Talk given at:
Estonian e–Residency Week Zagreb – 28.11.2019. https://www.meetup.com/Zagreb-Freelancers/events/266380557/
Running a companyas an e-Residentin CroatiaDražen Lučanine-Resident & founder of Punk Rock Devhttps://punkrockdev.com/
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Background• Punk Rock Dev – https://punkrockdev.com/ Web development & data science studio• Osaühing (OÜ) company through the e-Residency (Limited liability / d.o.o.)• I was living in Austria at the time & had to shut down mysole proprietorship anyway when I moved to Croatia• Decided to separate my business from my whereabouts
Why I chose the e-Residency?• Everything online• Fast & gets out of your way• Eurozone• Better tax system under some circumstances• e.g. for saving money within the company for futurepersonal projects (investing in my own products)
Business taxes• 0% corporate tax until you pay out dividends• 0% tax in Estonia when you’re paying yourself a salary• (assuming, of course, that you don’t live in Estonia)• 20% corporate income tax in Estonia on the amount youpay out as a dividend to yourself
Personal taxes• You don’t have to be employed• If you are employed• Same taxes & social insurance• As if you are a d.o.o. employee• Some people also open a “paušalni” in Croatia
Paying yourself• Invoice the Estonian company from another legal entity inCroatia (e.g. a sole proprietorship / “obrt")• Pay out dividends• Pay yourself a salary
Comparison1000€ total paid out3000€ total paid out
Benefits• All the usual Ltd stuff (limited liability, business expenses, dividends)• Good online system• ID card works on macOS• SmartID mobile app – you don't even need your ID card most of the time• Accounting (I use xolo.io)• Drag'n'drop or email invoices / bills• Professional and fast tax / legal advice• Banking (I use LHV)• Corporate card• Payments automatically imported as expenses• Very convenient for travel expenses• Xolo generates tax payment drafts – I just sign it online
Limitations• Somewhat limited business expenses• Trips only across border• Luxury tax on food / drinks• No car / apartment (only in Estonia)• Office max 6 months in a single country (outside Estonia)• No employees outside Estonia• d.o.o. much better if you want a classical company with an office,employees & take all of your money out as dividends
Administration inCroatia
Steps to register yourincoming dividend payments• Submit tax forms• RPO form – one time• JOPPD form – every month or once a year by 15.1.• In your local tax authority office (područni ured porezneuprave)• Or via Croatia's e-Citizen• In Estonia, your service provider will prepare a bank transactiondraft that you just need to sign to pay the corporate income tax
Steps for your Estonian companyto hire yourself in Croatia• OBVEZE POREZA NA POREZ NA DOHODAK IDOPRINOSA S OSNOVE RADA ZA POSLODAVCE SASJEDIŠTEM ILI MJESTOM POSLOVANJA U DRUGIMDRŽAVAMA ČLANICAMA EU• http://bit.ly/EU-poslodavci• Somewhat complicated procedure• Croatian government agencies were very helpful
One-time steps• 1. Create a Croatian ID (OIB) for your Estonian company• Sudski tumač – ovjereni prijevod na hrvatski izvatka iz Trgovačkog registra• 2. Agreement to take over financial obligations of your company• “Sporazum o preuzimanju obveze doprinosa"• Croatian tax authority (Porezna uprava – središnji ured u Zagrebu)• 3. Report your employment status to the Croatian pension insurance (HZMO)• Walked in there with all the papers• Filled out a form• Got asked for a work contract, but they agreed that I don’t need one if I’m working for myself• 4. RPO form – one time
Each month• Two JOPPD forms – in your local tax authority office or viaCroatia’s e-Citizen• Doprinosi – OIB firme• Porez na dohodak• Third JOPPD when you pay out dividends
Tax advisor help• Knjigovodstvo “Ledine”• http://ledine.hr/
Conclusion• Good online-first system• Not a tax haven• d.o.o. better for employees, maxing out immediate payout• OÜ – perfect for reinvesting in your personal projects
Thank you! Aitäh!• Start your e-Residency – http://bit.ly/estonian-e-residency • Raffle for a free trip to Tallinn if you do it this year• Join our Facebook group!• http://bit.ly/e-residents-hr