Unlocking Croatia’s Potential for Remote IT and Software Teams

Croatia is quickly becoming a top choice for companies seeking to outsource their IT and software development needs. With its growing reputation in the tech industry, businesses in Western Europe and North America are increasingly turning to Croatia to hire remote teams. 

So, what makes Croatia such an appealing destination? From its skilled tech workforce and cost-effective solutions to its favourable time zone and cultural similarities, there’s much to recommend. In this article, we’ll explore the reasons behind Croatia’s rise as a nearshoring hub, compare its standing with other regional contenders, and highlight the government initiatives that are helping to boost its thriving tech sector.

Croatia’s Tech Talent Pool: Skilled, Educated, and Growing

Croatia offers a highly skilled tech workforce that is growing rapidly. The country’s pool of tech professionals reached nearly 70,000 in 2024, up from just over 60,000 in 2022 (according to N-iX). This growth rate (approximately 19% annually in recent years) far outpaces the European average of around 6% (according to Decode Agency), signaling a strong pipeline of new talent. Each year about 2,000 students graduate from computer science programs at Croatian universities (according to Emerging Europe). Notably, over 80% of Croatia’s young IT workforce (under 34) have a formal ICT education – the highest rate in Europe (according to Decode Agency). This reflects the strength of Croatia’s education system in STEM fields and the emphasis on producing well-trained software engineers and IT professionals.

In terms of skill sets, Croatian tech experts cover a wide range of modern technologies. According to N-iX, the most widely used programming languages among Croatian developers are JavaScript, Java, and Python, each with approximately ten thousand specialists proficient in them. The local tech community also includes thousands of professionals in roles such as business analysis, quality assurance (QA), system architecture, and DevOps. Croatian engineers are known for tackling complex domains. The IT sector here serves clients in finance, healthcare, telecom, e-commerce, and other technically demanding industries.

High English Proficiency and Western Work Culture

Croatia stands out for its excellent English skills, ranking among the top ten globally for English proficiency (according to the EF English Proficiency Index). It’s the highest-ranking Central/Eastern European nation in this regard, with most professionals reaching a C1 level of fluency. English education begins in primary school and continues through university, ensuring strong communication skills in both business and technical discussions. Additionally, around 80% of Croatians speak at least two languages, often including German or Italian (according to Global Citizen Solutions), which reduces language barriers for international companies.

Croatia’s work culture is also closely aligned with Western practices. As an EU member, it shares similar business norms, making collaboration easy for Western partners. Croatian IT professionals are known for their directness, proactivity, and teamwork, and many have experience working with international clients. This familiarity with global best practices and agile methodologies means Croatian teams can integrate quickly with Western companies. Furthermore, Croatia’s EU membership ensures it follows strict data protection and intellectual property laws, such as GDPR, which simplifies legal considerations for businesses working with remote teams in Croatia.

Cost-Efficiency with No Compromise on Quality

Croatia offers excellent value for tech talent, with developer rates significantly lower than in Western Europe or North America. Croatian software developers typically charge €35–€68 per hour, while their counterparts in countries like Germany or Switzerland can charge €45–€90 per hour for similar work (according to Decode Agency). This translates to savings of 20–40% without sacrificing expertise, making Croatia one of the most cost-efficient options in the region.

Despite the lower costs, Croatian tech workers are highly productive. According to Eurostat, Croatia ranks 8th in the EU for "wage-adjusted labor productivity," outperforming some Western European countries. In simple terms, this means companies get great value for their investment, with top-quality output at a fraction of the cost. Croatian developers are known for their strong work ethic and dedication to delivering results, making them an ideal choice for businesses looking to optimise their budgets without compromising on quality or timelines.

Additionally, Croatia’s overall cost of living is 30–40% lower than major Western European countries (according to Sail Croatia). This makes it a cost-effective destination not only for hiring remote teams but also for relocating staff. Office space and co-working memberships in Croatia, especially in cities like Zagreb, are much more affordable compared to places like London or Amsterdam, further enhancing the country’s appeal as a nearshoring hub.

Time Zone and Geographic Convenience

Located in the heart of Europe’s Central European Time (CET) zone, Croatia offers excellent time zone compatibility for collaboration. Teams in Croatia work in sync with most of Western Europe (CET is shared by Germany, France, Italy, and more, and is only one hour ahead of the UK during winter). This means real-time communication with European headquarters is seamless, allowing for daily stand-ups, meetings, and agile workflows without complicated scheduling. For North American companies, Croatia’s time zone (6 hours ahead of New York, 9 hours ahead of California) still offers a reasonable overlap in working hours. Many U.S. firms find they can hold morning meetings with Croatian developers in the afternoon, maintaining productivity with a partial overlap. This is a significant advantage over distant outsourcing destinations in Asia, where the time difference can slow down feedback cycles.

