Hi ezpay, welcome to the forum!
You already pointed out several difficulties that you might face, and you should expect all of those.
Whether you start up a hostel in Croatia or any other non-English-speaking country, the language barrier is going to be a challenge that you’ll have to overcome quickly. It will be very difficult to negotiate deals, research regulations, or simply recognize whether or not the local you found to help you sort things out is actually ripping you off. Finding a business partner from the area may be helpful in this respect, but be sure that you have the same vision for the hostel and what you want to get out of it before you start to work together. Also, be sure to get a local lawyer who speaks English, as they can help you understand the whole process and walk you through the steps.
In addition to the short seasons that you mentioned, you are also likely to face high competition, so money may be tight. Some of these competitors may own their property outright, so you will need more revenue than they do just to pay your rent and survive. Croatia is one of the more expensive countries in that part of the world, so your costs may be higher than you expect. The last thing you want to do is start a price war as you enter the market, because you're likely to lose unless you have significant financial backing. It would be better to pick a particular niche to target and be sure to clearly convey the value that you provide rather than competing based on price.
The competition will also have the advantage of understanding the local culture and business environment, and your actions are likely to be scrutinized by the authorities more than theirs because you’re a foreigner. You will have to run your business on the straight and narrow, even if the competition gets away with cutting corners here and there.
Of course, if you choose a place that doesn’t already have a hostel, then the competition issues won’t apply right away. You may find that neither the local authorities nor the local population really understand what a hostel is though. This is a widespread issue, however, and not something specific to Croatia. Once the locals see that your business works well and brings in money from foreign tourists, you can be sure that others will pop up.
The visa will also be important, but if you’re setting up a legitimate business then it’s probably not going to be a huge obstacle. I have no experience with Croatian visas, so I can’t offer you any insight there.
If you’re seriously considering opening a hostel in Croatia, then you should definitely go there first and check it out. :)