REGISTRATION OF COMPANY IN SLOVAKIA

REGISTRATION OF COMPANY IN SLOVAKIA

Slovakia, officially the Slovak Republic, is a landlocked country in Central Europe. It is bordered by Poland to the north, Ukraine to the east, Hungary to the south, Austria to the southwest, and the Czech Republic to the northwest

Slovakia is a developed country with an advanced high-income economy, ranking very high in the Human Development Index. It also performs favorably in measurements of civil liberties, press freedom, internet freedom, democratic governance, and peacefulness. The country maintains a combination of a market economy with a comprehensive social security system, providing citizens with universal health care, free education, and one of the longest paid parental leaves in the OECD. Slovakia is a member of NATO, CERN, the European Union, the Eurozone, the Schengen Area, the United Nations, the OECD, the WTO, the Council of Europe, the Visegrád Group, and the OSCE. It is the world's largest per-capita car producer; it manufactured a total of 1.1 million cars in 2019, representing 43% of its total industrial output.

 A citizen or a non-resident of the specified country can register a company in Slovakia using the help of Law & Trust International. The lawyers provide essential information concerning the latest changes in legislation, conduct free consultations regarding the organizational and legal forms of companies to be registered and answer the questions from clients.

The applicant shall provide the specialists with a considerably small package of documentation that will include personal data and information about the business. Before applying, it is necessary to prepare a name for the company in Slovakia, determine its scope of activities and choose the form of business entity.

Naming is developed by the client, and assistance in the selection of the organizational and legal form, collection of the full package of documents, and legal support of the company registration process in Slovakia are the tasks of lawyers of Law & Trust International.

 

Company Formation in Slovakia

1. Plan the structure:
   • Legal entities, e.g. “k.s. with managing Slovak s.r.o.” for residents of most countries, ”s.r.o.” with an external holding plus a partnership on top for residents in Malta, UK, Ireland and of tax-free areas like UAE or Monaco
   • We will send you an offer
2. Send us an email with key information for new company formation. This service is offered only together with other corporate services (accounting etc.), (accounting, etc.) because this way we know the activities of our clients. If we also assist the company to apply for a bank account, please be aware that banks do their own due diligence, so we have little influence on their decision.
3. Company name
4. Object (most activities are free, but some need a license, then a Slovakian resident with a license has to be engaged)
5. Director (needs a clean criminal record; non-EU/EEA citizens need a work and residence permit if they have no permanent residence in an OECD country), Directors can have a single or joint signature and it is possible to limit the amount of competence of each director and to register this limit in the commercial register. This system is sometimes used to employ an additional local director to show more substance for tax purposes.
6. Shareholder (if corporate: board resolution and notarized extract of commercial register plus apostille)
7. A supervisory board is not required in most cases
8. In addition, our manager will meet or phone with you to ensure that you have the right setup and that it is clarified if you need a §4 VAT number – “DPH” and in this case, we may offer you to purchase an existing company
9. Paid-up minimum share capital of 5000 € can be declared.
10. Transfer funds for share capital and costs of company formation:

 

COMPANIES IN SLOVAKIA: TYPES AND FEATURES

1. The establishment of a company in the territory of Slovakia is the basis for the subsequent business migration of the membership of the board, beneficial owners, shareholders, or owners themselves.
2. Regardless of the citizenship of the founder in the territory of Slovakia, neither the owner nor his company pays taxes from the dividends received.
3. In order to register a company in Slovakia, it is not necessary to transfer the applicant into the status of a legal entity. A sole proprietorship can be registered on a natural person.
4. The company operating in any of the offshore zones also has the right to be registered in Slovakia as the legal entity and establish subsidiaries in all the EU countries.

LLC (Limited Liability Company)

It is the most common type of organizational and legal form when registering companies in Slovakia. Before submitting the application for the establishment, the client should be aware of: the future name of the company, the amount of the contribution as the authorized capital, the composition of the founders and general directors, the type of activity, and the legal address of registration.

LLC is obliged to comply with certain requirements and restrictions:

1. The minimum amount of the authorized capital shall be from 5 thousand euros. The number of participants of the shares should not exceed 50, and the minimum contribution of each participant cannot be less than 750 euros.
2. The process of registration of a company in Slovakia implies the complete absence of the applicant’s debts to the tax inspection, in the event when the applicant is a resident of Slovakia. For foreign entrepreneurs, an extract from the tax authorities is required on private request.
3. According to the provisions of the legislation of Slovakia, one of the general directors of the company shall be a resident of the country or have a residence permit. The lawyers of the company Law & Trust will help you to obtain a residence permit.

Private entrepreneurship

The registration of business in Slovakia in this organizational and legal form has one important advantage, that is a low level of expenses when establishing. However, in contrast to the LLC, the private entrepreneur is obliged to pay for medical insurance, and the business cannot be expanded or sold, if the residence permit exceeds the time limit or there are problems with obtaining it, then the establishment of entrepreneurship will become impossible.

Joint Stock Company

The lowest amount of the authorized capital is from 25 thousand euros, and the entire contribution is divided into shares with a certain value. All the shares in this jurisdiction are registered, and bearer securities are not used. The most prevalent cause of registration of public or private joint-stock companies in Slovakia is when the number of shareholders exceeds 50 people.

