Foreign companies and sole traders may conduct business activities in Croatia by setting up a branch office. The establishing and operation of branch offices owned by foreign companies are governed by the same regulations that apply to the establishing of branch offices by domestic companies.
A branch office is not a legal entity. Since they are not legal entities, branch offices may not independently hold legal rights and obligations in business transactions and legal affairs. The liabilities and rights stemming from its operation do not belong to the branch office but to the founder. In case of dispute with third parties, the branch office is not a party to, but the company or sole trader that owns the branch office.
The branch office operates under its own name. The name should also indicate registered office of the branch and of the founder.
To register a branch office, it is necessary to apply for registration and enclose the following original documents and certified translations in Croatian language:
- excerpt from the court register (in which the legal form and the date of establishing of the foreign founder of the branch office is evident)
- information on the persons authorized for representation and scope of their powers
- founder’s decision on the establishment of the branch
- certified transcript of the statement of establishment in accordance with the legislation of the country where the founder has its registered office (articles of association or statute of the founder)
- founder’s certified abridged financial report for the previous year.
The register court may approve entry of a branch office if the founder has proved that it
- has been legally established
- has a registered office in another country (EU/EEA and third countries)
- that persons from Croatia are allowed to establish branch offices in the founder’s country under the same conditions as those that apply to the founder in Croatia.
The founder is required to report all data changes to the court register.
In the case that the same founder intends to establish several branch offices, the establishment procedure is carried out separately for each branch office. The entry application should specify the main branch office, while the others have to be marked with ordinal numbers. The founder has to authorize for representation one or more individuals in each branch office, with the possibility of authorizing the same person for several branch offices.