Expand your organization into Croatia, even if you don’t have a Croatian entity
The European country of Croatia’s economy has experienced rapid growth in recent years, and the nation presents a great deal of potential for foreign businesses looking to invest and grow their presence there.
While Croatia is an excellent place to expand, the change in business practices and culture can be a shock to many organizations, and delays are commonplace. The language barrier is a common hurdle, but administrative procedures, cultural differences, and long waiting times can also hold businesses up and cause costs to get out of control.
At New Horizons, we provide a full range of outsourcing services to assist businesses with their Croatian expansion. Our employer of record, professional employer organization (PEO), and payroll services give you everything you need to build and expand your business in Croatia, even if you don’t have an in-country entity. Our in-house recruitment team can even find, recruit, and onboard your local workforce, as well as handling all ongoing HR administration.
New Horizons provides everything you need to expand into Croatia quickly and effectively while potentially saving you thousands in setup costs.
How can New Horizons help you expand into Croatia
New Horizons enables your business to expand its operations into Croatia, without having to set up a legal subsidiary.
Hiring in Croatia: Employment law overview
Employment contracts in Croatia
It is a legal requirement for employers in Croatia to provide new employees with a formal contract of employment with all relevant details of the employment agreement. This should be written in the local language of Croatian, with any references to compensation using the local currency of the Croatian kuna.
Working hours in Croatia
Standard working hours in Croatia are 40 hours per week, spread out over five days. Anything above this is classed as overtime, which needs to be paid at 150% of normal rates, and employees cannot work more than eight hours of overtime per week.
Public holidays in Croatia
There are several nationally celebrated public holidays in Croatia, for which most employees are given the day off:
Croatia vacation leave
Employers in Croatia must provide their employees with a minimum of 20 days of paid vacation leave every year. Additionally, employees are entitled to up to seven days of personal leave for things like a death in the family.
Croatia sick leave
Employees in Croatia can take up to 42 days of paid sick leave each year, with pay of at least 70% of normal salary.
Parental leave in Croatia
Female employees in Croatia are entitled to paid maternity leave. Generally, they can take up to 28 days of leave before the birth date, then a minimum of 70 days following it, or until the child is six months old. If the parents choose to, the father can take any unused days from the mother after the initial 70-day period.
The parents can also take 120 days each of parental leave after the child is six months old.
Terminations and severance in Croatia
Employment contracts in Croatia can be terminated if both the employer and employee agree, or if there is proper cause for termination. Employers must provide notice periods, the length of which depends on the length of service:
- Under one year of service = Two weeks of notice
- One year of service = One month of notice
- Two years of service = One and a half months
- Five years of service = Two months of notice
- Ten years of service = Two and a half months
- 20 years of service = Three months of notice
Some other factors, such as the age of the employee, can result in a longer mandatory notice period. Terminated employees may also be entitled to severance pay.
Taxation in Croatia
Employers in Croatia must pay into various social funds. For health insurance, they must pay 15% of employee salary, for unemployment they must pay 1.7%, and for accident insurance, they must pay 0.5%.
Employers do not have to pay these contributions for five years if they hire young people (under 30 years old).
Health coverage in Croatia
Healthcare is covered by the government and mandatory health insurance contributions, so private health insurance is not necessary. However, some employers may choose to offer it as part of their benefits packages.
Croatia compensations & benefits
Compensation laws in Croatia
The minimum wage in Croatia (as of January 2019) is 3,750 HRK per month.
Benefit management in Croatia
Setting up a Croatia benefits system for your workforce can be difficult as a foreign organization. With the language and cultural differences, and a complicated, unique collection of employment laws, running a comprehensive and compliant benefits system can be very time-consuming
At New Horizons, we specialize in establishing and running Croatian employee benefits systems. We’ll handle everything, using our extensive experience to ensure you are ready to commence operations in Croatia quickly and efficiently.