The circular economy is based on a series of key principles that are aimed at changing the fundamental paradigms of consumption and production. Reduction, reuse, restoration and recycling become the stone foundation of this innovative economic philosophy, which emphasizes the minimization of losses and the creation of positive synergies within economic activities. The key concept of the circular economy promotes the imaginability of a closed circle of resources, where products are designed in such a way that they are easily disassembled and recyclable, and waste becomes a valuable resource for the creation of new products and materials. Sustainable and successful implementation of the circular economy requires cooperation and engagement of various stakeholders. Businesses play a key role by transforming their business models to align with the basic principles of the circular economy. This includes the adaptation of products and services and orientation towards sustainability and resource efficiency. At the same time, governments have a key responsibility in creating enabling frameworks and regulations that support the transition towards a circular economy. This includes encouraging research, innovation, and educating and raising public awareness of the importance of the circular economy. The perspectives of the circular economy in the European Union and Croatia are extremely promising. It is becoming increasingly obvious that the traditional linear model of consumption and production is no longer sustainable and that a transition to a circular model is necessary to face global challenges such as climate change, resource depletion and environmental pollution. The circular economy not only enables reducing the negative impact on the environment, but also creates fruitful opportunities for economic growth, encouraging innovation and creating new jobs.