Seminar: “Employing foreign workers without mistakes: what changed in 2025 and what is coming in 2026”

In March 2025, amendments to the Aliens Act were implemented, which significantly affected the process of obtaining residence and work permits and, in certain aspects, made employment easier, while in others more difficult, both for employers and for foreign workers themselves. Following their implementation and the analysis of their effects, additional amendments have been announced for spring 2026.

During 2025, important changes were introduced for the Croatian diaspora, enabling the regulation of temporary residence for the purpose of immigration and return. The duration of temporary residence was also extended, significantly easing administration for both police authorities and foreign nationals (e.g., residence and work permits based on the opinion of the Croatian Employment Service are issued for three years, seasonal work has been extended to nine months, and family members may register residence for two years).

Additionally, changing occupation with the same employer and changing employers after one year of work have been facilitated, and the possibility of additional work has been introduced. A period of unemployment of 60 days was also introduced, during which a foreign national may remain in Croatia and seek new employment.

The conditions for issuing a positive opinion by the Croatian Employment Service have been regulated, stipulating that the employer must have at least one employee, a Croatian or EEA national, employed on a permanent and full-time basis for at least one year. Furthermore, the employer — a legal entity — must have generated turnover of at least EUR 10,000 per month in the past six months, while an employer — a natural person — must have generated a total of EUR 15,000 in the observed period. In practice, these conditions are problematic for new companies wishing to employ foreign workers.

Provisions regulating the accommodation of foreign workers have also been introduced, in order to prevent inadequate living conditions and excessively high rents. A Commission for the Assessment of Knowledge, Skills, and Competencies for the purpose of issuing the EU Blue Card has also been introduced; however, it is not yet operational, which has led to prolonged processing of applications.

The seminar also discussed the difference between the legal framework and its application in practice, as the law leaves room for various interpretations, and police authorities apply their own internal rules. Therefore, in practice, it is a significant advantage to have a qualified representative who is familiar with the system.

The Government has announced new amendments to the Act no later than June 2026. Some aspects have been changed in favor of employers, but many are not beneficial to them. It is envisaged that changing employers will be possible after six months of work, while the permitted period of unemployment will be extended to three or six months, depending on the duration of the permit.

The police will deliver documentation electronically (e-Citizens system), and seasonal workers will be able to obtain permits of up to three years, with a limitation of working up to 90 days or nine months per year. Permits will be issued for a specific county, which may increase the administrative burden for employers operating in multiple locations.

Registration of residence for family members will be possible only after two years of residence of the permit holder. Conditions for rejecting applications are also being regulated, including proof of economic activity related to the occupation and the presence of key personnel with regulated residence.

One of the most important innovations is the introduction of mandatory knowledge of the Croatian language (level A1.1) when extending a permit after one year, with this provision to start applying one year after the amendments come into force.

In the final part of the seminar, tax implications were addressed. It is crucial to determine the tax status of the worker — resident or non-resident — because residents pay tax on worldwide income, while non-residents pay tax only on income earned in Croatia.

A particular complexity arises in the posting of foreign workers to work abroad, where double taxation avoidance agreements apply. It is also important to determine social security contribution obligations in accordance with EU regulations and local legislation.

In conclusion, timely analysis of legal and tax obligations is key to avoiding risks and ensuring compliance with regulations.