Doing business in Slovakia offers an attractive gateway to the European Union market, characterized by a stable economy, competitive taxation, and a strategic Central European location.
Foreigners generally operate under the same conditions as citizens, but success requires careful navigation of the legal formation process, strategic focus on key sectors, and respect for local business etiquette.
Establishing Your Business
To set up a business in Slovakia, foreign entrepreneurs typically choose between establishing a sole proprietorship (for individuals) or a Limited Liability Company (s.r.o. or spoločnosť s ručením obmedzeným) as the primary legal entity for small and medium-sized enterprises. An s.r.o. is the most common form due to its limited liability and relatively straightforward governance. Alternatively, a foreign company can register a Slovak branch, which is an extension of the parent company.
The Company Registration Process
The establishment process for a legal entity generally involves several key steps. First, you must select and verify a unique company name and secure a registered office address in Slovakia, which can be a leased premise or a property where the company has a right of use.
Next, you must formally define your business activities and apply for a Trade License (Živnostenské oprávnenie) at the Trade Licensing Office, which often acts as a single point of contact (PSC). Trades are classified as unregulated (no fee, or a small fee if filed in person), craft, or regulated (requiring professional competence and a fee). The trade license is typically issued within three working days.
Concurrently, you must prepare the core constitutional documents, such as the Memorandum of Association or Foundation Deed, with signatures often requiring verification by a notary. For an s.r.o., the minimum registered capital is €5,000, with a minimum contribution of €750 per member. Before registration, at least 30% of the cash contributions must be paid up, totaling at least €2,500. You must also appoint executive directors and an administrator of contributions.
The final official step is the submission of an application for registration into the Commercial Register (Obchodný register), maintained by the relevant District Court. The company legally comes into existence on the day of its registration in this Commercial Register. Following registration, the company must register with the relevant Tax Office for corporate income tax purposes within 30 days and may voluntarily register for Value-Added Tax (VAT), which becomes mandatory if the annual turnover exceeds €49,790. The standard Corporate Income Tax (CIT) rate is 21%, though a reduced rate of 15% applies for companies with profits up to €49,790.
Key Business and Investment Sectors
Slovakia’s economy is highly integrated with the European market and is primarily driven by its robust industrial sector.
The automotive industry is the single most important sector, with Slovakia being the world’s largest car manufacturer per capita, hosting major international brands. Related sectors like machinery and electronics are also highly developed and attract significant foreign direct investment.
Beyond manufacturing, the services sector contributes a majority of the country’s GDP, including areas like financial services, telecommunications, and tourism. Emerging opportunities also exist in ICT (Information and Communication Technology), logistics, and R&D/technology centers. The government offers various investment incentives to attract foreign capital, including income tax relief and subsidies for asset acquisition or new job creation, particularly for projects in industrial production and technological centers.
Business Culture and Etiquette
Slovak business culture is generally characterized by a blend of Western professional practices and a Central European emphasis on formality and hierarchy. Building personal relationships and mutual trust is a crucial part of long-term business success, with initial meetings often including social conversation before diving into business topics.
Professional Conduct
Punctuality is highly valued for all business appointments, and being late is considered a sign of disrespect. Formality is key, especially in initial meetings: you should use titles and surnames unless explicitly invited to use first names. When exchanging business cards, ensure your card includes your title and any academic degrees, as these are respected. The appropriate business attire is conservative and professional, typically a suit and tie for men and a business suit or conservative dress for women.
Communication and Negotiation
Communication is generally direct but polite and professional. Decision-making tends to be hierarchical, with final approval resting with senior management, so be patient, as the process may take time. Negotiations are methodical and focused on detailed written contracts. Avoid appearing overly rushed or aggressive; patience and perseverance are seen as positive attributes. When communicating via email, professionalism, clarity, and conciseness are appreciated. Avoid scheduling critical meetings on a Friday afternoon or during the month of August, as many Slovaks may be on holiday.
Social Etiquette
If you are invited to a Slovak’s home, it is customary to bring a small gift for the hosts, such as flowers (ensure the number is odd, as even numbers are for funerals), a bottle of wine, or chocolates. A firm handshake and direct eye contact are the standard greetings for both professional and social settings.