We set out below a short summary of key changes introduced by the new Law.
Work and employment of foreigners
· The Law ceases to recognise the terms “work permit” and “business permit” for a foreign individual who intends to work in Croatia, and introduces stay and work permit within the annual quota and outside the annual quota, which simultaneously represents a work permit and a temporary residence permit.
· Certain categories of foreigners would still be able to work in the Republic of Croatia based on a work registration certificate, depending on the category for up to 30, 60, or 90 days per year.
· The Law abolished the category of foreigners who may work in the Republic of Croatia without a time limit provided a temporary residence permit has been obtained, if they will stay in Croatia for longer than 90 days. More precisely, such foreigners would, in principle, be able to work in Croatia for up to 90 days after which they would be required to obtain a stay and work permit or would be required to obtain a stay and work permit from the beginning of their work in Croatia.
· The Law allows foreigners who are either owners or working in companies that are holders of investment incentives measures, a more simple procedure to regulate their stay and work permit.
A stay and work permit for key personnel in a company may be granted to a foreign individual who, in addition to the general requirements, meets the following criteria:
1. performs key activities in a company which is the holder of investment incentives measures in accordance with specific regulations, or the foreigner holds an ownership share in such a company of at least 51%, or
2. performs work or carries out projects in the Republic of Croatia pursuant to international treaties on professional and technical assistance, which have been concluded between the Republic of Croatia and the European Union, other countries or with an international organization.
· Furthermore, the conditions for obtaining a stay and work permit for foreigners holding key positions in companies have been amended.
Specifically, in order to obtain a stay and work permit, foreigners, in addition to the general requirements, should also meet the following criteria:
o the value of the share capital of the company, that is, the assets of a general partnership or public trading companies, exceeds the amount of HRK 100,000.00;
o at least 3 Croatian nationals are employed in the company, branch office or representative office of a foreign company on positions other than the position of procurist, member of the management board or member of the supervisory board; and
o the foreigner’s gross salary amounts to at least the average gross salary in the Republic of Croatia for the previous year according to the official statistics.
· If more than one foreigner is performing key activities for the same company, the stay and work permits may be issued provided that:
o the value of share capital of the company, that is, the assets of a general partnership or public trading company, exceeds the amount of HRK 100,000.00;
o for each foreigner employed, at least 5 Croatian nationals are employed on work positions other than the position of procurist, member of the management board or member of the supervisory board; and
o the foreigners’ gross salary amounts to at least the average gross salary paid in the Republic of Croatia in the previous year according to the official statistics.
Nationals of the European Union are not obligated to meet the criteria listed above.
· Finally, the Law prescribes the requirement for police stations to ensure the delivery of all issued stay and work permits and work registration certificates to employers and Tax Authorities’ regional or local offices.
All permits issued in accordance with the currently valid Law on Foreigners remain effective until the expiration date for which they have been issued.
KPMG Croatia d.o.o.
Eurotower, Ivana Lučića 2a/17
10000 Zagreb, Croatia
Tel: +385 1 5390 006
Fax: +385 1 5390 111