On 7 March 2025, the Croatian Parliament adopted comprehensive amendments to the Aliens Act. This marks the third major reform of the legislative framework governing migration policy since 2020. The new amendments consist of 96 articles and bring far-reaching consequences for the legal status, employment, residence, and rights of third-country nationals in the Republic of Croatia.

In recent days, one of the key legal developments in Croatia has been the adoption of amendments to the Foreigners Act. The Croatian Parliament has amended the existing Foreigners Act (Official Gazette Nos. 133/20, 114/22, and 151/22), following a proposal submitted by the Government of the Republic of Croatia last year. The revised Act entered into force on 15 March 2025 (hereinafter: the Act). The amendments primarily aim to improve the management of residence and employment of third-country nationals in Croatia and to align national legislation with EU law—particularly Directive (EU) 2021/1883 of the European Parliament and of the Council, which governs the admission and residence conditions for highly qualified workers (the so-called EU Blue Card). The Act also introduces stricter criteria for employers hiring foreign workers, in response to the continuous rise in the number of third-country nationals working and residing in Croatia.

Croatia is a popular destination for foreign investors, particularly in the real estate sector, especially those located in the southern, coastal, and seaside areas of the country. This is because their tourist potential is far superior to that of properties used for tourism in other parts of Croatia. Naturally, when it comes to such investments, the speed of return is crucial, if not decisive.

The primary legal act governing the legal status of foreigners (persons who do not hold Croatian citizenship) is the Foreigners Act (hereinafter: FA) and the Regulation on the Residence and Work of Highly Qualified Third-Country Nationals in the Republic of Croatia, which is fully aligned with Council Directive 2009/50/EC of 25 May 2009 on the conditions of entry and residence of third-country nationals for the purposes of highly qualified employment (OJ L 155, 18 June 2009).

The European Blue Card is a residence and work permit that allows third-country nationals to live and work in the member states of the European Union (EU) and the European Economic Area (EEA) if they meet certain conditions. The main objective of the European Blue Card is to attract highly skilled workers from third countries to contribute to the economic development of the EU. The permit is issued under simplified conditions compared to the standard residence and work permit.

According to the Labor Law (Article 76 and 77), an employee has the right to paid annual leave for each calendar year, lasting at least four weeks. However, minors and employees working in jobs where, despite the application of health and safety measures, it is not possible to protect the worker from harmful influences, have the right to annual leave lasting at least five weeks. Similarly, individuals with disabilities have the right to paid annual leave lasting at least five weeks for each calendar year. Nonetheless, through a collective agreement, an agreement between the workers' council and the employer, work regulations, or an employment contract, the duration of annual leave longer than the minimum prescribed can be determined. In cases where a right from the employment relationship (in this case, annual leave) is differently regulated by these sources of law, the most favorable right is applicable to the employee. It should be noted that an employee who is newly employed or who has a break between two employment relationships longer than eight days gains the right to full annual leave only after six months of uninterrupted employment with that employer.

Liability of the Employee for Damage Caused to the Employer Article 107 of the Labor Act regulates the liability of an employee who intentionally or due to gross negligence causes damage to the employer. According to this article, the employee is obliged to compensate the damage caused to the employer. If the damage is caused by multiple employees, each employee is responsible for the portion of damage they have caused, as prescribed in Article 107(2) of the Labor Act. In cases where the exact amount of damage caused by each employee cannot be determined, it is presumed that all employees share equal responsibility and are required to divide the liability for the damage equally, as stipulated in Article 107(3) of the Labor Act. Lastly, if multiple employees have caused the damage through an intentional criminal act, all employees are jointly liable for the damage, in accordance with Article 107(4) of the Labor Act.

It is known that the Republic of Croatia became part of the Schengen Area on January 1, 2023. But what does this actually mean for Croatia, Croatian citizens, and citizens of other countries within the Schengen Area? Despite being a small country, Croatia successfully gained the trust of all signatory states and thereby became equal to the "old" members of the European Union.