06.07.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:033, Edited:21.08.2017 SHReserve Fund of the Slovak LTD company (SK)The LTD company is not obliged to establish any reserve fund (RF) at the time of incorporation, however it must create it within its first year when it reaches at least 5 per cent of its first net profits. In this way the company replenishes the reserve fund in each year until the achieved amount is 10 per cent of its equity. Example:ABC company was established in 2014. Its basic capital is in the amount of 5,000.00 EUR. At its formation the company has decided not to create a reserve fund . In 2015, the Company had losses and therefore wasn´t oblidged to create a reserve fund. However in 2016, the company made a profit in the amount of 2,000.00 Eur . Firstly, the company had to tax the sum at 22%, so the remaining amount was 1,560.00 Eur. From this sum, the company had to earmark the minimum 5% - which is 78.00 Eur. This value represents the sum that is paid to the reserve fund for 2016. Every year, in which the company makes a profit, a minimum of 5% is paid to the reserve fund, until it reaches at least 500.00 Eur (500.00 Eur represents 10% of the amount of the basic capital of the company ABC s.r.o.). Unless the company has losses again in the next year, it won´t pay any money to the reserve fund.It is possible to replenish the reserve fund with a higher sum (members can define the sum in the Partnership agreement or in the Articles of associaton). The abovementioned example contains only the minimum percent laid down by law. Also it is possible to create the reserve fund immediately at the company´s beginning. The reserve fund may be created at any rate from the members´contributions provided beyond its contribution. If this option is pursued, the Partnership agreement shall include the period within which the members are obliged to provide the agreed allowances. The reserve fund exclusively serves to cover the company´s losses and it doesn´t have to be created only with money and it doesn´t have to be held in a special bank account (as of 2002). The disposal of the reserve fund is determined by the directors unless the partnership agreement states that the decisions concerning the reserve fund will be made by the general assembly. Problem from practice: The reserve fund is created from the profits established in the duly approved financial statement. However the general assembly, which approves the financial statement, always meets in the following year. For example if the financial statement for 2015 is approved, the general assembly meets sometime at the beginning of 2016. Therefore , some clients have problems because they don´t know, whether the reserve fund shall be created in 2015 or 2016. In this regard we wish to point out that the contribution to the reserve fund is always bound to the year in which the profit was made- in this case it´s 2015 (even if the general assembly approves the financial statement in 2016). 16.06.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:031How to set up a Slovak company – the whole process (SK)The best way to make a business in Slovakia is a formation of a business company. There are five types of companies but we recommend establishing a Limited Liability Company – mainly because of its many advantages: limited liability of the shareholders, simple structure, very low formation fees and operating costs and high flexibility. 99% of all business companies in Slovakia are LLCs. The following steps are necessary in order to form a company:1. Registered office/seat: at the beginning you need to have a registered office for the company (the address which will be published in the Business Register and where all the correspondence will go). This can be obtained by signing a contract with some provider of registered offices. After signing the contract and paying for the office, the provider will give you a document called Consent of the Owner.2. Trade notification: you have to register your company at the Trade Licensing Office, where you get identification number. This office will allow you to perform business activities of your choice (of course there are different conditions for different activities, therefore it is recommended to consult before with a lawyer). Trade Licensing Office will give you a Trading License after 2 – 3 days. It is possible to ask Trade Licensing Office to also register the company with the Tax Office so you don´t have to do this on your own afterwards.3. Business Register (managed by registered courts): after getting the Trading License you have to register your company with the Business Register. To properly do this following attachments are necessary: Trading License, Consent of the Owner, Memorandum of Association, Statement of the Depository, Specimen Signature and Statement of the Founder (stating that you as a foreign person are not obliged to provide the court with the consent of the Slovak tax authority). Naturally depending on the specific nature of your business, also other attachments might be needed. The registered court will issue a Business Extract in a few days which serves as a legal evidence of existence of your company.What do you need to set up a company?You will need your ID card and a Criminal Record (no older than 6 months) translated into Slovak language. If the founder is a legal entity also business documents are requested (this depends on the specific country where the entity was established), in most cases these documents need an Apostille.Author Dr. Soňa Šallai15.06.