Estonian Company Run from Croatia: Tax Rules

Many Croatian entrepreneurs — and many people who moved to Croatia — form or buy an Estonian private limited company (OÜ), often as e-residents, and run it from Croatia. Croatian profit tax looks at two things: where a company's seat is registered and where its business is actually managed and supervised. A company whose place of actual management and supervision of the business is in Croatia is a Croatian resident and is taxed there on its profit made in Croatia and abroad. Croatia's rule on controlled foreign companies is written for Croatian taxpayers that control a foreign entity. And the Estonia–Croatia tax treaty leaves a company resident in both countries to an agreement between the two tax authorities. This guide sets out these rules with the official texts, and what we do on the Estonian side.

The guide is general information, not tax advice. How your company and you are taxed depends on the facts of your case; ask a Croatian tax adviser (porezni savjetnik) before you form or buy the company. We read the Profit Tax Act (Zakon o porezu na dobit, Narodne novine 177/04) and every amending act up to Narodne novine 151/25 in the official gazette Narodne novine, and the Estonia–Croatia tax treaty in Riigi Teataja, on 23 October 2026; the English wording of the Croatian act below is our translation.

In Estonia: an Estonian company is Estonian

A company established under Estonian law is resident in Estonia for tax purposes (Income Tax Act § 6). Its profit is taxed when it is distributed, not while it stays in the company — the guide how Estonia taxes company profit explains the rule. The company keeps its Estonian duties wherever its owners live: accounts, an annual report to the commercial register and, if its address is abroad, a contact person in Estonia.

In Croatia: the company side

Registered seat or actual management. Residents are legal and natural persons whose seat is entered in the court or another register in the Republic of Croatia, or whose place of actual management and supervision of the business is in the Republic of Croatia (Profit Tax Act, Article 3(1)).
Non-residents. Non-residents are persons whose residence is not established under paragraph 1, under a special act or under an international treaty (Article 3(2)).
Profit made in Croatia and abroad. The tax base of a resident taxpayer is the profit made in Croatia and abroad; the tax base of a non-resident is only the profit made in Croatia (Article 5(2) and (3)).
Rate. Profit tax is 10% when the revenue of the tax period is up to EUR 1,000,000.00, and 18% when it is more than EUR 1,000,000.00 (Article 28(1)).

An Estonian OÜ has its seat in Estonia. If you live in Croatia and the business is actually managed and supervised from there, Croatia can treat the company as a Croatian resident — unless the treaty settles its residence for Estonia. Your Croatian tax adviser answers that with the facts of your case.

In Croatia: the owner side

Controlled foreign company. A taxpayer's controlled foreign company is any entity, in any legal form, or permanent establishment in another state whose profit is not subject to tax or is exempt there, if the taxpayer, alone or with related persons, holds directly or indirectly more than 50% of the voting rights or of the capital or is entitled to more than 50% of the profit, and the actual profit tax the entity paid abroad is lower than the difference between the profit tax it would pay under the Croatian act and the tax it actually paid (Profit Tax Act, Article 30.b(1)).
What is added. The taxpayer includes in its tax base the entity's undistributed profit from interest and other income from financial assets, licence fees and other income from intellectual property, dividends and income from disposing of shares, financial leasing, insurance, banking and other financial activities, and sales and services bought from and sold to associated enterprises with little or no economic value added (Article 30.b(2)).
Exceptions. The rule does not apply when the controlled foreign company carries on a substantive economic activity supported by staff, equipment, assets and premises (Article 30.b(3)); an entity whose income of these kinds is one third or less of its total income is not a controlled foreign company (Article 30.b(4)), unless it is in a state on the EU list of non-cooperative jurisdictions (Article 30.b(6)).

The rule is written for taxpayers of the Croatian profit tax — companies. How an individual owner living in Croatia is taxed on what the Estonian company pays out is a question for your Croatian tax adviser.

What the Estonia–Croatia tax treaty says

Resident in both countries. If a person other than an individual is resident in both states, the competent authorities decide by agreement how the treaty applies to it; if they do not agree, the person is not treated as a resident of either state and the treaty's benefits do not apply to it (agreement signed in Tallinn on 3 April 2002, article 4(3); RT II 2004, 19, 82).
Permanent establishment. A permanent establishment is a fixed place of business through which the business of an enterprise is wholly or partly carried on; it includes especially a place of management, a branch and an office (article 5(1) and (2)). The profit attributable to it may be taxed in the state where it is (article 7(1)).
Directors' fees. Fees a Croatian resident receives as a member of the management board or the supervisory board of an Estonian company may be taxed in Estonia (article 16) — see board member fee or dividend from abroad.
Dividends. Dividends paid by an Estonian company to a Croatian resident may be taxed in Croatia; if Estonia also taxes them at source, the treaty limits that tax to 5 percent of the gross amount for a company (other than a partnership) holding at least 10 percent of the capital, and 15 percent in all other cases (article 10(1) and (2)).

So the treaty does not settle a double residence by itself: a company actually managed from Croatia may need an agreement between the two tax administrations before it can rely on the treaty. The multilateral convention on tax treaty measures (MLI) can change the rules of tax treaties; how it applies to your company is a question for your Croatian tax adviser — we do not give that ruling.

What to decide before you form or buy the company

Where the business is actually managed and supervised. That is the fact the Croatian residence rule looks at.
Who owns the company. A Croatian company holding more than 50% brings in the controlled foreign company rule.
Where the work is done. An office or other fixed place of business in Croatia can be a permanent establishment.

What we do on the Estonian side

online formation for an e-resident — €950 Registered address and contact person service for one year are included., or formation by power of attorney — €1,250;
a ready-made company bought remotely — €1,200 Registered address and contact person service for one year are included.;
accounting — from €150 / month and the annual report — from €450;
the registered address and contact person after the first 12 months — €350 / year.

Our accounting covers the Estonian company's Estonian obligations. Croatian tax returns and Croatian tax advice are not included. Owners in other countries: Estonian company run from abroad compares the rules side by side.

Prices exclude VAT. All communication takes place by email.

Ready to start? A new Estonian company — online for e-residents or by power of attorney; Croatian tax advice is not included. Order.

Official sources

The laws this article names, by the name of their official text, as read on 9 October 2026. For the Estonian acts we read the English translation in Riigi Teataja; the legally binding text is the Estonian one.

Income Tax Act — Riigi Teataja, English translation

Sources are named in the text, without links. To see which of our services your company needs, open the Business Navigator.

Frequently asked questions

Is my Estonian company taxed in Croatia if I run it from Croatia?

It can be. Croatia counts as resident a company whose seat is registered in Croatia or whose place of actual management and supervision of the business is in Croatia (Profit Tax Act, Article 3(1)), and a resident is taxed on its profit made in Croatia and abroad (Article 5(2)). In Estonia the company stays resident because it was established under Estonian law (Income Tax Act § 6). Under the Estonia–Croatia tax treaty the competent authorities decide such a double residence by agreement; without an agreement the company gets none of the treaty's benefits (article 4(3)). The Croatian controlled foreign company rule names Croatian taxpayers as the controlling owner (Article 30.b). Ask a Croatian tax adviser before you form or buy the company; we handle the Estonian side.

Estonian company run from Croatia: what is taxed where