| Quick reference | Basic Facts on Slovakia | Slovak Legal System in General | Types of Companies | Before Contacting Us |
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Slovak republic is a landlocked state situated in Central Europe. Neighbouring states are: Czech Republic, Poland, Ukraine, Hungary and Austria. Because of similarity in names, Slovakia is sometimes mistaken with Slovenia (a former Yugoslav republic between Austria and Croatia)
Area: 49.000 sqkm.
Population: over 5 mil of Slavic origin.
Official language: Slovak.
Capital: Bratislava (450.000 inhabitants).
Other major cities: Kosice (230.000), Presov (100.000), Nitra (90.000), Zilina (90.000), Banská Bystrica (90.000).
The territory is administratively divided into 79 districts and 8 regions. The country is mostly mountainous, there are two lowlands - on south-west and south-east. Major rivers are Danube (port: Bratislava), Vah, Hron.
Slovakia's form of government is democratic parliamentary republic. Legislature is vested in Parliament called National Council of Slovak Republic. Executive power is vested in the Government and President. There are 3 grades of courts: Supreme Court seated in Bratislava, thereto subordinate 8 regional courts seated in regional capitals and thereto subordinate 55 district courts seated in some district capitals.
Web sources of information on Slovakia
Slovak legal system belongs to the family of continental legal systems, which are based on written law rather than on judicial decisions - precedents. The decisions of courts are not generally binding as a source of law, although the Supreme Court's decisions are most of the times followed by subordinate courts and serve as guidelines for interpertation of law. Because of varios influences, compared to common law systems, there sometimes are substantial differences in terminology as well as in legal concepts and that is why Slovak legal system may in certain aspects seem incomprehensible for persons from common-law countries.
The main source of corporate law is the Commercial Code of 1991. There exists a growing number of court decisions in this area which serve as guidelines in those cases where the text of the law is not very clear. The Commercial Code contains provisions about enterprise, various types of companies (corporations) and contracts. Another importatn law in this field is The Licences Act, which sets conditions for individual fields of activity of an enterpreneur.
A company is regarded to be an entity (juristic person) and has its own personality, i.e. it is able to act with legal consequences. If its seat is on the territory of Slovak republic it is regarded to be a Slovak entity irrespective of from which country its shareholders are.
Persons wishing to establish a company shall sign a contract (an equivalent of Articles of Association; there is a slight exception when establishing a joint stock company). In this contract the fields of activity must be specified (the company must obtain a licence for each field of activity from the local authority). A company begins to exist when it is registered with the court.
Persons who shall be entitled to act on behalf of the company (managers) shall be either Slovak citizens or foreign nationals. In some cases a long-term stay permit for foreign nationals who shall become managers, is required; this depends on the county of their citizenship and activities that the company is to conduct. The general rule is that citizens of EU nad OECD countries need not have a long-term stay permit in order to be a manager of a company seated in Slovakia. When required, the foreign nationals shall apply for a long-term stay permit at the Embassy or Consulate of Slovak Republic in the country of their citizenship. They shall enclose a signed contract from which it is obvious that they have the right to act for the company and other documentsd required by the Embassy/Consulate. For a list of Slovak Embassies and Consulates, [click here].
| Quick reference | Public trading company | Limited liability company | Limited partnership company | Joint stock company | Summary |
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German eqivalent: Offene Handelsgesellschaft (OHG)
A type of the company where at least two persons (natural/juristic entities) join, whereby the companions are liable for obligations and duties of the company (e.g. debts) with all their property. The companions are not required by law to pay any initial investment to the company at the beginning of its existence. Each of the companions has the right to act on behalf of the company (i.e. to be its manager), unless the companions agree otherwise.
German equivalent: Gesellschaft mit beschraenkter Haftung (GmbH)
A type of the company where at least one person (natural/juristic) pays the initial amount of money or property equivalent. The sums of initial investments by each companion must total at least 200.000 SKK, whereby each companion's share must be at least 30.000 SKK.
Example 1:
The sole person wants to establish a limited liability company:
He/she is required to pay up the initial investment of at least 200.000 SKK as a whole or bring other movable or immovable property worth at least 200.000 SKK (the value of this property investment would have to be set by an expert).
