Workforce Payments Guide Croatia
Last updated: Dec 18, 2023
Papaya Global supports workforce payments in Croatia, with potential local requirements.
Papaya Global supports payments to contractors in Croatia. The payout currency may vary based on the receiver bank account setup when receiving foreign currencies. Contractors are advised to reach out to their bank to confirm how foreign currencies are handled
|IBAN Example Croatia
|IBAN in print
HR77 2340 0094 6916 7796 5
|Bank Account Number
The KYC process in Croatia involves a comprehensive process for customer verification. It uses Accura Scan, a solution that specializes in Global Digital KYC, Customer Onboarding, and Identity Verification. It verifies all types of Croatian national ID cards, driver’s licenses, and passports in about 10 seconds using a mobile camera. It uses AI and OCR technology for data extraction and validation from these documents.
This process also includes a swift, bank-level identity verification system that authenticates customer’s ID cards, passports issued by the General Police Directorate – Ministry of Interior Affairs, and driving licenses issued by the Road Police – Ministry of Interior Affairs.
The KYC process aligns with Anti-Money Laundering (AML) and KYC regulatory guidelines, allowing businesses to assess and monitor customer risks and protect against fraudulent individuals. The KYC solution integrates seamlessly into the business system, streamlining the onboarding process and identifying potential red flags. It also includes video-based automated KYC solutions for efficient onboarding, risk mitigation, and business growth.
The process also involves complying with regulatory requirements to identify and verify Ultimate Beneficial Owners (UBOs) to adhere to Anti-Money Laundering (AML) regulations. Thorough KYC due diligence is conducted, which involves identifying and verifying individuals with ultimate ownership or control over a business.
Various methods are used for identifying and verifying UBOs, including gathering information directly from the company, such as registration documents, company addresses, and licensing records.
Finally, the KYC process in Croatia also involves AML services for Croatian banks and businesses to identify high-risk clients. PEP screening and real-time sanction list monitoring is conducted for faster client onboarding. Continuous monitoring processes and robust AML screening are implemented to ensure compliance with regulations and effectively mitigate global money laundering risks.
Here are some regulations that affect cross-border workforce payments and international payroll:
Foreign Workers: For foreign workers, the gross salary must be equal to at least 1.5 times the average gross salary paid in Croatia, considering the salaries a year ago.
Cross-Border Payments Regulation: For cross-border payments, payment service providers are required to disclose an estimate of the applicable currency conversion charges, as well as the estimated total amount of the credit transfer in the currency of the consumer’s account, including the costs deriving from any transaction fee and any currency conversion charges applied by the payer’s payment service provider.
Opening a Bank Account
To open a company bank account in Croatia, the requirements include:
- A copy of the articles of association of the company
- A copy of the decision on the appointment of the company’s representative
- The company’s court registry extract
- Proof of deposit of the share capital
- A copy of the identity card or passport of the representative
- A copy of the OIB (personal identification number) of the representative
Once all the required documents are gathered, you can go to your chosen bank and complete the process which involves filling out forms, signing a contract and depositing a certain amount.
The entire process can take approximately an hour and you will receive the account number and online access codes the following day. However, you’ll need to wait for your ATM card, which will arrive in five to ten business days.
The major foreign banks operating in Croatia are:
- Zagrebacka banka d.d. (Italy): Part of the Italian UniCredit group.
- Privredna banka Zagreb d.d. (Italy): A member of the Intesa Sanpaolo Group, a leader in Italian banking.
- Erste&Steiermarkische Bank d.d. (Austria)
- OTP banka d.d. (Hungary): Part of the Hungarian OTP Group.
- Raiffeisenbank Austria d.d. (Austria): Part of the Austrian RBA group.
- Addiko Bank d.d. (Austria)
- J&T banka d.d. (Czech Republic)
Major Local Banks
The major local banks operating in Croatia include:
- Addiko Bank d.d.
- Agram banka d.d.
- Banka Kovanica d.d.
- Croatia banka d.d.
- Erste&Steiermarkische Bank d.d.
- Hrvatska postanska banka d.d.
- Imex banka d.d.
- Istarska kreditna banka Umag d.d.
- J&T banka d.d.
- Karlovacka banka d.d.
- KentBank d.d.
- OTP banka d.d.
- Partner banka d.d.
- Podravska banka d.d.
- Privredna banka Zagreb d.d.
- Raiffeisenbank Austria d.d.
- Samoborska banka d.d.
- Slatinska banka d.d.
- Wustenrot stambena stedionica d.d.
- Zagrebacka banka d.d.
The B2C payment tools available in Croatia include:
- Credit/Debit cards such as Visa, Mastercard, American Express, Maestro, and Diners Club credit cards
- E-wallets like Apple Pay and Google Pay
- Local payment gateways like Monei, Fondy, Mollie, TrustPay, and Reepay
- Instant bank transfer
- Mobile solutions such as the mobile payments application Settle and mHPB offered by Hrvatska postanska banka
- Online banking through Hrvatska poštanska banka
- Cash on delivery
- Contactless cards.
In Croatia, it is technically possible to pay employees with cryptocurrencies. However, these payments are considered benefits in kind according to the Personal Income Tax Act. Taxes must be calculated for this type of payment based on the market price of the paid cryptocurrencies on the day of the salary transfer.
However, the Croatian Tax Administration has stated that cryptocurrencies, being virtual, decentralized, outside the jurisdiction of monetary authorities, and anonymous, cannot be used as a means of paying salaries. Furthermore, cryptocurrencies are not recognized as a legal means of payment, foreign currency, or foreign payment instruments in Croatia.
The country does not regulate cryptocurrency transactions or issue licenses to cryptocurrency firms, but it enforces anti-money laundering regulations that cover certain types of cryptocurrency enterprises.