Most people who apply for the HZZ self-employment grant believe the award decision is a formality: fill in the form, attach the documents, wait. They treat the business plan as an administrative hurdle to be "somehow filled in", rather than as the document on the basis of which someone decides whether they'll get several thousand euros or not.
That is the most expensive misconception in the whole process.
The panel evaluating applications reads hundreds of plans in a single competition cycle. After the first twenty or so, the eye sharpens. Within a few minutes, an evaluator senses the difference between someone who knows what they're doing and someone who downloaded a plan off the internet and pasted in their own name. Generic applications — the ones that would sit equally well beside any line of business — are recognised almost at first glance. And it's precisely those that most often fall below the threshold.
The quality of a business plan isn't decoration. Measured in points, it is the main reason one application passes and another doesn't.
This guide doesn't repeat what's already written on the HZZ website. It deals with what is rarely written down anywhere, yet in practice decides the outcome: what the evaluator is actually looking for, where applications most often fail, and how to put together a plan that withstands serious scrutiny.
Who is eligible for HZZ self-employment in 2026
The self-employment grant is intended for unemployed persons registered in the records of the Croatian Employment Service (HZZ) who want to start their own business — a sole trader business (obrt), a company, a self-employed activity or an institution. It is a de minimis aid, meaning it isn't subject to the rules on state aid for employment, but it carries concrete obligations that last two years.
The basic condition is status: you must be registered as an unemployed person in the HZZ records at the time of submitting the application. Everything else builds on that.
Who is not eligible
There are several situations that automatically exclude you, and it's worth checking them before you invest time in writing the plan:
- You have already used this grant once. The self-employment grant is used once in a lifetime. If you've already received it, you can't reapply.
- Your private accounts are blocked. If you appear in FINA's register with unfulfilled grounds for payment, the application won't pass.
- You've owned a sole trader business or company within the last 24 months. There's an exception: if more than 24 months have passed since cessation and you've settled all obligations to the state (taxes, contributions), you can apply.
- You intend to take over an existing entity rather than found a new one. The grant finances starting up, not buying someone else's business.
- Your employment in the same or a similar activity ended through dismissal for which you were personally responsible, unless you've been unemployed for more than 12 months since.
INFO — check before everything else Before you write a single sentence of the business plan, check whether you've ever used the grant before and whether your account is clean at FINA. These are two conditions that cannot be "fixed" with a quality plan — they're checked before scoring.
Sole trader business or j.d.o.o. — what to choose
The organisational form you choose directly affects the amount of grant you can receive, so the decision shouldn't be made out of inertia. The most common dilemma is between a flat-rate sole trader business and a j.d.o.o. (simple limited liability company):
| Aspect | Flat-rate sole trader (paušalni obrt) | j.d.o.o. / d.o.o. |
|---|---|---|
| Maximum grant | Up to €7,000 (€10,000 for green/digital), regardless of activity | Depends on activity: €7,000–15,000 (up to €20,000 for green/digital) |
| Taxation | Flat-rate, simpler bookkeeping | Corporate profit tax 20% |
| Bookkeeping | Minimal | More complex, ongoing |
| Guarantee (debenture note) | A natural person as guarantor | Company members and those authorised to represent |
| Documentation on founding | Simpler (trade register) | More complex (court register, founding act) |
The logic of the choice is simpler than it seems. If you plan more modest revenue and a simple service activity, a flat-rate sole trader business is administratively easier and most often quite sufficient. If your activity falls into a higher-amount group and you need serious equipment, a j.d.o.o. can bring even double the grant — but it also carries greater bookkeeping and tax obligations.
In practice, people too often inherit this choice from an acquaintance ("everyone opens a flat-rate sole trader business") instead of tying it to their own numbers. Make the decision only after roughly estimating revenue for the first two years — because that is exactly what determines which form makes sense. We've covered a more detailed comparison in a separate text on the flat-rate sole trader business and the j.d.o.o..
