HISTORY AND POLITICAL STRUCTURE
The Slovak Republic is a landlocked state in Central Europe. It has a population of over five million people and an area of approximately 49,000 square kilometres (19,000 square miles). Slovakia is bordered by the Czech Republic and Austria to the west, Poland to the north, Ukraine to the east and Hungary to the south. The largest city is the capital, Bratislava, and the second largest is Košice. Slovakia is a member state of the European Union, NATO, the United Nations, the OECD and the WTO, among others. The official language is Slovak, a member of the Slavic language family.
The Slavs in the 5th Century
The Slavs arrived on the territory of present-day Slovakia in the 5th and 6th centuries during the period of migration. In the course of history, various parts of present-day Slovakia belonged to the Samo Empire, the Principality of Nitra, Great Moravia, the Kingdom of Hungary, the Austro-Hungarian or Habsburg Empire and Czechoslovakia. A separate Slovak state briefly existed during the Second World War, during which Slovakia was a dependency of Nazi Germany between 1939-1944. In 1945 Slovakia again became part of Czechoslovakia. Today's Slovakia became an independent state on 1 January 1993 after the peaceful dissolution of Czechoslovakia.
Slovakia is an advanced, high-income economy with one of the fastest growth rates in the European Union and the OECD. The country joined the European Union in 2004 and the Eurozone on 1 January 2009. Slovakia, Slovenia and Estonia are the only former communist countries to be part of the European Union, the euro area, the Schengen area and NATO simultaneously.
Slovakia is a parliamentary democratic republic with a multi-party system. The last parliamentary elections were held on 12 June 2010 and two rounds of presidential elections were held on 21 March 2009 and 4 April 2009.
The Head of State of Slovakia is the President, elected by direct universal suffrage for a five-year term. Most executive powers belong to the head of government, the Prime Minister, who is usually the leader of the winning party, but he/she must form a majority coalition in parliament. The Prime Minister is appointed by the President. The rest of the cabinet is appointed by the President on the recommendation of the Prime Minister.
The highest legislative body in Slovakia is the 150-seat unicameral National Council of the Slovak Republic. Delegates are elected for a four-year term on the basis of proportional representation. The highest judicial body in Slovakia is the Constitutional Court of Slovakia, which decides on constitutional matters. The 13 members of this court are appointed by the President from a list of candidates nominated by parliament.
Slovakia has been a member of the European Union and NATO since 2004. As a member of the United Nations (since 1993), Slovakia was elected on 10 October 2005 for a two-year term on the UN Security Council from 2006 to 2007. Slovakia is also a member of the WTO, OECD, OSCE and other international organizations.
The Law System
The Constitution of the Slovak Republic was ratified on 1 September 1992 and entered into force on 1 January 1993). It was
amended in September 1998 to allow for the direct election of the President and again in February 2001 because of the
conditions for admission to the EU . The civil law system is based on Austro-Hungarian codes. The legal code has been amended to comply with the
obligations of the Organization for Security and Cooperation in Europe (OSCE) and to erase the
Marxist-Leninist legal theory. Slovakia accepts the compulsory jurisdiction of the International Court of Justice with reservations.
The Slovak economy is considered an advanced economy, the country being nicknamed the "Tatra Tiger". Slovakia has moved from a centrally planned to a market economy. Major privatisations are almost complete, the banking sector is almost entirely in private hands and foreign investment has increased.
Slovakia has recently been characterised by high and sustained economic growth. In 2006, Slovakia recorded the highest GDP growth (8.9%) among OECD members. Annual GDP growth in 2007 is estimated at 10% with a record 14% reached in the fourth quarter. According to Eurostat data, GDP per capita in the Slovak PPS was 72 % of the EU average in 2008.
Slovakia adopted the euro on 1 January 2009 as the 16th member of the euro area. The euro in Slovakia was approved by the European Commission on 7 May 2008. The Slovak koruna was revalued on 28 May 2008 to 30.126 per euro, which was also the exchange rate of the euro.
