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Are you looking for a Mediterranean country with a good climate, great landscapes, relatively cheap and with low taxes? Then today’s article is of interest to you.

Of course, at with our maxim to go where we are going to be treated best, we cannot resist a state that treats us well. Residence in countries that offer value is always something to appreciate.

In our blog, we have already reported on several countries in Europe, such as Romania, Bulgaria or the Czech Republic, which have excellent low tax regimes. Today, we are going to talk about Croatia. The former Yugoslav country is increasingly integrating into Europe, as is Montenegro.

Croatia has recently been the subject of discussion for being one of only twelve countries free of cryptocurrency taxation. Croatia is a very attractive place for small and medium-sized businesses thanks to its very low taxes. With its beautiful beaches and pleasant Mediterranean climate, the country is one of the most developed among the former members of Yugoslavia. Zagreb, Split and Dubrovnik are the most important cities and all have air connections to most European countries. The country is a member of the European Union and adopted the euro as its official currency on 1 January 2023.

Non-Europeans can also apply for a digital nomad visa to avoid taxation of their foreign income.

Croatia’s background in Europe

Croatia is one of the six republics that emerged from the break-up of the former Yugoslavia. The country has an area of 56,594 km2 and a population of 4.1 million.

In 2020, Croatia had the highest per capita income among the former Yugoslav republics: USD 13,822, almost double that of Serbia (USD 7,666).

With its access to the Adriatic Sea, the country has some of the most beautiful natural landscapes in Europe. Its pristine beaches attract tourists from all over the region, who flock to the country during the European summer. In addition, the country is one of the safest in Europe, has a peaceful environment and a low cost of living.

The (now old) local currency, the kuna (HRK), is quoted at HRK 7.54 per euro, and the average cost of living in the country is €795. By comparison, the average cost of living in Portugal – the cheapest country in Western Europe – is around €1500. Croatia therefore combines natural beauty, good connections to Europe and an affordable and cheap cost of living, although it depends very much on location – on the coast, and especially in destinations such as Hvar or Dubrovnik, it can be much more expensive.

However, with the introduction of the euro from 1 January 2023, it is very likely that prices will gradually rise.

Along with the introduction of the euro has also come Croatia’s membership in the Schengen zone, which has both advantages and disadvantages.

For non-Europeans, Croatia was one of the countries where they could stay for 90 days after their visa (also 90 days) in the Schengen countries had expired. After that time, they could spend another 90 days in the Schengen zone. This no longer works now, of course.

However, for non-Europeans who have or acquire residence in Croatia, moving around Schengen Europe will be much easier.

How does taxation work in Croatia?

Corporate tax in Croatia is 10% on profits up to HRK 7.5 million (almost EUR 1 million). After that, the corporate tax rate rises to 18%, which makes the country less attractive than, for example, Hungary, Bulgaria or Romania. However, the tax is still slightly lower than in the Czech Republic (19%).

The country applies a withholding tax of 10% on dividends. This is lower than in the Czech Republic and Hungary (15%). As for remuneration through dividends, 10% is already lower than what you pay in a good number of countries.

In total, there are 128 cities in Croatia and corporate tax is levied at the federal level. However, some cities in the country also have their own taxes. As always, the tax rate depends on the tax domicile. According to the Croatian government, taxes are levied based on the following criteria:

  • Municipalities: up to 10%.
  • Towns with less than 30,000 inhabitants: up to 12%.
  • Cities with more than 30,000 inhabitants: up to 15%.
  • City of Zagreb: up to 18%.

At the personal level, the tax rate for those earning up to HRK 360,000 (€50,000) per year is 20%. Salaries above this figure are subject to a high tax rate of 30%. Croatia is therefore not as attractive for employees and self-employed persons actively working in the country. All persons with tax residence in Croatia are subject to taxation regardless of where their income comes from. In addition, you normally have to pay social security contributions, which can be avoided if you receive your income through dividends instead of a salary.

The VAT rate in the country is generally 25%. However, some areas are taxed at 13% and others, such as food or education, are taxed at 5%. For entrepreneurs, the high rate is largely irrelevant, as the Reverse-Charge principle or the country of consumption principle usually applies.

In the context of real estate, there is the transfer tax. This tax is levied on any transfer of real estate, e.g. sale, gift or change of ownership by inheritance. The tax rate is 3% of the value of the property, but there are some exceptions. Inheritance tax is also levied on cash, financial assets and movable property.

Tax benefits in Croatia

Now, let us go back to the context of the title, where we said that Croatia is interesting for small and medium-sized entrepreneurs and crypto investors.

Croatia is not exactly a tax haven, but it has a very advantageous system for small businesses. Self-employed and small entrepreneurs with a turnover of less than one million euros per year have one of the lowest tax burdens in Eastern Europe.

As there are no direct taxes on real estate, the country is also an excellent choice for those who want to invest in this market. Buying real estate also makes it easier to obtain permanent residence in the country as a non-EU citizen.

For long-term investments in cryptocurrencies, the country offers tax exemption, as Croatia has a favourable tax legislation for cryptocurrencies. With the exception of staking and mining activities (whose activities would oblige you to pay income tax), special exemptions apply to cryptocurrency transactions and trading. To qualify for the exemption, you must hold your crypto investment for at least 2 years. However, you can buy and sell between cryptocurrencies without it counting as “exiting the investment”.

For example, let us say you bought Bitcoin today and earned income. If you leave that amount in stablecoins and do not withdraw your profit within 2 years, you will not pay tax on those profits.