Eligible and ineligible activities
The grant amount for companies and income-tax sole traders is determined by the group into which the activity falls under the NKD 2025 (national classification of activities):
| Group | Standard amount | Green / digital | Example activities |
|---|---|---|---|
| Group 1 | up to €15,000 | up to €20,000 | Manufacturing industry (divisions 25–33), construction |
| Group 2 | up to €10,000 | up to €15,000 | Manufacturing industry (10–24), IT, telecommunications, programming |
| Group 3 | up to €7,000 | up to €10,000 | Professional and technical activities, education, healthcare, the arts |
Certain activities are not eligible for funding at all — among them agriculture, forestry and fishing, wholesale and retail trade, transport and storage, accommodation and food preparation, financial activities, real estate, and legal activities (NKD 69.1). If your activity is on this list, there's no point continuing until you've checked an alternative code or reconsidered the concept.
How HZZ evaluators actually look at a business plan
Here is the core of the whole story, and the part most guides skip.
Each application is scored against predetermined criteria. The maximum is 100 points, and the threshold for a positive assessment is 65 points. That means you don't have much room for error — losing points on two or three items easily drops you below the threshold.
What's crucial to understand: nearly half of all the points are tied directly to the quality of your business plan and financial projections. The rest are mostly objective circumstances (experience, education, location) you can hardly influence at the moment of application. In other words — the plan is the only place where you can really "earn" points.
| Criterion | Max. points | What the evaluator looks for |
|---|---|---|
| Work experience in the activity | 15 | Demonstrable experience: up to 1 yr = 5, 1–3 yrs = 10, more than 3 yrs = 15 |
| Education / training | 15 | Closely related to the activity = 15; partly = 10; unrelated = 5 |
| Estimate of revenue and costs | 15 | Realistic = 15; partly realistic = 10; unrealistic = 5 |
| Completeness of the plan + quotes/proforma invoices | 15 | A developed plan with quotes and letters of intent = 15 |
| Development index of the location | 10 | Registered office in a less developed local unit (groups I–IV) = 10 |
| Sustainability and competitiveness | 10 | Clear vision, SWOT, proof the business survives 24 months |
| First entrepreneurial experience | 5 | First time = 5 |
| HZZ workshop | 5 | Participation in the preparatory workshop = 5 |
| Innovativeness | 5 | A new product or technological process = 5 |
| Investment in lacking activities | 5 | The local market lacks this activity = 5 |
Look carefully at the first four items. Experience, education, the realism of projections and the level of detail of the plan together carry 60 points. Collect the maximum there and you're already within reach of the threshold even before counting location, the workshop and the rest. From experience, this is exactly where applications are won or lost — not on the minor items at the bottom of the table, but on these four big ones.
What the evaluator is really checking
Behind the points table hides a simple question the evaluator asks themselves: do I believe this person knows what they're doing and will still be in business in two years?
Everything they read, they read through that lens.
When they assess your experience, they're not looking for an impressive CV — they're looking for a connection. An accountant who wants to open an IT company but shows nowhere that they can program or that they've ever worked in IT loses points at the very start, because the connection between what they know and what they plan doesn't exist.
When they look at sustainability, they're not looking for optimism — they're looking for proof that you've thought about what happens when things go badly. A plan that assumes everything will go to plan isn't a sustainable plan; it's a list of hopes.
And when they look at the financial projections — which is also the most common point of failure — they're not looking for big numbers. They're looking for numbers that can be defended.
TIP The HZZ preparatory workshop brings 5 guaranteed points and is registered at radionice.hzz.hr. That's the easiest five points in the whole system — no reason to miss them.
Structure of the business plan: what each section should contain
A business plan isn't an essay. It's a document that has to allow the evaluator to quickly understand your business and believe in it. Each section has its function.
Executive summary
Although it stands at the start, it's best written last. In a few paragraphs, clearly say what you do, who you sell it to, how much you expect to earn and why you believe it will succeed. From the summary, the evaluator forms a first impression of the whole plan.
Most common mistake: a summary full of generalities ("I will provide quality services at competitive prices") that says nothing concrete. If your summary could be pasted onto any other business, it isn't good enough.
Description of the product or service
Describe concretely what you offer. If you're opening a hair salon, don't write "hairdressing services" — list the treatments, the price list, what sets you apart from the salon next door. The evaluator needs to be able to picture your business in reality.
Most common mistake: a superficial description without detail. "A hair salon for women" without a price list, without a list of treatments and without a clear target group doesn't tell the evaluator that you've thought the business through.
Market analysis
Show that the market exists and that you know it. Who are your customers? How many of them are there in your area? How will you reach them? You don't need academic studies — you need proof that you haven't invented the demand.
