Company Formations in Slovakia - Interesting facts and general conditions
Slovakia is located in Central 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) starts currently at 10%, but will increase to 21% if taxable revenues exceed €100,000 and 24% if profits exceed € 5,000,000.
A Withholding Tax (WHT) of 10% (17% until 2024) applies to dividends, interest, and royalties for both residents and non-residents. Royalties and interest paid to related EU-resident companies are not subject to WHT if conditions set by the Government are met.
As mentioned before, there is a special and highly competitive tax regime for entrepreneurs and micro-taxpayers, with a tax rate of just 10%, up to a threshold of taxable profits of €100,000.
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. Increasingly, firms and entrepreneurs are becoming aware of the benefits of company formations in Slovakia and are establishing subsidiaries and branches within the country. The banking sector is stable, and there is a good selection of local and international banks, so banking is not a concern.
Our internationally experienced and highly qualified lawyers and tax advisors will review your company structure and existing management or mandate contracts. Our full service approach includes a review of your contractual arrangements at home and abroad. On top, our tax and accounting department will be pleased to handle your bookkeeping and tax returns.
Why not appointing us? We offer company formations in Slovakia at a fixed price of € 1,580.00 net, including notary services. Enjoy our fast, reliable, and competent approach in your native language (German, English, French, Italian, Spanish, Czech, Slovak, and Greek).
Ideal Tax Framework for Holding Companies and Businesses
Before Slovakia joined the European Union, it introduced a modern tax framework. Nowadays, Slovakia offers one of the lowest corporate tax rates for profit taxes (in steps from 10%, 21% and 24%), and a valuable regime for group taxation is in place. Group taxation involves a moderate application of transfer pricing, CbC, and Thin Capitalization rules, at 25%, creating a suitable framework for holding structures. Thus, Slovak legislation fulfills all relevant EU standards, EU regulations, OECD standards, the FATF standards, and the FSF standards.
Slovak companies are recognized throughout the European Union as EU companies with an extensive Network of Tax Treaties. This circumstance is used mainly by holding companies. Slovakia nowadays has one of the most favorable tax regimes in Central Europe. It competes within the EU and Central Europe with Czechia and other countries, such as Poland, but at a fraction of the cost.
Why not speak to us about the advantages of company formations in Slovakia or holding structures?
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.
To receive a detailed offer or placing an order, please fill out the form down below for Company Formations and we will get back to you shortly!
Subscription
Join our Corporate Services Newsletter for monthly updates, best practices and product news.
