The content of this thesis tries to explain the concept of social entrepreneurship, its formation, advantages and disadvantages of dealing with social entrepreneurship and the situation in Croatia and Portugal. The role of social entrepreneurship is to reduce poverty, unemployment, disparities in the labour market, assisting people with disabilities as well as former addicts in finding a sense of self-esteem and social utility. Social entrepreneurship is still developing not only in Croatia but also at European and world level. For this reason, and because the width of its forms there is no single accepted definition of social entrepreneurship nor strictly defined criteria for assessing the terms social entrepreneurship, social enterprise or social entrepreneur. Therefore, the Croatian Government established a working group that has identified 9 criteria of recognizing social entrepreneurship. Republic of Croatia should apply the models of social entrepreneurship which have proved successful in other countries of the European Union , such as Portugal, which has already recognized the importance and the role of social entrepreneurship. Due to the difficult economic situation prevailing in Croatia social entrepreneurship should become one of the key models out of the difficult economic situation and also in maintaing the social state by decreasing inequality and providing protection for socially vulnerable groups.