Croatia

Shipowner Eligibility

It is not necessary that the shipowner be a Croatian citizen or legal entity registered in Croatia.
The Maritime Code distinguishes between compulsory and voluntary registration in the Croatian Register of Ships. Subject to compulsory registration in the Croatian Register of Ships is every ship which is wholly owned by a Croatian citizen domiciled in Croatia or by a legal entity seated in Croatia. On the other hand, a ship may be registered in Croatia if it meets one of the following conditions:
In case of a ship which is owned wholly or partially by a foreign entity or by a Croatian citizen domiciled outside Croatia, it may be registered in Croatia:
i) If the ship is operated by a company or a citizen seated in the Republic of Croatia; and
ii) If such registration is approved by the ship's actual owner.
In case of a ship which is owned wholly or partially by a foreign entity, it may be registered in Croatia:
i) If the Republic of Croatia has control over the ship in administrative, commercial, and technical
issues; and
ii) if such registration is approved by the Croatian Ministry of Maritime Affairs.
In case of a yacht which is owned wholly or partially by a foreign entity or by a Croatian national with no domicile in Croatia, it may be registered in Croatia if it spends most of the time in Croatian waters.

About the Flag

Located in southeastern Europe bordering the Adriatic Sea between Bosnia and Herzegovina and Slovenia, the Republic of Croatia was officially recognized by the international community on January 3, 1992 after the breakdown of the former Yugoslavia. Croatia is a member of United Nations and the IMO. The capital is Zagreb, and the principal language is Croatian. The government is a parliamentary democracy with the President as the Chief of State and the Prime Minister as the Head of Government. There is a bicameral Assembly (Sabor).

The chief exports of Croatia are machinery and transport equipment and chemicals. Major trading partners are the EC countries and Slovenia. The monetary unit is the kuna.

The law governing ship registrations in Croatia is the Maritime Code which fully implements all international maritime and labor legislation.

Companies for a specific purpose may be incorporated and may be used for any legal purpose. A company must have at least one director. Officers and directors may be of any nationality. A company must have a registered office in Croatia.

Company Formation

Company formation in Croatia is based on the activities necessary to form a new company in Croatia. These activities include drafting the articles of association, which can be signed through a power of attorney. Other documents are also required, such as the passport copies, the specimen signatures and the special forms from the registration office. Anyhow, it is important to keep in mind that all procedures for company formation in Croatia must be performed through a public notary. A registered office is also necessary for setting up a company in Croatia. It is also required to have a bank account and a local accountant for company formation in Croatia.

Types of Companies
Drustvo s OgranicenomOdgovornoscu (D.O.O. - limited liability company) - This structure is designated for small companies, with at least one shareholder and one director and a minimum share capital of 20,000 HRK or 2,500 EUR. The amount must be paid up in full prior to company registration in Croatia.

DionickoDrustvo (D.D. - joint stock company) - At least one shareholder can incorporate this business structure, provided that it has a registered local office and a minimum share capital of 200,000 HRK or 25,000 EUR.

Croatian Branch, Subsidiary or Representative Office - branch entities can be set up as either separate entities in Croatia or extensions of the parent company in Croatia.

Incorporation Procedure
Company formation in Croatia can be performed by anyone regardless of their citizenship, no matter if it is an individual or a legal entity. The only condition is not to have had problems with the Croatian legal or tax system. It is mandatory under the Croatian law for all types of company formation in Croatia to have a registered address. Company registration in Croatia can be performed by the shareholder or a legal representative appointed through power of attorney.

After the certificate is issued for the company registration in Croatia, it is important to register for VAT if the company is subject to VAT in Croatia. An application must be submitted with the Croatian Tax Authorities, together with a copy of the founder's ID or passport. The company is eventually issued a VAT number.