In March 2008, the Ministry of Finance announced that the Slovak economy was sufficiently developed to no longer be a recipient of World Bank assistance. Slovakia became an aid provider at the end of 2008.
WHY CHOOSE SLOVAKIA?
Slovakia is widely recognised as an open market economy and has recently become a central European leader in economic development and is ranked by the World Bank as one of the 20 most investor-friendly countries in the world. It offers almost the whole of the EU within a radius of 2000 km and acts as the gateway to the Balkans with an additional 440 million inhabitants. It is a politically stable EU Member State with a flat tax rate of 19%. More than 90% of the more than 200 existing foreign investors in Slovakia have further expansion plans.
Advantages of the jurisdiction of Slovakia
- Corporate income tax in Slovakia is low, with companies being subject to a standard rate of 19%, which is much lower than the standard rate of 19%.
In addition, income tax is 19%, VAT is 20% and there is no local tax.
- After the payment of 19% of income tax, there is no further tax expenditure.
- The taxed profit generated may be freely used in the cases permitted by conventions avoiding double taxation.
- Successful Payment Expenses
- It is not mandatory to employ a manager in an employment relationship - A part-time job of 4 hours is accepted
- No restrictions are imposed on foreign entities or individuals with respect to their commercial activities after
the incorporation of the Slovak company.
- Accounting for Actual Spending - An additional benefit appears in the aspect of expense descriptions, as in the
In the Slovak tax system, the situation may be favourable.settlement of several expenses.
How to start a business in Slovakia
This is the most common type of new business in Slovakia, whether run by foreign or local investors. The suffix for a limited liability company is SRO One person is sufficient to form a new limited liability company and the shareholders can be individuals or a limited liability company. The total number of shareholders may not exceed 50. Any natural person residing in an EU or OECD country can become a director or shareholder. At least 30% of each individual contribution must be paid up before entry in the commercial register.
The registration of a new company in Slovakia involves several procedural steps. Checks must be made to ensure that the company name is not already in use. The articles of association and other relevant documents must be notarised. An application must be made for business licences, tax registration and health insurance; this can be done on a single composite application and can take between five and 30 days. An identity document and passport are required as proof of identity. The opening of a new bank account is also essential when capital is to be paid out.
Once the application has been processed, it must be registered with the County Registry Court, a process that will take another five days. Finally, registration for pension, sickness and unemployment insurance is also compulsory.
Limited liability companies in Slovakia must have a registered office address and all official company documents must be kept at the registered office. A representative of the company, who must be a Slovak resident, must be appointed. A general meeting acts as the governing body of the company and can ultimately decide on all matters of legal consequence. Normally, a simple majority of the votes of the shareholders is sufficient to take a decision of the General Meeting.
Conditions for registration of a Slovak company
- Director: Directors can be of any nationality and reside anywhere. Only one director is required, although a single director may be appointed.
that there could be more than one. Directors may be resident or non-resident. Corporate directors are allowed. Directors
designated are authorized.
- Shareholder: Shareholders can be of any nationality and reside anywhere. Only one shareholder is required.
It could be the same person as the director. Shareholders can be resident or non-resident.
- Shares and capital: The minimum capital requirement for the establishment of a limited liability company is share capital.
5,000 of ordinary shares with a par value of 1 euro per share of which one share is to be issued
. Bearer shares are not permitted.
- Company Name: The company name must end with sro - Ltd. or as - Inc.
- Documents required to register the company:
- Certain documents and information are required to establish a limited liability company in Slovakia, namely
- the full name of each shareholder;
- The name of the company;
- the full name, date of birth and nationality of the person who created the new company;
- The main objectives of the new company and the type of business;
- Details of the paid-up capital and shareholding of each member.
- Application must be made for business licenses, tax registration and health insurance.