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:030, Edited:18.08.2017 SHThe authenticity of electronic invoice (SK)When using electronic invoicing, it´s necessary to ensure authenticity , content integrity and legibility. The authenticity means, that it´s indisputable who supplied the goods or services. According to the methodological guidelines of Financial Directorate of the Slovak Republic, the supplier who issues an invoice ensures the authenticity of its origin by registering it in accounting records. „Integrity of the content“ means that the content required according to this guideline has not been altered (converting of the format doesn´t mean that the content is changed) . All electronic invoices shall be legible for the recipient. If they are issued in a structured format (eg XML) it´s necessary to convert them to a legible form. In case of an audit, you must be able to render the invoices legible when requested to do so. VAT Act gives three possible alternatives how to reach authenticity. The tax payer can choose between these options: 1.Control mechanism of business process management: This is achieved by attaching other supporting documentations to an invoice (order, delivery note, contract, proof of payment etc.) It doesn´t imply that they need to be clipped together, but they shall be archived together and marked in order to easier match them up. 2.The invoice shall be signed by the qualified digital signature.3.Electronic data interchange EDI: EDI is the computer-to-computer exchange of business data. The agreement on EDI shall explicitly provide the terms and conditions for such invoices. 4.Other ways: possible combination of abovementioned ways or the taxable person can use other technologies of protection including scanning the invoice or using web portals. In these cases we recommend observing the first point as well.In conclusion, in compliance with the directive on invoicing, the tax administrator is not allowed to restrict the tax payers regarding which option they choose. We recommend that you choose themethod , which is the most effective one for you and your business partners giving consideration to the amount of released invoices. 14.06.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:029, Edited:18.08.2017 SHWhat is considered to be a valid electronic invoice ? (SK)Since 1.1.2013 both paper and electronic invoices are recognized equally . They are bound by equal requirements stated in VAT directive Sec.74. Some enterpreneurs believe, that there is specific format for electronic invoices as provided by law. It´s not true. Electronic invoices are the following:•invoices in any electronic format including PDF or XML (recipient can convert the invoice to another format that is more convenient for him) •invoices drawn up as paper invoices and then scanned •invoices sent by e-mail as attachments•invoices received by fax in electronic format•invoices signed by qualified digital signature or without it Some notes to electronic formats of invoices:•it depends on you which format of electronic invoice you choose. it is neither determined by the directive (2006/112 ES amended by the directive 2010/45/EU) nor by the state. •if you sign the invoice by qualified digital signature and then its format is changed, it´s necessary to enter it in the check list.•invoices can be also sent in structured messages in XML or EDI formats. Except for the compliance of all particulars of invoices, set out in the provisions of Section 71 (3) of the VAT Act, every invoice must be legible and have a-legible format. The invoice may be sent electronically with the consent of a business partner. As of 2013, the acceptance does not need to be made in writing. It can be expressed by e-mail or in the agreement, The consent to using electronic invoices is also implied by payment of such invoice. If the recipient does not agree with sending the electronic invoices for any reasons, you are oblidged to send him the invoice in paper form. 14.06.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:028, Edited:18.08.2017 SHWhat does DECLARATION OF TRUST involve ? (INTL)This term is usually mentioned in the context of an offshore company where a „nominee“ is appointed to perform duties relating to administration and voting rights of the beneficial owner. That means that the nominee director (corresponding to managing director of a limited liability company in Slovakia) or shareholders (corresponding to member of a Ltd in Slovakia) are appointed due to the fact that the real beneficial owners or managers may remain anonymous. In this arrangement , the whole company is entrusted to the unknown director who performes all legal acts. Read the attached PDF document (the docu is being processed)10.06.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:026, Edited:18.08.2017 SHWhen is it possible to pay company´s profit out among the company members ? (SK)Members of an LTD have the right to share in the company´s profits . Unless otherwise provided in the partnership agreement this share is determined by the paid contribution . Profit distribution shall be realized within the legal terms and it can be subject to the following conditions: 1. Distribution of profit must be preceded by approval of the General Assembly of the financial statement. The General Assembly shall have the right to distribute all or part of the profits among the members. 