 

 Some good reasons to register your company in Slovakia

• The Slovak economy is booming, public debt is low
• Bratislava is easy to visit, in the middle of large Central European markets
• Our office is located in front of the Petrzalka train station, where an hourly train goes to Vienna. Customers can use 24/7 our separate business center that offers several desks, closed shelves, meeting places, and other supporting facilities as well as several parking spaces in front of the building. Customers can use the facilities without additional investment up to a certain extent. The building has a high standard with permanent security at the entrance.
• A well-educated multilingual workforce at reasonable costs makes it possible to create real structures
• A Slovak company has free access to EU and Swiss markets
• Slovakia is an EU member state and uses Euro currency

• EU compatible tax laws with lower taxes than the surrounding countries
• Little tax on dividends and possibilities for tax-free profit distributions
• Advantages from various double taxation agreements
• Special corporate structure allows to transfer of money and assets tax-free profit distribution from corporate to private level, and shareholders can keep their residence in other countries
• Acceptable due diligence requirements. Banks open accounts for local operational enterprises, but also accounts in other countries are permitted. Check our guidelines on how to deal with banks and you will have success in opening a bank account.

 

How long does it take to open a company in Slovakia?

The company formation process in Slovakia will usually respect the following timeline:

1.        the company name reservation takes less than one day and is subject to a small fee;
2.        the drafting and notarization of the company's statutory documents take one day;
3.        the opening of the corporate bank account and deposit of the share capital take another day;
4.        obtaining the tax form showing the shareholders have no debts to the state takes about 5 days;
5.        the registration of the company with the Trade Register and the tax authorities takes about 9 days;
6.        the registration for VAT purposes will take another 5 to 15 days;
7.        the registration as an employer for health and pension benefits will take one day.

 

Taxation of companies in Slovakia

One of the most important aspects related to starting a business in Slovakia is taxation. According to the Tax Code, companies in Slovakia must pay the following taxes:

• -          the corporate tax which is imposed on all the sources of income is levied at a rate of 21%;
• -          withholding taxes on dividend payments which are levied at a rate of 35%;
• -          withholding taxes applied to interest and royalty's payments which are also levied at a 35% rate;
• -          the value-added tax which is applied at different rates (the standard rate is 20%).

It should be noted that Slovakia has signed numerous double taxation agreements under which reduced rates apply to foreign investors with business activities here. For an easy understanding of the taxation system in Slovakia, we offer accounting services. If you also need legal assistance in Slovakia, we can put you in contact with our partner law firm.

 

Additional information about Slovakia:

Slovakia is located near Austria, to Hungary, and to Czech
Republic. 3,5 million people live in the region (Bratislava- Györ- Vienna), 25 Million people can be reached within 3 driving hours, about 60 Million people within 8 driving hours. The location is especially suitable for companies in the neighboring countries because it is possible for their managers to be frequently present on site.

A reasonable salary level and good language skills let businesses quickly reach profitability. In addition, the administration is formalistic but quite liberal. Transfers of functions pay off fast and as tax authorities increasingly ask for proof of substance, a reasonable salary level is helpful.

FAQ on how to open a company in Slovakia

1. Is it possible for a non-resident to establish a business in Slovakia?

Yes, non-residents who decide to open companies in Slovakia can do so and what is more, the laws for a Slovak startup are rather similar for both Slovak residents and foreigners.

 

2. What are the costs for opening a company in Slovakia?

The start-up costs in Slovakia vary depending on what type of company you decide to establish in the country and also on the additional services (if any) you choose for your future business.

 

3. How long does it take to incorporate a Slovak company?

Opening a company in the Slovak Republic should not take more than a week if all the documents are in order and if they are all filed when requested. There are also some requirements that need to be met and asking for the help of a company formation firm in Slovakia is the advisable way to proceed when incorporating a legal entity on the country’s territory.

 

4. What are the most important steps for incorporating a company in Slovakia?

When opening a company in Slovakia, the main steps that need to be completed are as follows:

● choosing the type of company;

● choosing a suitable name for the company and receive the approval of the Company Registrar in Slovakia;

● notarizing articles of association and related papers at a notary's office;

● putting together the application (with all the required information) so as to register your new company with the Company Registrar in Slovakia.

 

5. What are the requirements for opening a bank account?

If you wish to open a bank account in Slovakia, you need to submit proof of identity (a passport or Slovak ID card). Our local experts can help you open a bank account in Slovakia and assist you through the other procedures for setting up a Slovak company.

 

6. Is there a minimum share capital needed for the incorporation in Slovakia?

There are several legal entities you can establish in Slovakia and depending on the type you choose to set up, the share capital varies. Our specialists in company formation in Slovakia can offer you complete information on the amount required for each legal entity (limited liability company, limited partnership, etc.).

 

7. Are business permits and licenses necessary in Slovakia?

Yes, depending on the business activities you choose to operate in Slovakia, you could be requested to present a business permit or a license.

 

8. Why should I decide on investing in the Slovak Republic?

Amongst the most important reasons why you should invest in Slovakia, are the following:

 - favorable geographical position;

- stability in economy and politics;

- Slovakia’s currency – Euro;

- low labor costs;

- highly-developed industry;

- fast-developing infrastructure.