Companies act Croatia: How to deal with share capital and company shares as a result of the introduction of the Euro

On 1 January 2023, the Republic of Croatia converted the kuna to the euro with a fixed exchange rate. How and when must companies adjust their share capital and shares to the new currency and the Companies Act Croatia? The Ecovis experts explain the regulations.

What is new in terms of share capital

The introduction of the Euro (EUR) as the official currency instead of the previously valid kuna (HRK) was the final step in the process of joining the EU. The Government introduced a fixed conversion rate of 1 EUR = 7.53450 HRK. From 1 January 2023, all values had to be converted into EUR at this rate. For businesses, this obligation and its terms and deadlines are set out in the Companies Act.

The share capital of companies registered in the Republic of Croatia was given in kuna and visible online in the public registries of all commercial courts in Croatia, available at https://sudreg.pravosudje.hr/registar/f?p=150:1

From 1 January 2023, these courts converted share capital from HRK and displayed it in EUR in their online databases. However, this is only for display purposes and does not mean that the company has actually complied with its obligations to convert its share capital into EUR.

The Companies Act obliges companies to recalculate their share capital and business shares under specific rules, with slightly different amounts of minimum share capital and shares, as well as rules for rounding these amounts.

We will help you to correctly convert share capital and shares from kuna to euros in your business documents.

Ema Kalogjera Juranić, Attorney at law, HAČIĆ & KALOGJERA JURANIĆ Law Firm Ltd.*, Zagreb, Croatia

Prescribed deadlines for limited liability companies (LLC), simple limited liability companies (SLLC) and joint-stock companies (JSC)

There is no specific deadline for LLC and SLLC. However, these companies are required to enter the share capital and business shares in euros in the court register either at the first sale/purchase of business share(s), in case of recapitalisation, amendments to the articles of incorporation, or other changes in status carried out in the companies registry. Unlike LLC and SLLC, for JSCs the deadline was a period of one year (i.e., until the beginning of 2024).

When recalculating share capital and business shares, the nominal amounts need to be converted into euros and rounded up. Due to the provisions of the Companies Act on the minimum amount of share capital and the minimum amount of business shares and their multiples, practically all companies will need to increase or decrease their share capital and nominal amounts of business shares, including their own business shares.

An increase or decrease in order to comply with the Companies Act is not treated as a change in share capital or business shares and there is a simplified procedure. However, to comply with these rules, the ownership structure should not change, and shareholders’ rights should remain as they were.

It is inevitable that all companies registered in the Republic of Croatia will have to carry to out the adjustment of share capital and shares from HRK to EUR in the companies registry, their articles of incorporation, and in regulations, decisions, business and other documents. However, it is important to note that this must not have any negative effect on shareholder’s rights.

For further information please contact:

Ema Kalogjera Juranić, Attorney at law, HAČIĆ & KALOGJERA JURANIĆ Law Firm Ltd.*, Zagreb, Croatia
Email: ema.kalogjera@hkj-legal.hr

Darko Pavlic, ECOVIS FINUM/ECOVIS FINUM REVIZJA, Zagreb, Croatia
Email: zagreb@ecovis.com

*In cooperation with ECOVIS L+C Rechtsanwaltsgesellschaft mbH