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Doing business in Croatia: Mandatory e-communication
29.08.2024
Companies wanting to set up a business in Croatia or provide services there from an EU or EEA country must register their company for “e-communication”. All legal proceedings are handled via this information system. Registration is mandatory, even without a specific reason. The Ecovis experts explain the details.
In 2019, Croatia implemented a string of reforms aimed at the digitalisation and general acceleration of judicial processes. One such reform was the amendment to Article 133 of the Civil Procedure Act (Official Gazette no.70/2019), which introduced the mandatory use of electronic communication with courts (“e-communication”) for legal entities. Although the obligation has been in place since 2020, a large percentage of companies founded by foreigners do not comply and therefore face serious consequences. In principle, the obligation comes into force for new companies on the day they are founded. If they do not comply with the obligation, they may be sued, and money may be withdrawn from their accounts without them knowing about the proceedings. This must be avoided.
Who is required to use electronic communication
The legislation applies to essentially all legal entities and natural persons who perform a registered activity (in disputes concerning that activity). This includes, for example, state bodies, the state attorney’s office, lawyers, notaries public, court experts, court appraisers, court interpreters, bankruptcy trustees etc.
In what types of proceedings is electronic communication used
E-communication is mandatory in all commercial and civil litigations, enforcement procedures and administrative disputes. It is not used for company registration purposes, land-registry matters and general administrative procedures, explain the Ecovis experts.
E-communication is used by all commercial, civil, administrative, municipal and county courts, as well as the High Commercial Court, Supreme Court, High Criminal Court and High Administrative Court of the Republic of Croatia.
What is sent by e-communication
The e-communication system is used for sending lawsuits, resolutions and judgements; for submitting written statements, submissions, delivering documents, submitting legal remedies and generally for every aspect of communication in the prescribed types of proceedings. The aim is to fully replace submissions in paper form. It also provides full remote access to court case files.
We support you in setting up e-communication and, if necessary, using it correctly. Ema Kalogjera Juranić, Attorney at law, HAČIĆ KALOGJERA JURANIĆ Law Firm Ltd.*, Zagreb, Croatia
How to register
All those legally obliged to do so, including legal persons, must request access to the courts’ e-communication system, whether they are involved in any ongoing court proceedings or not. The following is required for registration:
Registration with the internal registry of the Ministry of Justice
Electronic credentials level 3 or higher
Signature certificate used to sign documents with a qualified electronic signature
Who should obtain digital credentials and how?
Just as ID cards and passports are used daily to prove a person’s identity, in the digital world, electronic (digital) credentials are used for the same purpose.
Any person authorised to represent a company should have an electronic credential, not just for electronic communication, but for business transactions – especially with the tax administration. To obtain a (free) digital credential in Croatia, this person must be one of the following:
A Croatian citizen
An EU citizen with residence in Croatia
A foreign national with residence in Croatia
A digital nomad
An EU citizen through a cross-border cooperation
Where a company representative does not meet any of the above criteria, they can have a representative in Croatia who will be tasked with electronic communication with the courts only.
Croatian digital services re quire credentials with 3 levels of security: a high level of security (3), a significant level of security (2) and a low level of security (1). All digital services and digital credentials fall into one of these levels of security. The level 3 (high security) credentials allow the holder to access all e-services in Croatia, which includes e-communication.
The definition of the security levels as well as the criteria for assessing the quality and the level of security of authentication are governed by the criteria as set out in Regulation (EU) No 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market.
The consequences of not registering
The most severe consequence is that a company/legal entity would not be able to react in due time to claims and court decisions (judgments). This could result in judgments/decisions being made in favour of the plaintiff, claims being accepted and decisions going against the company/legal entity (default judgments).
Moreover, the company/legal entity would not be able to file its own submissions to the court and thus actively participate in the proceedings.
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
Top Talent Pass Scheme Hong Kong: Highlights of the TTPS • 高端人才通行證計劃
29.08.2024
The Top Talent Pass Scheme (TTPS) is one of the new measures announced by the Hong Kong Special Administrative Region (HKSAR) government to attract talent to Hong Kong. This scheme is expected to be popular as it does not require employer sponsorship at the time of application. The scheme is widely available to eligible nationals from many countries and offers a new path to Hong Kong to live and work. The experts from ECOVIS Axial CPA Limited outline the features and benefits.
Official data
The Hong Kong TTPS was undoubtedly a rising star in 2023 and 2024, as indicated by official data: As of December 31, 2023, the total number of approvals under the scheme was 50,612, with the B and C categories (see eligibility criteria below) combined totaling nearly 40,000, the majority share. However, two months later, by the end of February 2024, the number of approvals had increased to 59,000, signaling an increase of nearly 8,500 approvals in just two months. This remarkable surge in approvals suggests significant demand and also implies an inevitable tightening of policy.
Why this matters
This scheme opens a new, flexible door to welcoming international talent who may be interested in working in Hong Kong or establishing a business in Hong Kong, without the need to secure employment or to provide a business plan upon application.
