Setting a Company
Croatia Properties works in partnership with local lawyers who are experienced in establishing limited private entity's for individuals wishing to purchase property in Croatia via this route but we also advise whether this is the convenient route for you and your circumstances. This could be that you need to get the property registered in the Land Registry more quickly or that you need a quick registration in order to apply for planning permission.
By setting a company in Croatia for buying property you can also claim the VAT back but if you also establish a company, you will have a liability to make regular returns.
By setting a company you can claim VAT back but you will have a liability to make regular returns
You will need to contract an account in order to make those returns, which will cost a modest amount each time. The risk you run by no making the returns is of the company being closed with consequences for its assets like your property. Forming a company does not automatically register you for PDV (VAT) .You would need to register with the tax authorities for it and you will incur a liability for submitting regular returns. If you put yourself in the PDV regime, you'll be liable to charge PDV on all sales. This could have implications when you want to sell your property.
A Croatian lawyer will have to check that your choice of name is acceptable. Once the name is agreed, it will need to be registered with the Trade Court appropriate to the area you will operate in. The time for this varies from a few days to six weeks, depending on the court.
Your lawyer will also have to register your company with the tax office and get a statistical number and this is usually achieved with specific powers of attorney to save you from regularly having to go to Croatia. There is a minimum share capital of the equivalent of 20,000 kunas (about £1,800), although this can be recycled into your purchase.