Definition of crafts business
Crafts business shall refer to permitted economic activities performed independently and permanently in the market by natural persons with the objective of generating income or profit by means of activities performed in the market in the field of production, traffic or providing services.
Crafts business may also be performed by legal entity carrying out economic activity defined in the list of associated or privileged crafts businesses provided it performs practical or apprenticeship/vocational training. Every economic activity not prohibited by the law shall be permitted (Article 2, paragraph 2 of the Crafts Act).
We distinguish following types of crafts businesses:
- Free crafts businesses – crafts businesses requiring only the general conditions for crafts registration, i.e. not requiring necessary qualifications.
- Associated crafts businesses – requiring, apart from the general conditions, the exam on vocational training, appropriate secondary school qualifications or master craftsmen’s examination.
- Privileged crafts businesses – crafts businesses which can be run exclusively on the basis of the privilege certificate issued by the competent ministry or other body which competence is stipulated by special regulation, depending on the activity.
Conditions for registration of crafts business
The Crafts Act provides for general and special conditions for running a crafts business.
- General conditions (Article 8 of the Crafts Act) to be met by natural person:
- no security measure or protection measure of forbidding the crafts business has been introduced by means of an effective court verdict, misdemeanour verdict or decision of the Court of Honour for as long as the measure is in force.
- the right to use the adequate premises if required for running a crafts business
- Special conditions:
- vocational qualifications, adequate secondary school qualifications or master craftsman’s examination in case of associated crafts business (Article 9 of the Crafts Act)
- meeting the special health conditions if provided for by the Act (Article 9 of the Crafts Act)
- privilege in case of privileged crafts businesses
Exceptions from the special condition:
- Exceptionally a natural person intending to run associated crafts business meeting the general conditions, however not meeting the special condition of vocational qualifications, adequate secondary school qualification or master craftsman’s exam may run associated crafts business provided such a person hires a full time employee meeting the stipulated conditions, which shall be entered into the Crafts Register.
- Special advantages shall be provided for crafts businesses located within the territory defined by the Act on Areas of Special State Concern, Highland Areas Act and by the Islands Act, in which territory the natural persons may run crafts businesses without the master craftsman’s exam provided they have adequate secondary vocational education and provided they pass the master craftsman’s exam within the period of three years from the date of entering into the Crafts Register.
Premises, equipment and instruments required for running crafts business shall meet the minimum technical and other conditions set forth by special regulations referring to carrying out particular economic activity (Article 11 of the Crafts Act).
Mutual Running the Crafts Business
Two or more natural persons can run a crafts business together with the objective of performing economic activities. Natural persons can mutually run an associated crafts business provided one of them, apart from the general conditions, meets the special condition of vocational qualifications, adequate secondary vocational education or passed the master craftsman’s exam. The mutual relations between such persons shall be regulated by written agreement and the regulations referring to partnership provided for by the General Obligation Act.
It should be noted that in the process of crafts registration, apart from the provisions of the Crafts Act, the provisions of other acts have to be complied with (such as for instance the Trade Act, Catering Act, Road Transport Act, Utility Services Act etc.) regulating special conditions for performing particular activities, and in particular with respect to conditions referring to premises, vocational qualifications or special licences/permits and concessions.
Crafts registration by foreign citizens
The same conditions applying to citizens of the Republic of Croatia shall apply to foreign citizens running crafts business in the Republic of Croatia as well. The foreign citizens shall meet the same conditions for starting crafts business – both general and special conditions and conditions referring to associated crafts.
Additional conditions shall be provided by the Aliens Act (Official Gazette 130/2011 and 74/2013) setting forth the obligation of obtaining the residence permit and work permit to be issued by the Ministry of the Interior.
The crafts business registration process by foreign citizens shall be as follows:
- Crafts business registration without the date of starting the crafts business operations
- Obtaining the residence permit and work permit
- Register the start of crafts business operations
A natural person with registered crafts business in the territory of a European Union member state or a state which is party to the Agreement on the European Economic Area may run associated crafts business operations in the Republic of Croatia in line with the provisions of the Crafts Act.
A natural person with registered crafts business in the territory of a European Union member state or a state which is party to the Agreement on the European Economic Area may run services activity in the Republic of Croatia temporary or periodically in line with the provisions of the Services Act.