered by our accountants in Croatia should also be considered. Thus, you will ensure that you have the necessary support regarding important procedures and tasks, such as payroll, bookkeeping, or submission of annual financial statements.
What are the functions of a liaison office?
As mentioned earlier, a liaison office is a bridge between the parent company and potential clients in Croatia. The promotional and advertising activities of a liaison office in Croatia are the only operations that can be established and developed. There are no financial operations and there is no possibility of signing contracts or issuing invoices when having a liaison office in Croatia. A liaison office is a non-profit entity meant for marketing purposes and related aspects, so foreign entrepreneurs wanting to test a market and make business connections should direct their attention to this kind of structure. The registration of a liaison office in Croatia is not a complicated process, however, if you would like to start in a professional manner, it is recommended to ask for the complete support of our company formation specialists in Croatia and find out more about the guidance they can provide.
The main attributes of a liaison office in Croatia
The following characteristics describe in large lines the position of a liaison office in Croatia and the main attributes that respect the international laws referring to this kind of structure:
- There are no financial operations connected to a liaison office in Croatia.
- The only activities of a liaison office in Croatia strictly refer to the promotion, advertising, and marketing strategies of a foreign company.
- A liaison office in Croatia must have a registered agent with residency in this country.
- A liaison office cannot sign contracts with potential partners and cannot issue invoices.
- Employees can be hired for a liaison office in Croatia, in complete communication with the overseas company.
One of our company formation representatives in Croatia can help you establish a liaison office in this country and can also act as a legal representative of this structure. All the aspects and formalities connected to a liaison office in Croatia can be handled by one of our specialists in company formation in Croatia.
What kind of companies can open liaison offices in Croatia?
There is are no restrictions when it comes to opening a liaison office in Croatia, as long as the foreign entrepreneurs respect the applicable legislation. For example, a trucking company from abroad can decide on opening a liaison office in Croatia, if the owner of such a firm wants to verify the market and get in touch with potential customers. The same thing is available for travel agencies from abroad interested in the business market in Croatia and the development possibilities available in this country. A company dealing with technical equipment might be interested in placing the operations in Croatia but with a complete analysis in the first place. The promotion and marketing activities of this kind of company can prove quite necessary before running any type of business in this field. It would be a lot easier to know the perspective of a market, plus the possible risks, with the help of a liaison office instead of establishing a company in the first place. A liaison office provides a good level of liberty and movement on the market, letting foreign entrepreneurs decide the business direction after preliminary analysis. Also, international companies can benefit from varied promotional activities that can be developed in Croatia with the help of a liaison office.
Is a liaison office a good business idea in Croatia?
Yes, from an entrepreneurial point of view, a liaison office might represent the proper business tool that can help an investor develop in other markets too. Even if this is a non-profit entity that needs to respect a few guidelines in terms of promotion, advertising, and marketing, a liaison office can be a suitable start for your future business operations in Croatia. In terms of investments, Croatia is a preferred business destination that attracts numerous entrepreneurs each year. Sectors like tourism, manufacturing, engineering or agriculture can be quite appealing to investors in Croatia. You can also pay attention to the following facts and data about the economy and business in Croatia:
- around 12.3% of the total FDI stock for 2018 in Croatia came from Austrian investors;
- more than USD 32,884 million represented the total FDI stock for 2018 in Croatia;
- according to the 2020 Doing Business report provided by the World Bank, Croatia ranked 51st out of 190 economies in the world;
- Germany and the Netherlands are two important investors in Croatia;
If the liaison office in Croatia hires personnel, it acquires the statute of an employer and it has to register with the tax authorities and with health insurance and social insurance. Under certain conditions, the VAT incurred by a liaison office in Croatia can be eligible for a refund on behalf of the foreign company which established it.
Feel free to contact our representatives in company incorporation in Croatia if you need help registering a liaison office.