Most common mistake: a complete absence of analysis or a few empty phrases. If you claim you'll achieve €50,000 in revenue in the first year but nowhere explain where those customers will come from, the evaluator reads it as a fabrication.
Competition
Who already does what you plan? Be honest — the claim "we have no competition" is almost always wrong and signals to the evaluator that you haven't researched the market. Instead, explain who the competitors are and why a customer would choose you.
Marketing strategy
Concretely: how will you attract your first customers? What will you do in the first month, and what continuously? This isn't asking for a marketing degree, but proof that you have a plan to reach revenue, and not just hope.
Operational plan
How the business functions day to day — where you work, what equipment you need, how you deliver the service or product. This section connects your idea with the real world and with the cost budget.
Financial section
The most important and most sensitive section. It's dealt with separately below, because this is exactly where most plans either convince the evaluator or fail.
The financial section and projections: where applications most often break
Financial projections carry up to 15 points, and beyond that they permeate the assessment of sustainability and the level of detail of the plan. Poorly set finances bring an application down in several places at once.
You're expected to provide a two-year projection of revenue and expenses, ideally broken down monthly at least for the first year. The aim isn't for the numbers to be big — the aim is for them to be convincing.
Revenue projection
Build revenue bottom up: price × number of sales × number of months. Never the other way round, because if you start from "I want to earn €40,000" and work backwards to find how to get there, you'll get numbers you can't defend.
Revenue of a new business is rarely high from the first month. A realistic projection shows gradual growth — modest in the first few months, then a rise as the business develops. A plan showing full capacity from the first month strikes the evaluator as insincere.
Many applicants try to present more optimistic numbers than they can defend, believing that higher revenue means a better score. The effect is the opposite. Evaluators recognise inflated projections very quickly and read them as a sign that the applicant doesn't understand their own business — so instead of points comes doubt about the whole plan.
Operating costs
This is where applicants most often "forget" items to make the business look more profitable. The result is the opposite — an evaluator who sees that accounting, utilities or contributions are missing knows the plan isn't serious.
Be sure to include: the cost of labour (contributions for a sole trader or a gross salary), accounting, rent if you have it, utilities, consumables, marketing and everything else specific to your activity.
Taxes, contributions and the VAT threshold
Here it's important to be precise, because the rules recently changed:
IMPORTANT — the VAT threshold is €60,000, not €40,000 As of 1 January 2025, the threshold for mandatory entry into the VAT system in Croatia was raised from €40,000 to €60,000 of annual turnover, and it remains at that level in 2026 as well. Many older guides and templates still cite €40,000 — that is outdated. If your revenue projections exceed €60,000, include the obligation to enter the VAT system in the plan.
A flat-rate sole trader business below that threshold doesn't enter the VAT system and keeps simpler books. For a j.d.o.o./d.o.o., count on corporate profit tax of 20%. An important warning concerning the cost budget itself: VAT shown on invoices is not an eligible cost for the variable part of the grant — plan all items in the budget without VAT. For those near the threshold, we've laid out the logic of entering the VAT system in a separate article.
Cash flow and break-even
The evaluator wants to see that you understand the difference between profitability and liquidity. A business can be profitable on paper and still fail because in the third month it had no money for utilities. Show the monthly cash flow and clearly mark the break-even point — the moment when revenue covers costs.
What a realistic mini-projection looks like
Here's a simplified example for a service sole trader business, purely to illustrate the logic — not as a template to copy:
| Item | Year 1 | Year 2 |
|---|---|---|
| Revenue (gradual growth through the year) | €18,000 | €26,000 |
| Contributions / cost of labour | €5,400 | €5,400 |
| Accounting | €600 | €720 |
| Utilities and materials | €3,000 | €3,600 |
| Marketing | €1,200 | €1,500 |
| Total costs | €10,200 | €11,220 |
| Result before tax | €7,800 | €14,780 |
What makes this projection convincing isn't the size of the profit, but the fact that revenue grows gradually, all key costs are present, and the second year is better than the first — which confirms sustainability.
WARNING — what the evaluator doesn't want to see - €50,000 in revenue in the first year with no proof the market absorbs it - High revenue from the first month, with no growth trend at all - Costs without accounting, utilities or contributions - A business financed solely from the subsidy, with no own contribution Each of these items drops the projections score to 5 points — and at the same time brings down the sustainability score.
