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FAQ: Trade licences and doing business in Slovakia

The Slovak Spectator brings you the most frequently asked questions on obtaining a trade licence and other conditions a foreigner needs to meet to be able to do business in Slovakia.

Illustrative stock photo(Source: TASR)

Q: What do I need to be able to pursue trade activities in Slovakia?
Q: Which activities are considered trade?
Q: As a foreigner, am I able to obtain a trade licence in Slovakia?
Q: Can I do business in Slovakia on the basis of a trade licence issued in another country?
Q: What type of residence permit do I need to be able to get a trade licence?
Q: Where do I request my trade licence?
Q: What conditions do I need to fulfil in order to be eligible for a trade licence?
Q: What documents do I need when applying for a trade licence?
Q: How much does it cost to have a trade licence issued in Slovakia?
Q: What do I need to do after I receive my trade licence?
Q: Where do I register to pay my health insurance and how much should I pay?
Q: Where do I register to pay my social insurance and how much should I pay?
Q: Do foreigners with permanent residency in Slovakia and doing business in Slovakia have to submit a tax return and pay taxes in Slovakia?
Q: What deadlines must taxpayers meet?
Q: What rules are applied when foreigners do not have permanent residency in Slovakia but do business here?

We have answered these frequently asked questions about residence in Slovakia with the kind help of the Migration Information Centre of the International Organisation for Migration - MIC IOM.

Q: What do I need to be able to pursue trade activities in Slovakia?
A: If you intend to do business in Slovakia, it is essential to be granted a residency status which allows you to conduct business. This means not all types of residency allow you to do business in Slovakia. If you intend to conduct a trade, you need to notify the Trade Licencing Office and obtain a Trade Licence.

Your activity would be regarded as unauthorised trading if you systematically, independently, on your own behalf, on your own responsibility, for the purpose of earning profits, without holding a Trade Licence, perform an activity subject to craft, regulated or unregulated trades. The fine for unauthorised trading ranges from €1659 up to €3319.

http://www.mic.iom.sk/en/doing-business/trade-business.html

Q: Which activities are considered trade?
A: Trade is a constant systematic activity pursued independently, on one’s own responsibility, with the aim to gain profits.

The law does not define which activities it does recognise as trade, but rather lists activities that are NOT considered trade and governed by the law on trade licences. These are mostly activities of freelancers or activities that require other authorisation than just a simple trade licence (like banking or health-care services). It is a rather long list that includes for instance the following:

  • Publishing and distributing literary and other works
  • Healing activities
  • The work of psychologists, health-care workers, veterinary doctors, attorneys, notaries, patent representatives, executors, forensic experts, translators, auditors, tax advisers, financial agents and financial advisors, mediators, authorised architects, construction engineers, geodetics and cartographers, restorers of cultural monuments, social workers
  • The activities of banks and other financial institutions
  • Providers of hazard games
  • Mining
  • Production, transport, distribution and supply of electricity, gas, motor fuels, oil
  • Agriculture and forestry
  • Radio and television broadcasting
  • Postal services
  • Road transport, air transport
  • Trading defence industry products
  • Technical and emissions checks of motor vehicles
  • Environmental assessment
  • And others

Trade also does not include activities that fulfil the criteria of a trade but are not in line with good morals.

Q: As a foreigner, am I able to obtain a trade licence in Slovakia?
A: A person can pursue trade in Slovakia in two different legal statuses – either as a Slovak person or as a foreign person. In general, every foreign person can carry on trade under the same conditions as every Slovak person.

Q: Can I do business in Slovakia on the basis of a trade licence issued in another country?
A: For those hailing from the EEA countries, based on the EU Services Directive (PDF, 217 kB) a service provider established in any of the EEA countries can temporarily provide services in Slovakia.

In general: no. Only citizens of EU/EEA Member State or Switzerland can occasionally provide services on the basis of a trade licence issued in another EU/EEA Member State. Occasional providing will be determined in respect to quantity, regularity and duration of services.

Q: What type of residence permit do I need to be able to get a trade licence?
A: Neither EU/EEA and Swiss citizens nor non-EU/EEA citizens need a residence permit in Slovakia to obtain a trade licence, apart from regulated trades and crafts trades, where residence in Slovakia is required. However, non-EU/EEA citizens need a residence permit in Slovakia if they are willing to run their business legally.