When setting up a company in Croatia, the main procedure is company registration in Croatia. After company registration in Croatia is completed, the business can begin its activity. For that matter, employees might be needed and as a consequence the employer must begin the search for the best candidates. One can choose to use recruitment agencies or job websites in order to find qualified personnel. After deciding who the best employees are, the company must be aware of the fact that the payment has to be made accordingly to the country's standards. That means that the salaries must be around the average monthly wage for a Croatian employee of 700 EUR.

(http://www.companyformationcroatia.com)

Taxation

As a matter of principle, individuals in Croatia may be subject to income tax, while companies are subject to profit tax. The rate of income tax is 15%, 25% and/or 35%, as the case may be. The rate of profit tax is 20%, with a further 15% taxable on actual receipt of the profit. Companies are also subject to a lump sum company tax, the amount of which varies from region to region, but is never of substantial proportions. There are no differences in taxation for shipowners. There is also a value added tax at the rate of 22%. Ownership of securities and the moneys earned from transactions with securities are freely disposable and transferable and are subject to no tax duty. This applies both to domestic and foreign shareholders/members. On the other hand, foreign investors are, under certain circumstances, free from customs duties in importing goods which serve as their investment in a Croatian company.

Croatia has entered into double taxation agreements with Albania, Austria, Belgium, Bulgaria, Canada, China, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Macedonia, Malta, The Netherlands, Norway, Poland, Romania, Russian Federation, Slovakia, South Africa, Sweden, Switzerland, Turkey, Ukraine and the United Kingdom.

Registration and Documentation

Entries in the Ship Register are divided into three categories: Folio A contains particulars for identification of the ship and technical specifications; Folio B contains information on the identity of the shipowner and ship operator; and Folio C contains real rights on the ship, demise charter(s), time-charter(s), the right(s) of first purchase, prohibition(s) as to the right of disposal etc.

Permanent registrations are effected only through the Harbor Master's Offices throughout the Republic of Croatia, but provisional registrations may be handled by Consuls competent for the location of the vessel. The duration of a regular Certificate of Registry is unlimited. The duration of a provisional Certificate of Registry is maximum one year. As a matter of general principle, the documents on the basis of which registration is sought must not have obvious faults which would affect their authenticity. The documents that serve for entries in Folios B and C must be submitted in original, while all other documents may be submitted in certified copies. If originals are not readily available because they are held by a court or other official body, an applicant is allowed to submit copies certified by the court/official body in question.

If the applicant has not submitted original documents where required by law, and the Registrar concludes that registration would be permissible if the documents were submitted in original, the Registrar will enter a caveat of the application, "pending originals", and order that the applicant submit the originals within a given period of time.

If the originals are not submitted on time, the Registrar will dismiss the application and delete the caveat. Exceptionally, if the Registrar deems it justified in the circumstances, it will grant the required registration of a ship in the Croatian Register on the basis of a foreign Deletion Certificate sent by telefax, provided that the applicant submit the original within a given period of time.

Entries in the Register, with the exception of entries in Folio A, may be done solely on the basis of valid official deeds or notarized private deeds. Official deeds issued by foreign official bodies should be legalized. If an entry is sought on the basis of a judgment issued out of a foreign court such judgment must have been recognized in the Republic of Croatia.

With regard to private deeds, notarization is required for the signature of the person whose right is being transferred, charged or restricted by way of such deed. If such person is represented by an attorney, the private deed should be accompanied by a power of attorney issued specifically for that purpose, which must not be more that one year old. Any document written in a foreign language should be accompanied by a certified transcript in the Croatian language. If the applicant has not submitted certified transcripts where required by law, and the registrar concludes that registration would be permissible if the documents were accompanied by such transcripts, the Registrar will enter a caveat of the application, "pending transcripts", and order that the applicant submit the transcripts within a given period of time. If the transcripts are not submitted on time, the Registrar will dismiss the application and delete the caveat.
The documents necessary for permanent registration of a vessel are as follows:
- Proof of ownership of the ship (Bill of Sale)
- Documents proving the Croatian nationality of the owner or documents proving that the conditions for voluntary registration are satisfied
- Decision on the ship's name and home port, issued by the Ministry of Maritime Affairs and Transportation