According to government requirements, starting a business in Slovakia takes an average 11.5 days and seven procedures, which places Slovakia in 77th place in the World Bank’s ease of doing business rankings.
Although little or no fee is charged, the number of separate procedures involved can make the process quite laborious for businesses.
Companies looking to trade and operate in or from Slovakia will typically be required to register a legal entity such as a company or branch. It is important to determine what activities you want to carry out from this entity as early as possible. Some business purposes require application for a related licence from the very beginning.
The types of business entities operating in Slovakia include:
- Enterprise or Branch Office of a Foreign Company (podnik alebo organizačná zložka podniku zahraničnej osoby): These types of companies are treated as foreign exchange non-residents under the Foreign Exchange Act (i.e. they are not treated as separate legal entities). These entities are not subject to any minimum capital or audit requirements. Further, there are no withholding taxes on repatriation of profits. It is the most common form of business entity used by foreign investors.
- Joint Stock Company (akciová spoločnosť, a.s.): They are formed by a single legal entity or by two or more resident or non-resident individuals or legal entities, as shareholders. A joint stock company (JSC) is a separate legal entity. It can be public or private and requires a minimum capital of EUR 25,000. Shares of a public JSC are offered for subscription through a public offering and can be listed on a stock exchange.
- Limited Liability Company (spoločnosť s ručením obmedzeným, s.r.o.): This entity type requires between one and 50 members who may be individuals or legal entities. However, one sole member company cannot be the sole member of another company. It requires a minimum capital of EUR 5,000, and the liability of the members is limited to their capital contribution.
- Limited Partnerships (komanditná spoločnosť, k.s.): They are generally founded by two or more legal entities or individuals comprising at least a limited and a general partner. General partners are jointly responsible for the obligations of the partnership, while the liability of the limited partners is limited to the extent of their capital contribution. The minimum capital contribution requirement for limited partners is EUR 250.
- General Partnerships (verejná obchodná spoločnosť, v.o.s.): These are generally formed by two or more individuals or legal entities who are jointly and severally liable for the partnership’s obligations. There are no minimum capital or audit requirements.
- Cooperative (družstvo): They are formed by at least five Individuals and legal entities whose liability is limited to the extent of their capital contribution. The minimum capital required at the time of foundation is EUR 1,250.
All of the above-mentioned business entities are required to be registered in the Slovak Commercial Register.
As part the EU, the Slovak law also recognises the following legal entities:
- European Company (Societas Europaea, SE): It operates on a Europe-wide basis under an Europe-wide law that allows it to open a registered presence in Slovakia.
- European Economic Interest Group (EEIG): It also operates on a Europe-wide basis and can have an official address in Slovakia.
- European Cooperative Society (Societas Cooperativa Europea, SCE): It operates on a Europe-wide basis and can establish a registered office in Slovakia.
A number of legal documents are required in order to form a company, such as a trading licence, a registered office, a bank account, and several documents related to the shareholders and the company executives or representatives.
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