The most common reasons applications are rejected
If there's one part of this guide worth reading twice, this is it. The reasons applications fail repeat from cycle to cycle, and almost all of them are avoidable.
Unrealistic financial projections. The most common reason. Optimistic revenue with no basis, underestimated costs, a lack of growth. The evaluator recognises this immediately because they've seen hundreds of such plans.
A disconnect between experience and the activity. When a person with no demonstrable experience in an area plans to build a business in that very area, the panel has no basis to believe they'll succeed. A typical example: someone with administrative experience opening a technically demanding activity without a single qualification or piece of proof.
A superficial description of the business. "Salon", "consulting", "services" — without detail, a price list and a target group. If, after reading, the evaluator can't describe your business in one sentence, the plan has failed.
Absence of market analysis. Without data on customers, market size and competition, everything else hangs in the air.
Incomplete documentation. A lack of quotes, letters of intent, confirmations of experience or certificates directly means lost points — and quotes and letters of intent are worth up to 15 points.
An incomplete or incorrectly filled-in form. This is the most frustrating reason because it has nothing to do with the quality of the idea. An incomplete form often means automatic rejection, no matter how good the business is.
INFO — what if you're rejected after all A negative assessment isn't the end of the road. The panel states concrete weaknesses in its reasoning — study them carefully. You have the right to appeal, and the recommendation is to appeal against every item except those on which you received the maximum. Submit the appeal in two copies and request certification of your own copy. If the appeal is also negative, it's worth considering professional help when rewriting.
Deadlines and procedure
The process is relatively clear, but every step has its trap.
- 01Status of unemployed person — a prerequisite for everything. You must be in the HZZ records.
- 02Preparatory workshop (radionice.hzz.hr) — not mandatory, but worth 5 points.
- 03Preparation of the business plan with a cost budget — completed through the system, with a mandatory cost budget.
- 04Gathering documentation — a certificate of account blockage (not older than 7 days), confirmations of experience, quotes.
- 05Submitting the application — online via mjere.hzz.hr, through the e-Građani (e-Citizens) system. Deadline: by 30 September 2026, or until funds are exhausted.
- 06Evaluation — scoring against the criteria, threshold 65 points.
- 07Grant award contract — signed by the Service, the business entity and the guarantor.
- 08Submission of a blank debenture note — notarised, within 8 days of the contract; a condition of payment.
- 09Payment — a single payment into the business account, within 30 days of signing the contract.
- 10Spending of the variable part — within the first 12 months, according to the cost budget.
- 11Proof of revenue — achieving at least 50% of the awarded grant as revenue within 24 months.
Documentation you need to prepare
| Document | When |
|---|---|
| Business plan with cost budget | With the application |
| Certificate of account blockage (FINA, not older than 7 days) | With the application |
| Tax Administration certificate of settled obligations | If you previously had a sole trader/self-employed activity |
| Quotes and proforma invoices for equipment | Desirable (brings points) |
| Letters of intent | Desirable (brings points) |
| Proof of experience (contracts, confirmations) | For scoring experience |
| Certificates and training records | For scoring education |
WARNING — procedural mistakes that cost dearly - Submitting an incomplete form = often automatic rejection - A cost budget without attached quotes = loss of up to 15 points - Invoices issued after the first 12 months = ineligible for the variable part - Cash payment = the cost isn't recognised - Ceasing operations before 24 months have passed = repayment of the grant
Practical advice before applying
A few things that separate an application that passes from one that "merely exists":
Collect the points available to you. The workshop brings 5 points, quotes and letters of intent up to 15. These are points you don't win with eloquence, but with preparation. Collect them all.
Prove the connection between you and the business. Before describing the business, draw up a list of everything that qualifies you — work experience, training, projects. If the connection isn't obvious, make it obvious.
Set projections bottom up. Start from price and a realistic number of customers, never from desired profit. Every number must be defensible in a single sentence.
Include all costs, even the unpleasant ones. A plan that shows costs honestly comes across as more serious than one that hides them. The evaluator values realism, not optimism.
Write specifically, not generally. If your sentence could be pasted into someone else's plan, rewrite it. Specificity is the strongest signal that you know what you're doing.
