A foreign natural or legal person in Croatia must have an OIB if they are registered in official records of persons and property in the Republic of Croatia and become a taxpayer in the Republic of Croatia according to a special regulation. This includes entry in the land register, opening a bank account or establishing a company, as well as entry in the court register of the commercial court (director, member of the company). The OIB is issued by the local tax administration. Your presence is not required to obtain an OIB; a lawyer can obtain it on your behalf with a power of attorney before the sale. You can read more about this at the following link:

http://www.porezna-uprava.hr/en/Pages/PIN.aspx

All citizens and legal entities from EU countries, as well as citizens of the Republic of Iceland, the Principality of Liechtenstein, and the Kingdom of Norway, can buy and own real estate in Croatia without restrictions, provided that the property is located within the boundaries of a construction area in accordance with spatial planning documentation.

Third-country nationals (countries outside the EU and outside the Republic of Iceland, the Principality of Liechtenstein, the Kingdom of Norway) can buy real estate under the same conditions as EU citizens, but with the condition that they first obtain the consent of the Ministry of Justice and Administration for the acquisition of a specific property. The Ministry will issue consent to citizens of countries with which there is reciprocity for the acquisition of ownership rights to real estate in the Republic of Croatia, and you can check the updated list of countries with which there is reciprocity at the following link:

https://mpu.gov.hr/information-on-reciprocity-in-the-acquisition-of-ownership-rights-in-real-estate-between-the-republic-of-croatia-and-countries-other-than-eu-member-states-republic-of-iceland-principality-of-liechtenstein-kingdom-of-norway-or-swiss-confederation-25361/25361

Yes. A sales contract can be concluded from abroad.

Notaries are obliged to certify the seller's signature on the sales contract, but there is no legal obligation to certify the buyer's signature. The buyer is only obliged to sign the sales contract himself and then can send it by registered mail to Croatia (to a lawyer hired by the buyer or to our agency). After the signed sales contract arrives in Croatia, we will arrange for the seller to sign the contract before a notary, whereby the contract is concluded and fully legally valid. In addition, a lawyer can sign the contract in your name and for your account on the basis of a power of attorney.

Even when the seller is abroad, it is possible to conclude a contract 'remotely'. In this case, the seller must certify his signature on the sales contract in the country where he is located, together with the corresponding stamp called an apostille (only in cases where an apostille is necessary - depending on the country in which the contract is certified).

Find more information about the apostille at the following link: https://en.wikipedia.org/wiki/Apostille_Convention

The document must then be sent by registered mail to Croatia, and a certified court interpreter must translate it into Croatian before it can be used as a legal document for concluding the sale.

No. To be sure that the ownership relations of the property are in order, i.e., that the seller is also the real owner of the property and that there are no encumbrances or other rights of third parties on the property, a lawyer with the necessary knowledge should perform a due diligence of the ownership relations of the property. During this analysis, it is necessary to examine not only the current land registry extracts but also the historical land registry extracts as well as the entire documentation on the transfer of rights in the land registers.

Namely, in the 1990s in Croatia, the conversion of so-called 'social' ownership into private ownership was carried out, and a series of regulations were passed by which certain persons, such as the Republic of Croatia, acquired ownership rights. Therefore, in practice, we have encountered cases where one person was listed as the owner in the current land register extract, while the real (extra-judicial) owner was a third person. In addition, in the last 10 years or so, land registers in Croatia have been transcribed from manually kept to digital land registers. During the transcription, there is a risk that the court will erase some rights of third parties by mistake without any basis (e.g., easement, mortgage, etc.). In this case, the holder of the right that was erased can obtain a re-registration of that right in the land register through court proceedings.

In Croatia, the protection of trust applies to the majority of real estate. This means that it is presumed that the land register truly and completely reflects the factual and legal state of the property, i.e., that what is registered in the land register exists and that what is not registered in the land register does not exist. However, the basic prerequisite for the application of the principle of protection of trust in land registers is that the acquirer acted in good faith, i.e., that at the time of concluding the sales contract and at the time he requested the registration of the registered right, he did not know and, given the circumstances, had no reason to suspect that what was registered in the land registers was not complete or that it was different from the extra-judicial state. Since the land registers are public, anyone can inspect them and the entire documentation. Therefore, if a review of historical extracts from the land register and the documentation attached to the land registers may lead to the suspicion that what is registered in the land registers is not complete or that it is different from the extra-judicial state (e.g., that the person registered as the owner is not the owner of the property or that an encumbrance has been incorrectly erased from the property), then the buyer cannot invoke trust in the land registers.

