Potential Impact of Croatia's Proposed Legislation on Foreigners on Local Business Operations
May 3rd, 2025 - The Voice of Business Owners Association (UGP) Sounds the Alarm Over the New Croatian Foreigners Law
According to Poslovni Dnevnik, the UGP is voicing concerns over the recently enacted Croatian Law on Foreigners, claiming it's a stranglehold on micro and small companies. This predicament mainly stemms from the convoluted process of granting permits for foreign workers. On top of that, they're taking issue with the rigorous minimum turnover requirement of 10,000 euros. The association is calling for immediate solutions.
The UGP has reportedly been receiving complaints from micro and small enterprises on a daily basis due to delays in obtaining permits for legally hiring foreign workers. They pointed out that many of these businesses have been rejected due to the rigid minimum turnover requirement of 10,000 euros for each of the last six months. Others are still waiting for a decision for as long as six months, with the main culprit being the new Croatian Law on Foreigners and the inefficient and painfully slow system within the Ministry of the Interior (MUP).
The UGP described this legal solution as yet another example of a measure that directly harms small businesses and showcases the legislator's concerning lack of comprehension of doing business in Croatia, particularly sectors like tourism and construction, which are extremely seasonal in nature.
They offered an example of a construction firm that generates 500,000 euros in January and 300,000 euros in March, but due to a lack of turnover in February, loses the right to employ foreign workers. This seems absurd, they noted, since the average monthly revenue of these companies is significantly above the prescribed minimum. The situation is similar in tourism, with winter months bringing little turnover but summer months employing more workers and recording high revenues.
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The UGP is adamant that the new Croatian Law on Foreigners is injurious to companies, raising the alarm that these rules present a serious risk to the livelihood of thousands of families who rely on work in these sectors. Therefore, they're urging competent institutions to act promptly. Proposed solutions include the Ministry of the Interior reallocating personnel to strengthen the capacity of the department responsible for issuing work permits, as well as streamlining the permit process to a maximum of 30 days from the submission of the proper documentation.
They also believe that the criteria for turnover should be adjusted to the actual circumstances of business, especially considering the seasonality of sectors such as tourism and construction.
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"Because of insufficient legal solutions and the inefficiency of the system within the Ministry of the Interior, Croatian companies are left workerless, and their businesses are being seriously jeopardized. The Voice of Business Owners Association is therefore appealing to Minister Davor Božinović and the relevant institutions to respond urgently.
The Croatian Law on Foreigners needs to be aligned with the realities in the business market, and the system for issuing work permits needs to be reorganized and accelerated. The Croatian economy cannot endure the clutches of bureaucracy and a complete misunderstanding of key sectors such as tourism and construction," concluded Boris Podobnik, the president of the UGP.
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The UGP is urging competent institutions to streamline the process of granting permits for foreign workers, as delays and rigid criteria under the new Croatian Law on Foreigners are harming micro and small businesses, particularly in the tourism and construction sectors. The association is calling for adjustments to the turnover criteria to reflect the seasonal nature of these industries and a reduction in waiting times for decisions to a maximum of 30 days. The UGP believes that the current inefficiency within the Ministry of the Interior is jeopardizing Croatian businesses and is appealing to Minister Davor Božinović and relevant institutions to respond urgently. The association also warns that the new law poses a risk to the livelihood of thousands of families who rely on work in these sectors.
