How can an IT company from Ukraine relocate employees to Croatia?

The relocation of IT workers to other countries has become a pressing topic nowadays. European countries are very popular for relocation, given their high standard of living and social security. However, each country of the European Union (hereinafter referred to as the EU) has its specifics of legal stay in the country, and some countries do their best for Ukrainian citizens working in the IT sphere to live and work there.

One such country is Croatia. Let's consider two ways of legal relocation to Croatia and obtaining a temporary residence permit (hereinafter - the permit) in Croatia for Ukrainians that we used for our Clients.

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Special visa for IT specialists "Digital Nomad" in Croatia

In order for a person to be elegible for a residence permit, they must meet the following criteria:

• the person must not be an EU/Switzerland/EEA citizen;
• the person must provide IT services to a company, or work for their own company that is not registered in Croatia and does not provide IT services to companies registered in Croatia and/or operating in Croatia.

Note: Individual entrepreneurs (hereinafter referred to as sole proprietors) registered in Ukraine are eligible for obtaining a residence permit in Croatia on this basis.

You can apply for a residence permit either online or by contacting a local police station in Croatia, if you are in Croatia, or a Croatian consular office in the respective country of your residence.

To submit the documents:

• you need to fill out the form online at the link Digital Nomads Croatia;
• by contacting the aforementioned authorities in person, you must first print and fill out the form, which you can find by following this link.

The following documents must be attached to the completed form:

• Copy of the biometric passport, which must be valid for three months longer than the planned period of stay in Croatia;

Please note: If you do not have a biometric passport, you need to obtain a D-type visa. It can be obtained at the Croatian embassy in your country of residence.

• Copy of life and health insurance for the period you plan to stay in Croatia and which covers the territory of Croatia;
• Copy of an IT service agreement with a foreign company that is not registered in Croatia and does not provide services in Croatia, or a letter from such a company confirming that you provide IT services to it;
• Confirmation of your subsistence on the territory of Croatia. Such proof may be a bank statement indicating that you have the required amount per year, a bank statement showing that you receive the required amount every month, or a bank statement showing that you have spent the required amount in the last six months. The required amount is considered to be 17,822.50 Croatian kunas per month (approximately EUR 2,375), or 213,870 Croatian kunas per year (approximately EUR 28,475);
• A certificate of no criminal record from the country where you have been residing for the last year before your arrival in Croatia. Such a certificate must be legalized through the Croatian embassy in the country where you are currently staying, or in Croatia at the Croatian Ministry of Justice or the Croatian Ministry of Foreign Affairs.

When filling out the form, you will need to indicate your location in Croatia or your planned location in Croatia. Proof of such residence can be both rental contracts and confirmation of apartment or hotel reservations.

The residence permit application form and all additional documents must be written in Croatian or English and translations must be certified by a notary.

After receiving a positive decision on granting you a residence permit, you must:

• If you need a D visa to enter the territory of Croatia, you need to obtain such a visa by filling out the form at the following link: https://crovisa.mvep.hr/default.aspx?langId=en;
• You have to register your place of residence within 30 calendar days from the date of receipt of positive decision on granting residence permit or D visa at the police station in the place of your planned stay; otherwise your residence permit will be cancelled;
• You must go to the police station where you reside to physically obtain a residence permit ID card. You will need to provide biometric materials and take a photo.

A residence permit is issued for a maximum period of 1 year. You can apply for a new residence permit not earlier than 6 months after the expiry of the previous residence permit. During the 6 months necessary to obtain a new residence permit, the person can stay in the country with the visa-free regime, without violating its conditions for continuous stay in the EU (90 days within 180 days).

We help the client at each stage of obtaining a residence permit in Croatia. In our experience, applicants have difficulties in completing the application for a residence permit and additional documents. For example, the client turned to the fact that the competent authorities of Croatia do not want to issue a residence permit, because they do not like the contract between the client, as a sole proprietor, and his employer. We concluded a new contract, which fully satisfied the Croatian authorities and the client was granted a residence permit.

