Property Investment Croatia | Two roads to investing

Posted on July 29, 2012

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There are two separate roads to making a real estate investment in Croatia. One is to buy as a private citizen and the other is to buy as a business company. Both ways have their advantages and disadvantages, which will be explained in this text.

If you go for private ownership, you must first be aware that EU citizens have the same rights as Croatians, while non-EU citizens have to come from a country that has a reciprocity contract with Croatia and must also get an approval from the Croatian Ministry, which means the whole process can last for a couple of months, depending on the circumstances. Private ownership has it’s advantages in the fact that once you buy your property in Croatia, you no longer have any more problems with book keeping, company accounts, taxes, and VAT returns. On the other hand, you can not get your VAT back after buying furniture or anything else you need to make your real estate representable, and you also need to wait a couple of months to get the Ministry approval, although you will not be rejected and you are practically the owner of your property.

Another way to buy real estate in Croatia is to open your own company, which is especially useful if you are not a EU citizen. All you need is the name of your company, an accountant, a bank account with an initial deposit of 20,000 Kunas, a company stamp and a contract with your company’s function that has to be notarized in the public notary office. This can take up to 2 months and the best way to do this is to authorize a lawyer to do it instead of you. Advantages of investing in property through a company are the fact you don’t need to wait for a Ministry approval, you can claim your VAT return, when you decide to sell the property you actually transfer your company to a new owner and 5% land tax does not have to be paid and the last thing you should know and can be very profitable is the fact that as a company you can rent out the property and earn some money, which would not be possible for a private foreign citizen. The only bigger disadvantage of this way of buying property in Croatia is that you need an accountant for your company who will charge you a monthly fee of approximatly 100 Euros.

via Property Investment Croatia | TRASA Real Estate Croatia – Part 6.

Posted in: Croatia