More than a hundred entrepreneurs attended a panel discussion titled “How to run and run a company outside Croatia?” Organized by the eCommerce Croatia association at Jockey Club on the Hippodrome in Zagreb.
Participants of the panel were CRANE President Davorin Štetner (experience from the USA), CRANE Board Member Hrvoje Prpić (experience from the UK), Sanja Guc (experience from UAE), Luka Kladarić (experience from Estonia) and Ivan Komorčec (experience from Bulgaria).
“Because of the turbulent business climate in Croatia, we have decided to organize a roundtable where we will gather entrepreneurs with companies in Estonia, UK, Bulgaria, America, or in the countries where it is worth doing business,” they said from eCommerce Croatia.
Questions to which the panelists tried to answer are:
How to open a business in another country and live in Croatia?
Opening a company in Estonia can be done online as there is an e-Residency application system through which you can become a virtual citizen wherever you live. Once you become an e-resident, you can open a business, and your new ID card can be downloaded at the nearest embassy (for Croatia that is Vienna).
To open up a business in Bulgaria you have to go there, and the whole procedure may be completed within 2 to 3 days. The problem is that a small number of Bulgarians speak English, and the alphabet is in Bulgarian Cyrillic, so it would be desirable to know someone who speaks Bulgarian and understands the alphabet. A similar situation exists in the United Arab Emirates (UAE), where acquaintance plays one of the most important roles. Also, there are several types of companies in the UAE, and most often are in Free Zone, to launch it you need to go there, perform a medical examination, and sign all documentation prepared for you by agents. In some cases, going to Dubai for opening a company is not necessary.
You can also start an online business in England in just a few hours, or you can also hire a bookkeeping service to do this for you. Due to the need for an address, you can open a virtual office. Hrvoje has recommended that you contact his accountant who has opened over 80 companies in England for Croatian citizens if you intend to do the same. You do not have to go to the US to open a business, it can be done by lawyers. Hrvoje Prpic pointed out that most people in Croatia think that they need to open a bank account abroad, as is the case in Croatia, and in most countries, everything can be done through PayPal or prepaid cards.
What is the equity capital for opening a company?
For a UAE, UK or US equity capital doesn’t exist, in Bulgaria, its minimum is €1 while in Estonia the minimum is € 2,500, but it does not have to be paid. Only a statement can be made in which the founder guarantees his property to that amount. Bank reimbursements in all countries are still high, so it is recommended to have a TransferWise account instead of a bank one.
What are the prices of the company’s establishment?
In Estonia, the simplest way to open a company is to hand it over to a company that deals with it, and the price is about 120 euros for e-Residency and a little less than 300 euros for registration. Luke recommends using LeapIn’s service to set up the company, which you will pay 50 to 100 euros per month. As far as Dubai is concerned, the company’s foundation price depends on several factors and the cluster in which the company is founded. The prices range is around 5 thousand euros.
The cost of establishing a company in Bulgaria also depends on several factors, and the price is from a minimum of 180 euros to a maximum of 900 euros. If you still need an accountant for opening a company in England, you will pay around 300 pounds, with free accounting services for the next 6 months, said Hrvoje. The cost of establishing a company in the United States is about $ 1,500.
Who takes care of accounting?
In Estonia, there are, said Luka, specialized services that offer flat rates and do absolutely everything. The local accounting service in Bulgaria will pay you from 100 to 200 euros per month, UAE does not need it, and in England, the cost of accounting services ranges from 50 to 100 pounds.
Can you avoid all other requirements in HR if the company is registered abroad?
If you are a resident of the Republic of Croatia, you have to pay 12% profit tax, and other taxes depending on the city you live.
What is the profit tax in foreign countries?
Estonia’s profit tax is 20%, Bulgaria 10%, England 19%, USA 21% (but there are many exceptions, so you do not have to pay taxes), while Dubai has 5% VAT for businesses at the territory of the UAE with an annual turnover of over 90,000 euros, other taxes simply do not exist.
How is health and retirement insurance paid if you are living in Croatia?
If you have a business abroad, you do not have to be employed in Croatia, and you have the right to health insurance as well as your children. As far as pension insurance is concerned, you have to take care of it yourself. Within one month of termination of employment in the Republic of Croatia, you must apply for health insurance. For health insurance purposes and so on, Luka has opened a company in Croatia.
What are the biggest advantages and disadvantages of doing business outside the Republic of Croatia?
As the biggest advantage of doing business abroad, all panelists, except for the example of Bulgaria, provided almost non-existent bureaucracy and the ability to send invoices in various currencies. The biggest advantage of doing business in the UAE is that there is no tax and bookkeeping, while Bulgaria’s biggest business disadvantage is in their currency (lev) and conversion of the same in the euro, but the big advantage is low taxes. Bank charges in all of the mentioned countries are high.
CRANE President Davorin Štetner advised all entrepreneurs who are planning to open a company abroad to first thoroughly explore the market and decide which market is the best option for their service or product.
ECommerce Croatia said that the panel discussion is organized to help people who are concerned about their future in Croatia, given to the more uncertain circumstances and business conditions. They hope that with a bigger interest in the subject and at another location will have an even greater number of people.
Also, for any information about establishing a company in the United Arab Emirates, you can contact Sanja at the following email address: firstname.lastname@example.org