To supplement our Slovakian bookkeeping services we are at our partners’ disposal in the following fields:
- complete company formation in Slovakia
- founding Slovakian branches
- amending company register records in Slovakia
- the preparation and the review of contracts
- legal representation in Slovakia
- Slovakian legal attorney, Slovakian lawyer
During the years of our operation we have executed and managed more than 200 company formations, alterations and acquisitions from the smallest limited partnerships to the Slovakian branch of a large multinational. Beside our Hungarian and Slovakian clients numerous Western and Northern European investors have entrusted our firm with the formation of their Slovak company. The quality of our work in the field of company formation in Slovakia and the filing of changes in Slovakian company register records along with our global connections are guaranteed by our MGI Worldwide membership.
Prompt and reliable company formation in Slovakia…
- 20 % vat
- 21 % corporate tax
- 14 % health insurance contribution levied on dividends if the receiver is insured in Slovakia
- 7 % dividend tax if the receiver has no health insurance in Slovakia
- no local business tax
- online communication with government offices
- in case of operating a Slovak company, most kinds of expenses are allowed for tax deduction (e.g. expenses related to the maintenance of vehicles; cost of vehicles and fuel costs are allowed for vat deduction)
- the minimum wage in Slovakia is 480 Euros, total compulsory social and health insurance contributions at 251,61 Euros
- personal income not subject to taxation up to the annual sum of 3 830,02 Euros
- the minimum registered capital required in case of company formation in Slovakia is 5000 Euros
- low banking and administrative costs
- please fill out the fields in our required table and we will prepare the articles of association within 24 hours
- if a foreign legal person is to become member of a Slovak company, then the recent certificate of incorporation of the foreign legal person needs to be translated into Slovak, this can be prepared in 2-3 days, in urgent cases even in 1 day
- the time needed to complete the registration of a Slovak company is within 7-8 working days after the signing of the documents
the documents are signed in the presence of our Slovakian attorney and public notary, the personal presence of both the owner(s)/partner(s)/member(s) and the executive(s) is required
- the time needed to acquire a general tax identification number: 7 days after company registration
- claiming a European vat identification number: the success of an application is not automatic, evidence of economic activities in the Slovak Republic need to be provided. Specialised committees consider the application within 30 days of its filing.
- • after company registration, only the executive is allowed to open a bank account in person; it is mandatory to have a Euro account, but it is also possible to open bank accounts in foreign banks or in different currencies
Limited Liability Company (s. r. o.): – company formation in Slovakia
- The “sro” is the most common form in Slovakia
- The minimal required registered capital for company formation in Slovakia is 5000 Euros
- The company is liable to the extent of all its assets. The liability of the members is nevertheless limited to their share of the registered capital they have not yet paid up to the company.
- An Sro can be founded by one or more natural or legal persons.
- In the course of company formation in Slovakia it must be taken into account that one natural person can only incorporate three one person companies.
- The name of the Slovakian limited liability company must contain one of the expressions spol. s r. o. or s. r. o. (abbreviations of the Slovak term for limited liability company).
- Slovak company accountancy note: companies are required to establish a reserve fund from 5% of the net profits indicated in the annual final accounts up to 10% of the registered capital. The reserve fund can then be used to cover future losses of the company.
- The supreme body of the company is the annual general meeting which is convened at least one a year.
Slovakian branch of a foreign business – company formation in Slovakia
- Prior to founding a company in Slovakia one needs to consider if it is necessary to found a separate company if our economic activities can be carried out by a Slovakian branch an existing company.
- A foreign business can carry out economic activity in Slovakia through a branch registered in Slovakia.
- The Slovakian branches or foreign businesses are not considered to be separate legal persons.
- Both Slovakian and foreign citizens can be appointed as executive officer.
- There is no minimal registered capital requirement.
Public Limited Company: (a.s.) – company formation in Slovakia
- The Slovak Public Limited Company is a legal person whose registered capital can be divided into a predetermined number of shares of predetermined nominal value.
- The company is liable to the extent of all its assets. The liability of the members is nevertheless limited, they are not liable for the obligations of the company, but are obliged to pay the issue price of the shares they agreed to take, in full.
- The name of a Slovakian public limited company must contain one of the expressions akc. spol. or a.s.
- A public limited company can be listed or unlisted on the stock exchanges.
- A public limited company can be founded by one or more shareholders. For company formation in Slovakia, the articles of association need to be in written form.
- For the company registration in Slovakia, in the case of public limited companies, a minimum of 25 000 euros worth of shares (face value) need to be issued. At least 30% of share face value needs to be paid up before company registration.
- The supreme body of a Slovak public limited company is the meeting of shareholders, the authority of which usually extends to: amending the articles of association, increasing or decreasing the registered capital, appointing and relieving directors or supervisory board members and distributing the profits.
- The main operative and executive body is the board of directors.
- In case of forming a public limited company in Slovakia, a supervisory board of at least three members also need to be appointed. Its authority is to oversee the work of the board of directors.
- In the framework of Slovakian accounting, the books of the public limited company and its annual report need to be audited by an auditor.
Limited Partnership: (k.s.) – company formation in Slovakia
- In the framework of company formation in Slovakia, the limited partnership is a form of business organisation, where a number of partners (general partners or GPs) has unlimited liability for the obligations of the partnership while another group of members (limited partners or LPs) has limited liability for the obligations of the partnership to the extent of their not paid up financial contributions.
- The name of the limited partnership must contain one of the expressions kom. spol. or k.s. . An important note before the formation of this kind of partnership in Slovakia: if the name of the partnership contains the family name of a limited partner, that LP also has unlimited liability for the obligations of the company.