Slovakia is an attractive country for foreign investors, mainly because of its low wages, low tax rates and well-trained workforce. In recent years, Slovakia has pursued a policy of encouraging foreign investment. FDI inflows increased by more than 600% compared to 2000 and reached an all-time high of $17.3 billion in 2006, or about $22,000 per capita at the end of 2008.
As a member state of the Organisation for Economic Co-operation and Development (OECD), the corporate tax system of the Slovak Republic generally follows the OECD guidelines and principles.
Corporate Income Tax (CIT) applies to profits generated by all companies, including branches of foreign companies.
Slovak tax residents are taxed on their worldwide income. Slovak tax residents may use a method of elimination of double taxation if their income is taxed abroad. The exemption or credit method may be used to eliminate double taxation, depending on the applicable double taxation treaty (DTT) and the type of income.
Slovak tax non-residents are only taxable in Slovakia on their Slovak-source income. Slovak source income is defined by local tax legislation and includes inter alia s business income and passive types of income, such as royalties, interest and income from the disposal of assets.
The standard CIT rate for 2020 is 21% applicable to taxpayers who earn more than EUR 100,000 for the tax period concerned.
The reduced CIT rate for 2020 to 15% has been introduced for taxpayers, entrepreneurs and self-employed persons with income (earnings) up to EUR 100,000 for the tax period concerned.
A withholding tax (WHT) of 7% may apply to certain taxable dividend payments to individuals.
In addition, certain income, such as interest or royalties, may be subject to a rate of 19% WHT. A specific WHT rate of 35% applies for payments to taxpayers in non-Convention jurisdictions (i.e. where there is no DTT or Tax Information Exchange Agreement (TIEA) and the taxpayer is not from a jurisdiction included in the EU's list of non-cooperating countries) or where the beneficial owners of the income cannot be identified, including the payment of taxable dividends.
Local income taxes
Slovakia has no local, state or provincial CIT.
|Location||Slovakia lies between latitudes 47° and 50° N, and longitudes 16° and 23° E. It is a landlocked state in Central Europe.|
|Time zone||UTC / GMT +1 hour|
|Airport (s)||Mr. Stefanik (Bratislava), Kosice (Kosice), Tatry ( Poprad )|
|Political system||Parliamentary democratic republic with a multiparty system.|
|International dialling Code||421|
|Legal system||Civil law system based on Austro-Hungarian codes.|
|The expertise of the Center||Banking, advanced economy, international trade traffic, automobile construction and electrical engineering.|
|Income tax||Tax of 19% only if you have been residing in Slovakia for more than 183 days with a permanent address.|
|Corporation tax||19% corporate income tax.|
|Exchange restrictions||No exchange controls on foreign currency transactions.|
|Tax treaties||Some countries are: Cyprus, Spain, Italy, France, Austria, Netherlands, Denmark, Greece, Russia, Hungary.|
|Authorized currencies||In all foreign currencies.|
|Minimum authorized capital||LLC - Joint stock company of 5,000 euros - 25,000 euros|
|Minimum share issue||LLC - Joint stock company of 5,000 euros - 25,000 euros|
TYPE OF ENTITY
|Calendar for new entities||Registration process about 5 days.|
|Incorporation expenses||LLC EUR 400.00 - Joint stock company EUR 1700.00|
|Annual fees||800.00 EUR|
|Residence conditions||The director must have a resident address in Slovakia or in another EU or OECD country.|
|Meetings / frequency||Yes, at the discretion of the companies|
|Public share registry||No|
|Meetings / frequency||Yes, at the discretion of the companies|
|Annual return||Filed annually.|
|Registration Desk||The registered office of a Slovak company must be in Slovakia.|
|Home issues||Change of residence is allowed.|
|Company naming restrictions||There are no major restrictions on the company name in Slovakia. It is important that the name has not yet been taken. Special conditions apply to the use of words such as "Casino" or "Bank".|