Company registration in Slovakia

If you got an idea and are ready to implement it, it's time to choose the right country. Slovakia is located in the centre of Europe and has many prospects, so if you are going to start a business, check this option. Today, we will look at what details should be thought through when preparing papers, what is crucial and how to make the procedure as simple as possible.

Advantages of companies in Slovakia

As we have already brought up, the country is located in Europe’s heart. Its neighbours are Ukraine, Poland, the Czech Republic, Hungary and Austria. These are equally promising countries with which to cooperate. The euro currency also has its pros, as it is widely used. We have collected the main pluses of starting a career in Slovakia, so let's take a look at them:

• Optimal location;
• Opportunity to enter the markets of neighbouring countries;
• Political and economic stability;
• Developed infrastructure, including transport interchange;
• Relatively quick and easy registration;
• Possibility of registration for non-residents;
• Tax and other benefits for foreigners;
• DTA agreements to avoid double taxation;
• Possibility of remote registration.

What do you need to know?

If you are an international entrepreneur planning to initiate a business venture in Slovakia, there are a few essential aspects to ensure a smooth process. First and foremost, it is imperative to familiarize yourself with the provisions of the Commercial Code, which outlines the necessary documentation, submission requirements, and various company types. Let's delve into the key aspects.

It makes no difference the type of company you decide to establish, it is crucial to submit the required documentation to the local Trade Registry. Upon completion, you will receive the necessary permits and a registration certificate, unless there are any specific queries or issues. Non-residents possess similar rights as Slovak citizens, thus you should be able to establish:

• A limited liability company (CPO);
• Joint Stock Company (AS);
• A branch of an existing company;
• Individual entrepreneur.

Let's take a look at the registration process for each option.

CPO company in Slovakia

It is one of the most common firm types, and there is a reason for this. CPO attracts with a simple registration, all you need is this:

1. 1 employee;
2. 1 manager;
3. open an account with any official bank in Slovakia;
4. at least EUR 5000 on the account, including a mandatory payment of EUR 750 per 1 participant.

It should be emphasized that the maximum allowed number of participants is 50. Moreover, every participant is required to make a down payment. Non-residents can join as participants, including both the owner and other employees. Furthermore, the appointment of the executive director must be decided through voting at a formal meeting.

Regular reporting to the tax authorities is also required every year. This is a standard procedure, but an audit is mandatory only in the case of a large financial turnover – more than €2 million. But if you have over 30 employees, you are also subject to an audit, regardless of your turnover and assets.

AS company in Slovakia

A joint-stock company has more registration requirements, including financial costs. You need to follow the following standards to ensure a smooth establishment of the organisation:

• 1 shareholder;
• 1 director;
• open an account with a Slovak bank in a corporate form;
• a minimum of EUR 25000 on the account, of which 30% must be paid before the company is open.

There are also special requirements for the board of directors – it must consist of at least 3 members. This is your option if you plan to start a medium or large business. The joint-stock form allows you to list securities on the stock exchange and attract investors. But if you are listed on the stock exchange, an audit is mandatory. In other cases, you can do without it if:

• you have a turnover of less than EUR 2 million per year;
• assets are valued at less than EUR 1 million;
• the organisation has fewer than 30 employees.

Registration of a partnership in the Republic of Slovakia

An organization built on an agreement between two or more partners is known as a general partnership. They evenly split the company's revenue, costs, and liabilities. In such a partnership, all decisions are made by the partners collectively.

It's important to note that the formation of a limited liability company in Slovakia involves an agreement between one or more general partners and one or more shareholders, should you be considering such a venture. Shareholders' liability is limited to the amount of their contribution, while the general partner carries unlimited liability and takes on a controlling role.

Creating a branch office

Opening a representative office or a branch in Slovakia is also available to foreign businessmen. Those considering the option of registering a branch office in Slovakia should take into account that such a legal entity can engage in production and commercial activities. To open a Slovak branch, you need to appoint a local representative (who can reside in the European Union).

It is equally important to know that the country's legislation neither differentiates between representative offices and branches. Both types of organisations allow foreign companies to operate in the country following local rules and legislation.

Documents for registering a company in Slovakia

You won't face any problems if you prepare all the necessary docs in advance and double-check the correctness of your writing. In some cases, additional papers are required, depending on the company’s type, but we will go over the standard list. It includes:

1. The company's charter was previously certified by a notary.
2. Certificate of payment of all mandatory state fees.
3. Certificate of minimum capital.
4. A document with the approved title of the future organisation.

If you have any doubts or additional questions, our specialists are always ready to help you set up your business in Slovakia as soon as possible.

Articles of Association of a Slovak company

This is one of the main documents and you cannot do without it. Before applying to start a business in Slovakia, you need to draw up the deeds correctly and contact a notary. Only then can you apply to the regulatory authorities for a permit. So, your articles of association should contain this info:

• date of foundation;
• details about the company's founders and other lead figures;
• total initial capital and a description of its distribution;
• the address of the future organisation;
• information about the company's planned activities and the value of shares.

Step-by-step instructions for registration

The following steps are typically included in Slovakia's business registration process:

1. Signing up for the name. Checking the selected title in the commercial registry is the first step in forming a company. It normally takes one to two days to complete this process, which is necessary to prevent infringement on another person's intellectual property rights. You will therefore get a paper verifying the reserved name.
2. The paperwork’s creation and notarization.
3. Submitting a request. The firm is listed in the Slovakian Commercial Register based on the application and the list of obligatory papers.
4. Assemble a bank account. Establishing your own account in Slovakia requires adhering to the current legal prerequisites, including making the required minimum deposit and conducting all business operations through a local corporate account. It is mandatory to carry out every business transaction through the designated Slovakian bank account. Once all the official paper is prepared, the creation is quite straightforward and can be successfully accomplished.
5. Filing a tax return. The permission of the tax officials is a crucial phase in business creation in Slovakia. A tax identification number and a VAT identification number are requirements for all businesses operating inside the nation.
6. Apply for the necessary permits and licences to operate in a particular business sector.

Principle of taxation

This is the prime issue after registration, as all companies pay taxes without exception, so it is essential to know all the details. There are different fee types for each specific area. Among them:

1. Corporate income tax. This is standard taxation that applies to every firm. If your profit is up to EUR 50000, you have to pay 15%. If you receive more, the tax is 21%. A 7% income tax applies to some dividends from individuals. Income in the form of interest and royalties is taxed at 19%.
2. Stamp duty. There is no stamp duty or similar tax on the transfer of shares or other property in the Slovak Republic, but a small administrative fee is charged for the registration of such transactions. Slovakia has free trade agreements with 63 countries, including Austria, Hong Kong and Mexico, which also provides some advantages for business holders.
3. Value-added tax. It is 20% and applies to supplies. However, some privileges reduce the tax to 10%. This applies to medicines and other medical products, printing, media, and some food products. Some industries are exempt from VAT in principle – you should find out more about this.

Conclusion

Initiating a business in Slovakia is a great and promising idea, especially if you are plotting to expand and enter other markets in the EU. Foreigners have the same opportunities as citizens, and in some cases, they even receive additional benefits for a successful start and future progress. The main thing is to take into account the legislation and comply with all standard requirements, and then you will not have any problems with either registration or doing business.

If you still have any questions or need legal support at all stages of setting up a company, we are happy to help. Take advantage of YB Case's advice and make your organisation successful.