Geographically, Croatia’s proximity to major European capitals adds to its appeal. It’s just a few hours’ flight from most cities and is well-connected by international airlines (according to Sail Croatia). This makes occasional on-site visits or team offsites both feasible and affordable. Whether you need to bring your Croatian team to your offices for a week or send managers to Zagreb for project kickoffs, travel is easy and efficient. Croatia’s recent inclusion in the Schengen Area (as of 2023) further simplifies travel within Europe, and its international airports offer many direct flights across the continent. This ease of physical access reinforces the "near" in nearshoring; your remote team is never too far for face-to-face meetings when needed.

Modern Infrastructure Supporting Remote Work

Croatia has heavily invested in its digital infrastructure, providing remote teams with the necessary tools to work efficiently. High-speed internet is reliable and fast in urban areas, with average fixed-line speeds of around 90+ Mbps (according to Trade.gov). The country ranks among the top 35 globally for mobile internet speed, and the government continues to expand its network through the Digital Croatia Strategy. This ensures Croatian developers can join video calls, collaborate on cloud platforms, and push code seamlessly.

The country also boasts a growing number of co-working spaces and tech hubs in cities like Zagreb, Split, Rijeka, and Dubrovnik, offering modern offices and community events for tech workers. These spaces help remote IT staff stay connected and foster a culture of innovation through networking events and startup incubators. According to Global Citizen Solutions, Croatia is becoming a popular destination for digital nomads and remote workers.

Croatia’s infrastructure is also robust, with stable electricity, modern public transport, and well-developed highways. As an EU member, the country benefits from development funds that enhance utilities, ensuring minimal disruptions for remote work. Croatia’s well-connected infrastructure makes it a reliable choice for companies looking for a plug-and-play nearshoring location.

Regional Standing: How Croatia Compares to Other Tech Hubs

When considering nearshoring, Croatia is often compared with larger tech hubs like Poland and Ukraine. While Croatia's talent pool is smaller, it stands out in several key areas. Notably, it leads Central and Eastern Europe in language skills and education quality, with English proficiency surpassing countries like Hungary, Romania, and the Czech Republic (according to the EF English Proficiency Index). This gives Croatia a communication advantage over larger markets.

Croatia's tech competitiveness is also rising. In Emerging Europe’s Future of IT Competitiveness Index, it climbed from 13th to 10th place between 2023 and 2024, thanks to improvements in talent availability, digital infrastructure, and innovation. This places Croatia among the top Eastern European destinations for tech. While Poland, Czechia, and Ukraine are often in the spotlight, Croatia is gaining recognition as an “underrated ICT hotspot” with untapped potential. The advantage of this is less competition for talent compared to more saturated markets like Poland.

Each nearshoring location has its strengths, but Croatia offers a balanced package: strong skills, Western alignment (EU member, Euro currency, stable politics), and an attractive lifestyle for talent. With solid experience working with U.S. and UK clients (according to Trade.gov), Croatian tech firms are well-versed in Western standards. Though smaller in scale, Croatia’s combination of quality, productivity, and European integration makes it a strong contender for nearshoring, often surpassing other alternatives in certain aspects.

Business Environment: Ease of Hiring and Supportive Policies

Croatia’s business and legal environment is straightforward, especially for those familiar with the EU market. As an EU member since 2013 and part of the Eurozone since 2023, Croatia offers stable and transparent regulations. Foreign companies can easily set up operations, with 100% foreign ownership allowed for subsidiaries or branches, all protected by EU law. Many firms opt to partner with local staffing agencies or Employer of Record services to hire Croatian developers without the need for a full legal entity, thanks to Croatia’s modern labour laws. Remote work contracts and contractor arrangements are common and supported by the country’s flexible approach to knowledge-sector employment.

Croatia also offers appealing tax incentives for tech employers. The corporate tax rate is 18%, or 10% for small enterprises, and companies investing in high-value sectors can qualify for substantial tax reductions (up to 100% corporate tax holiday) under the Investment Promotion Act (according to Trade.gov). Additionally, R&D tax allowances and grants are available to support innovation. Industry associations like HUP-ICT are pushing for further tax relief for tech salaries, creating an even more competitive environment for IT companies.