- During the formation of a limited partnership in Slovakia, the minimal financial contribution of a limited partner is 250 euros; there is no required amount for general partners.
- The supreme body is comprised of the general partners themselves, who are empowered to act independently in the name of the partnership if not otherwise regulated in the partnership agreement. Only the GPs of the Slovak business have management control.
- The limited partner is entitled to insight into the books and accounting documents and to a copy of the documents regarding the annual closing of the partnership’s books.
1. Corporate tax
The taxable base and the rate of tax
The taxable base of corporate income tax is the net income of the company reduced by the associated costs, but a number of correction items need to be taken into account during the taxation of a firm in Slovakia.
The rate of tax is: 22 %
Advance tax payments:
Monthly payments required if corporate income tax exceeded 16.000 euros
Quarterly payments required if corporate income tax exceeded 2.500 euros
Eligible (tax-deductible) costs
The general rule is that expenses in the interests of the business are considered eligible in Slovak accountancy except those specified as non-eligible. The necessity of the expenses needs to be supported with the corresponding documents.
Examples of tax-deductible expenses:
- depreciation costs of assets
- costs associated with motor vehicles
- mission costs
- book value of assets sold
- compulsory social and health insurance contributions
- contributions to social and health service costs for the employees
- environmental costs
- taxes and contributions payable (with exceptions)
- certain costs related to foreign branches
- advertising and promotional costs except certain high value promotional and representation expenses
- the interests of loans, special reserves, provisions, accruals
- non realised exchange rate losses originating in the pricing of receivables and payables
Examples of non-eligible expenses:
- penalties, fines
- part of depreciation costs which is accounted for in the books, but is above the rate recognised by the income tax act
- certain benefits in kind, social, healthcare benefits to employees
- certain representation expenses, promotional assets, gift items above 17 euro/piece purchase price
- losses resulting from sold receivables
The losses generated in a given tax year can be carried over a maximum of 5 consecutive years, starting at the first profitable year.
Recognised straight line depreciation rates:
Tangible assets up to 1700 euros can be simply written down.
|Type of asset
|Computers, printers, mechanical equipment, motor vehicles
|Certain productive assets, production equipment, farm machinery, furniture
|Certain productive assets, production equipment, heating equipment, metal structures
|Buildings, pipes, electric and telecommunication cables
2. Personal income tax, social insurance contributions:
|Name of the contribution
|Solidarity Reserve Fund
|Personal Income Tax
Up until 316,94 euros a month the wages are not included in the taxable base, so from these sums effectively no personal income tax needs to be paid.
Obligation to register:
A Slovak company automatically becomes a VAT payer if its turnover over 12 consecutive months reaches 49 790 euros.
The general rule is that becoming a subject to VAT and obtaining a European vat identification number requires the same registration process. .
The registration to become a VAT payer can be initiated even without reaching the aforementioned annual turnover threshold.
- The success of an application is not automatic, evidence of economic activities in the Slovak Republic need to be provided. Specialised committees consider the applications.
- National distinctiveness: the Tax Office issues a tax card certifying the fact a person or entity is subject to given forms of tax. A pink coloured tax card indicates that a company is a VAT payer and possesses a European vat ID number.
The tax rate
– The standard rate is 20%
– The reduced rate is 10%
(medication, diagnostic materials, books, medical equipment, special equipment for people with visual, hearing or movement impairment)
VAT cannot be deducted in case of:
- non-business related expenses
Passenger vehicle and petrol costs are subject to VAT refunds!
Slovakian accountancy note: there are no bureaucratic restrictions to issuing invoices (anybody can buy appropriate blocks or – as long as the required data are included – it is possible to issue invoices using MS Excel)
Just like invoices, receipts are also accepted for VAT deductions
In case of cash purchases up to the sum of 1659,7 euros, the merchant gives the customer a receipt printed by an electronic cash register. (typical example: fuel purchase)
Thus, the vat from the current period can be reclaimed with the VAT return from the next month,, if there is no VAT payable then. .The Tax Office completes the refund within 30 days of filing the return.
There are no further legal requirements to reclaiming. (E.g. there is no minimal reclaimable sum required; the invoice is not required to be paid etc.)
In case of larger tax refunds (cca. 5000 euros) the Tax Office frequently carries out a tax inspection prior to completing the refund.
4. Dividend tax
- If the profits of a Slovakian company are paid out in dividends to a natural person with health insurance in Slovakia (who is employed and entitled to receive social security benefits in Slovakia), then a health insurance contribution of 14% is payable.
- Natural persons without Slovakian health insurance need not pay this contribution: 0%.
Note: the country of tax residence of the owner may levy income tax or compulsory contributions on dividends from abroad.
The legal basis of doing business (the forms of contracts used) is similar to
other countries in the region (e.g. Hungary). Business culture, negotiating habits, business protocol
is also similar. English
is spoken more and more
. A few emphasised elements of the Slovak business environment:
- the opportunities to gain EU subsidies are available to a substantially higher degree than before
- well educated workforce readily available at affordable prices, in several cases Government is greatly promoting employment by means of massive discounts
- a banking fees are substantially lower compared to Hungary; thanks to the SEPA system the banking system is capable of realising a domestic bank transfer in 4 hours, an international transfer within a day
- most matters with the government offices, Tax Office, can be arranged electronically
- real estate prices have still not recovered from their decline during the crisis, so it is highly recommended to invest either into industrial or administrative buildings
Last but not least, if we enter a foreign country in the pursuit of tax benefits, that country can at the same time be a new potential market for our products, services.
Reliable Slovakian professional support…