Business Start-up Costs in Slovakia - Lowest Cost for Starting a Slovak Company
Business Start-up Costs in SlovakiaUpdated on Thursday 16th September 2021
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If you are a foreign entrepreneur who intends to open a business in the country, you should be aware of significant issues regarding the costs for starting a business in Slovakia, as well as the time frame involved in opening a company here. The data below shortly outlines the procedure, costs and time frame involving starting up a business in Slovakia with 10 to 15 employees and a startup capital 10 times the per capita gross national income of the local economy (which was 26,110 PPP dollars in 2013). Our solicitors in Slovakia can offer more details on the costs involving other types of companies in this country.
Below, our Slovak lawyers present the main costs associated with starting a business in Slovakia. You can also rely on us for assistance in registering a company with the Slovak authorities.
Steps in opening a business in Slovakia
The business start-up costs in Slovakia are influenced by several factors. One of the most important factors is the type of structure selected by the future business owner. For foreign investors, the limited liability company represents the most common business form because of the many advantages it offers from a fiscal point of view.
No matter the type of structure selected, the steps to be completed when starting a business in Slovakia are enumerated below:
- choosing and reserving the trade name for the business (in the case of sole trader, this step is usually skipped);
- preparing the company’s statutory documents in the case of limited and joint stock companies;
- opening the corporate bank account and depositing the share capital, as required by the law;
- filing the documents with the Trade Register in order to obtain the certificate of registration;
- registering for taxation, VAT and social security purposes with the local tax office in the city the company will operate;
- applying for the necessary licenses (the general business license and the special permits), depending on the industry to operate in.
We mentioned above that Slovak sole proprietorships do not need to make a trade name reservation as these can operate under the business owner’s name. The registration of a sole trader’s name is free of charge with the Trade Register in Slovakia.
Our lawyers in Slovakia can assist with the registration of any type of company in accordance with your business purposes in the country.
The main costs associated with starting a business in Slovakia
Starting a company in any country implies the payment of various taxes and fees. This is also the case of Slovakia, where several steps in the company registration procedure attract fees. However, these are usually low, which is why they pose no problems to those who want to set up business ventures here.
These are the main costs an entrepreneur should consider when setting up a company in Slovakia:
- the creation of the registration documents which consists in drafting and notarizing the Articles of Association;
- the registration and the tax identification issuance fees;
- the translation and notarization of various documents in the case of foreign investors;
- the licensing fees which depend on the industry the company will operate in.
There are also procedures that are free of charge when setting up a business in Slovakia and among them we can mention the following:
- the trading name reservation;
- the registration for VAT purposes;
- the registration for pension, sickness, disability insurance and unemployment insurance purposes.
Another aspect to consider when it comes to business start-up costs in Slovakia is the appointment of a custodian of funds upon the deposit of the share capital. This procedure is free of charge.
Our Slovak lawyers can explain in detail the cost associated to each procedure if you want to create a business here.
Verifying the company name
In order to verify the uniqueness of the company name with the Commercial Register held by the District Court, it will cost you EUR 3 to effectuate the research.
Documents for starting a business in Slovakia and associated fees
The paperwork that needs to be processed when setting up a Slovak company depends very much on the chosen business form. Sole proprietorships and partnerships are non-corporate entities that are subject to less registration requirements, therefore fewer documents and fees.
When creating private or public companies, on the other hand, the list of documents that need the attention of the investors is more extensive, and it will attract more fees. Luckily, Slovakia has a modern approach to what it implies creating a venture which is why many of these fees have been cancelled.
Also, most of the procedure can be created by submitting the relevant papers online.
Among the documents to be prepared when opening a Slovak company are the identification papers of the founders and the Memorandum and Articles of Association. Various declarations from directors and managers must also be submitted.
Also, in the case of companies, shareholders can decide to create agreements which will attract additional fees. However, these are not mandatory which is why it is a case-to-case situation on which our law firm in Slovakia can advise.
Particular situations apply in the case of foreign investors who might want to establish themselves in Slovakia and for which residence permits are required. Obtaining visas for Slovakia are subject to certain fees. Also, their certified copies of their passports must be filed with the Trade Register which will attract notary fees.
In the case of sole traders, the only documents that need to be filed are the IDs. These must also fill out an application form for creating their ventures, however, this paper is issued by the Companies House. Also, the tax registration fee must be considered.
When it comes to partnerships, these require drafting the partnership agreement which is usually created in a public notary or law firm’s office.
The entire procedure of starting a business in Slovakia and the costs associated with this procedure can be explained in detail by our lawyers.
