Establishing a company in Slovakia is an increasingly popular choice for foreign entrepreneurs seeking access to the European Union market. With its educated workforce, strategic Central European location, and stable liberal market economy, Slovakia offers a reliable and business-friendly investment environment.
This guide provides essential information on the main types of legal entities and the key aspects of the Slovak tax system to help you successfully navigate the process of establishing a company in Slovakia.
1. Limited Liability Company (S.R.O.) in Slovakia
The Spoločnosť s ručením obmedzeným (S.R.O.) is the most common company type in Slovakia. It can be established by a single individual or a legal entity, whether Slovak or foreign.
- Minimum Share Capital: €5,000
- Shareholders’ Liability: Limited to their capital contribution
- Ownership: Foreign individuals and legal entities can be both shareholders and directors
This structure is ideal for small to medium-sized businesses due to its flexibility, simple incorporation process, and limited liability protection. If you’re considering establishing a company in Slovakia, an S.R.O. is often the go-to option for foreign investors.
2. Joint Stock Company (A.S.) in Slovakia
A Joint Stock Company (Akciová spoločnosť – A.S.) is more suitable for larger enterprises or businesses seeking to raise capital through share issuance.
- Minimum Share Capital: €25,000
- Ownership Structure: One legal entity or two individuals
- Corporate Bodies: General meeting, Board of Directors, and Supervisory Board
- Foreign Participation: Foreign individuals and entities can fully own and manage the company
For businesses aiming for significant expansion or public offerings, establishing a joint stock company in Slovakia provides a solid legal and financial foundation.
3. Branch Office in Slovakia
Foreign companies not wishing to create a separate legal entity can open a branch office in Slovakia. While the branch operates under the legal identity of the parent company, it must still be registered with:
- The Slovak Trade Registry
- The Slovak Tax Office
This option is suitable for international businesses seeking a simple operational presence in Slovakia.
Taxation in Slovakia
Understanding the local tax system is a crucial part of establishing a company in Slovakia. Here’s a quick overview:
Corporate Income Tax
- Standard Rate: 21%Slovak companies are taxed on their worldwide income, while branches and permanent establishments of foreign entities are taxed only on Slovak-source income.
Value Added Tax (VAT)
- Standard VAT Rate: 20%
- Reduced VAT Rate: 10% (applies to selected goods and services such as pharmaceuticals, books, and certain food items)
All businesses that exceed a certain annual turnover threshold must register for VAT in Slovakia and comply with local VAT reporting obligations.
Conclusion
Whether you’re planning to open a limited liability company, a joint stock company, or a branch office, establishing a company in Slovakia offers strategic benefits for international expansion. From straightforward legal procedures to favorable tax policies, Slovakia stands out as a competitive option within the EU for foreign investors.
For more information or personalized assistance with establishing a company in Slovakia, please contact us.