Read the plan as if you were the evaluator. Before submitting, read the whole document from the perspective of someone who doesn't know you and is wondering whether you'll still be in business in two years. If your own plan doesn't answer that question for you, it won't answer it for them either.
CHECKLIST BEFORE SUBMISSION - [ ] Self-employment grant never used before, clean FINA register - [ ] The activity is on the list of eligible activities under NKD 2025 - [ ] Experience and training documented with confirmations, not merely stated - [ ] Revenue projected bottom up, with gradual growth through the year - [ ] All costs included — accounting, contributions, utilities, materials - [ ] The cost budget matches the requested amount, with quotes/proforma invoices attached - [ ] Break-even clearly marked, the second year better than the first - [ ] HZZ preparatory workshop registered (+5 points) - [ ] Form read twice; no mandatory field left empty
Frequently asked questions (FAQ)
How much is the HZZ self-employment grant in 2026? It consists of a fixed part of €5,000 and a variable part that depends on the activity and the organisational form. In total it ranges from €7,000 for a flat-rate sole trader business to €20,000 for Group 1 activities in the green/digital category.
How many points do you need to pass? At least 65 out of a possible 100. Nearly half the points are tied to the quality of the business plan and financial projections.
Can I apply if I've already had a sole trader business? You can, but only if more than 24 months have passed since cessation and you've settled all obligations to the state. Previously using the self-employment grant itself, however, excludes you permanently.
Which activities don't qualify? Among the ineligible are agriculture, forestry and fishing, trade, transport and storage, accommodation and hospitality, financial activities, real estate, and legal activities.
What is the fixed and what is the variable part of the grant? The fixed part (€5,000) doesn't need to be justified with invoices — it's intended for current operating costs. The variable part is justified with a cost budget and is intended for purchasing new equipment, software or a franchise necessary for the activity.
Do I need business premises? Not necessarily — many activities can be carried out from home or in the field. What matters is that the operational plan and cost budget match the actual way of working.
Can I buy used equipment? The variable part of the grant is intended for purchasing new equipment. Used equipment is, as a rule, ineligible for that part.
What is a green/digital workplace? These are activities where the recipient earns the majority of revenue (more than 90%) from producing green products and services, or ICT products and services. They bring higher grant amounts. The definitions are in the glossary on the HZZ website.
Do I have to pay VAT if I enter the system? The obligation to enter the VAT system arises when annual turnover exceeds €60,000. If you plan to stay below that threshold, you don't have to, and a flat-rate sole trader business below that amount keeps simpler books.
How long does processing the application take? The official processing deadline isn't unambiguously prescribed, but the process includes scoring and verification. Payment is made within 30 days of signing the contract.
How do I prove 50% of revenue within 24 months? Through the financial statements you submit to FINA or the Tax Administration. The obligation is to achieve revenue equal to at least half the awarded grant during two years of operating.
What if my plan is rejected? Study the panel's reasoning and submit an appeal against every item except those with the maximum number of points. The appeal is submitted in two copies.
Conclusion
The HZZ self-employment grant is one of the more concrete forms of financial support for starting a business in Croatia. But the amount you can receive isn't decided on the basis of your idea, but on the basis of how convincingly you manage to present that idea on paper.
The difference between an application that passes and one that fails is rarely in the quality of the business. Far more often it's in whether the business plan was written as a serious document or as a formality. Realistic projections, a clear connection between your experience and the activity, an honest picture of costs and proof that you've thought about what happens when things go badly — that is what convinces the evaluator.
If you care about your application passing on the first attempt, it's worth approaching the plan with the same seriousness with which you plan the business itself.
How we can help
Most people come to us only after a first negative assessment, when the competition cycle is already lost. A better moment is earlier — while the concept is still open and the numbers can be set up properly.
At Meridian Consulting we work with future entrepreneurs on business plans that withstand serious scrutiny: realistic financial projections, a clear connection between experience and activity, documentation that earns points. We don't write the plan for you, nor do we sell a guaranteed pass — we help your business look on paper as convincing as it is in reality.
If you're considering applying in 2026, get in touch before you start writing. A large part of the work is actually in asking the right questions at the outset.
Related
- Flat-rate sole trader business or j.d.o.o. — what to choose when starting a business
- VAT threshold 2026: when an entrepreneur enters the VAT system and what changes then