Entrepreneurship is an important driver of economic progress and growth. In an effort to build an innovative economy, promoting youth entrepreneurship should be a priority. Younger individuals are in general more mobile, proactive, creative, innovative, willing to change and adaptable than older population and as such represent an important strategic resource of any national economy. To encourage the development of entrepreneurial intentions among youth, it is essential to develop an understanding of their antecendants. The subject of this research is therefore the role of the perception of the importance of formal and informal institutional factors in the formation of entrepreneurial intentions among youth. The objectives of the research were to determine youths perceptions of the importance of formal and informal institutional factors in the context of a hypothetical decision to start a new business venture and to determine the impact of these perceptions on their entrepreneurial intentions. Furhtermore, one of the objectives of the research was to determine the impact of previous parental entrepreneurial experience, gender and level of education on the entrepreneurial intentions of youth. The primary survey was conducted in the Republic of Croatia through an online survey questionnaire accessed by 301 respondents aged 18 to 30 years. Respondents’ answers imply that the majority of them consider all the investigated factors of the formal institutional environment to be important in the context of their influence on the hypothetical decision to start their own business venture. Respondents' answers also suggest that in Croatia young people perceive primarily negative social attitudes towards entrepreneurship and entrepreneurial activity. Regression analysis found that perceptions of the importance of favorable tax policy and regulation of labor relations, perception of the positivity of social norms and perception of the impact of economic need on entrepreneurial career motivation are statistically significant predictors of entrepreneurial intentions of youth. Using the Mann Whitney U and Kruskall Wallis H test, it was determined that the existence of previous parental entrepreneurial experience and a higher perception of its positivity has a positive effect on the entrepreneurial intentions of youth.