Switzerland informed the EU of the decision at a meeting on Friday of the Switzerland-EU Joint Committee on the Agreement on the Free Movement of Persons.
Switzerland is not a member of the European Union, but the two economic partners signed an agreement on the free movement of people in 1999, which came into force in 2002.
That deal allows Swiss nationals and those of EU member states to freely choose their place of work and residence within those nations. But the agreement includes transitional stages.
Croatia joined the European Union in 2013 and since 2017 Croatian citizens have enjoyed free movement in Switzerland, but labour restrictions have been maintained.
These restrictions will end on January 1, 2022.
“This will put Croatian workers on an equal footing with those from other EU member states or the European Free Trade Association,” an organisation that includes Iceland, Liechtenstein, Norway and Switzerland, the Swiss State Secretariat for Migration said in a statement.
“If the immigration of Croatian workers exceeds a certain threshold, Switzerland will be able to invoke a safeguard clause and limit the number of permits again from 1 January 2023 until the end of 2026 at the latest,” it added.
As of the end of 2020, 28,324 Croatian nationals were living in Switzerland, six more than a year earlier. This number represents 1.9 percent of the total number of EU and EFTA nationals living in Switzerland.