Her future employer asked her to find an EOR in Croatia. Two weeks later, she opened a d.o.o.
A real Employer of Record inquiry, and why opening a d.o.o. or a paušalni obrt is the wrong answer when a foreign company has already offered you the job
About this case This case is based on a real inquiry to our EOR inbox. Personal details have been removed and the candidate is not identifiable. Figures are valid for 2026.
In short A German company wanted to hire a candidate in Croatia and asked her to find an Employer of Record. She compared providers on price, went quiet, and finally opened a d.o.o. to take the job. In doing so, she took on the employer’s obligations herself: share capital, bookkeeping, monthly contributions, sick pay and compliance risk.
The email in our EOR inbox: “my future employer asked me to find one”
It arrived like dozens of others. A woman based in Croatia wrote to our EOR inbox asking for information about our services. One sentence stood out: her future employer had asked her to find one.
The employer was a German company. She had gone through the interview rounds, the team wanted her, and then the practical question came up: how do we actually employ you? The company had no entity in Croatia, had heard that an Employer of Record could solve the problem, and handed the search over to her.
We followed our usual routine. We replied, introduced Ambacia and offered a call. Before anything else, we wanted to understand how much she already knew about EOR, because the phrase “my employer asked me to find one” usually tells us the answer: not much, and through no fault of her own.
Why candidate-led EOR searches usually go wrong
We see this pattern more and more often, and to be honest, we would rather not. When an employer delegates the EOR search to the candidate, the research is done by the person with the least information and the most urgency.
The candidate wants one thing: a signed contract and a start date. That is normal and completely understandable. But the employment contract is the last step of an EOR setup, not the first. Before it, the client and the EOR have to agree on how the three-party arrangement works, who is responsible for what, how salary, benefits and working conditions are structured under Croatian law, and what the service costs and covers.
None of that is the candidate’s job, and most candidates do not care about it, which is fine. But when the person comparing providers does not know what to compare, one criterion takes over: price. Some candidates understand that a low monthly fee and a well-run employment are not the same thing. Many simply rank providers from cheapest to most expensive, without asking what their payroll, sick leave, contract or termination will actually look like with each of them. The shortlist then goes to the employer, who signs with a provider they have never spoken to.
Our view The candidate is optimising for speed. The employer is optimising for convenience. Nobody in that conversation is optimising for how the employment will actually run for the next two or three years.
What an Employer of Record in Croatia would have done for her
We scheduled the call and explained what an EOR looks like in practice. Ambacia would become her legal employer in Croatia, sign a Croatian employment contract with her, run her monthly payroll, register her with HZMO and HZZO, file the JOPPD and handle the HR administration, while the German company directs her day-to-day work. We also explained why we thought we were the right fit: our team and operations are less than a hundred kilometres from where she lives, and her employment would be managed by Croatian specialists who deal with Croatian labour law every day, in her own language.
Then we asked our questions. What did she expect from an EOR? How many providers had she contacted, and which ones? Could we speak directly with the company that would become our client?
The answers were telling. She did not know what to look for in an EOR. She had already been in touch with several competitors, mostly the names that appear first on Google. And no, we could not contact the German company directly, at least not yet. Maybe later, once she presented her shortlist. From our side, that is already too late. By the time a shortlist exists, the conversation about scope, responsibilities and cost has taken place without the client in the room.
Silence, then the plot twist
Everything about the inquiry felt urgent. One week passed and we sent a friendly follow-up. No reply. A second week passed and we called.
She had got the job. And she was opening a d.o.o.
We wished her well, and we meant it. But the story is worth telling, because the decision she made is one we see regularly, and it changes far more than the paperwork.
Opening a d.o.o. is not the same as being employed
A d.o.o. does not make you an employee on a different contract. It makes you the owner and director of a company whose only client is the firm that wanted to hire you. Before the first invoice, the company needs €2,500 in share capital (a j.d.o.o. can start from €1), a business account and a bookkeeper, plus a VAT ID and a monthly EC Sales List (Zbirna prijava), because its client is in Germany. If she employs herself as director, contributions run on a minimum base of €1,295.45 gross a month in 2026, about €1,509 a month in company cost, whatever the company earns. Profit is then taxed at 10%, and dividends at a further 12%. Sick pay, holidays and compliance become her company’s problem, which means hers. The German firm has not avoided the work of employing someone. It has handed it to the person it wanted to hire.
A paušalni obrt with one client is not the safer option
A paušalni obrt looks like the cheaper shortcut: in 2026, fixed contributions of €290.98 a month, a flat 12% income tax paid quarterly and a €60,000 annual cap. The catch is the profile. One client who sets your hours, tools and tasks is exactly what the Tax Administration checks for hidden employment (prikriveni nesamostalni rad). In 2021 it reviewed around 50,000 paušalisti, with IT freelancers first in line. If the work is reclassified, tax and contributions are recalculated as salary, and it is the worker who is assessed, with the client liable as guarantor. Meanwhile the protections are gone: no statutory four weeks of paid leave, no notice period or severance, and the first 42 days of sick leave are paid from your own pocket. It is a job without the protections of a job.
EOR vs d.o.o. vs paušalni obrt in Croatia: the 2026 comparison
The same job, seen from the worker’s side:
| Employed through an EOR | Own d.o.o. | Paušalni obrt | |
|---|---|---|---|
| Setup cost for the worker | None | Min. €2,500 share capital (€1 for a j.d.o.o.) plus founding costs | Registration, plus a VAT ID to invoice an EU company |
| Fixed monthly obligations | None. Salary and contributions are run by the employer | Bookkeeping, bank account, director contributions (about €1,509 a month in company cost at the 2026 minimum) | €290.98 contributions every month, plus quarterly flat tax |
| Who runs payroll, tax and filings | The EOR | You, through your accountant | You |
| First 42 days of sick leave | Compensation paid by the employer | Paid by your own company, out of your own revenue | Covered from your own funds |
| Paid annual leave | Statutory minimum of four weeks | Only if your company can afford it | None. A day off is a day not invoiced |
| Who carries the compliance risk | The EOR and the client | Your company, which means you | You, including reclassification risk |
What we would tell candidates and employers today
To candidates whose future employer asks them to find an EOR: you are allowed to ask questions that have nothing to do with price. Three are enough to separate the providers worth your time from the rest.
- Who exactly will be my legal employer, and do they have their own entity in Croatia or do they subcontract to a local partner?
- Who do I call when my payslip is wrong or I am on sick leave, and will that person speak Croatian?
- What happens to my contract if the client decides to end the arrangement?
To employers: please do not delegate this. A thirty-minute call between your HR team and the EOR settles scope, responsibilities and cost before anyone signs anything. Pushing your new hire into a d.o.o. or an obrt instead is not neutral either: Croatia’s law on undeclared work explicitly covers disguised employment through contracts with self-employed people.
The cheapest quote is rarely the cheapest outcome, and a company is not a contract. If your future employer has asked you to find an EOR, forward them this article, or put them in touch with us directly. We would much rather explain it to them than watch you register a d.o.o. to do the job you were hired for.
Frequently asked questions
Can a foreign company employ someone in Croatia without a local entity?
Yes, through an Employer of Record. The EOR becomes the legal employer, signs a Croatian employment contract, runs payroll, registers the employee with HZMO and HZZO and files the JOPPD, while the foreign company directs the day-to-day work.
Is it legal to work for only one client through a paušalni obrt?
Having one client is not illegal in itself. But if the relationship has the features of employment, the Tax Administration can reclassify it and recalculate tax and contributions as if the income were a salary. The authority has to look at the relationship as a whole, and the burden of proof is on its side.
How much does it cost to open a d.o.o. in Croatia in 2026?
The minimum share capital is €2,500 (a j.d.o.o. can start from €1). Founding online through START costs only a court fee, while the notary route usually costs a few hundred euros. The real cost comes afterwards: bookkeeping, a business account and the director’s monthly contributions.
Who should look for the EOR, the employer or the candidate?
The employer. The EOR contract is signed by the client company, which decides the scope, the budget and the responsibilities. The candidate should be involved but should not be the one negotiating it.
If this sounds familiar
We are a Croatian employing entity, not a platform reselling somebody else’s. We employ people in Croatia under Croatian law.
If you’re looking for a proven, trusted EOR, the first conversation is free and usually takes about twenty minutes.
Feel free to reach out at [email protected].