2. A company may distribute only the net profit reduced by obligatory reserve fund and unpaid losses from the previous periods, i.e. settlement of losses from previous periods take precedence over distribution of profit. LTD companies are oblidged to establish a reserve fund in the amount of 10% of its basic capital. Joint-stock companies are oblidged to establish a reserve fund in the amount of 20% of its basic capital. Example: XY Ltd has two members whose contribution to the basic capital is 5,000.00 Eur paid by the equal contribution in amount of 2,000.00 Eur. While the company hasn´t modified profit contribution in its partnership agreement, the profit shall divide profit equally. The company has reached net profit in amount of 8,000.00 Eur. The company is obliged to create the reserve fund in accordance with the provisions of article 124 of Commercial Code and supplements the reserve fund on an annual basis by sum of 5% of the net profit, resulting from an annual financial statement. In 2017, after duly approved financial statement for 2016, the company supplemented the reserve fund by sum of 400,00 Eur. The rest of the net profit was divided among two members in amount of 7,600.00 Eur (provided that they don´t have to settle a loss from the previous periods). 3. On the contrary, if in the past, the company reached a profit which wasn´t divided among the members and the company hasn´t used the money in any other way, the company can pay out the profit only by including it to the actual profit and then it can be divided among the members. Undivided profit from the previous years and money from other capital funds can´t be paid out through other financial implementation during the year; the company may perform the payment only by paying out the profit from the company after duly appoval of the annual financial statement. 4. Paying out the profit is not possible, if the company went bankrupt due to this payment or its basic capital (according to the financial statement) is lower than the total sum of basic capital and reserve fund. 5. Advanced payment for profit shares during the accounting period is not allowed. It is also unlawful to pay out the interest out of the members´ contributions. If the profit share is paid out contrary to the rules, the members are obliged to pay the funds back . Paying the funds back is guaranteed by the directors announced approval of such payout . Directors are obliged to pay attention to these duties. If the company is liable to be harmed in the context of such proceeding due to breaching the duties to execute their duties professionally, directors bear full responsibility for it owing to absence of . 06.06.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:025, Edited:18.08.2017 SHNew general data protection regulation in the EU - GDPR (EU)All over the EU, regulations regarding data protection regulation have been introduced. These regulations outline the rights of website providers, webshops, employers, providers of marketing services, biometric, camera and access systems and retailers. General data protection regulation pertains not only to the category of personala data. It also relates to cookies, geolocations, e-mails, IP addresses, genetic data. Beyond these, the territorial scope of GDPR is widening . It applies to those providers, who process the personal data outside the EU and the providers outside EU who process personal data of the European citizens (mainly when they provide services or sell goods ).We are bringing you some new institutions: Right „to be forgotten“:Personal data provided for a specific purpose by the person whom it concerns that which is no longer necessary, can be erased. The person may ask for data erasure anytime, if the person decides to withdraw the consent to provide the personal data. Right to data transmission:It provides the person in concern the right to ask the provider for his own personal data. The provider is obliged to provide it in a legible, structured format. The person is entitled to transmit the data to another provider. Right to announce security incident:If there is a breach of security of personal data, the provider shall report this breach without undue delay (no later than 72 hours) to the competent Supervisory Authority.Companies which process personal data on a large scale (eg. marketing, market research etc) are obliged to appoint an independent and responsible person - the Data Protection Officer. GDPR determines the requirements for SK enterpreneurs as well so that they can modify the general data protection despite the fact that Slovakia has had the strictest legislation in this area. Regardless of whether your company processes the personal data in large scale itself or a third party has been appointed ( this categhory applies to the enterpreneurs mentioned at the beginning of this article), you should modify your genaral data protection in accordance to the provisions of GDPR or contact our lawyer, who will explain the details to you. 25.05.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:024, Edited:18.08.2017 SHHow to register business establishment correctly (SK) To start with, obtaining a business license for business establishment isn´t required by any law. A business establishment isn´t bound to a specific trade. If you perform a business activity, which can´t be executed from your home or place of business, then the registration of the business establishment will be required by local authorities – especially when your business activity concerns handlinggoods or producing goods.The registration of the business establishment ( and its liquidation as well) shall be performed at the Trade Register Office. The notification of the establishment can be exectuted only after the registration of the commercial company at the Registrar of Companies. The registration of the establishment shall be performed on the first day businessis conducted at the latest. It´s necessary to register the establishment at the Trade Office and Tax Office within 30 days.When using the electronic register , a tax code is required. The enterpreneur can ´t performed his business activity unless a permit is issued by Public Health Authority in the Slovak Republic. After