Advantages of obtaining a property in Croatia
Croatia's property market is well-established and has demonstrated a stable growth rate, complemented by a consistent influx of tourists for around five months per year. The country is set to become a part of the Eurozone in 2023 and has recently eliminated work permit quotas, making it an even more attractive destination for businesses and investors. With a stunning coastline stretching 1,777.3 km and 1,246 islands and islets encompassing a further 4,058 km, Croatia's Adriatic Sea offers a unique experience for visitors, including the opportunity to see dolphins and enjoy world-class diving. Given its appeal to European vacationers, many of whom hail from Germany, Austria, and Poland, Croatia is sure to remain a top choice for years to come.
Residence permits on the grounds of owning real estate
If you own a property in Croatia and complete the necessary paperwork for residence, you can stay in the country for up to 9 months per year. However, it's important to note that this type of residence permit does not lead to permanent residency or citizenship in Croatia.
Residence permits on the grounds of company formation
Non-EU nationals looking to incorporate a company in Croatia must fulfill certain requirements. They need to hire three EU citizens or Croatians, including themselves, on a full-time basis and invest 200,000 Kuna (approximately $30,000 USD) in startup capital. During the incorporation stage, the shareholder must physically relocate to Croatia and provide proof of a local address; otherwise, the court may reject the application. Additionally, paying state health insurance and relevant taxes is mandatory.
If the company's primary business is renting out apartments, it will be subject to a state tax of 10% and a locally determined Company Income Tax, which varies from place to place. For instance, the tax paid in Dubrovnik may differ from that paid in Split. The Capital Gains Tax is 25% if you sell your property within three years of acquiring it; after the three-year threshold period, it drops to 0%.
Officially, there are no retirement residence permits, but with the assistance of a competent lawyer, this type of residence can also be arranged. Obtaining permanent residency (after holding qualifying temporary residence types for five years) requires a language test, which foreigners generally do not find particularly challenging.
Other residence types in Croatia
There are several residence options available for non-EU nationals in Croatia. These include options for work, volunteering, student programs, property ownership, scientific research, and other purposes. A relatively new option is the digital nomad visa, which offers tax exemptions for individuals who work remotely for an overseas company.
Regardless of the option chosen, applicants may need to provide a range of documents, such as proof of a 12-month property lease, evidence of wealth in their bank accounts, criminal records, and a clear explanation of the purpose of their stay. All documents must be translated and apostilled before being submitted to the local police station.
It's worth noting that although there is no official retirement visa in Croatia, a skilled lawyer can potentially help retirees to obtain residency through other means. Additionally, those who hold a qualifying temporary residence permit for 5 years can apply for permanent residency, which requires passing a language test that is not considered particularly challenging by most foreigners.
Which residence permits offer a path to permanent residency and citizenship?
If you are a non-EU national, there are two main ways to obtain citizenship in Croatia: being hired by a Croatian company with a proper labor contract or becoming an entrepreneur and forming a local company. Additionally, it's worth noting that marrying a Croatian citizen can also lead to citizenship. However, keep in mind that these options may take several years to complete and may require meeting certain requirements and passing various tests.
Restrictions & Challenges
Individuals from certain countries may face restrictions on buying properties in Croatia. To rent out an apartment, setting up a company is necessary, which is subject to a state tax of 10% and locally determined Company Income Tax that varies from place to place (tax rates in Dubrovnik may differ from those in Pula). Capital Gains Tax is 25% if the property is sold within 3 years of acquisition, but it is 0% after the 3-year threshold period. Officially, there are no retirement residence permits in Croatia, but a skilled lawyer may be able to assist in obtaining this type of residence. To obtain permanent residency (after holding qualifying temporary residence types for 5 years), a language test must be taken, which foreigners do not consider particularly difficult.