Given the above, and in order to eliminate any risks during the sale, before concluding a preliminary contract/sales contract for real estate, we advise the buyer to hire a lawyer who will perform a due diligence of the property. Our agency cooperates with excellent lawyers who are specialized in real estate law and land registers and have extensive many years of experience in this, and we can confidently recommend them. These lawyers provide their services, in addition to Croatian, in English and German and prepare all documentation (including a preliminary contract/sales contract for real estate) in Croatian, and at your request, in German or English.

The services included in the lawyer's fee depend on the agreement between you and the individual lawyer. The fee of a lawyer trusted by our agency includes the following services:

– due diligence of the land registry status of the property,

– obtaining confirmation that the property is located within a construction area (which is a prerequisite for foreign buyers who are citizens of EU member states to acquire the property),

– obtaining a personal identification number (OIB),

– consulting within the scope of the sale,

– preparation of a bilingual (Croatian/German or Croatian/English) preliminary contract/sales contract,

– registration/pre-registration/enrollment of ownership rights in the land registers,

– management and coordination of the entire sales procedure.

Yes. Lawyers and banks use special purpose accounts - 'escrow' accounts, while notaries have trust accounts. If necessary, payments can be made to the lawyer's 'escrow' account. The role of the 'escrow' account is protection.

If you are buying real estate, the 'escrow' account represents security that the purchase price will not be paid to the seller until the buyer fulfills all the obligations provided for in the sales contract. If you are the seller, you are protected that the property you are selling will not be transferred to another's ownership until you are paid the money determined by the sales contract. Thanks to the 'escrow' account, you are protected in whatever role you are in. Feel free to contact us for more information on this issue. However, we emphasize that the use of an 'escrow' account is associated with additional costs, and the aforementioned security can largely be achieved with a well-drafted sales contract in which the transaction structure is adapted to each specific case. See the answer to question number 6.

In principle, in Croatia there is income tax on the alienation of real estate, which is paid by the seller, and it is calculated in cases where the real estate is sold within two years from the date of its acquisition. The basis for calculating the profit tax is the difference between the market value of the real estate (selling) and the purchase price of the real estate, and the tax is calculated at a rate of 20%. The tax is not paid if the real estate was used for housing by the taxpayer or dependent members of his immediate family.

If the real estate is sold after the expiration of two years from the date of acquisition of the real estate, no income tax is paid on the alienation of real estate. Also, in the case where the owner permanently resides (has a registered residence) in the property in question, the income tax on the alienation of real estate will not be applied even in the case of the sale of the real estate before the expiration of the two-year period.

Furthermore, income tax on the alienation of real estate is also calculated in cases where the seller alienates (i.e., sells) three or more real estates within five years.

Please note that different tax rules apply to legal entities selling real estate.

Contact us for more information and we will connect you with tax and accounting experts.

If the real estate is sold after the expiration of a two-year period from the date of the acquisition of the real estate, no income tax is paid from the sale of the real estate. There is no obligation to pay the mentioned tax if the taxpayer (buyer) or dependent members of their immediate family lived in the real estate even in the case the real estate is sold before the expiration of the two-year period. Furthermore, income tax from the sale of a real estate must also be paid if the seller alienates (that is, sells) three or more real estates within a period of five years.

Please note that different tax rules apply to legal entities when selling real estates.

Contact us for more information and we will bring you into contact with tax and accounting experts.

In Croatia, all holiday properties are subject to an annual tax on holiday homes. The amount of the tax is prescribed by the local self-government body and it can vary from 0.66 EUR to 2.00 EUR/m² per year, depending on the area where the property is located. The annual tax on holiday homes applies only to properties that are used as holiday homes. If the owner of the property has registered residence in that property, in that case the owner of the property will be exempt from paying this tax.

More about this: https://www.poreznauprava.hr/HR_porezni_sustav/Stranice/porez_kuce_za_odmor.aspx

Below are just some of the reasons to choose Regent d.o.o.:

• Regent is an agency specialized in the sale of real estate to international clients
• Regent can provide and ensure a comprehensive service in the process of buying and selling real estate, including legal services, financial consulting services, and all other services for which a need arises in the process of buying and selling real estate
• Regent is a licensed agency with extensive experience in real estate brokerage
• all our agents are experienced and professionally trained consultants for buying and selling real estate
• all our agents are Croatian citizens who, in addition to Croatian, are fluent in English, while some have knowledge of two or more foreign languages
• Regent has a rich offer of all types of real estate. We offer exclusive properties, luxury villas, traditional stone houses, building and agricultural land, high-quality modern apartments, as well as affordable properties along the entire coast
• sellers and buyers contact us because we are known for the efficient and fast sale of real estate
• we respond quickly and efficiently to all your inquiries, whether by e-mail, phone, or in person
• based on the many years of experience of our agents in this business, we will be happy to advise you professionally and guide you through all phases of the real estate sales process in Croatia.

• agency commission of 3% + VAT = 3.75% (min. 3,000.00 € + VAT)
• lawyer's fee from 0.5% to 1.5% (depending on the amount of the agreed purchase price of the property) + VAT = 0.63% to 1.88% (min. 2,000.00 € + VAT) plus smaller amounts of court fees
• real estate transfer tax = 3% (one-time payment)
• annual tax on holiday homes in the amount of 0.66 EUR to 2.00 EUR per m² of real estate, which is paid once a year
• notary costs for signature verification approx. 10.00 EUR, and if documentation is deposited with a notary approx. 133.00 EUR per document.

Annual tax on holiday homes in the amount of 0.66 EUR to 2.00 EUR per m² of real estate (depending on the location). In addition, there is a monthly utility fee, the amount of which depends on the local municipality, as well as the usual utilities that are paid according to consumption (water, electricity, etc.).

Example of approximate monthly amounts for a property of about 100 m²:

– Electricity ————————————————— 50 € to 100 €
– Water ————————————————— 20 € to 50 €
– Municipal waste collection and other local services ———— 15 €
– Internet and TV ————————————————— 30 €
– Annual property tax ————————————— max. 2 € / per m² (i.e., max. 200.00 € per year)

Currently, foreign citizens cannot buy agricultural land in the Republic of Croatia. However, if you want to buy agricultural land, you can establish a company in Croatia and buy the land through that company (the buyer of the agricultural land would be a company with its headquarters in Croatia).

We would like to point out that on June 23, 2023, the ban on the purchase of agricultural land by EU citizens expires. Namely, from that day on, citizens of EU member states will be able to buy agricultural land without any restrictions. The only restriction is that the Republic of Croatia will have the right of first refusal on larger areas of agricultural land, i.e., the land must first be offered to the Republic of Croatia. If the Republic of Croatia does not exercise its right of first refusal, the owner of the agricultural land will be able to sell it to both Croatian citizens and citizens of any EU member state.

If you decide to open a company, we can recommend our trusted lawyers who will prepare all the documentation and register the company with the competent commercial court. Your arrival in Croatia to open the company is not necessary, but your arrival will be necessary only to open the company's bank account (due to regulations on the prevention of money laundering and terrorist financing, most banks require a personal visit to the bank branch for identification).

Foreign citizens can currently buy agricultural land in Croatia only by establishing a limited liability company (d.o.o.). Opening a company in Croatia entails some additional and ongoing costs.

• The minimum share capital is 2,500.00 EUR, which can be used for the company's needs immediately after its establishment.
• Notary fees for establishment are about 600.00 - 800.00 EUR.
• Even an 'inactive' company must have an accountant. Fees for these services range from 100.00 Euros per month for inactive companies, to 300.00 Euros per month for companies that actually operate, i.e., perform some activity.
• There are also smaller monthly/quarterly fees that must be paid to the state.
• The monthly bank fee for maintaining a bank account is about 15.00 EUR.
• The profit tax for companies with annual revenues up to 7,500,000.00 kuna is 12%.
• The profit tax for companies with annual revenues above 7,500,000.00 kuna is 18%.
• The tax on withdrawing/paying out realized profits is 12%.

If you decide to open a company, we can recommend our trusted lawyers specialized in company law who will prepare all the documentation and register the company with the competent commercial court. If you need additional information on the topic of establishing and operating a company from a tax perspective, we can also recommend tax advisors and accounting experts.

No. Buying real estate in Croatia does not automatically mean obtaining a residence permit for foreign citizens.

You can find more information about residence permits for foreign citizens here: https://mup.gov.hr/stranci-333/333

Yes. Foreign citizens can also rent out their properties in Croatia, provided that they have previously obtained the necessary rental permit called 'categorization'. The rental permit is not transferable, so after buying the property you will have to request and obtain a permit in your name. Citizens from EU countries can rent out properties in their own name under the same conditions as Croatian citizens.

Citizens of the USA and other non-EU countries cannot obtain categorization in their own name. They have 3 options on how they can legally rent out their property in Croatia:

1. Citizens of non-EU countries can establish a company with its headquarters in Croatia and can decide to buy real estate through a (newly established) Croatian company registered for performing tourist activities. The categorization would then be obtained for the Croatian company, and the company would be obliged to pay all necessary taxes and other duties related to performing tourist activities.
2. They can decide to buy the property in their own name and then establish a company through which they would legally rent out their property - in the same way as under point 1)
3. After buying the property (whether the buyer will be a private or legal person), the owner of the property can conclude a rental agreement with a Croatian tourist agency. The tourist agency would in that case obtain categorization for the property in question in its own name, and the rental of the property would be done through the respective tourist agency.