Opening a One-Person Limited Liability Company (j.d.o.o.) in Croatia: Everything You Need to Know
Opening a one-person limited liability company (j.d.o.o.) is a popular choice for entrepreneurs in Croatia due to its lower costs and simpler registration process compared to a standard limited liability company (d.o.o.). A j.d.o.o. is a form of commercial company that allows for a faster business launch, and to make the process as smooth as possible, it is important to understand what it involves and the key steps required.
What Is a One-Person Limited Liability Company (j.d.o.o.)?
A j.d.o.o. is a legal form of a limited liability company with certain specific features. It differs from a standard d.o.o. in that the minimum share capital is only €1, whereas a d.o.o. requires a minimum share capital of €2,500. A j.d.o.o. can have up to three founders and one management board member, while a d.o.o. has no such restrictions. Although a j.d.o.o. is easier and cheaper to establish, the company is required to retain a portion of its profits for future increase of the share capital.
Steps in the Process of Opening a One-Person Limited Liability Company (j.d.o.o.)
Prepare the Documentation
The first step is to prepare the basic company information, including the company name, registered address, business activity, and the founder’s full name. You also need to choose a company name. The availability of the name can be checked on the Court Register website. Once you select a name that is not already taken, you can proceed with the formal registration steps.
Draft the Founding Act
The founding act can be prepared with a notary, who ensures that the document meets all legal requirements. The founding act includes the basic company information, the activities the company will perform, details about the founders, and the share capital. For a j.d.o.o., the share capital can range from €1 to €19,900, but many choose the symbolic amount of €1 to keep costs low.
Deposit the Share Capital
After drafting the founding act, you need to open a company bank account and deposit the share capital. The minimum deposit is €1. The bank will issue a confirmation of capital payment, which you will use in the subsequent registration process.
Register with the Court Register
You submit the company registration application to the court. Along with the application, you must attach the founding act, the confirmation of capital payment, and proof of the registered office address. If all documents are in order, the court usually registers the j.d.o.o. within a few days.
Register with the Tax Administration and the Croatian Bureau of Statistics (DZS)
After registration with the Court Register, the next step is to register the company with the Tax Administration and the Croatian Bureau of Statistics (DZS) to obtain a company identification number and the required tax numbers. The Tax Administration also issues the company’s OIB (personal identification number), which is a crucial step for starting operations.
Create the Company Seal and Open a Bank Account
The final step is to create the company seal and open a business bank account. While the seal is not legally mandatory, it may be required for certain administrative procedures.
Costs of Opening a One-Person Limited Liability Company (j.d.o.o.)
One of the main advantages of opening a j.d.o.o. is its low initial costs. The share capital can be minimal, and typical expenses include:
- Notary fees (for drafting the founding act);
- Court registration fees;
- Fee for creating a company seal (if required);
- Potential costs for opening a bank account.
Advantages and Disadvantages of a One-Person Limited Liability Company (j.d.o.o.)
The advantages of a j.d.o.o. include lower startup costs and a simplified registration process, making it ideal for young entrepreneurs and beginners. However, it’s important to note that a j.d.o.o. has limitations on the number of founders and management board members, and the company is required to retain a portion of profits to increase its share capital.
Establishing a j.d.o.o. in Croatia provides an opportunity for a quick and affordable business launch. If you are ready to take the first steps toward entrepreneurship, a j.d.o.o. allows you to realize your business ideas without large initial investments. Contact us for assistance with company formation or virtual office registration.
