Sole trader: comparison between Slovenia and Croatia

Croatia offers a good system of favorable arrangements and incentives for setting up a sole trader business. However, a foreigner will find this task extremely difficult if not impossible. The present article discusses the practical limitations of the Croatian system and points out positive arrangements offered in Slovenia. Knowledge of Croatian language is one of the main requirements for setting up a sole trader business, while foreigners need to pass the Croatian language proficiency verification. Furthermore, it is obligatory to have a residency registered in Croatia and take an exam about your business sector, which is obviously held in Croatian. Hopefully, by now you have realized that for non-native speakers this is not an advantageous option.

On the other hand, in Slovenia, none of the above-mentioned conditions apply. In Slovenia, it is not required to take a language exam or to have a professional certification. Anyone can open a sole trader business, which can either have an ordinary accounting scheme or a flat rate scheme. A flat rate scheme is highly recommended for companies offering services and consultancy or for limited liability company (LLC) holders. The tax rate for LLC with a flat rate scheme is of 4%, while the turnover limit has been increased in 2018 to €150,000. Furthermore, for this type of enterprise, there is no need to run accountancy, a list of issued invoices is sufficient. In addition to taxes, the entrepreneur will be required to pay social security contributions amounting €235‒350.