NUMBER AND STRUCTURE OF BUSINESS ENTITIES, SEPTEMBER 2023

The comparison of the number of legal entities in the Register of the Croatian Bureau of Statistics with the number of active legal entities in other registers shows that the share of active legal entities was 59.5%.

This discrepancy occurs due to differences in the methodology of data entry method and of defining activities applied in individual registers.

The data on the number of entities in crafts and trades and free lances refer to the number of self-employed entrepreneurs, with or without employees, as well as to the number of persons engaged in a professional activity according to pension insurance records.

The data on the structure of business entities by economic activities show that more than a half of registered and active entities belong to the following four activity sections: Wholesale and retail trade; repair of motor vehicles and motorcycles, with 15.9% of registered and 15.0% of active entities, Manufacturing, with 7.5% of registered and 8.8% of active entities, Professional, scientific and technical activities, with 10.5% of registered and 12.9% of active entities, and Other service activities, with 17.5% of registered and 13.0% of active entities.

The share of profit entities in the total active business entities was 80.3% and their structure by economic activities shows that 68.7% of them belonged to five activity sections, shown in the following order of frequency: Wholesale and retail trade; repair of motor vehicles and motorcycles (18.5%), Professional, scientific and technical activities (16.0%), Manufacturing (10.9%), Construction (14.2%), and Accommodation and food service activities (9.1%).

The share of non-profit active entities was 19.7%. Half of them were classified into the activity section Other service activities. The remaining half was distributed between Arts, entertainment and recreation (28.8%), Education (7.5%), Human health and social work activities (7.0%) and Public administration and defence; compulsory social security (2.7%).

The structure of entities in crafts and trades and free lances by economic activities was much more balanced than the structure of legal entities. Professional, scientific and technical activities was the most represented activity section. Besides this activity section, five other activities covered one half of the total number of entities.

 

NKD 2007 activity sections
A	Agriculture, forestry and fishing
B	Mining and quarrying
C	Manufacturing
D	Electricity, gas, steam and air conditioning supply
E	Water supply; sewerage, waste management and remediation activities
F	Construction
G	Wholesale and retail trade; repair of motor vehicles and motorcycles
H	Transportation and storage
I	Accommodation and food service activities
J	Information and communication
K	Financial and insurance activities
L	Real estate activities
M	Professional, scientific and technical activities
N	Administrative and support service activities
O	Public administration and defence; compulsory social security
P	Education
Q	Human health and social work activities
R	Arts, entertainment and recreation
S	Other service activities
T	Activities of households as employers; undifferentiated goods – and services – producing activities of households for own use
U	Activities of extraterritorial organisations and bodies

 

The structure of active legal entities by ownership types shows that the private ownership predominated with 79.2% of entities, while 0.8% of entities were owned by the state, 0.4% of them were in mixed ownership and 0.4% of entities were in co-operative ownership. The ownership of 19.1% of legal entities was not monitored.

The ownership structure by activities shows that privately owned entities were predominant in service activities, e.g. Wholesale and retail trade; repair of motor vehicles and motorcycles had a share of 98.6%, Real estate activities of 99.1%, and Transportation and storage of 98.1%. Approximately the same share of private ownership existed in the productive activities such as Construction (99.2%), Manufacturing (97.8%), and Information and communication (98.7%).

Observation of the structure of active legal entities according to the number of persons in paid employment shows that the highest share of 55.2% belonged to entities employing 1 – 9 persons, followed by 33.9% of entities without persons in employment, 8.4% of entities employing 10 – 49 persons, and 2.1% of entities employing 50 – 249 persons, while entities employing more than 250 persons had a share of only 0.4%.

Limited liability companies were markedly predominant in the structure of trade companies by legal organisational forms, with a share of 73.1% of registered and 74.3% of active ones. Simple limited liability companies held the second place by their number, with a share of 25.6% of registered and 24.7% of active companies. Other legal forms of trade companies constituted the remaining share of 1.1%.

The structure of registered non-profit legal entities by legal forms shows that associations, institutions, co-operations and similar organisations had a share of 96.8%, while state government bodies and bodies of local and regional self-government units had a share of 3.2%.

Concerning the activity of the mentioned legal entities, there were 45.3% of active ones. Their structure by activities shows that they were entities belonging to four activity sections: Other service activities, with 58.6% of registered and 40.7% of active ones, Public administration and defence; compulsory social security, with 4.1% of registered and 29.8% of active ones, Human health and social work activities, with 5.0% of registered and 63.3% of active entities, and Education, with only 3.8% of registered ones but with the largest share of active entities (90.2%).

The data on the territorial distribution of business entities at the county level show that slightly less than one third of the total number of registered business entities (legal entities) were situated in the City of Zagreb. The City of Zagreb, however, had a significantly lower share of entities in crafts and trades and free lances, amounting to 19.3%. The County of Split-Dalmatia followed, with a share of 10.5% of legal entities and 14.5% of natural persons.

Three counties had a share larger than 5.0% of registered legal entities: the County of Primorje-Gorski kotar (8.3%), the County of Istria (7.4%) and the County of Zagreb (6.5%). The number of natural persons came in the same order.

The territorial structure of active trade companies was different in relation to the structure of the registered ones. Hence, the City of Zagreb had a share of 35.0% of registered and 33.5% of active entities, while the second largest county, the County of Split-Dalmatia, had a share of 10.7% of active and 10.6% of registered entities.

Data on changes in registered entities are divided into three groups: creations, deletions and harmonisations. They show that in the mentioned period the number of deletions decreased, while the number of creations and harmonisations increased.

The share of trade companies in the number of newly created entities was 92.7% in the observed period.

