Formation of Limited Liability Company (s.r.o.) in Slovakia

Company Name 
There are currently no major restrictions on the  choice of name for a proposed s.r.o. in Slovakia. It is only important that the name is available. However special conditions apply to the use of words such as “casino” or “bank” and other words indicating regulated activities. The name will be checked through the Commercial Register, a process which takes around one day and as a result a certificate of name reservation is issued. 

Memorandum And Articles Of Association 
It is necessary to adopt Articles of Association when founding a Slovakian company, it a requirement to draw up a Memorandum of Association describing the company`s activities, partners and their shares, company representatives (executives) and details of the company’s reserve fund. As all types of legal entities, so does the s.r.o. require specific documents to be duly submitted together with the application in the commercial register, in order to incorporate the proposed company. Such documentation requirements include not only the memorandum, but also:

• A trade license issued by the local Trade Authority, including the name of the person who meets the qualification requirements for engaging in that trade (if applicable).
• A foundation deed (or a similar foundation document) and company’s Articles of Association, if applicable.
• An account with a Slovak bank (only if minimum capital requirements are applicable). The fulfilment of any minimum capital requirements (if applicable). Since January 2016, the share capital of a Slovak company will not have to be paid up to a bank account.
• Rather than a trade license, a special approval is required in such areas as banking, finance and defense.
• Both foreigners and Slovak citizens may lead local entities, but foreigners need a temporary residence permit before they can be entered as statutory representatives in the Commercial Register (though this does not apply to citizens of the EU and OECD member states).

The Articles of Association of a company in Slovakia can be signed through Power of Attorney (the same applies to Public Notary proceedings, a step required by the Slovakian Law). 

Shareholders 
At least one shareholder is required and the maximum of fifty shareholders permitted. Each shareholder’s liability being limited to the amount specified in the Commercial Registry. Shareholders may be individuals or a limited company and any individual resident in an EU or OECD country may become a director or shareholder. It is important to note that an individual may be the sole shareholder of up to three companies. Single-member companies cannot be the sole member of another limited liability company. 

Share Capital 
The minimum registered capital is EUR 5,000. The minimum shareholder´s contribution is EUR 750. Before registering a company, at least 30% of each shareholder´s contribution and 50% of the minimum registered capital must be paid. Each share can have different rights, such as voting and distribution rights. The company can be incorporated only after depositing the minimum share capital of EUR 5,000 in a bank account by the shareholder(s). Since January 2016, the share capital of a Slovak company will not have to be paid up to a bank account. 

Directors 
Directors may be of any nationality and may reside anywhere. Only one director is required, although there may be several. Directors can be residents or non-resident. Corporate directors are allowed. Nominee directors are allowed. 
REGISTERED OFFICE, RESIDENT AGENT AND COMPANY SECRETARY 
All Slovakian companies, including s.r.o companies must have their statutory registered office in Slovakia, and all formal company documents must be kept at the registered office. A company representative, who must be a Slovak resident must be appointed. The Secretary need not be residing in Slovakia. 

Trade Licences And Representation 
A trading license must be obtained from the Slovakian One stop shop (the Trade Licensing Offices), which will also provide an income tax unique number and the registration at the Health Insurance Company, prior applying to the Slovakian Commercial Registrar for registration. The company must register its business activities with the Trade License Office to obtain an extract of its trade license. 

Meetings 
Company meetings need not be held in Slovakia. 

Incorporation Time 

Usually ten to twenty working days.

Taxation 
Personal income tax in Slovakia is 19%, whilst corporate income tax is 21%. There are currently two VAT rates – 20% being the standard rate, and 10% being the reduced rate. There is currently no local tax imposed, and after the payment of 19%, In Slovakia no withholding tax is applicable to dividends and Slovakia is currently a party to more than 60 Double Taxation Treaties. 

Slovak companies pay a minimum tax (so called “tax license”) whereas the amount depends on the turnover of the company. Tax licence represents a minimum tax payable by each tax payer for every tax period where it declares a tax loss, or where its tax liability is lower than a minimum tax amount stipulated by law. 

• Revenues up to 500,000 EUR: the minimum tax to be paid will be at the amount of 480€.
• Revenues up 500,000€, the minimum tax to be paid will be at the amount of 960€. 
• Revenues higher than 500,000€ will pay the minimum tax at the amount of 2,880€.

  If the calculated income tax of the company is higher than the above stated tax licenses, the payment of tax license does not apply. 

Audit And Financial Returns 
Legal regulations regarding accounting and audit in the Slovak Republic, are in compliance with the legislation of the European Community. All legal entities must be audited provided that at least two of the following conditions are met:

• Assets of the entity exceed €1M
• The annual net turnover exceeds €2M
• The entity has more than 30 employees.

Furthermore, the financial statement is always subject to approval of the auditor provided that the shares of the company are listed on the regulated market, or the specific legal regulation requires so (e.g. in case of banks, insurance companies, foundations, etc.)