EU/EHP and Swiss citizens can start running a business immediately, after obtaining a trade licence.

Non-EU/EEA citizens can start operating their business only based on permanent residence or temporary residence granted for the purpose of doing business, family reunion, studies, research and development or temporary residence granted based on the status of a Slovak living abroad, or a person with long term residence in another EU member state. In addition, foreigners from EU/EEA and Switzerland or OECD Member States are obliged to register themselves in the Commercial Register. Without this registration the right to a operate business in Slovakia will not be permitted. Permanent or temporary residence in Slovakia is a vital condition for registration.

Q: Where do I request my trade licence?
A: The Trade Licencing Office issues trade licences. The first step is to notify the office about your intention to pursue trade. You can do that in person at your district trade licencing office based on your permanent residence. The addresses of the offices are available on the Interior Ministry’s website, search by region (in Slovak) or on this website’s menu on the right. It is now also possible to request your trade licence online on the www.slovensko.sk

E-government portal, but this can only be done by those who have the biometric ID cards.

If a person does not have permanent residence, they must go to the Trade Licencing Office in the region where their place of business is located.

Q: What conditions do I need to fulfil in order to be eligible for a trade licence?
A: An applicant needs to:

  • be older than 18 years of age;
  • have a legal capacity;
  • be impeccable – which means that the person has not been sentenced for committing an economic crime, a crime against property or another deliberately committed crime linked to the business. In case of legal persons, this relates to its statutory representatives.

There are also some specific conditions applicants need to fulfil, based on the type of a trade licence:

  • free trade licence – it is necessary to fulfil the three above-mentioned conditions;
  • craft trade licence –applicants are required to have a certificate issued by an education facility stating they are professionally competent in a selected craft;
  • fixed trade licence – applicants need to have a confirmation of their professional competence acquired outside of education.

Applicants must submit all the documents to the respective Trade Licencing Office (either in person or electronically). The Trade Licencing Office subsequently checks whether the applicants fulfil the conditions and whether they submitted all necessary documents. If everything is alright, the office issues a certificate confirming the trade licence (Certificate of Trade Authorisation) in three days after submitting a request and obtaining the abstract from criminal records.

Natural persons also need to announce it to their health insurers within eight days after launching a business ((in case this person is not yet registered in the system of mandatory health insurance in any of the EU Member States, Member State of the European Economic Area or Swiss Confederation).

Q: What documents do I need when applying for a trade licence?
A: All applicants need to fill in a form, either for natural persons or legal persons. For natural persons it is necessary to state the personal information, residential address, place of business (if it is different from the residential address), and the business name of their health insurer.

Natural persons with permanent residence in Slovakia need to prove they are impeccable by handing in an abstract from criminal records of the General Prosecutor’s Office. In case of foreigners, they need the abstract from criminal records issued in their homeland. If their country does not issue such a record, applicants need to submit an equal document issued by the respective court or administrative body. The documents cannot be older than three months and must be translated into Slovak.

Applicants also need to submit the certificate authorising them to use a property at which they will do business (if the address is different from the address of permanent residency).

Regarding craft and fixed trade licences, applicants also need to submit a certificate confirming their professional competence to carry out the business.

As for legal persons, they need to fill in their business name, legal form and residence, as well as information about the statutory body.

Part of the application is also a certified copy of agreement or founding document, as well as documents necessary for listing the company on the business register.

When submitting an online application via www.slovensko.sk, applicants need to fill in an e-form, which requires the same data as the paper form. Applicants, however, need to sign it via electronic signature, for which they need an ID card with an electronic chip.

Applicants also attach scanned documents (.pdf, .tiff, .rtf formats), which are the same as in the case of paper forms, and signed with an electronic signature.

Q: How much does it cost to have a trade licence issued in Slovakia?
A: An applicant who goes to the trade authorities in person needs to pay € 5 to be issued a certificate for a free trade licence and € 15 for the craft and fixed trade licence. This can be paid via e-tax stamp, cash, money order or bank transport.

