Slovakia

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Slovakia

GENERAL INFORMATION ABOUT JURISDICTION

The Slovak Republic is located in the center of Europe and is present on the land territory of the continent. Slovakia is quite small regarding size and population; it borders with Ukraine, Poland, Czech Republic, Austria and Hungary. The country was declared as an independent state on the day of 1 January of 1993 as a result of the "velvet divorce" - the disintegration of Czechoslovakia into the Czech Republic and Slovakia. Slovakia became a member of NATO in March 29, 2004, of the European Union - in May 1, 2004, joined the Schengen zone in December 21, 2007, and entered into the Euro in January 1, 2009.

OPEN A FIRM IN SLOVAKIA - ADVANTAGES:

- Member of the EU, member of the Schengen Area.

- Slovakia is not an offshore and is not included in the black lists of countries.

- A developed industrial-agrarian state with a modern market economy.

- Access to the market of the European Union and Switzerland.

- A country with a rapidly growing economic performance.

LEGISLATION

The legal requirements for opening a company, a company on the territory of Slovakia are provided for by the Commercial Code (1991), the Civil Code (1964) and the Law on the Commercial Register (2003).

COMPANY REGISTRATION IN SLOVAKIA

Forms of Companies:

Company in Slovakia can be set up in one of the following forms: Limited liability company (s.r.o), Joint-stock company (a.s.), Full partnership (v.o.s), Limited partnership (k.s), Representation of foreign companies, European Society (SocietasEuropaea).

The most popular and attractive form is a Limited Liability Company (hereinafter – S.R.O.).

LIMITED LIABILITY COMPANY (S.R.O.):

  • Authorized capital – 5 000 EUR, should be paid at the moment of registration. The contribution of each shareholder cannot be less than 750 euros.
  • Shareholder – there is no residency requirements; the minimum number – 1. It can be both an individual and a legal entity. Nominee service is not provided.
  • Director – exclusively a natural person who has citizenship in one of the EECD / EU countries or with a residence permit in Slovakia.
  • Secretary - not required.
  • Public information - information about shareholders and directors is available in the Trade Register. Information about beneficial owners is submitted to the Register, but is not open.
  • Reporting - companies are required to keep accounting, prepare and submit financial statements and tax returns annually. An audit is mandatory for those companies that exceed 2 indicators of the following in the reporting period:

-        the total amount of assets is 1 000 000 euros;

-        company turnover (income) 2 000 000 euros;

-        the average number of employees is 30 people.

  • Registration address - it should be on the territory of Slovakia.

TAXATION

To determine the tax residency of the legal entity, registered in Slovakia, management and control should be carried out from the territory of Slovakia. Residents subject to taxation of all income received from sources worldwide. The income of non-residents is subject to taxation only if it is obtained from a source in Slovakia.

Income tax rate - 21%. A reduced tax rate of 15% applies to legal entities and entrepreneurs with incomes of up to 100 000 EUR.

VAT rate – standard rate – 20 %. Reduced rate of 10% (applies to medical products). Insurance and financial services are exempt from VAT.

Registration as a VAT payer is compulsory if the company conducts business and makes a profit on the territory of the country, or if it receives an annual profit of more than 49 790 euros.

Commencing from 1 day of January 2014 definition "tax license" is introduced in Slovakia. It implies the payment of minimum tax by companies in the following amounts:

-          480 EUR - if the company is not a VAT payer and annual income does not exceed 500 000 EUR;

-          960 EUR – if the company is VAT payer and annual income does not exceed 500 000 EUR;

-          2 880 EUR – if the company’s annual income does exceed 500 000 EUR.

Obligation to pay the tax license does not extend on the first financial year.

Taxation of dividends: rate of 7%, if a Slovak company pays dividends to a tax resident of Slovakia or a tax resident of a state with which a double taxation treaty has been signed. If dividends are paid to a tax resident of a state with which a double taxation avoidance agreement has not been signed, the rate will be 35%.

Taxation of interests and royalty: rate 19 % while paying to the residents of EU and 35 % while paying to non-residents of the EU.

When opening a company in Slovakia, stamp duty is charged depending on the form of filing registration documents.

CURRENCY CONTROL

None.

DOUBLE TAXATION AVOIDANCE AGREEMENT

Slovakia has signed 70 international tax treaties, including agreements with Russia and Ukraine.

If you want to buy a company in Slovakia, please contact our lawyers for advice:

+38 (044) 383-48-88

+38 (044) 383-28-88

We will help you register a company in Slovakia or in any other jurisdiction of your choice.