Croatia has seen a dramatic 70% plunge in foreign work permit applications following the implementation of stricter immigration regulations in March 2025.

The sweeping policy shift, aimed at tightening labor eligibility criteria, has triggered significant ripple effects across industries reliant on migrant labor, raising concerns about long-term workforce sustainability.

New immigration law stalls workforce flow

In March, Croatia enacted amendments to its Aliens Act, tightening the requirements for hiring foreign workers.

Since then, temporary employment agencies, hospitality companies, and construction firms have seen a sharp drop in permits. Applications in 2025 are nearly 7,000 fewer than the same period last year.

According to Ivana Šimek of the Croatian Employment Service, the decline isn’t due to a lack of available workers. “The problem now is not finding workers—it’s legally hiring them,” she explained.

Tougher rules hit employees hard

In the new law, employers must now meet three main conditions to hire foreign staff:

• Employ at least one Croatian citizen full-time for the last 12 months.
• Be actively conducting business.
• Not be listed for employing undeclared workers.

These requirements, coupled with stricter enforcement, caught many employers off guard. “Employers weren’t fully ready for what the law entails,” Šimek said.

The Croatian Employment Service no longer uses the term “rejection” for work permits. Instead, it issues a “negative opinion” if an application doesn’t meet legal standards.

Temporary agencies and construction lead impact list

Temporary work agencies saw a 70% decline in submissions. Employers in construction, tourism, manufacturing, and retail are struggling to meet the legal thresholds. Construction still holds the majority of active foreign permits, followed by hospitality and manufacturing.

Many of these foreign workers hail from Nepal, the Philippines, Bosnia and Herzegovina, Serbia, and India. For many, Croatia isn’t just a workplace—it’s a long-term goal. A study by the Institute for Migration found:

• 90% send money home to support families.
• Over 50% hope to reunite with their families in Croatia.
• One in five plans to stay until retirement.

Legal hiring now a maze of red tape

The revised Aliens Act allows work permits up to three years and seasonal permits for nine months. It also simplifies employer switching for workers, but the added conditions created confusion.

While the law aims to balance immigration and workforce needs, many businesses say the bureaucracy slowed hiring to a crawl. “It’s not about shortage. It’s about the bottleneck,” a construction company owner reportedly said, reflecting widespread concern across sectors.

Migration management still in progress

Croatia faces a broader immigration challenge. Legal migration needs, especially for labor, often clash with concerns over illegal entry.

Border crossings have dropped from 65,000 two years ago, but legal employment pathways are now struggling under the pressure of stricter oversight.

The government’s move responds to EU labor standards and aims to curb abuses. Still, it highlights the struggle between control and demand.

Navigating a tighter gate

Croatia’s sudden drop in foreign work permit applications following stricter regulations signals a shift that could echo across the EU.

For European Travel Information and Authorization System (ETIAS) applicants, this reinforces the bloc’s broader trend of tightening entry controls, suggesting increased scrutiny not just for workers but also for tourists and digital nomads.

Long-term migrants may face more complex bureaucratic hurdles, especially as the Schengen visa regime grows stricter.

The timing is critical—with ETIAS set to launch soon, the message is clear: the EU is prioritizing regulated, high-accountability mobility.

Setting the tone

Croatia’s legislative move reflects a broader recalibration within the EU’s migration apparatus. 

By demanding that employers meet tougher standards—such as active business operations and a history of legal employment—the country is reframing migration as a structured, selective process.

This could inspire neighboring EU states to follow suit, especially amid growing concerns about illegal migration and labor exploitation.

In the long run, such policies could become templates within the bloc’s evolving strategy for balancing labor needs with border integrity.

Stricter laws, unintended pause

Croatia’s sweeping reforms to its Aliens Act were meant to curb abuse and reinforce local hiring, but the resulting plunge in foreign work permit applications signals a dramatic shift that employers were unprepared for.

As businesses struggle to adapt, the country risks labor shortages in key sectors like construction and tourism.

Whether this crackdown fosters long-term stability or hinders economic momentum remains an open question.