Security interest law in Croatia

Guarantees

1. Can an intercompany guarantee be granted?

1.1 Upstream? 

Yes (subject to financial assistance, insolvency and capital maintenance rules).

1.2 Downstream?

Yes

1.3 Lateral?

Yes (subject to financial assistance, insolvency and capital maintenance rules).

2. Can a guarantee be given under foreign law (e.g. English law)?

Yes

3. Any special arrangements (e.g. to deal with transfer pricing/corporate benefit)? 

Yes, may be subject to thin capitalisation rules.

Security

4. Can a security interest be granted in the following type of asset?

4.1 Real property

Yes

4.2 Shares (privately held) 

Yes

4.3 Shares (marketable securities)

Yes

4.4 Receivables

Yes

4.5 Bank account

Yes

4.6 IP/Trademark

Yes

4.7 Equipment/Plant/Machinery

Yes

4.8 Inventory

Yes

4.9 Insurance

Yes

4.10 Rights under a contract

Yes

5. Can security interests be granted to a foreign lender?

Yes

6. Can multiple security interests be granted over the same asset?

Yes

7. Can a security interest be granted to secure liabilities of a holding company, a subsidiary or any other affiliate?

Yes, but subject to financial assistance and capital maintenance rules.

Perfection

8. In order to be enforceable against third parties, must a security interest be? 

8.1 Notarised?

No, except mortgages. It is recommended to notarise all types of security.

8.2 Registered?

Yes, mortgages. Other securities (if notarised).

8.3 Other? 

No, but sometimes third parties have to be notified about the security interest.

9. Does registration in most cases protect the secured creditor against the debtor’s subsequent dealings with the secured asset?

Yes

10. Is there any stamp or similar tax or duty payable on the security document?

Yes

Enforcement

11. For a security interest to be legally enforceable which items must be filed as part of the registration or notarisation process?

11.1 Entire security agreement?

Yes

11.2 Names of pledgor and pledgee?

Yes

11.3 Description of secured asset in general terms?

Yes

11.4 Description of each individual secured asset?

Yes

11.5 Documents concerning ownership of secured asset?

Yes

11.6 Documents concerning debt in respect of which the asset is being secured?

Yes

12. Can a right to enforce security arise: 

12.1 When the secured debt is unpaid and due? 

Yes

12.2 When there is some other breach of the pledge/security agreement?

Yes

12.3 When the debtor becomes insolvent?

Yes, but enforcement proceedings cannot be initiated once insolvency proceedings have commenced. Secured creditors have beneficial status.

13. Can the creditor enforce its security interest by taking possession of the asset and selling it without court assistance?

No, but there are exceptions (e.g. ships).

14. Is an instrument for direct enforcement necessary/available/market practice?

Yes

15. Are powers of attorney to the secured party used to facilitate a sale of secured assets in an enforcement situation?

No, normally done by courts but there are exceptions.

16. If a sale is permitted without court assistance does it have to be made by public auction? 

Generally yes.

17. Can a transfer of all or part of the debt be made without affecting the security over the assets? 

The security over the assets follows the debt automatically but steps need to be taken to make necessary changes in the registries.

18. Is there anything else of which a lender should be aware as unusual or particularly difficult?

N/A