Slovakia is a Central European country and member of the European Union (EU) since 2004. A politically and economically stable country that enjoys the full benefits of being an EU member state. The business-friendly environment and progressive tax regime make Slovakia an attractive location for foreign and local investors alike.
According to the corporate law in Slovakia a firm can be registered under one of the following business structures:
- General Partnership
- Limited Partnership
- Limited Liability Company
- Public Limited Company (Joint-stock)
- Simple Joint Stock Company
- Co-operative
The below table represents the legal business structures in Slovakia along with the minimum required paid-up capital:
| Type of business structure | Local name | Req.paid-up capital(approx.) | |
| 1. | General Partnership | Verejna Obchodna Spolocnost (V.O.S) | No minimum paid-up capital required |
| 2. | Limited Partnership | Komanditna Spolocnost (K.S/Kom.Spol) | €250/partner |
| 3. | Limited Liability Company | Spoločnosť s Ručením Obmedzeným (Spol.S.R.O/ S.R.O) | €5000 | €750 per partner minimum |
| 4. | Public Limited/Joint Stock Company | Akciová Spoločnosť (A.S/Akc.Spol) | €25,000 |
| 5. | Simple Stock Company | Jednoduchá Spoločnosť na Akcie (J.S.A) | €1 |
| 6. | Cooperative | Družstvo | €1,250 |
V.O.S – General Partnership
Two or more persons coming together to promote business interests under a common name, whereby agreeing to assume liabilities and obligations is called a General Partnership business structure. In case of loss and debt, the partners in a partnership are liable to the full extent of their personal properties.
K.S – Limited Partnership
Similar to a general partnership in formation, but differing in performance to the effect that in a limited partnership one or more partners are liable for loss and debt only to the extent of their contribution to the business. At least one partner in a limited partnership assumes full liability to the extent of personal assets.
As per Slovakian law, the contribution of limited partner(s) shall not be less than €250.
SRO -Limited Liability Company
Probably the most commonly found business structure in Slovakia is a limited liability company. The liabilities and obligations of the company are separate from their owners (partners) in the case of SRO. This means in the event of loss or debt; the owners are not bound to compensate the stakeholders from personal assets. SRO is recognized as a separate legal entity by law, and as such grievances and lawsuits can only be petitioned against the company and not the owners/directors in a personal capacity.
According to the Commercial Code of Slovakia, the minimum capital registered for SRO is €5,000, while the minimum contribution required by each shareholder is €750. Additionally, the law requires that 30% of each contribution and/or 50% of the entire registered capital is paid before the application to register the company with the “Commercial Register”.
A.S – Joint Stock Company
Also known as a Public Limited Company (PLC) is a form of business where the general public is involved to invest in an organization. Generally, businesses that require large-scale capital distribute their paid-up capital into shares that are legally traded in stock markets.
A Joint Stock Company can also be created by a private agreement to sell all the shares to one or more legal persons. The minimum required registered capital for an A.S company is €25,000.
J.S.A – Simple Joint Stock Company
A variation of the joint stock company, this new format of business was introduced first in 2017. The minimum registered capital required by law is merely €1 with a minimum nominal value of a share as low as 1 Cent.
Due to its lean structure, a Simple Stock Company provides is more agile and flexible than an LLC or general Joint Stock. J.S.A has gained popularity as it has an unlimited number of shareholders, minimal registered capital requirements, and the option to float several types of shares with different privileges to the shareholders.
Note that the Simple Joint Stock Company cannot be formed to issue shares to call for public subscription. It is very possible that in years to come, the Slovakian Govt. ceases such company structures.
Co-Operative
A cooperative is a type of company that is formed to carry out social, economic, welfare, and other benefits for its members. The Co-operative assumes all the risks, obligations, and liabilities to its entirety, whereas the members have no obligation to perform and liability in a personal capacity.
The minimum registered capital required to establish a Co-operative according to the Commercial Law of Slovakia is €1,250 and requires at least 5 natural persons or 2 legal persons to be registered.
Branch office
Though not a separate business structure or format, a branch office is a representation of a foreign company in Slovakia. A branch may perform various tasks at the behest of the head office to the extent mandated within the formation document while registering the office.
A physical or virtual address in Slovakia and other legal conformations are necessary to register a branch office in the country. Many top-tier Indian companies have branch offices in Slovakia and other neighboring countries to allow them to perform swiftly to the requirements of their clients.
Trade license & penalties
The Commercial Law of Slovakia stipulates that any person, legal or natural, engaging in trade independently or on behalf of other, alone or as a team, to earn or maximize profit, without acquiring a trade license is in direct and clear violation of the Slovakian laws. The activity thus conducted will be subject to penalty and may be considered criminal activity.
The penalty, varying upon severity and case, shall be imposed from €1,659 to €3,319.
Working hours & wages in Slovakia
Slovakia is considered a developed high-economy nation with an annual GDP volume of around €127B as of 2021 and estimated to surpass €200B mark by the end of 2022. Slovakia’s government regulates the minimum wage for laborers at €646/month or €3,71/hour, this is the lowest an employer can pay to a worker.
The standard working hours are set at 40 hours per week. In cases where employers require fewer working hours, the per-hour wages must be increased to the ratio of 40 hours to meet the minimum wage requirements, unless agreed otherwise under section 49 of the Labor Code.
Similarly, upon mutual agreement, the employer can increase the working hours per day but not more than 12 hours. The increased working hours are subject to overtime; typically, 125% of the worker’s average salary is applied as overtime rates.
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