Croatia has experienced a sharp 70% decline in foreign work permit applications so far this year, following the government’s decision in March to implement stricter conditions for international labor recruitment.

According to data released by the Croatian Ministry of the Interior, this significant drop is directly tied to the country’s tightened regulations on issuing work permits, a policy move that has notably impacted temporary employment agencies, among others.

Tougher Permit Rules Reshape the Labor Market

The revised employment framework, which came into effect in March 2025, requires employers to meet three main conditions before they can legally hire foreign nationals:

1. The business must have employed at least one Croatian citizen full-time for the past 12 months.

2. The company must be actively operating.

3. The employer must not appear on the government’s blacklist for using undeclared labor.

Many employers, particularly small and mid-sized enterprises, were reportedly unprepared for the regulatory shift, leading to a backlog of denied applications and a notable reduction in submitted requests.

Ivana Šimek from the Croatian Employment Service has voiced concerns, confirming reports of 18,000 rejected applications and noting that “the problem is not finding workers—it’s being able to legally hire them under the new system.”

Temporary Employment Agencies Among the Hardest Hit

Among those most affected by the updated rules are temporary employment agencies, which have historically played a key role in staffing labor-intensive sectors. These agencies have seen a 70% drop in work permit submissions, according to a report by Croatia Week.

Agencies and employers alike are now grappling with the regulatory complexity, and many fear that the current framework may undermine Croatia’s ability to meet workforce demands—particularly in essential sectors.

Construction Industry Leads in Work Permits Issued

Despite the overall decline in applications, the construction industry continues to receive the highest number of work permits, followed by:

• Tourism and Hospitality

• Manufacturing

• Transportation

• Retail and Trade

The majority of foreign workers granted permits are nationals from Nepal, the Philippines, Bosnia and Herzegovina, Serbia, and India—countries that have traditionally supplied much of Croatia’s international labor force.

Foreign Workers Contribute Economically and Socially

A recent study from the Institute of Migration adds depth to the understanding of Croatia’s foreign workforce. According to the findings:

• 90% of foreign workers send remittances to their home countries to support their families.

• One in five workers plans to stay in Croatia until retirement.

• More than 50% are considering bringing their families to live with them in Croatia.

These insights underscore the vital role international labor plays—not just economically, but also in the broader social landscape of Croatia.

Current Foreign Workforce in Croatia

As of May 2025, Croatia is home to approximately 136,000 international workers. However, nearly 7,000 fewer applications have been submitted compared to the same period in 2024—highlighting the immediate impact of the new rules.

Employers across the country, especially in labor-heavy industries like construction and hospitality, are expressing growing concern about filling essential roles amid a tightening regulatory environment.

Conclusion

While Croatia’s new work permit policies aim to better regulate the employment of foreign nationals and protect the domestic labor market, they have also introduced significant challenges for employers and temporary staffing agencies. As the country continues to navigate demographic changes and labor shortages, the balance between regulation and flexibility will remain a pressing issue for both government and industry stakeholders.

For now, Croatia’s message to employers is clear: compliance is non-negotiable, and preparation is key.