Example 2:
Two persons want to establish a limited liability company one of them desiring to have the minimal share:
The minimal share (investment) is, as mentioned above, 30.000 SKK. The other person would have to invest in this case at least 170.000 SKK. When there is more than companion it is not obligatory to pay the investment as a whole, installments are permitted as well. Provided the latter option is chosen by the companions, each of them has to pay at least 30% of the investment, but there is another parallel condition that at least 100.000 SKK must be paid before registering the company with the court. In this case, if the first companion paid 30% of his/her 30.000 SKK share (which is 9.000 SKK) the other companion would have to pay at least 91.000 SKK (roughly 53%) to meet the 100.000 SKK-paid-before-registering condition. The rest must be paid within 5 years unless otherwise (shorter period of time) agreed by the companions.
The company begins its existence, when it is registered. According to the concept of limited liability, the companions are liable for the obligations of the company only up to the registered sum of money which they are indebted to pay to the company as the rest of their investment.
Example 3:
In the Example 1 thare was a sole companion who had to pay the investment as a whole. By doing this, he/she is not indebted to pay the rest of the investment, because he/she has already done so. He/she is not liable for the obligations of the company.
Example 4:
In the example 2 there were 2 companions, one of them has paid 9.000 of 30.000 SKK, the other one 91.000 of 170.000 SKK. Both of them are indebted to pay the rest within 5 years and the sum of the debt is registered along with the other data about the company. The first companion is therefore liable for the obligations of the company up to the sum of 21.000 SKK (e.g. the company is insolvent and cannot pay the debts, the companions would have to do so up to the amount of their liability), the other one up to the sum of 79.000 SKK.
The companions choose from among themselves or from third persons a natural person(s) who shall act for the company (a manager). The manager must be either a citizen of Slovak republic or a foreign national (whether he/she needs a long-term stay permit must be evaluated in each individual case; some general rules were already mentioned above) and must not have been prosecuted and sentenced for a criminal offence related to business activities in the past.
This type of company is widely used for small and medium-size businesses.
German equivalent: Komanditgesellschaft (KG)
French equivalent: société comandite
This type of company is a mixture of two preceding ones. It is a company where there is at least one companion with unlimited liability (named "complementary") and at least one companion, who has paid the investment to the company and whose liability is limited (named "commanditist"). The complementaries are not required to invest to the company, they usually work for it, the commanditists shall on the other hand pay the investment and need not work for the company.
The complementaries are the persons who are entitled to act for the company. (managers) unless agreed otherwise.
German equivalent: Aktiengesellschaft (AG)
French equivalent: société anonyme
This type of company can be established by either at least one juristic entity or two natural persons. The assets of the company must be at least 1.000.000 SKK. The assets are divided into shares (stock), which can be issued as papers or in a dematerialised form (registered with an authority). The assets of the company are raised by the investments of companions who shall own shares in return.
In this type of company, two bodies must be created. First of them is The Board of Managers (predstavenstvo), whose members are entitled to act for the company. The Board must consist of at least 3 members either a citizen of Slovak republic or a foreign national (whether he/she needs a long-term stay permit must be evaluated in each individual case; some general rules were already mentioned above). The second one is The Supervisory Board (dozorna rada), whose main task is to supervise the activities of the Board of Managers. The Supervisory Board must also have at least three members irrespective of nationality or citizenship. If the company has more than 50 employees, 1/3 of the Supervisory Board is nominated by the employees.
The joint stock company is mostly used for a large-size businesses.
| Type of company | Assets when being registered | Persons entitled to act for company | Note |
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| Public trading co. | not required | each companion unless agreed otherwise | when a companion shall be entitled to act for a company, he/she must be either a Slovak citizen or a foreign national, whereby in some cases a long-term permit is required |
| Limited liability co. | min. 200.000 SKK | manager | manager must be either a Slovak citizen or a foreign national, whereby in some cases a long-term permit is required |
| Limited partnership co. | not required | complementaries unless agreed otherwise | when a complementary (unlimitedly liable) shall be entitled to act for a company, he/she must be either a Slovak citizen or a foreign national, whereby in some cases a long-term permit is required commanditist's investnemt shall be at least 30.000 SKK |
| Joint stock co. | min. 1.000.000 SKK | Board of Managers, at least 3 natural persons | members of Board of Managers must be either Slovak citizens or a foreign nationals, whereby in some cases a long-term permit is required |
Before contacting our office for the purpose of settin up a company in Slovakia, we would advise to think about following issues:
All of the above issues can be discussed with us per e-mail or at a meeting. We will arrange for everything that is necessary.
(c) JUDr. Martin Lassak, 2002
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