Slovakia – Setting up a company

Time to read: 8 min

This post aims to examine schematically the three most common ways of enter in the market of Slovakia: Limited Liability Companies, a Joint Stock Companies, and Branch Offices.

Limited Liability Company

Minimum registered capital

EUR 5,000 (in case of a sole shareholder the whole sum must be fully paid up at the incorporation)

Minimum reserve fund

  • optional establishment of the reserve fund at the incorporation
  • sum equal to at least 5% of net profits has to be contributed to the reserve fund in the first year when profit is made (however not exceeding 10% of the registered capital) and in each subsequent year until the amount of the reserve fund equals to at least 10% of the registered capital

Minimum number of founders

1 (either individual or legal entity, cannot be a limited liability company having only one shareholder!)

Liability

  • unlimited liability of LLC
  • liability of shareholders up to unpaid amount of their contributions to the registered capital

Representation Authority

at least one Managing Director

Required corporate bodies

General Meeting

Corporate income tax

22%

Audit

Required:

  • if at least 2 of 3 conditions are met in decisive period (2 consecutive accounting periods): a) annual turnover exceeds EUR 2 million, b) amount of net assets exceeds EUR 1 million, c) average number of employees exceeds 30
  • if company’s securities are publicly traded, or in specific regulated businesses

Registration fees

EUR 300 in paper form and EUR 150 in electronic one (excluding notarial, translation, and legal services costs)

Timeframe for incorporation (including completion of registration)

approx. 3 weeks (after receiving all required documents from the founder; timeframe depends on the scope of business activities, in case of necessity of special license such time frame may be prolonged)

Process of registration

  1. Drafting of required documents
  2. Tax Authority’s consent to be obtained for Slovak residents to verify their taxpayers’ history (not required for foreign shareholders)
  3. The share capital has to be paid
  4. Obtaining of chosen trade licenses
  5. Registration in the Commercial Register
  6. Registration as a taxpayer at the respective Tax Authority

Necessary documents (general)

  • Foundation Memorandum/Memorandum of Association
  • Declaration of the share capital administrator or bank statement
  • Agreement on performance of function of Managing Director – not mandatory but recommended
  • Necessary trade licenses
  • Tax Authority consent (if applicable)
  • Payment of the court fee
  • Power of Attorney
  • Specimen signature of Managing Director/s
  • Right for using of a legal address
  • Extract/s from criminal record

Note: Some of the documents have to be notarised. Other documents may be required in particular cases.

Joint Stock Company

Minimum registered capital

EUR 25,000 (at least 30% of cash contributions must be fully paid up at the incorporation)

Minimum reserve fund

  • obligatory establishment of the reserve fund at the incorporation,
  • sum equal to 10% of registered capital,
  • sum equal to at least 10% of net profits has to be contributed to the reserve fund every year until the amount of the reserve fond equals to at least 20% of the registered capital

Minimum number of founders

1 (must be a legal entity)

Liability

  • unlimited liability of JSC
  • no liability of shareholders (limited to the nominal value of its shares)

Representation Authority

Board of Directors (consisting of at least 1 member)

Required corporate bodies

  • General Assembly of shareholders
  • Supervisory Board (3 members at minimum)

Corporate income tax

22%

Audit

Required:

  • if at least 2 of 3 conditions are met in decisive period (2 consecutive accounting periods): a) annual turnover exceeds EUR 2 million, b) amount of net assets exceeds EUR 1 million, c) average number of employees exceeds 30
  • if company’s securities are publicly traded, or in specific regulated businesses, e.g. in the financial sector

Registration fees

EUR 750 in paper form and EUR 375 in electronic one (excluding notarial, translation, costs of legal services)

Timeframe for incorporation (including completion of registration)

approx. 3 weeks (after receiving all required documents from the founder; time frame depends on the scope of business activities, in case of necessity of special license issuance (such as concession license) such time frame may be prolonged)

Process of registration

  1. Foundation Deed, Articles of Association, and other documents should be drafted in the form of a notarial deed
  2. Tax Authority’s consent (the same rule as for LLC)
  3. Necessary trade licenses have to be obtained at responsible state authority
  4. Paying up of the share capital and reserve fund
  5. Registration in the Commercial Register
  6. Registration at the Tax Authority

Note: The process above is a simplified summary.

Necessary documents (general)

  • Foundation Deed, Articles of Association in the form of notarial deed
  • Trade licenses
  • Agreements on performance of function of Board Members
  • Permission to use legal address
  • Declaration of the share capital administrator and bank statement
  • Tax Authority consent (if applicable)
  • Specimen signature of the Chairman of the Board and other Members of the Board of Directors
  • Payment of the court fee
  • Power of Attorney
  • Extract/s from criminal record of the Chairman of the Board and other Members of the Board of Directors

Note: Some of the documents have to be notarised. Other documents may be required in particular cases.

Branch Office

Minimum registered capital

N/A

Minimum reserve fund

N/A

Minimum number of founders

N/A

Liability

unlimited liability of the founder (i.e. the parent company of which the branch forms a part)

Representation Authority

Branch Manager, in addition to the statutory representatives of the founder

Other required corporate bodies

N/A

Corporate income tax

22%

Audit

N/A

Registration fees

EUR 300 in paper form and EUR 150 in electronic one (excluding notarial, translation, and legal services costs)

Timeframe for incorporation (including completion of registration)

approx. 3 weeks (after receiving all required documents from the founder; time frame depends on the scope of business activities, in case of necessity of special license issuance (such as concession license) such time frame may be prolonged)

Process of registration

  1. Decision of the parent company on establishment a Branch Office in Slovakia
  2. Obtaining of chosen trade licenses
  3. Registration in the Commercial Register
  4. Registration at the Tax Authority

Necessary documents (general)

  • Decision of the parent company on establishment a Branch Office in Slovakia
  • Foundation Documents of the parent company
  • Parent company’s extract from relevant register in home jurisdiction
  • Trade licenses
  • Permission to use legal address of the Branch Office
  • Extract/s from criminal record for the appointed Manager of the Branch Office

Note: Some of the documents have to be notarised. Other documents may be required in particular cases.

Tomas Rybar
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