Croatia’s labour laws align with EU standards, offering reasonable worker protections while allowing flexibility in contract types and working hours. Remote work is widely accepted, especially after 2020, and many tech professionals expect remote-friendly jobs. Croatia’s labour pool is open to relocation, with the government offering a special visa program for digital nomads and remote workers. This visa makes it easier for foreign hires to live and work in Croatia legally.

Quality of Life and Remote Work Appeal

Croatia offers an excellent quality of life that is highly appealing to remote workers. The country blends Mediterranean charm with Central European convenience, with the ability to unwind at the beach, a historic café, or on a mountain hike within the same day. Cities like Zagreb, Split, and Rijeka offer modern amenities, vibrant cultural scenes, and a large expat/digital nomad community, all at a lower cost of living compared to Western Europe. Croatia is also known for its safety and political stability (according to Global Citizen Solutions), which is important for attracting top talent.

Croatia’s work-life balance is a major selling point. Remote workers can enjoy stunning natural landscapes, including Adriatic coastlines and national parks, helping to avoid burnout. The mild climate, with warm summers and moderate winters, appeals to those accustomed to gloomier weather in Northern Europe. Croatia’s friendly atmosphere and widespread English proficiency make it easy for foreign professionals to integrate into local life.

The Croatian government’s progressive digital nomad visa program further enhances its appeal. This visa allows foreign remote workers (and their families) to live in Croatia for up to a year, with the possibility of renewal. Digital nomads are exempt from local income tax on foreign-sourced earnings, making Croatia a highly attractive destination for remote professionals. This program also allows companies to hire team members from around the world, offering them a chance to enjoy the benefits of living in Croatia while working remotely.

Government Support and Tech Ecosystem Outlook

Croatia’s rise as a tech nearshoring hotspot is no coincidence – it's driven by deliberate government and industry initiatives. The national development plans, aligned with the EU’s Digital Decade goals, focus on growing the digital economy. The government has invested EU recovery funds into projects such as digitalising public services, improving broadband infrastructure, and enhancing digital skills (according to Trade.gov). This ensures that the environment for doing tech business, from e-governance to connectivity, continues to improve. Efforts to expand the tech talent base also include campaigns encouraging more women to pursue ICT careers, addressing the current gender gap (women hold about 15% of ICT jobs in Croatia).

Croatia’s startup ecosystem is thriving, with tech startup funding increasing by 15% from 2023 to 2024, raising over €180 million. Success stories like Rimac Automobili (electric hypercars) and Infobip (cloud communications unicorn) have placed Croatia on the global tech map, inspiring new entrepreneurs and engineers. For companies nearshoring to Croatia, this innovative atmosphere, coupled with a network of tech events, accelerators, and government support, is invaluable. Croatia’s tech industry group (HUP ICT) actively advocates for policies like tax relief, R&D incentives, and easier immigration for skilled workers, further enhancing the business climate.

Conclusion 

Croatia offers a rare mix of advantages as a nearshoring destination: a tech-savvy, English-proficient workforce; cost-effective operations with high ROI; convenient time zone alignment; and a supportive EU business environment, all in a location that people love to live in. Whether you're a startup CTO or an HR manager considering Eastern Europe for talent expansion, Croatia is a top contender.

Contact us for a free consultation on how nearshoring in Croatia could work for your organisation. We can provide tailored insights on hiring, legal setup, and finding the right Croatian talent for your needs.

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References 

Decode Agency. (2023). 5 reasons to outsource your app development to Croatia. https://decode.agency/article/5-reasons-to-outsource-to-croatia/

EF Education First. (2023). EF English Proficiency Index. https://www.ef.com/wwen/epi/

Emerging Europe. (2024). Future of IT Competitiveness Index. https://emerging-europe.com/

Eurostat. (2023). Wage-adjusted labour productivity by NACE Rev. 2 activity. https://ec.europa.eu/eurostat

Global Citizen Solutions. (2024). Croatia Digital Nomad Visa: Everything You Need to Know. https://www.globalcitizensolutions.com/

N-iX. (2024). Software development in Croatia: Tech talent, companies, and market overview. https://www.n-ix.com/software-development-in-croatia-overview/

Sail Croatia. (2023). Cost of living in Croatia. https://www.sail-croatia.com/croatia-travel-guides/cost-of-living-in-croatia

Serengeti. (2023). Why consider a software development partner in Croatia. https://serengetitech.com/blog/software-development-partner-croatia/

Trade.gov. (2024). Croatia - Country Commercial Guide. https://www.trade.gov/country-commercial-guides/croatia

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