In the light of the ongoing events in Ukraine, many entrepreneurs and citizens are forced to leave the country and search for new locations to carry on with their business activities and everyday lives. Slovakia, as a neighbouring country, offers various opportunities for newly established businesses and entrepreneurs. In this publication, we provide a brief overview for Ukrainians who would like to enter the Slovak market and summarize the necessary steps and obligations that should be taken into account.

Incentive plans for Ukrainian entrepreneurs in Slovakia

At the moment, the Slovak government has not announced any preferential rules for entrepreneurs relocating from Ukraine. However, there are numerous universal incentive programs to invest in Slovakia.

In general, there are 4 categories of projects that can be supported by the investment incentives: tourism, industrial production, technological and shared service centres.

Each category has specifically defined conditions that needs to be met in order to apply for the investment incentives. In general, the incentives can be provided as:

• a subsidy for the acquisition of material and immaterial assets
• a tax relief on income
• a contribution for newly created jobs
• transfer of immovable property or exchange of immovable property at a price lower than the general asset value

The provision of the state aid is governed in particular by the EU law that forms the basic legal framework also for the Slovak authorities.

Relocating a business from Ukraine to Slovakia

Relocating a business from Ukraine to Slovakia is not recommended, since the process is expensive and long-term. A better solution is establishing a new company, which becomes either the mother or daughter company of the Ukrainian company.

Company formation in Slovakia

Recommended company type: Limited Liability Company (s.r.o.)

Minimum registered capital: EUR 5000

Registrations required to run a business in Slovakia

The entrepreneur is obliged to:

• Establish the company and have a registered seat in Slovakia
• Acquire necessary licenses
• Register in the Commercial Register
• Register for a company tax number, VAT number

Requirements on foreign investors in Slovakia

Citizens of the EU or EEA (except Slovak citizens) who will form the statutory body have to prove their integrity by obtaining and submitting the criminal record from the state of citizenship or residency.

Non-EU or non-EEA citizens (e.g. citizens of Ukraine), in order to become members of the statutory body, must have a residence in Slovakia. Currently the process on granting the residence permit has stopped, since the police focuses mainly on the refugees and granting them temporary refuge. Therefore, Ukrainians can establish a company only if they choose an EU/OECD citizen as the statutory body.

Sanctions

The fine for unauthorized trading ranges from EUR 1,659 to EUR 3,319 in Slovakia.

Key taxes for businesses in Slovakia

Corporate income tax

• 21% – Standard corporate income tax rate15% – Reduced corporate income tax rate for taxpayers with taxable income not exceeding EUR 49,790 per tax period

Value-added tax

• 20% – Standard VAT rate10% –  Reduced VAT rate

Personal taxation of employees relocated from Ukraine to Slovakia

Contributions paid by the employer

• 35.2%

Contributions paid by the employee

• 13.4%

Slovak legislative measures in relation to Ukraine

Slovak legislation measures include Lex Ukraine, which facilitates the employment process of refugees.

Need help with entering the Slovak market? Book us for a free consultancy!

We have years of experience in supporting businesses to grow in Slovakia. Benefit from our free 1-hour long market entry consultancy that includes:

• Brief analysis of your needs based on the information provided
• Country-specific aspects that may be important to your investment
• Basics of local tax, accounting and legal rules in Slovakia

We can provide full-range support to Ukrainian companies planning to enter the Slovak market and help with navigating the country-specific statutory requirements – starting from advisory on choosing an optimal form of conducting business activity and taxation to a smooth incorporation process.