Foreign investors and entrepreneurs choose to start a company in Slovakia due to its political and economic stability, active and business-friendly tax regime, in addition to the availability of a well-educated and highly skilled workforce with competitive labor costs.
Opening a company in Slovakia is not a difficult process as long as the applicable type of company is selected, and the requirements of the Company Law are obeyed.
Legal types of Slovak corporations
In Slovakia, there are different types of companies that can be established, depending on each investor and entrepreneur’s prospects and requirements.
The Corporate forms introduced by the Slovak Commercial Code are the following:
General Partnership (verejná obchodná spoločnos or “v. o. s.”)
A General Partnership is a company form in which at least two persons conduct business activities under a common business name and assume joint and several liabilities for the obligations of the partnership with their entire assets.
Limited Partnership (komanditná spoločnos or “k. s.”)
This is a Slovak company structure in which one or more partners are accountable for the partnership’s liabilities up to the amount of their unpaid contributions, and one or more partners are responsible for the partnership’s liabilities with their entire equity.
Limited Liability Company (spoločnosť s ručením obmedzeným or “s.r.o.”)
This is the most popular form of business in Slovakia. This company form exists independently of its members and it may be established either by one person, a natural or legal person, or by more persons.
Joint-Stock Company (akciová spoločnos or “a. s.”)
This type of company may be established by a sole founder (given that the founder is a legal entity) or by more founders.
Co-operative (družstvo)
The purpose of a cooperative is to undertake business activities or to guarantee the economic and social benefits of its members.
Branch of a foreign company
Individuals may conduct business in Slovakia given that they have their business or branch offices located in Slovakia, registered with the Slovak Commercial Register.
Slovakian Sole Proprietorship (živnostník)
A Slovakian sole proprietorship is the most popular form of a small business and it is managed by a single investor who is fully responsible for the debts.
A Limited Liability Company (spoločnosť s ručením obmedzeným) is the most popular form of business in Slovakia due to the ensurance of limited liability in exchange for a moderately small investment into the registered capital.
A Slovakia LLC is subject to the following features:
Advantages of establishing a Limited Liability Company (S.R.O.) in Slovakia
A Slovakia (S.R.O.) offers the following benefits:
- Non-citizens can lawfully establish a business within Slovakia with ease
- Full Foreign Ownership
- 19% personal income tax and 7% tax on dividends
- Shareholder’s liability are limited to their contribution in the share capital
- 21% corporate income tax and 20% VAT
- Bi-lateral agreements on double taxation avoidance
- Nominee shareholders are allowed of, offering greater privacy.
- Only one shareholder is needed who can be the sole director in order to fully control the S.R.O
- Low Capital requirements
- There is a moderately simple tax and reporting system in Slovakia
- In some cases, capital losses can be lessened or carried forward
- Cost-effective setup and maintenance of the LLC
- Easy visa and residency choices for all nationalities
Benefits of having a Vat number for a company in Slovakia
- VAT registration can make the company appear bigger and more established.
- Many suppliers and institutions are reluctant to do business with companies that aren’t VAT registered.
- VAT registration can add credibility to the business and give a more trustworthy and professional image.
- VAT Registration allows the reclaim of VAT on most goods and services purchased from other businesses.
Process to register your Limited Liability Company in Slovakia
Forming an llc in slovak is relatively straightforward and it involves the following steps:
- Choosing a trade name: remember to check in the Commercial Register database to confirm that the trade name of the company you have chosen is not already in use.
- Choosing a registered office: the registered office can be a non-residential building, a flat, or a house.
- Choosing a line of business (notifying a trade-Unregulated, regulated, or craft trade), designation of executive directors and administrator of contributions
- Preparing a memorandum of association: to apply for registration in the Commercial Register, you will be expected to produce a memorandum of association. If the company has only one founder, you’ll prepare a deed of incorporation, but for multiple members, you’ll prepare a memorandum of association.
- Registering a company in the Commercial Register: you can register electronically or via the point of single contact.
- Tax registration: after registering a company in the Commercial Register, it is mandated to register it with the competent local tax authority within 30 days from the start of business. The tax office shall then assign the company a tax identification number (DIČ).
Choosing a Ready-Made Slovak Company and its Benefits
Shelf companies, also called ready-made companies, are business entities that were constructed mainly to be sold to entrepreneurs.
Benefits
- Slovak ready-made companies are credible vehicles under which investor can initiate their operations in the shortest time possible.
- Your Slovak ready-made company will have a Tax certificate.
- The trading name, registered addresses, and other addresses of the company can be changed without any extra fees
- Slovak ready-made company will not have any tax obligation.
- Slovak ready-made company scope of business can be expanded
- When well selected, the Slovak ready-made company can help with the creation of a positive corporate image.
If you like to set up your company in Slovakia, or you need help in acquiring your Slovak ready-made company, let’s go ahead and contact your Damalion expert now.