Another advantage is that the period you have to keep your crypto applies from the first purchase. So, if you buy Bitcoin (BTC), then switch to USDT and then switch back to BTC, the period counts from the date of the first purchase. If you switch to fiat currency before the period expires, you will have to pay a 10% capital gains tax on the transaction. This is still much lower than the 15% tax rate in Hungary, 20% in the UK and up to 37% in the US.

By the way, the tax exemption after a 2-year holding period does not apply to cryptocurrencies, but also to shares and other securities. With a dividend tax of 10% and many double taxation treaties, residency is also more than interesting for individuals. Croatia has double taxation treaties with more than 60 countries, most of them in Europe. In North and South America, only Canada and Chile have such an agreement with Croatia.

How can I obtain a visa or residence in Croatia?

The criteria for entering Croatia vary according to nationality. However, it is easy for citizens of most countries, and of course even easier for EU citizens.

Nevertheless, if your idea is just to spend some time in the country, in most cases it is not necessary to apply for a visa before entering Croatia: for non-EU citizens, the country allows a tourist stay of up to 90 days.

There are several ways to obtain temporary residence in Croatia:

  1. Obtain a job (the duration of stay will be equal to the duration of the employment contract). In case of leave of absence or termination of the contract, a maximum of one year.
  2. Buying real estate (by the way, there is no direct real estate tax and no minimum real estate value is required). However, with this visa, you do not get a work permit in the country.
  • Therefore, you will have to prove that you have the necessary means to support yourself. At least 50% of the average monthly salary based on the previous year’s value is required (in 2022 this value was about €475 per month).
  • The investment visa is valid for 6 months and can be extended indefinitely for the same period.
  1. Opening a business. The minimum investment is HRK 200,000 (i.e. about €26,700) and three employees.
  • This visa gives you a residence permit for one year and can be extended for the same period;
  • Extending the visa for five years entitles you to apply for permanent residence.

To obtain a permanent residence permit, you must live in Croatia continuously for 5 years. During this time, you may not leave the country for more than a total of ten months or be absent for up to six months in a five-year period.

Foreigners must pay an administrative fee of HRK 630 (€83) to obtain permanent residence. The fee for issuing a residence permit is HRK 240 (€32).

If you are an EU citizen, you can apply for a temporary residence permit at any local police station. You will need a rental contract (or home ownership), proof of sufficient funds to support yourself and your family (if you have one) and health insurance. Of course, if you have an employment contract, are a student or are moving to Croatia for family reunification, the requirements are somewhat different.

Visa for digital nomads

Croatia also offers a special visa for digital nomads and remote workers. Although it is called a “digital nomad” visa, Croatian authorities stress that it is a temporary residence permit, and is only available to non-EU citizens.

According to the law, a digital nomad is a worker who provides services for a company that is neither Croatian nor registered in Croatia.

The digital nomad visa grants temporary residence and allows living in Croatia for a maximum period of one year. It is not possible to extend or renew the visa immediately after this period. After one year, you can apply for a shorter duration visa, which entitles you to a further stay of six months.

How to apply for a visa for digital nomads in Croatia? The most practical way is, of course, to apply online. You can also apply directly from Croatia or through a Croatian embassy or consulate abroad.

The fee for applying for a visa ranges from HRK 420 (about €56) to HRK 880 (€117). You must also prove that you have at least HRK 202 890 (about €27,000) saved to cover your living expenses for one year – that is, for the duration of your visa.

For families, an additional 10% per family member must be included. It is also necessary to take out health insurance to cover health expenses for COVID-19.

Obtaining Croatian citizenship

Of course, if you are going to spend time living in Croatia, you may be interested in obtaining Croatian citizenship. As you know, citizenship goes far beyond residency.

Maybe you identify with the culture, with the region, or maybe you want to live in Croatia forever. We at promote life without borders, but of course, there are also people who have no intention of living a nomadic life.

Basically, there are three ways to obtain Croatian citizenship:

  • By descent, if at least one parent is a Croatian citizen.
  • By birth in Croatia (one of the parents must have Croatian citizenship). Also in the special case of a child abandoned in Croatia whose parents are unknown.
  • By naturalisation

If you do not have Croatian ancestors, the way to obtain Croatian citizenship is by naturalisation.

To become a naturalised Croatian citizen, you must have lived in the country for at least 8 years and have done so while maintaining permanent residence. In addition, you must pass a Croatian language and culture test, which will not be easy if your mother tongue is English… However, in 8 years you have plenty of time to learn the language and get to know the culture.

In any case, you may end up preferring to do nothing at all. Dual citizenship is not allowed in Croatia, so if you manage to obtain Croatian citizenship, you will have to renounce your original citizenship (on the other hand, if your country does not allow you to give up your citizenship, as in the case of Mexicans, you would end up having two nationalities).

According to Article 8 of the Croatian Nationality Act, naturalisation into one’s own nationality requires renunciation of the nationality of the other country, if that country allows it. However, Croatian descendants and Croatian-born citizens are not affected by this restriction.


Croatia is not exactly a tax haven, but it has a very beneficial system for small entrepreneurs and is a country that offers a fairly pleasant standard of living.

Self-employed or small entrepreneurs with a turnover of less than one million euros per year can benefit from one of the lowest tax burdens in Eastern Europe thanks to the Croatian tax system.

Moreover, if you sell your shares or cryptocurrencies after a 2-year holding period, you will not pay tax. Individuals are taxed at 10% on their profits if they do not meet the two-year grace period, but trading in cryptocurrencies is completely tax-free.

Since there are no direct taxes on real estate, the country is also interesting for this type of investment. What is more, buying real estate also makes it easier to obtain residency in the country!

If you would like us to help you, just contact us.

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