Registered address costs when starting a business in Slovakia
One of the mandatory requirements for opening a company in Slovakia is to have a legal address in this country. This will usually be located in the Slovak city the business will mainly operate which is why the costs of such an address depend on multiple factors. Among these:
- whether the owner has a property he or she can use as a business address;
- if the address is located in a building office and is rented or leased;
- if the owner uses a virtual office service.
Apart from these, it is also useful to note that the city in which the company operates counts a lot, as large cities attract higher costs.
Notarizing the articles of association
The business start-up costs in Slovakia include the fee for checking a signature at a Notary Public, which is EUR 2.39 without VAT per each signature. The fee for checking a signature at the Registrar’s Office is EUR 1.50 per each signature. The procedure will normally take one day. Our Slovak lawyers can provide more information on the VAT conditions in this country.
Applying for trade license, register for income tax and with the District Court
In order to apply for the trade license, income tax and health insurance, a single application form is required, which has to be submitted to the One-stop shop.
The hardcopy application for a normal trade license costs EUR 5 and that for a regulated or craft license – EUR 15. The entire procedure takes three days. Our lawyers in Slovakia can offer more details on the types of licenses required for businesses in this country.
Setting up a bank account
The minimum contribution of a shareholder is of EUR 750. The standard fee for setting up a company bank account in Slovakia is of EUR 16.5, however this figure can vary depending on each bank and it normally takes one day.
Share capital requirements as a business start-up cost in Slovakia
One of the most important business start-up costs when starting a business in Slovakia is related to the share capital. The requirements in this sense are provided by the Slovak Company Law which stipulates a minimum share capital of 5,000 euros in the case of a private limited liability company and 25,000 in the case of a joint stock company.
With respect to the share capital, it should also be noted that at least 30% of the share capital must be paid up when the private company has more than one shareholder. In case the company has a single shareholder, the whole amount of money must be deposited. The value of the shares held by one shareholder is 750 euros.
In the case of Slovak joint stock companies, 10% of the share capital must be deposited in the company’s account upon incorporation.
The amount of money required as a share capital is not high compared to other European countries, which makes Slovakia a very appealing state in terms of business start-up costs.
Our Slovak law firm can help foreign investors who want to open companies here, no matter the business forms they choose.
Register with pension, illness and disability insurances & unemployment insurance
The registration with pension, illness and disability insurances, as well as with the unemployment insurance is effectuated with the local social insurance company. The business must register as an employer in maximum eight days after the date it began employing at least one worker for social security. Before the company’s employees start working, the business has to register all new workers with the Social Insurance Company. The procedure takes one day and there are no charges involved. Companies can also hire foreign personnel, so foreigners who want to immigrate to Slovakia can easily obtain a job, after receiving various permits.
Other costs related to starting a business in Slovakia
There aren’t many start-up costs which need to be considered when starting a business in Slovakia, however, one must pay attention to them. Apart from the costs mentioned above, it is also important to consider the costs related to finding a suitable place for the operations and a location which will serve as a registered address for the company. Considering a Slovak company must have a legal address in this country, a virtual office can be a suitable option for the first months after the business was incorporated. Otherwise, renting an office space is also an option, however, a more expensive one.
The other Slovak business start-up costs to be considered are related to obtaining the special licenses with different authorities and the employment costs.
Our lawyers in Slovakia can offer more information on the legal address and employment regulations applicable when starting a business in this country.
Economic forecast for Slovakia
Several reports indicate that 2022 is the year Slovakia will recover after the Covid-19 crisis. According to the European Commission and the Slovak Ministry of Finance:
- in 2021, the Slovak economy is expected to recover and grow by 4,8%;
- the Slovak Ministry for Finance, however, is more cautious and predicts a increase of 2% to 3% for 2021;
- in 2022, the European Commission predicted a 5,2% economic growth.
FAQ on business start-up costs in Slovakia
- Is it expensive to set up a business in Slovakia?
No, Slovakia is quite a cheap country to open a company in, considering many of the fees have been reduced.
- Are there any additional costs to consider if I am a foreigner?
Apart from the regular costs, you should also consider the fees associated with translating certain documents.
- Is there any difference between the online and traditional registration procedures?
Yes, the online registration procedure is cheaper than the traditional one.
- How long does it take to register a business in Slovakia?
The registration of a company in Slovakia can be registered within a matter of two weeks.
- Are there any other special costs to consider when opening a business in Slovakia?
The other costs which could influence the opening of a company could be related to specific licenses.
If you need more information about the business start-up costs in Slovakia, as well as the taxation system in this country, we invite you to get in touch with our Slovak law firm who can offer full guidance through the process of starting a business in Slovakia.