Buying an iPhone 5 abroad

Hey guys, I'm kinda new here so I'm disoriented. Forum directed me here. I think my account isn't activated yet so I can't post my question to the right place.
Anyway :/

I'm thinking of buying an iphone 5 abroad (Canada) because my friend will be visiting and he's living there. Main reason to buy it abroad is it's uncomparable price to Europe's.
Now, is it possible to do so? I mean, will it be useable here? Do I have to unlock it or buy it unlocked? What's with that? I'm trying to find some info on it on internet but it's all clogged with those temporary vacation phones.

Btw, I live in Croatia and our major mobile networks (or how are they called in english) are Tele2, T-com (T-mobile), Bonbon and few others.
Help?

You just need to find out if your local provider in Croatia can supply you with a nano sim card to add your local contract to the phone

You can buy an UNLOCKED iPhone in Canada by paying full price for it, yes. It will work with any of your local providers IF they can give you a nano-SIM and local agreement as louishen said.

What if I unlock it myself? That doesn't change much, right?

And, could you explain to me what exactly does "new 2-year contract" mean? Is it possible to buy it with this contract (in my situation)? No?
How would this contract be realized if the purchase is made through internet?

Sry, i'm kinda helpless and just want to be sure...

1. You can't unlock it yourself. There is no unlock solution for the iPhone 5/iOS 6 available to users.

2. You can certainly buy an iPhone on a contract, but then you're obligated to pay the monthly charge on that contract whether you are using it (or even in that country) or not. What YOU want is to buy a FULL-PRICE, UNLOCKED iPhone from Apple in Canada, take it back to Croatia and find a provider that will sell you a prepaid plan (no contract, just month-to-month).

Ok, gotcha.
Thanks