making anevaluation of positive and negative factors affecting public health, the Office gives its approval to operating procedures document. The operating procedures document is necessary for swimming pools, personal care facilities (e.g. hairdresser´s , tanning salons), facilities with catering service etc. The operating procedures shall be announced at the municipal authority ( due to the fact that these obligations are provided by the municipalities individually it does not concern to every establishment).In addition to these measures, it´s necessary to ensure OHS (occupational health and safety) training and fire prevention training (if the employer has more than 5 employees and complies with further legal requirements he is oblidged to perform more duties. Due to their wide range, they can´t be inluded in this article); if the company employs more than 3 employees, it has to be announced to RTVS (Broadcasting and media production) and he has to pay licence fees . Other requirements depend on specific business activities, eg. contact with the consumers, production or sales of food, webshop, smoking ban. 11.05.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:023, Edited:21.08.2017 SHNew Procedure for debt recovery in Slovakia should be quicker than payment order (SK) The new Debt Recovery Act 307/2017 which went into effect on 1. February 2017, will help the appropiate officers of the court as well as citizens to accelerate the processing of requests for payment orders. The new act introduces an electronic alternative to the standard payment order. It may be only filed electronically and the only competent Court is the District Court of Banská Bystrica. The biggest advantage of the whole process is its simplicity- you only have to attach the invoice or similar document related to the submission and declare that the data concerning the claim enforcement is listed in your bookkeeping . In the case of the complainant being a VAT payer, he can include a declaration in his proposal , stating that the data is listed in the accounting statement. If the proposal in incomplete orincorrect , the court will request that the claimant complete or rectify the proposal within 5 working days. Upon the satisfaction of all specified conditions, the court shall issue the payment order within 10 working days and shall oblige the defendant to pay his liability within 15 days of receipt of the payment order (the payment order may be serviced only by electronic means) . The defendant may submit a statement of opposition exactly in the same way as in a standard payment order . In the statement of opposition, the defendant shall express whether or not the invoice was delivered to him, how he dealt with the invoice and whether or not the invoice was recorded in his bookkeeping (if not, why not), or if the invoice was recorded in his accounting statement. If the defendant finds it difficult to pay the whole amount of money at once, the law allows him a payment schedule under following conditions :•he hasn´t submitted a statement of opposition to the payment order, •maximum amount of installments is 10 , •the total amount doesn´t exceed 2,000.00 EUR ,•he proves that the first installment of at least 50.00 EUR has already been paid to the claimant03.03.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:013, Edited:24.03.2017 ELChange of the business name of a limited company (SK)The business name of a company registered in the Trade Registry is possible to change, but the addendum, indicating the legal form of the company must be retained- either in the form of abbreviations, or a verbal expression. To change the company´s name is primarily necessary to check if someone has already used the new name that you have selected (checking is available on the webpage of the Trade registry www.orsr.sk) and then it is possible to handle a proposal to change the registered name to the Registry Court. The annex to the proposal for the change of registration is the memorandum of the General Assembly or the decision of the sole shareholder (depending on how many shareholders are there in the company) about the change of the Articles of Association, which the change of name comes from. To accept this decision it needs the approval of at least two-thirds majority of all the votes of the shareholders, unless the General Assembly is entitled to decide about the change in the Articles of Association. If this competency is not entrusted to the General Assembly, and the Articles of Association can be changed only with approval of all partners, so the trade name may be changed only by unanimity. Notarized verifying of the executive´s signature is not requested. After that the executive of the company has to draw up the Articles of Association under the new trade name, and save in a collection of documents within 30 days of receipt of the decision on the change. Finally it is important to change all the business documents and the webpage according to §3 of the Commercial Code.01.03.