Background information

The Aliens Act (OG 133/20, 114/22, 151/22, 40/25)defines third-country nationals in Croatia as aliens who are not nationals of the Member States of the European Economic Area (the European Union, the Principality of Liechtenstein, the Kingdom of Norway, and the Republic of Iceland) or nationals of the Swiss Confederation. The Aliens Act prescribes the entry, movement, stay, and work conditions of third-country nationals. Third-country nationals may stay in the Republic of Croatia: i) up to 90 days in any 180-days in the Schengen area- short-term stay; ii) up to a year - temporary stay; and iii) indefinitely - permanent stay and long-term residence. A short-term stay is a stay of third-country nationals. The Croatian Parliament adopted amendments to the Aliens Act (OG 40/25) on 21 February 2025, introducing significant changes to employment and residence procedures for foreign workers. These changes aim to harmonize Croatian regulations with European standards. However, in addition to their advantages, the amendments also impose stricter conditions for the employment of foreigners, significantly impacting the labour market.

Content of measure

One of the most important changes is the extension of residence and work permit duration. Foreign workers can now obtain a permit for up to three years, instead of the previous one-year period, if the employer signs a longer-term contract with them. Additionally, a transitional period of 60 days has been introduced, allowing foreign workers to remain in Croatia after losing their job, providing them with additional security and an opportunity to find a new employer. This measure will make it easier for employers to plan their workforce and reduce administrative burdens for foreign workers, who previously had to renew their permits annually. The extension of the work permit period will reduce the time employers spend waiting in lines for permits in the coming year and, due to job security, encourage foreign workers to consider bringing their families to Croatia after two consecutive years of employment. A major change introduces the obligation to conduct a labour market test before an employer can hire a foreign worker. This means that employers must prove that no suitable workers are available in the Croatian labour market before hiring a foreigner. As before, the employer must specify the criteria that the desired worker must meet, but these criteria can no longer be set to exclude all unemployed workers in Croatia. These criteria cannot be stricter than the conditions in comparable workplaces, nor can the salary offered by the employer be lower than the wages of Croatian employees in the same occupation. Thus, offering only the minimum wage based on a worker’s foreign status is prohibited. This measure aims to eliminate wage discrimination between domestic and foreign workers and to encourage employers to prioritize domestic workers. Considering the costs of bringing in foreign workers and providing accommodation, hiring a domestic worker for the same salary is ultimately more economical. Occupations in tourism and construction continue to experience labour shortages and are not subject to a labour market test, nor is the test required for a worker previously employed by the same employer in the prior year

Use of measure

The new regulations also establish a ratio of domestic to foreign workers of 1:12 if the occupation is in high demand. The Act introduces employment quotas of 8% for foreign workers in high-demand occupations and 16% for non-high-demand occupations. This means that for every domestic worker, an employer may hire up to 12 foreigners in high-demand fields or up to 6 foreigners in other fields. This measure particularly affects the construction and hospitality industries, which have experienced a significant influx of foreign workers without previous hiring restrictions. Until the new application system is fully implemented, this rule will be replaced with a temporary measure: an employer with fewer than 50 domestic workers may submit up to 50 applications for work permits, while employers with 50 or more domestic workers may submit up to 250 applications for foreign workers. Until the administration of applications is established, this rule will be replaced by the rule that an employer who employs fewer than 50 domestic workers may submit 50 applications for a work permit, and if they employ 50 or more, their limit is 250 applications for foreign workers

Target groups

Workers	Businesses	Citizens
Applies to all workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government	No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Any other form of consultation, institutionalised (as stable working groups or committees) or informal	Any other form of consultation, institutionalised (as stable working groups or committees) or informal

Social partners' role in the implementation, monitoring and assessment phase:

• Social partners jointly
• Main level of involvement: Peak or cross-sectoral level

Involvement

Representative social partners were involved during the preparation of the Law. The social partners fully support better regulation of foreigners’ work and stay in Croatia.

Views and reactions

Trade unions fully support the need to combat abuses and the importance of ensuring a balance between employers’ needs and domestic workers’ protection. The Croatian Employers’ Association believes that the amendments to the Aliens Act can cause problems for entrepreneurs and be very costly.

Sources

• 24 December 2024: Amendments to the Labour Market Ac (narodne-novine.nn.hr)
• 28 March 2025: Amendments to the Aliens Act (Izmjene i dopune Zakona o strancima) (www.vecernji.hr)