NOTES ON METHODOLOGY

I Introduction

Based on the Act on the National Classification of Activities (NN, No. 98/94), the Decision on the National Classification of Activities − NKD 2007 (NN, Nos 58/07 and 72/07) and the Ordinance on the Classification of Business Entities According to the National Classification of Activities − NKD 2007 (NN, Nos 55/16 and 35/18), the Croatian Bureau of Statistics keeps the Register of Business Entities (hereinafter referred to as: the Register). The Register, pursuant to provisions of the aforementioned Ordinance, includes legal entities, state government bodies and bodies of local and regional self-government units and parts thereof (hereinafter referred to as: business entities). The Register does not presently include natural persons engaged in activities according to regulations, foreign associations headquartered in the Republic of Croatia and business entities not headquartered in the Republic of Croatia.

The NKD 2007 is based on the Statistical Classification of Economic Activities in the European Community – NACE Rev. 2, which is obligatory in EU Member States.

II Methods and sources of data collection

On registration, each business entity is assigned a seven-digit registration number, while its constituent parts are assigned an additional four-digit ordinal number besides that number.

Moreover, each business entity and parts thereof are assigned an activity code according to the NKD 2007.

Registered business entities are classified according to their prevailing activities in such a way that a numerical denotation of a class of the main activity is defined according to the NKD 2007. When, on the basis of a formal decision on registration with a competent authority or by law, a business entity is established to be engaged in more than one activity, the first classification according to the NKD 2007 is made upon the proposal of the business entity. Every subsequent classification of the business entity resulting in a change of the main activity is made in the following cases:

1) Upon the request of the business entity

2) Upon official duty, based on a change in the decision on registration with a competent authority or a change in the law.

The activity of the constituent parts of a business entity is established on the basis of a decision on registration with a competent authority or law on creation, irrespective of the activity of the business entity they are a part of.

Entry, registration, change and withdrawal of business entities are updated daily in the Register. Legal bases for updating the Register are the following:

1) Registers kept by:

− trade courts

− ministries

− state administration offices

− other registration bodies

2) Laws, decisions and other legal documents published in "Narodne novine".

Registered business entities are structured according to the legal basis, as follows:

− trade companies, enterprises, co-operatives and institutions registered in the Register upon decisions of registration bodies (trade courts),

− state government bodies and bodies of local and regional self-government units registered according to the law

− associations, foundations, political parties and others registered on the basis of decisions of registry bodies according to specific laws.

Difficulties in updating of a significant proportion of units in the Register are a consequence of long-term transition periods during which register bodies harmonise business entities according to a new legislation. This also postpones the procedure of deletions of business entities that have not submitted a request for harmonisation in line with new regulations. Consequently, the Register data have constantly been changed in line with data on business entities subsequently collected from publicly available data bases.

A lack in the coverage of the Register is related to business entities engaged in activities of crafts and free lances, foreign associations headquartered in the Republic of Croatia and business entities not headquartered in the Republic of Croatia. In addition, it must be pointed out that there are methodological discrepancies between the Register as an administrative data base and the Statistical Business Register (hereinafter referred to as: eSPRi).

The data of the Register of Business Entities are linked to administrative data bases through an identification number, a registration number and a personal identification number.

III Meaning of individual terms

Business entities are legal entities and natural persons that perform activities according to the law, public government bodies (government administration bodies, other government bodies, bodies of local and regional self-government units, legal entities and other public authorities, legal entities established by the Republic of Croatia or local and regional self-government units, legal entities performing public service, legal entities financed mostly or completely from the state or local and regional self-government units budgets, that is, from public funds (taxes, provisions etc.), on the basis of a special act as well as trade companies in which the Republic of Croatia or the local and regional self-government units hold individual or joint majority ownership.

Registered legal entities (business entities) are units that are registered in the Register. These are: trade companies, institutions, co-operatives, associations, political parties, public government bodies and other non-harmonised units that held a legal subjectivity status according to previously valid laws.

Active legal entities (business entities) are registered legal entities entered into the Register, for which the activity status has been determined according to the eSPRi data. 

Natural persons are units that carry out activities in line with the law and refer to crafts and trades and free lances.

Main activity is an activity established according to the largest share in the total value added in the case of business entities that make profit through production, trade or rendering of services on the market or by the largest share in the number of persons in employment according to the payroll and gross paid-off salaries in the case of business entities that do not make profit through production, trade and rendering of services on the market.

Identification number is a permanent identification denomination of each business entity. It is used in all activities of official statistics. It is determined in the process of allocation of a control number according to module 11, while any part of a business entity is at the same time determined a four-digit ordinal number along with the identification number.

Registration number is a number under which a business entity is entered in a court or another specific register.

Personal identification number (OIB) is a permanent identification designation of an OIB holder, used by OIB users in official records, in everyday activities and in data exchange. OIB is unique, non-revealing, unchangeable and non-iterative.

Legal organisational form is a characteristic of units in the Register that divides them as joint-stock companies, limited liability companies, simple limited liability companies, co-operatives, institutions, associations, state government bodies and bodies of local and regional self-government units and other legal organisational forms. A legal organisational form of the Register has been determined by a decision of a competent registration body or by act on creation that is a basis for their entry into the Register.

Type of ownership is a characteristic of units entered into the Register that indicates the ownership structure of the unit and refer to the ownership of assets, that is, to startup deposit of a business entity.

Number of persons in employment is the feature used for indicating the size and structure of business entities. It is derived from Fina’s annual financial reports. In order to update this feature, as indicated in tables, the data have been harmonised with the regular monthly statistical survey that covers employment.

 

Abbreviations

EU	European Union
Fina	Financial Agency
NKD 2007	National Classification of Activities, 2007 version
NN	Narodne novine, official gazette of the Republic of Croatia
Symbols
-	no occurrence
0,0	value not zero but less than 0.05 of the unit of measure used

 

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