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:012, Edited:24.03.2017 ELHow many of Limited Liability Companies can one person own (sole ownership) – according to the Slovak and Czech Law (CZ, SK)It is set in the Slovak Republic from 2002, that a natural person may be the sole owner of maximum of three companies according to section 105a of the Commercial Code (OBZ) - it is so called restriction on chaining. This restriction is set only for Limited Liability Companies, thus natural person can be a sole shareholder in many other Corporations or Simple Joint Stock Companies. In practise, sometimes entrepreneurs seek to work round this restriction by assigning for the sole shareholder a commercial enterprise, of which they are the sole owners. Commercial Code also calculates with this behaviour and it constitutes that single-member companies may not be the founder of another company (or become its sole partner for the entire existence of the company). The Registry Court is compulsory to verify the restriction of chaining. In case there is a breach-through, the Court is authorised to wind-up all the companies, which breaks this restriction, without any proposal. If the entrepreneur feels limited by the restriction on chaining, and tends to have more companies where there is no sharing among partners, there are some solutions: 1.Instead of a Limited Liability Company he may establish a different type of company, the best is the Simple Joint Stock Company which is the closest of all types to LLC but it is not covered by that rule.2. He is able to establish instead of a Slovak, a Czech LLC : the new Civil Code in the Czech Republic and the Law on the establishment of companies (ZOK) have allowed to establish a corporation by a sole member with an only restriction- so that the companion is unable to cancel his participation unless he assigns his successor.In the explanatory memorandum to the Law (ZOK) the Czech legislator explains the effort to simplify the restrictions on the single-member companies, due to seeing no purpose in burdening on companies. A Czech LLC is able to act independently or to establish a branch in Slovakia.3. To gain a minority shareholder (partner) with a contribution of 750,- Euros (minimal legal contribution in a LLC) but simultaneously to set up the Basic Stock and voting rights in Deed of Foundation in a way, he absolutely controls the decisions of the company. Certainly, it is necessary to respect the legal protection of the minority shareholder and do not misuse the position. 25.02.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:011, Edited:24.03.2017 ELChange of the company´s seat (SK)If you decided to change your company´s headquarters (seat), you shall need to following documents:•A warrant (PoA):Necessary in the case that an application to the commercial register is not handed in personally, but through another person (usually one that has a qualified electronic signature) •The resolution of General Assembly or The decision of a single member: The resolution of General Assembly is provided in case the company has at least two partners. The decision of a single member is used for companies with a sole shareholder–it is the only difference, otherwise these documents are equal. In the resolution or decision must be clearly set the will to change the seat and the address of the new headquarters must be stated. The resolution must be signed by the President of the General Assembly, as well as the decision of the sole partner, but a notarial certificate of signature authentication is not required.•Consent of the property owner: This document is a compulsory attachment to the proposal for the Commercial Registry The property owner, in which there will be the residence of the new seat of the company, is obliged to express his consent with the locating of the headquarters (in case the property is owned in common by spouses , both are obliged to give the consent). The consent with the locating may be given by the property tenant, but he is obliged to have an authorized permission from the owner (or to give their consent to placement directly expressed in the lease agreement). Then it is necessary to enclose for the Commercial Registry the consent of the tenant and the lease agreement with the property owner.•Property deed: It is necessary to provide an actual extract from the Property Deed on which the seat of the company will be located, but it is enough to provide the informative extract from the webpage of Land Registry (www.katasterportal.sk), there is no need to apply for the PD at the proper District Authorities, and to pay the charge.•The full text of the Articles of Association: By any change of the company there is always issued a new Articles of Association, or a new Deed of Foundation, where there is a need to incorporate these changes, sc. In that case it should contain the new seat of the company. Such an Article of Association is obliged to be signed by the executive(s) of the company, but there is no need for notarized verifying of the executive´s signature. After having all these documents prepared, the proposal for the change in your company can be handed in at the competent District Court, which is as well the Court Registry. The competent Court for proposals is always the one mentioned in current file mark of the company, so it is not the District Court, in which jurisdiction the new seat will be located. 24.02.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:010Why choose Slovak company? (SK)Foreign persons may conduct business activities in the Slovak Republic under the same conditions and to the same extent as Slovak citizens. They only need slightly different documents submit to authorities. ( read more here )Slovak Limited Liability Company (spoločnosť s ručením obmedzeným – SRO) can be formed within ten days, the process is very easy and the maintenance of the company is among the cheapest within the European Union. The corporation tax rate of 21% is lower than in the most of european large countries, so you can use the advantage of low tax and still make your business in the area of the whole European Union. There is no problem with the registered office and forwarding the correspondence to any chosen address. Furthermore, the accounting services, which are obligatory, are also cheaper than in the majority of the EU Member States and VAT registration is possible if you are willing to deposit