In case of electronic submission at www.slovensko.sk, the certificate is issued for free concerning free trade licences, and for € 7.50 in the case of craft and fixed trade licences.

Q: What do I need to do after I receive my trade licence?
A: Your duties after receiving a trade licence depend on your country of citizenship. Only foreign nationals with permanent residence outside EU/EEA/OECD Member States or Switzerland are liable to register in the Commercial Register. If you are a non-EU/EEA citizen and you have been granted temporary residency or you do not have residence in Slovakia, you must register yourself in the Commercial Register after obtaining the Trade License (or after obtaining the temporary residence). In such cases you may start doing business the day of entry into the Commercial Register. Registration in the Commercial Register is not required if you have permanent residence in an EU/EEA/OECD Member State or Switzerland.

Your registration with a Public Health Insurer and the Tax Office will be carried out directly by the Trade Licence Office, if you fill in also the attachments to the official application form. Your obligation to pay your health insurance contributions starts the first day of your sole trading. Subsequently, within 8 working days after this obligation arises, you are obliged to inform your Health Insurer of the amount of advance payments.

The obligation to register at the Social Insurance Agency does not arise during the first year of sole trading (the next years it depends on the amount of your income). However, you have the right to register yourself and pay the contribution voluntarily.

Q: Where do I register to pay my health insurance and how much should I pay?
A:
You can be registered in one of the public insurance companies by the Trade Licence Office directly. There are three public health insurance companies in Slovakia (Všeobecná zdravotná poisťovňa, Dôvera, Union zdravotná poisťovňa) from which you can choose one according to your preferences. The minimum rate for sole traders is currently €60.06.

Q: Where do I register to pay my social insurance and how much should I pay?
A:
Your obligation to pay social insurance depends on income earned in a particular calendar year. This obligation arises the year following the calendar year in which your income reached the required limit (currently €5,145). If your income in a particular calendar year reaches this limit, you are obliged to start paying the social insurance from July 1, the next year, as well as register yourself as a self-employed in the Social Insurance Agency by July 9.

Q: Do foreigners with permanent residency in Slovakia and doing business in Slovakia have to submit a tax return and pay taxes in Slovakia?
A: First, it is necessary to distinguish whether the taxpayers are tax residents in Slovakia or not. The tax residents in Slovakia, who need to pay taxes from all their incomes here, are natural people with permanent residency in Slovakia or those who usually reside here. The law stipulates that such people need to pay taxes in Slovakia, from income received both on the country’s territory and abroad.

As the same person can be considered a tax resident of another country as well (if said state has similar legislation), the international agreement on preventing double taxation is applied. Based on this deal, the tax residency is set.

In case Slovakia is the final tax residency, all people having permanent residency or usually residing in the country and doing business here (also based on the trade licence) need to pay taxes here, both from income received in Slovakia and abroad.

In case the international agreement states the person is not a resident in Slovakia (even if they have permanent residency here and do business here), they need to pay only for their income earned in Slovakia.

If a foreigner comes from a country which has not signed such an agreement with Slovakia, the tax residence is set only based on Slovak laws.

Q: What deadlines must taxpayers meet?
A: Everybody needs to submit a tax return for the previous year, by March 31.

There are, however, also some exceptions when the deadline can be postponed:

  • tax residents can prolong the period by three months or six months in case they receive income from abroad;
  • non-tax residents can extend it by only three months.

Q: What rules are applied when foreigners do not have permanent residency in Slovakia but do business here?
A:
If the international agreement states that the person is not a tax resident in Slovakia but in another signatory state, they only pay the taxes from Slovak income.

If non-tax residents do business based on a Slovak trade licence:

  • They need to register with the respective tax official, assigned by the tax authority;
  • and submit a tax return with incomes from Slovakia.

Non-tax residents who do business in Slovakia based on a trade licence issued abroad need to pay taxes only if they have permanent business premises in Slovakia. If they do not have such premises, their income is not taxed based on the Slovak law.

Sources: MIC IOM, Interior Ministry website, Financial Administration

We have answered these frequently asked questions about residence in Slovakia with the kind help of the Migration Information Centre of the International Organisation for Migration - MIC IOM.

article_photo(Source: MIC IOM)

Topic: Frequently asked questions


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