Eligibility criteria
TTPS is open to all nationals except those from Afghanistan, Cuba, Laos, Korea (Democratic People’s Republic of), Nepal, and Vietnam. Applicants may apply under one of the categories below and are not required to have secured an offer of employment in Hong Kong at the time of application:
Individuals whose taxable annual employment or business income reached HK$2.5 million or above in the past year;
Graduates of the world’s top 100 universities with at least three years of work experience in the past five years;
Graduates of the world’s top 100 universities in the past five years with less than three years of work experience, subject to an annual quota of 10,000 (not applicable for those who obtained their undergraduate qualifications from a full-time and locally-accredited programme in Hong Kong).
Applicants can also apply for dependent visas for their family members, which will allow them to stay, study, and work in Hong Kong.
Limit of stay
Successful applicants will be granted a 24-months stay and are free to take up and change employment or to establish or join a business in Hong Kong during their permitted stay.
Processing time
A processing times of four weeks is expected.
Extension of stay
When applying for an extension, applicants are required to have secured an offer of employment in Hong Kong. Evidence must be provided for those who have established or joined a business. Three-year extensions will be granted to successful applicants.
Contact us
If individuals have questions regarding their eligibility, the conditions for applying, and what kind of supporting documentation is required, please contact our Immigration Team in Hong Kong.
Apart from TTPS, there are various pathways for foreigners to work and reside in Hong Kong. Our Immigration Team is available to provide detailed information and guidance on these options.
Vietnam: Tax, Land Rental Payment Deadlines and 2% VAT Reduction Extended till End of 2024
23.08.2024
The Vietnamese government is easing financial pressures by extending tax and land rental deadlines and prolonging the 2% VAT reduction on certain goods and services through the end of 2024. The experts at ECOVIS AFA VIETNAM provide a detailed overview of these recent measures, which impact various tax and land rent obligations.
On 17 June 2024, the Government recently issued Decree No. 64/2024/ND-CP (Decree 64) extending the payment deadlines for Value Added Tax (VAT), Corporate Income Tax (CIT), Personal Income Tax (PIT) and land rent in 2024. Then, on 30 June 2024, the Government also issued Decree No. 72/2024/ND-CP (Decree 72) extending the 2% VAT reduction on certain goods and services for the second half of 2024.
1. VAT (excluding import VAT)
1.1. Extension of VAT payment deadline
The Government has extended the tax payment deadline for VAT payable (including the amount allocated to local governments at provincial level) of the tax period from May to September 2024 for monthly VAT returns and the second quarter of 2024, the third quarter of 2024 for quarterly VAT returns of businesses and organisations eligible for the extension.
The extension period is five months for VAT of May 2024, June 2024, and the second quarter of 2024, four month extension for VAT of July 2024, three month extension for VAT of August 2024, two month extension for VAT of September 2024 and the third quarter of 2024. The extension period is calculated from the end of the VAT payment deadline in accordance with the provisions of the tax management law.
Enterprises and organizations are eligible for an extension to declare and submit monthly and quarterly VAT declarations in accordance with current legislation, but are not required to pay the VAT due on the VAT declaration.
1.2. Extension of 2% VAT reduction
On 28 December 2023, Decree 94/2023/ND-CP was issued, in accordance with Resolution No. 110/2023/QH15, and implemented a 2 percent VAT reduction on goods and services that were taxed at 10% VAT, with certain exceptions.
Under Decree 72, the Vietnamese government has extended the VAT reduction to the end of 2024 but has not expanded the scope of goods and services eligible for the reduced tax rate. The Decree 72 included a comprehensive list of goods and services excluded from the 2% VAT reduction, detailing specific product codes and HS codes. This was to be effective from 01 July 2024 to 31 December 2024.
Sectors excluded from the 2% VAT reduction are telecommunications, IT, finance, banking, insurance, real estate, metals, prefabricated metal products, refined petroleum, chemical products, and products and services subject to special consumption tax.
2. CIT
With regard to corporate income tax, the government has extended the deadline for the payment of the quarterly advance payment of corporate income tax for the second quarter of 2024 for businesses and organizations eligible for the above-mentioned extension.
The extension period is three months from the end of the corporate income tax payment deadline according to the provisions of the tax management law.
3. VAT and PIT of household businesses and individual businesses
The government has extended the deadline for the payment of the amount of tax due in 2024 for business households and individual business owners operating in the specified economic sectors and fields.
Business households and individual business owners must pay the extended tax amount under this clause by 30 December 2024.
4. Land rental
The deadline for the payment of 50% of the land rent payable in 2024 (the amount payable in the second period of 2024) has been extended for businesses, organizations, households, and individuals eligible for the extension who are leasing land directly from the State in the form of annual land rent payments on the basis of a decision or contract by a competent State authority.
The extension period is two months from 31 October 2024.
This Decree will be effective from the date of signing until 31 December 2024.
The above content has been researched and summarised by ECOVIS AFA VIETNAM from widely published legal documents and articles. If you would like to discuss more in-depth issues, please contact us using the information below: