Doing business in Croatia is always tricky, it’s a long road often filled with an insane amount of paperwork and this bizarre requirement for you to physically go to multiple locations in order to get things done. Let’s not forget the dreaded and archaic stamps, and the typical utter lack of desire on the faces of those apparently employed to help you. Is all that about to change with the country’s gradual formation into a digital Croatia?
As Marija Brnic/Poslovni Dnevnik writes on the 29th of November, 2018, as of April the 1st next year, all those who want to start their own business in Croatia would be able to complete the process for registration and start doing business within just 48 hours. No, it isn’t just an April Fools’ trick.
A new business start-up system called Start will enable those who want to start their own businesses in the country to do just that, in a move which has been a deeply desired pipe dream up until now. With digital Croatia now finally on the horizon, getting your business off the ground is about to get a lot easier.
The service, which has been prepared by the Finance Agency (FINA), was finally given the green light following a government decision since last week. By the end of March next year, this system will be available to all those operating from within Croatia who own companies, including d.o.o and j.d.o.o’s, while those abroad will see the service enabled for them by the end of 2019.
While start is an incredibly welcome news, it isn’t the only player on the field, since 2005, Hitro.hr has been active, and is also a service from Fina. However, the Ministry of Economy, which is overseeing this project, clarified that there are some big differences between Hitro.hr and Start.
“Hitro.hr allows only the establishment of an Association or a company (obrt), or entry into the court or company register, while Start also enables the start-up of a business, which includes registration with the court and the company register, as well as entry into the register of business entities at the Central Bureau of Statistics, the filing of the beginning of the business and the beginning of the insurance with the Croatian Health Insurance Institute and the Croatian Pension Insurance Institute,the registration of the taxpayers’ register with the Tax Administration, registration in the VAT system, the opening of a bank account, and the electronic payment of any fees incurred during the process of all this,” they explained from the Ministry of the Economy.
The beginnings of a digital Croatia will see that in the future, company owners will not physically have to go to all of the mentioned institutions as they currently need to, and all of the applications involved in this paperwork ridden and tiresome process will be able to be exported in one place by filling out a single digital form.
The establishment of this system amounts to 5 million kuna, as foreseen in the Ministry of Economy’s budget, and in a year’s time, it intends to back the project up with yet another half a million kuna.
Start requires automated communication and the exchange of data and documents between the ministries of economy, justice, finance, the tax administration, DZS, HZMO, HZZO, and credit institutions. Hitro.hr will not be harmed or otherwise threatened by the more than welcome launch of the Start system, as was confirmed by the Ministry of Economy, this service fulfills the objectives for which it was founded – better informing future entrepreneurs and providing better communication between people and the state administration, as well as offering far more ease and saving precious time when establishing a company.
“Hitro.hr will continue to provide services to users who need that kind of help – information ”at the counter” and help with name reservations, or just the mere establishment of a company,” the Ministry pointed out.
Fina added that if a user wants to start a business from their own home, they will beed to use Start, and if they want to start a business by going to the Hitro.hr counter and taking all the other steps individually, they will still have that option as well. Therefore, for those who prefer the “classic” Croatian way of starting a business, characterised by their physical arrival at the dreaded counter, Fina intends to keep the Hitro.hr offices open.
However, due to the ever-increasing trend in the digitisation of public services and the inclusion of newer generations in their use, Fina has also estimated that the percentage of those who prefer to use Start will grow year-by-year. Since the establishment of Hitro.hr, a large number of entrepreneurs have used it during the first step, especially when establishing a j.d.o.o., where every other such form of company since the service’s introduction back in 2012, was established through Hitro.hr.
Altogether, Hitro has helped to create more than 57,000 new companies, of which some 32,000 are d.o.o.’s and 25,000 are j.d.o.o.’s. Obrt owners, however, have rarely used this registration service, since their start-up process is different, and since 2015, e-Obrt services have been introduced, which has completely taken over the registration processes of such companies.
The introduction of the Start system will not automatically open new jobs according to Fina’s information. Currently, the offices of Hitro.hr are located in 61 Fina offices throughout Croatia, and information and support services are provided to them by Fina’s existing employees, while as far as Start is concerned, as an online service, part of Hitro.hr staff will be engaged in staffing it via Fina.
Among the recommendations the World Bank gave to Croatia, the pressing need to create a more digital Croatia in order to improve the entrepreneurial climate was among the most outstanding, and it is precisely the creation of a unique online procedure, as opposed to the archaic dragging of one feet to numerous different offices in which processes are slow, confusing and often delayed, that will help paint a better picture of doing business in Croatia the most.
Interesting data from the analysis of Doing Business shows that starting up a business in Croatia is the easiest in Split, and there in the popular Dalmatian city are the largest number of Hitro.hr users. Out of five large Croatian cities, the worst results have rather surprisingly been recorded in Zagreb. According to Doing Business’s analysis, more than half of Split’s newly established companies use Hitro.hr, and for starting a business there, it is necessary to complete six individual procedures and the process typically lasts six days on average.
In Zagreb things appear bizarrely different, in the capital, a would-be entrepreneur has to complete eight different procedures and it takes a ridiculous average of three weeks for all the paperwork to be dealt with.
The welcome electronic changes that April the 1st, 2019, is set to bring owing to Start will require these procedures to be reduced in all cities across Croatia to just one step, and thanks to digital Croatia’s roots finally being planted, the duration of this previously insanely time consuming process will go on for an absolute maximum of two days.