advances. Limited Liability Company is very simple and flexible - every necessary change can be done within one week. There are not any restrictions regarding the commercial activities in other countries, except the third countries (outside the EU), but this issue can also be solved.For the clients who already conduct their entrepreneurial activities outside Slovak Republic (SR) but wish to expand to SR or nearby countries, there is a possibility of forming a branch. It is even more simple than forming a new company. The branch does not have a legal capacity, its internal relationships are managed by the law of the country where the main company (its founder) was incorporated. The branch has to pay taxes and keep accounts here, but it does not have to have any registered capital and the property of the branch is the property of its founder.Jurisdiction of Slovak Republic offers two more capitals companies: a Joint Stock Company(akciová spoločnosť - AS) and a Simple Joint Stock Company(jednoduchá spoločnosť na akcie - JSA). A Joint Stock Company needs to have the registered capital of € 25.000,- and the formation process takes longer (this depends also on the way the shares are issued). This type of company is suitable for capital intesive projects since there is no limit for the number of shareholders (the maximum number of shareholders in SRO is 50), it has more serious „image“ and offers much more space for acquiring the funds from investors as well as financial institutions.A Simple Joint Stock Company is an effective hybrid between SRO and AS. Its registered capital is at least € 1,- and the formation process is also faster than with AS, what makes it an ideal option for those who would like to benefit from seriousness and investment impact of AS and flexible management and low cost of SRO.Slovak jurisdiction offers valuable types of business companies with the possibility to expand beyond the borders – whether by establishing other entrepreneurial companies within the EU or in third countries or just by acting on their own behalf as reputable european legal entities. Author Dr. Soňa Šallai23.02.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ARTID:009, Edited:24.03.2017 ELNew compulsory evidence in the Czech Republic (CZ)Since January this year in the Czech Republic shall apply the amendment to the law 253/2008 Sb will be applied -so-called 'the law against money laundering '. The amendment reflects the European Union's efforts to prevent the use of the financial system for the financing of terrorism and money laundering (Directive no. 2015/849, so called “the fourth of AML” directive).Thus formed the obligation for Court of registration of companies to keep a record of the actual business owners and trustee funds and, on the other hand, companies and funds are obliged to report the persons with significant influence. There shall be signed in the evidence all personal information of the owners, their voting rights and other matters, which explain the way of participation of the person in the ownership. The real owner is deemed to be the person who has the most factual or legal influence over the management of the legal entity. Since 2018 there will be possible internet access to this register. Legal entities will be required to continually update this evidence, including the reports of the reasons why they consider the proposed persons for the actual owners. In addition to this registration other obligations relating to the entrepreneurs will change, for example by cash transfers in amount of EUR 10.000,- and more, each entrepreneur is obliged to check his client (sc. information about the nature of the business, the ownership of the client, the ongoing monitoring of the business relationship, reviewing sources of property which applies to trade...).18.02.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ARTID:005A branch of an enterprise (SK)One of the options how a foreign person can do business in Slovakia is a branch of a foreign enterprise (branch office). The branch itself does not have a legal capacity and doesn´t need a registered capital. Its internal relationships, liability, management and business activities are ruled by the law of its founder (a foreign person which formes the branch). In charge of the branch is a head of the branch(similar to a manager) appointed by the founder.The head is entitled to undertake any legal acts relating to this branch on the founder´s behalf. The head of the branch is available in public Commercial Register. The branch can perform any entrepreneurial activity in Slovakia after gaining a trading license and registering with Commercial Register. After this registration the branch becomes a tax payer and has to keep accounts and submit tax return in Slovakia. Naturally the branch pays a corporation tax only from a profit generated in Slovakia. More details about taxation can be found in Double Taxation Treaties with Slovak Republic and a country of the founder.If the branch does not perform real business activity, it cannot obtain a VAT identification number.If it is economically active and perform business activities, it can obtain a VAT ID but has to pay some deposit (in the amount set by the financial authority).The head of the branch must be EU citizen or citizen of any OECD member state or has a permanent residence permit. Read more - PDF for download: Author Dr. Soňa Šallai10.02.