How can a foreigner collect a debt from an invoice issued to a Croatian person?
In principle, after providing a service or selling goods to a Croatian company, foreign companies issue an invoice. If the Croatian company does not pay the invoice, the foreign company is entitled to initiate an enforcement procedure based on the issued and due invoice.
Before initiating the enforcement procedure, it is recommendable for the foreign company (the creditor) to send via Attorney at Law a Notice to the Croatian company (the debtor) and request payment within 7 days.
If the debtor does not act according to the Notice and does not pay the debt within the deadline, the foreign company shall first obtain a Croatian PIN - Personal Identification Number from the Tax Administration via Attorney at Law and simultaneously prepare the invoice, commercial excerpt from the relevant registry and the bank's confirmation on the bank account ownership. The Attorney at Law shall then obtain from the Court Expert certified translations of the respective documents.
Based on these documents and certified translations, the Attorney at Law can prepare and submit the Enforcement Proposal to the Notary Public. If the Notary Public determines that the Proposal is in order, the Notary Public shall issue and deliver to the debtor a Request for Payment within 15 days. If the debtor does not pay the debt, the Notary Public shall issue the Enforcement Resolution and deliver it to the debtor.
The debtor can file an objection against the Enforcement Resolution within 8 days, in which case the procedure shall continue before the competent first instance Court in a form of a litigation, during which the creditor as the claimant shall need to prove the basis and the amount of the claim against the debtor as the respondent. If the first instance Court determined that the basis and the amount are proven, it shall render a Resolution by which the payment order from the Enforcement Resolution shall be upheld. However, against this first instance Resolution, the debtor (the respondent) shall have the right to file an appeal, which shall be decided on by the competent second instance Court in an expedited procedure.
If the second instance Court confirms the first instance Resolution, the first instance Resolution shall become final and binding, and suitable for enforcement, based on which the creditor (the claimant) shall be able to deliver it to the Financial Agency for execution against the debtor (the respondent), which shall then issue an order to all Croatian banks to seize and transfer the full amount of the debt (with interest) and litigation costs from the debtor's (respondent's) bank account in favour of the creditor (the claimant).
We at Vukelić Law Office (VLO) regularly advise foreign companies in debt collection procedures against Croatian companies. If you are a foreign company and want to collect your claim against your debtor in the Republic of Croatia, please contact us at info@vukelic-law.eu