Those considering whether to set up a new company in Slovakia need not worry. In view of the scheduled introduction of the euro from January 1, 2009, the conditions for establishing a company in Slovakia have become slightly easier to meet. For those who have already established a company in Slovakia, the second half of this article regarding the registered capital of the company and the obligation to convert shares into euros may be of interest.
Those considering whether to set up a new company in Slovakia need not worry. In view of the scheduled introduction of the euro from January 1, 2009, the conditions for establishing a company in Slovakia have become slightly easier to meet. For those who have already established a company in Slovakia, the second half of this article regarding the registered capital of the company and the obligation to convert shares into euros may be of interest.
Types of companies and establishment procedures
In general, foreign investors can only do business permanently in Slovakia by joining an already established Slovak company or by establishing their own company under Slovak law.
The first thing to decide is the type of company that best suits the entrepreneur's needs and goals. To conduct business, investors can choose from the following forms: branches, limited liability companies, joint stock companies, limited partnerships, unlimited partnerships and cooperatives, European companies, European cooperatives, and European economic interest groups.
According to group policy, branches are usually preferred if the administrative burden of having a separate legal entity in the other country is too heavy. Under Slovak law, the procedures required to establish a branch are very similar to those for establishing a limited liability company. Branches, on the other hand, have no separate legal authority and all actions they perform are performed on behalf of the parent company.
Among other types of companies, limited liability companies and joint stock companies are preferred. Corporations are used for joint venture transactions and projects involving external financing. Limited liability companies are the most common organization in Slovakia, especially because of their simple structure and governance.
Personal issues also need to be considered, particularly who will take on the role of the statutory body. Citizens of EU and OECD countries do not need a residence permit to register as a statutory entity of a company.
The procedure for forming a company in Slovakia begins with the drafting of the incorporation documents (Articles of Incorporation in the case of an LLC and Articles of Incorporation with the Deed of Incorporation in the case of a JSC). Although it may be difficult to change the essential nature of a company after it has been established, it is recommended that the incorporation documents be thoroughly prepared. The law sets out minimum requirements for founding documents. However, detailed regulation of interactions between a company's founders may help prevent potential claims in the future.
After signing the establishment documents, the company will be able to apply for the necessary permits to operate in Slovakia. In most cases, licenses for activities are issued by the Trade Licensing Authority. For licenses for specific activities, companies must apply to other authorities such as the Slovak National Bank or the Telecommunications Authority.
After obtaining a license, the company formation procedure continues with registration in the Commercial Register. A company exists from the date of its incorporation in the Commercial Register maintained by the District Court. The Commercial Registry will establish a new legal entity within five working days of the submission of a complete and duly prepared application. Income tax registration must be completed within 30 days of the company being registered in the Commercial Register. Generally, if the law imposes an obligation for him to register for VAT, then registration for VAT is optional at a certain level of turnover.
introduction of euro
Since 2007, it has been possible to establish capital in euros. Until December 31, 2008, the minimum registered capital for a limited liability company is 200,000 SKK or 5,000 EUR. For joint stock companies, the minimum registered capital is 1,000,000 SKK or 25,000 EUR. Since January 1, 2009, the registered capital and member shares of Slovak companies must be denominated exclusively in euros.
As a result, companies already established in Slovakia and whose capital is registered with the SKK have new obligations related to the introduction of the euro. The conversion of the nominal value of registered capital and membership shares from his SKK to euros is not carried out automatically by the Commercial Register, but only on the basis of an application submitted by the respective company.
Applications to register the conversion of the registered capital and the nominal value of shares into euros must be submitted by December 31, 2009 at the latest, subject to strict rules established by law. However, during 2009, companies will no longer be able to register other changes in the Commercial Register unless they submit a change registration along with these changes.
Attorney Elena Chorbatova, PETERKA & PARTNERS Law Office
This article is for informational purposes only and is not to be considered a legal opinion for any reason. If you would like further information on the issues raised in this article, please contact our law firm PETERKA & PARTNERS, Kapitulská 18/A, telephone number 03-3202-5101. +421 2 544 18 700,
Email: office@peterkapartners.sk; www.peterkapartners.com
Author: Elena Chorbatova