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:004Solutions for internet-based companies (CY)For companies specializing in programming, software and applications development, website building or providing other internet services is Cyprus ideal tax and business environment.Benefits of Cyprus jurisdictions:•Corporation tax is 12,5%•VAT registration is very simple•Received invoices from third countries are not affected by the withholding tax•LTD can emit securities, whose sales are tax exempted•A profit of foreign branch offices is tax exempted•Nominees can be used as directors or shareholders•Low costs of establishing a real office or also a possibility to use virtual officeCyprus company can form a branch office or a subsidiary in any EU member state if needed. The biggest advantage of the subsidiary is the legal capacity, which means that any its problems or liabilities are not passed on the parent company so the parent (Cyprus) company possesses higher legal protection.Depending on the specific business activities and requests it´s possible to arrange such a setting of all the company´s factors (employees, dividends, real estates, patents and trade marks, connections to third countries and so on) which will guarantee the highest possible legal protections, tax optimisation and risk management. Author Dr. Soňa Šallai09.02.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ARTID:003Cooperative as an alternative to business companies (SK)The cooperative has an old history in Slovakia because it was very popular many years ago. But we think it can be still used as a very good option because of its many advantages: •limited liability similarly as in limited liability companies:members of the cooperative are not liable for the obligations of the cooperative•low registered capital: 1250,- EUR•it is universal: it can conduct also other than entrepreneurial activities•flexibility: unlike business companies which do not allow its shareholders to withdraw at any time, membership in the cooperative can be terminated anytime (this applies to establishing a membership as well)•low administrative burden: it isn´t necessary to prepare any official documents regarding the establishment, termination or transfer of the membership•anonymity: members of the cooperative are not listed in Business Register or any other public register. Only the cooperative itself maintains a list of them. The board of directors is publicly available. 05.01.2017 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ARTID:002Which type of company should I choose? (INTL)It is natural that choosing from various jurisdictions, types of business companies and related additive institutes today available can be confusing even for an experienced entrepreneur. Many clients simply ask us which type of company is the best. Since a general answer to this doesn´t exist, we wrote this brief overview which might help you with your decision.Slovak Limited Liability Company: currently the most widespread type of company, ideal for catering and restaurant services, craft or art activities, sale and purchase, body care (wellness, hairdressers, beauty salons..). The main advantages are limited liability of shareholders, simple structure and flexible administrating. Disadvantages are a bit high tax burden, complicated VAT registration and a lot of bureaucracy which is constantly increasing.Slovak Simple Joint Stock Company (JSA):best option for those who would like to use the benefits of a Joint Stock Company (no liability, very low entrepreneurial risk, a possibility to adjust rights attaching to shares and their transferability) but don´t want to invest too much money to the establishment. JSA has minimum registered capital of 1,- EUR (Joint Stock Company 25.000,- EUR) and even with the fees for the registration with the Central Securities Depository and Business Register are the start-up costs less than one thousand euros. Read more in PDF document.Author Dr. Soňa Šallai22.12.2016 ___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ARTID:001Hybrid form of capital company in Slovakia (SK)There is a new type of business company available for Slovak entrepreneurs since January – Simple Joint Stock Company (JSA). National Council of the Slovak Republic wanted to create a company uniting a simple organisational structure and flexibility of Limited Liability Companies with the low level of risk and limited liability of shareholders from Joint Stock Companies. JSA can be established by the sole shareholder whether it is a natural person or a legal entity while the registered capital has to be at least € 1,00. The company can emit various shares, some accompanied by special rights but all shares have to be book-entered and registered. JSA must maintain a register of shareholders and publish these information on the website of Central Securities Depository of SR www.cdcp.sk. The Board of Supervisors is not obligatory but a reserve fund is – in the amount of 10% of the registered capital at the beginning. Statutory body is the Board of Directors with an unlimited terms of office and its members are not subjected to a non-compete obligation. Shareholders possess extensive options regarding the disposition of shares including entries and withdrawal from the investment, possibility to completely exclude the transferability of shares and a Shareholders´ Agreement which allows them to modify remaining rights. The explanatory statement explains that this new type of company is created as an ideal form for start-ups which used so far mostly Limited Liability Companies but LLC are not optimum solution for relationships with investors and employees. The government reflects on the fact that entrepreneurial environment in Slovakia consists mainly of small and medium sized enterprises which have the biggest problems establishing themselves on the market and gaining the capital. Simply stated, we have a Joint Stock Company with all its advantages available for anyone. Author Dr. Soňa Šallai
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