A situation increasingly common in the information technology (IT) and consulting world: You live and physically remain in your homeland (Croatia), but are hired by a foreign company (e.g., from the USA or Germany) which has NO local office, OIB, or branch in your country. How do you legally receive a foreign monthly foreign currency salary payment into your local account and pay for public health and pension insurance?
If you agree to receive a goundless "pocket money" net amount through foreign currency transfer from the USA as a donation or similar into your private current account – you are committing a serious tax evasion offense by failing to pay mandatory state health and pension levies into the budget. Your transfer is not automatically visible to all state systems but requires immediate calculation according to local contribution regulations.
The US company hires special Employer of Record networks (such as Deel, Remote.com, etc.) that are legally registered and present in the local country (Croatia). You are officially employed by that EoR agency. Your salary undergoes the full traditional tax and administrative process, including all local accounting, tax filings (Tax Administration), and contributions. The foreign corporation pays the agency's invoice. This is 100% compliant and transparent.
If you do not want to use an intermediary agency, most tax jurisdictions allow you to submit a signed foreign employment contract to the local tax administration. In this case, you take over the company's role in calculating contributions completely yourself!
Agrement and signing of a foreign gross contract clearly stating your obligation to independently redirect all local costs and contributions to budget entities.
The employer transfers the entire Employer Total Cost (Gross 2 in the Croatian sense) to your foreign currency account once a month.
Within the prescribed legal deadline (e.g., a few days) upon receiving the funds, you as the employee must independently fill out the necessary forms on the local tax portal (e-Građani) and pay the bills for Pension (HZMO), Health (HZZO), and Income Tax to your local institutions to arrive at your legal net income.
The most tax-efficient way for many international consultants and programmers is to handle operations through a <strong>local "Sole Proprietorship / Agency with flat-rate contributions" and function via B2B invoicing</strong>. You invoice the foreign company every month and pay fixed flat-rate contributions from the profit. Caution: Due to many freelancers working for a single foreign client full-time, tax administrations across the region monitor such cases for "Disguised Employment" and often impose very high fines.