Company Formations in Slovakia
Interesting facts about and general conditions for Company Formations in Slovakia
Slovakia is located in Central East Europe and became an EU member in 2004. Since then, the tax framework has been altered from a flat tax to a progressive tax system. However, the CIT tax rate (Corporate Income tax) is currently at 15% but will increase to 21% if taxable revenues exceed 60,000 €. A WHT (Withholding Tax) of 17% for dividends and 10% for interest and royalties applies to residents and non-residents. Royalties and interest paid to related EU-resident companies are not subject to WHT if certain conditions are met. Additionally, there is a special tax regime for entrepreneurs and micro tax-payers with a tax of just 15%, up to a threshold of 49,790 €. Above the threshold, the standard tax rate between 15 % and 19 % will apply. The labor market is good, and the workforce is affordable.
Furthermore, one can enjoy reasonable living costs and low housing costs if living in a hot spot is not required. Hence, numerous international companies are already doing business in and from Slovakia. More and more firms and entrepreneurs are hearing about the benefits of company formations in Slovakia and setting up subsidiaries and branches in Slovakia.
The banking sector is stable, and there is a good choice of local and international banks, so banking is not an issue.
Our internationally experienced and highly qualified lawyers and tax advisors will review your company structure and existing management or mandate contracts. We also offer a review of your contractual arrangements at home and abroad. In addition, our tax and accounting department will be pleased to take care of your bookkeeping and tax returns.
Why not work with us? We offer company formations in Slovakia at a fixed price of 1.480,00 € net. Enjoy our fast, reliable, and competent approach in your native language (German, English, French, Czech, Slovak, Greek, Russian)!
Ideal Tax Framework for Holding Companies
Before Slovakia joined the European Union, Slovakia introduced a modern tax framework. Slovakia does not offer the lowest rates for profit taxes (21%), but a valuable regime for group taxation is in place. This includes a moderate handling of transfer pricing, CbC, and Thin Capitalization rules of 25%, creating a good framework for holding structures. Thus, The Slovak legislation fulfills all relevant EU standards, EU regulations, the OECD- standards, the FATF, and the FSF.
Slovak companies are recognized throughout the European Union as EU companies with an extensive Tax Treaty Network. This circumstance is used mainly by holding companies. Slovak nowadays has one of the most favorable tax regimes in Central Europe and competes within the EU with Czechia and other countries, such as Poland, at a fraction of the cost.
Why not speak to us about the advantages of a holding structure?
What you need to consider if relocating to Slovakia
A long-term stay in a country for more than 183 days will usually (and automatically lead) to an unlimited tax liability for your world income. Some countries go even further and already assign this tax liability if you can permanently use your apartment (this can even be the room in your parent’s house or a regularly visited hotel), which you can access with your keys – known as “Schlüsselgewalt” in German-speaking countries. This rule establishes or maintains an unlimited Tax liability for your world income. If this subject interests you, you may learn more about it on our dedicated website for Taxation.
The often cited and generally used “183-Days Rule” is incorrect. It can only be used to a limited extent, as few countries (Germany) consider a personal tax liability if one spends more than 183 days within the country in two consecutive years spanning two tax periods.
Therefore, one can only advise people interested in relocating their residence not to rely on start-up agencies and other jokers—the pitfalls are too great, and sound advice is required. A few advisors (specialized lawyers, accountants) have studied tax law for years, while others attend a weekend seminar or Google University. Where do you feel better off?
What’s on offer on the internet is sometimes unbelievable. There is no point in having no tax residency/residence anywhere. If in doubt, you never gave up your original tax liability (in your country of birth) or are automatically subject to tax through your passport.
If you plan to do business there, we can explain how company formations in Slovakia work or perhaps discuss a relocation.
TOP Jurisdiction for EU Residence in Central-Europe
Slovakia, however, offers ideal conditions for a tax residence. To obtain a tax residence, one must stay more than 183 days in Slovakia. With close links to other European countries, good flight connections, and travel times of roughly two hours into the center of Europe, Slovakia is an ideal place to conduct business of any kind.
Of course, you cannot stay in any other country for more than 183 days, which would trigger an unlimited tax liability there. This concept is, therefore, not ideal for everyone who can live and work flexibly (e.g., digital nomads). A different concept is required if you like extended travel, being broad for months.
You can rely on well-founded and legally sound advice if you come to us. Together, we will find your ideal life concept.
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