In Croatia, real estate transactions are most commonly structured as either asset deals or share deals, each offering distinct strategic and financial advantages for investors. In addition to these standard approaches, alternative structures—such as development agreements, joint ventures, and building right or long-term lease arrangements—are increasingly used, particularly in sectors like renewable energy, where large-scale solar and wind farms require significant land use and regulatory alignment.
An asset deal involves the direct acquisition of real property, including land, buildings, and any fixed installations. Once the purchase agreement is executed, ownership must be formally registered in the Croatian Land Register. This structure offers clarity in asset ownership and may be preferable for greenfield investments or when the investor wants a clean title without corporate liabilities.
A share deal, by contrast, involves the acquisition of a company, usually an SPV, that holds the real estate. By purchasing a controlling stake—often 100%—the investor gains indirect ownership of the property while maintaining the existing corporate vehicle. This can be strategically advantageous, allowing investors to leverage the existing corporate structure for tax planning, accounting efficiency, and liability management.
From a fiscal perspective, share deals often provide a more favorable tax outcome. Asset transactions are typically subject to a 3% real estate transfer tax or 25% VAT, depending on the nature of the transaction, where in a share deal taxes may be mitigated or entirely avoided, which can significantly enhance overall investment returns.
For investors considering entry into the Croatian real estate market, understanding the nuances between these structures is essential for optimizing transaction value, managing risk, and aligning with long-term investment strategies.