In addition, clients have difficulty filling out the forms themselves. During the relocation of our clients' IT companies, we helped all the employees in an organized manner to correctly fill out the forms in English and obtain a residence permit.

We advise clients, monitoring their actions already on the territory of Croatia. For example, we check if the IT specialist registered the rental contract at the Croatian Ministry of the Interior within 3 days after arrival on the territory of Croatia.

Please note! Nomad visa is not the only possible way for IT employees to obtain temporary residence in Croatia. You can also consider the following possibilities: official employment in a company of a Croatian resident, studying in Croatia, starting a family with a Croatian citizen or a person who has a permanent residence permit in Croatia.

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Temporary International Protection in Croatia

Currently, citizens of Ukraine and their family members can obtain Temporary International Protection in Croatia, which is similar in its legal consequences to residence permit.

You can apply for Temporary International Protection at the police station in Croatia where you reside. This means that a prerequisite for obtaining Temporary International Protection is to cross the border into Croatia legally.

In order to prove your eligibility for Temporary International Protection, you have to submit the following documents to the police station where you reside:

• A rental agreement, proof of hotel booking, or the owner of the room where you are staying must register your place of residence himself;

Depending on the basis for obtaining temporary international protection, you will need to submit one of the following documents:

• internal passport of a citizen of Ukraine, translated into English and notarized, and passport of a citizen of Ukraine;
• temporary residence in Ukraine for citizens of third countries where there is an armed conflict;
• temporary residence in Ukraine for citizens of third countries who have been granted temporary residence based on similar temporary international protection (persecution for political reasons, asylum).

If the application is approved, you will be issued a corresponding ID card (green booklet with photo, registration address, and tax number).

Temporary international protection for Ukrainian citizens is currently valid until March 03, 2023, and may be extended depending on the situation in Ukraine.

Temporary international protection is analogous to the same residence permit, as it provides the right to officially reside and work on the territory of Croatia. Therefore, companies wishing to relocate their employees to Croatia may recommend that such employees obtain Temporary International Protection. The problem of employees residing under temporary international protection may be that it is valid until March 03, 2023, and it is not yet clear whether it will be extended.

After the expiration of Temporary International Protection, the employee will have to leave the country or stay in the country on a visa-free basis, which does not entitle him/her to formal employment in the country.

Why do we speak of official employment?

Employee relocation to Croatia or any other country is suitable for companies whose business activities are not tied to any location. First of all, these are IT companies.

Such companies, transferring their employees to Croatia, can organize their activities the same way as in Ukraine, changing nothing if the employees provide services as sole proprietors. Employees can work under these contracts while in Croatia based on temporary international protection without any restrictions. If the employees are officially employed by a legal entity, then you need to open a legal entity in Croatia and employ the employees by it. However, remember that such a scheme (setting up a legal entity in Croatia and employing employees) is not suitable if the employees want to obtain a residence permit, because the entrepreneur working for a company that is not a Croatian resident must apply for a residence permit.

Let's summarize for those companies that want to move their employees to Croatia on the basis of temporary international protection and organize work for such specialists there.

If the company cooperates with specialists as sole proprietors on the basis of service contracts, it can do nothing to change the organization of its activities.

If employees are hired on the basis of an employment agreement, the company needs to set up a legal entity in Croatia and hire employees there.

However, it is necessary to remember in both cases that employees need to rent a house beforehand, and employees must not violate Croatian law in order not to be deported.

The major risk: Temporary international protection is only valid until March 03, 2023 and may never be extended. Then the scheme with the relocation of employees to Croatia under temporary international protection loses its relevance.

You must begin your business relocation by selecting a relocation model, choosing a jurisdiction, doing tax planning, and working out a scheme for relocating employees. All this we offer you as the first stage of business relocation with our company.

Subsequently, we provide legal services for the actual relocation, which may include registration of the business abroad, as well as the provision of other legal services, based on an agreed plan.

Please click here to view our service fees.

More on tax optimization of such a business here.