Employing foreign workers has in recent years become a necessity for many Croatian companies, particularly in construction, shipbuilding, manufacturing, tourism, and agriculture. However, this process is administratively demanding and subject to frequent legislative changes – and in the past two months, one of the most significant amendments in recent years has taken place.
What Has Changed: The Package of Amendments to the Aliens Act (OG 55/2026)
The Croatian Parliament adopted a comprehensive package of amendments to the Aliens Act on 15 May 2026, published in the Official Gazette No. 55/2026, in force from 4 June 2026. These are the changes that every employer hiring foreign nationals needs to be aware of:
1. Extended Deadline for the Ministry of Interior’s Decision
The deadline within which the Ministry of Interior (MUP) must issue a decision on a residence and work permit application has been extended from 30 to 90 days. In practice, this means employers must plan the recruitment of foreign workers significantly earlier than they were used to, as the waiting time for a permit is now longer.
2. Extended Deadline for Registering Place of Residence
The deadline for registering a worker’s place of residence has been extended from 3 to 15 days, giving employers and agencies organising accommodation somewhat more administrative flexibility.
3. Business Account Freeze as a New Sanction
A completely new measure has been introduced – the freezing of a company’s business account for up to 30 days as a sanction for the illegal employment of foreign nationals. This is a considerably harsher measure than the existing financial penalties (which range from €6,630 to €39,820 per worker for working without a valid permit) and can seriously jeopardise a company’s liquidity.
4. Easier Change of Employer for the Worker
A foreign worker now has the right to change employers after 6 months of continuous work under the same permit, without the need for a completely new permit to be issued from scratch. The new employer must submit a permit transfer request to MUP within 30 days of signing the new employment contract. This shifts the legal balance partially in favour of workers – for the first time since the 2013 reform.
5. Territorial Restriction of the Permit – A New Development
A worker may only work within the area of the police administration for which the labour market test (LMT) was conducted. If they work outside that area without a completed test, MUP may revoke the permit. This change particularly affects employers operating at multiple locations or construction sites across the country – a permit is no longer automatically “transferable” throughout Croatia.
6. Labour Market Test (LMT) Not Required for Shortage Occupations
If the occupation is on the shortage list for the relevant police administration, the labour market test is not conducted. For occupations not on the shortage list for that specific area, the test remains mandatory – even if the occupation is in shortage at the national level.
7. Precisely Defined Accommodation Requirements
The Ordinance (OG 43/2026, in force from 22 April 2026) clearly defines the concept of “adequate accommodation” – the sanitary facility must be physically separate from the living and sleeping quarters, and there must be facilities for food preparation or a communal canteen.
8. New Quota Mechanism
Numerical quotas for foreign workers were abolished back in 2021, but from 2026 the influx of labour is monitored through a 12-month report by the Ministry of Labour, and employers must maintain a ratio of 10% domestic workers.
What This Means for Employers in Practice
For companies that regularly employ foreign workers – particularly those operating at multiple locations or posting workers to other EU countries – these amendments mean:
- earlier planning is required due to the extended processing deadline (90 days),
- greater care when deploying workers to different construction sites due to the territorial restriction,
- checking whether the occupation is on the shortage list specifically for that police administration, not just at national level,
- stricter oversight of documentation compliance, given the introduction of a business account freeze as a sanction,
- a new opportunity, but also a risk, when hiring workers coming from another employer after 6 months – swift and accurate permit transfer administration is required.
Conclusion
The amendments to the Aliens Act that entered into force on 4 June 2026 are among the most comprehensive in recent years and directly affect how employers plan, contract, and manage documentation for foreign workers. Since MUP deadlines, territorial restrictions, and the new account freeze sanction carry real business risks, timely verification and alignment of internal processes with the new rules are more important than ever.
