Remember: the incentives of Slovakia are an excellent complement to those of Switzerland: Zugimpex helps customers to combine the advantages of Switzerland, Slovakia, Malta and other countries. We know which steps are necessary; with our local offices, we offer various services from one source.
Slovakia is located near to Austria, to Hungary and to Czech Republic. 3,5 Million people live in the region (Bratislava- Györ- Vienna), 25 Million people can be reached within 3 driving hours, about 60 Million people within 8 driving hours. The location is especially suitable for companies in the neighboring countries, because it is possible for their managers to be frequently present on site.
A reasonable salary level and good language skills let businesses quickly reach profitability. Transfers of functions pay off fast.
Corporate benefits:
The management body of an s.r.o. does not need to have a member that is Slovak resident.
For establishing an s.r.o., little capital is required: the founders may confirm in writing that half of the minimum capital of € 5000 (2500) was paid in cash.
Tax benefits:
Flat tax 19%, no progression, for companies as well as for individuals.
Corporations are taxed only on corporate profits: and there is no further taxation on dividends at shareholders level in Slovakia. Because dividends usually are taxed in the country of residence, a real change of residence may come into question as well as interposition of a partnership (of course with real activities).
Interesting possibilities for accounting policy: for example, in the evaluation of inventory or of receivables. This can be combined with the Austrian group taxation which allows compensating profits with losses of associated companies.
The advantages of a "S.R.O. & K.S." (Ltd. & Limited Partnership):
19% flat tax often with no social insurance contribution for the limited partner (explanation: the limited partnership k.s. has an s.r.o. as personally liable partner).
While in countries like Austria total taxation of the owner of a corporation is 43.75% (25% corporate income tax + 25% dividend tax on the remaining 75%), Slovakian tax remains at 19%, thus creates a saving of 24,75% versus Austria.
From 2011 there is a health insurance fee on dividends (also on payments to limited partners) that has a maximum of about 2500€ per year. Presenting the relevant documents, a waiver can be requested.
Managers who transfer activities to Slovakia additionally benefit there from lower wages and prices. Additional costs might be caused by tax progression in Austria (Austria takes Slovak profits into account when calculating the tax bracket for Austrian profits), structure costs and additional costs for restructuring. In addition, several actions must be taken to perform a real business and to avoid classification as misuse. The k.s. should not have mainly passive income in order not to be qualified as a pure financial vehicle. In addition, it is recommended to consider social charges according to the EU-Directive 883/2004.
Holding function: tax-free reception and distribution of dividends: a limited liability company (s.r.o.), which has a real substance (permanent establishment, real function), can (subject to the mother-daughter directive of the EU) receive dividends from a subsidiary in another EU country and distribute it to an active k.s. (limited partnership). Since distribution of dividends is not taxed in Slovakia, and since a limited partnership can receive dividends from a corporation tax free, usually there is no further taxation in Slovakia. If the owners of the KS have their residence in another country that has a double taxation agreement with Slovakia, taxation of the profits of the k.s. are subject to Slovak tax according to Article 7 of most double tax treaties.
If an s.r.o. receives dividends, they remain tax free, and there is currently no restriction on dividends from countries with comparable taxation.
To limit liability, often an s.r.o. takes over the role as general partner of KS.
There are different opinions if it is possible to pay dividends directly from other countries to an operational k.s., which forwards them directly to the owners. Some experts justify this by saying that the K.S. in Slovakia qualifies as a corporation, but in other countries as a partnership. While such a structure seems attractive at first glance, it also carries several risks and drawbacks, so Zugimpex recommends a solution with a receiving s.r.o. that distributes to the KS and offers packages that do not cost more than a single-stage s.r.o.& k.s
Attention: if you have residence in another country: only for corporate profits of a Slovakian company, the right of taxation is exclusively assigned to Slovakia according to Article 7 DTA. But dividends, interest and salaries to individuals usually are taxed in the country of residence according to the local tariff in this country.
Profits of a K.S. are not liberated in the country of residence, if the business is run from this country, if the company has no substance or if the k.s. receives dividends from abroad that are not relevant for its funktional business activities (therefore, in such cases we recommend a subsidiary corporation as a dividend feeder company for the k.s.). (see statement of Austrian ministery of finance in EAS 3010)
Steps to establish a company:
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We will send you an e-mail with 5 questions, you return the answers and an order to us.
- You will receive via e-mail in advance the documents (with translation). Then we make an appointment at our office in Bratislava where you bring an original criminal record of the future general manager.
- We prepare together with you the final version of the documents, then accompany you to the notary, organize the registration at the Commercial Register, the registration with the Trade Register and the application for a tax number.
- Once the company is registered, you open a bank account in Bratislava, register your internet domain and set up your bookkeeping.
- To create an s.r.o. & k.s., sometimes a second visit is required.
For long distance customers we offer a whole package from distance, based on several certified signatures and powers of attorney.
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