Business Opportunities in Slovenia
Slovenia has an excellent geostrategic location providing direct access to several European countries. The country is located at the heart of Europe and provides TEN-T corridors’ crossroads which is an ideal entry point to the large customer base of the European continent.
According to the World Doing Business Index 2020, Slovenia is ranked 37th out of 190 countries for ease of doing business. Slovenia is a highly desirable country for establishing a business due to its stable economic growth, low inflation, low unemployment rates, and tax benefits for investment activities.
The best infrastructure, accessibility to regional markets, and high standard of living will benefit anybody considering how to set up a business in Slovenia. A Slovenian company is an ideal starting point for commercial expansion across Europe.
Slovenia’s business incorporation is free, simple, and fast, taking less than three days to apply. Individuals who acquire a digital certificate in Slovenia can establish their business through the Slovenian Business Point portal.
Slovenia is an export-oriented economy that will benefit from other countries’ recovery and resilience plans. The country’s recovery and resilience plan will foster economic growth, create jobs, and lift Slovenia’s gross domestic product by 1.1% to 1.7% by 2026, bringing up to 6,000 people into jobs. The plan also focuses on improving the country’s macroeconomic challenges, including low investment rates, low employment rates of older workers, and skills mismatch.
Benefits of Starting a Business in Slovenia
Slovenia has a growing economy and offers several benefits for starting a business. Some of them are:
Strategic location
Slovenia is at the crossroads of major European cultural and trade routes, making it advantageous for entrepreneurs. Following are the major highlights.
- Driving to nearby nations like Italy, Austria, Croatia, and Hungary from the capital city of Ljubljana only takes around an hour. Businesses have access to a larger market and more prospects for growth.
- Slovenia has a well-developed startup ecosystem that offers competitive conditions and numerous benefits to startups.
Low tax system
Slovenia has a well-developed legal system and a simplified registration procedure, allowing companies to establish business swiftly and efficiently. Some key points are:
- Slovenia is an attractive location for starting a business due to its low corporate tax rate of 19% on profits and low VAT rate of 22%, or 9.5% in some cases.
- Slovenia offers ample opportunities for tax optimization and has signed treaties to avoid double taxation with many countries.
Skilled workforce
Slovenia has a highly educated and talented young population. It further provides the following benefits while setting a company in Slovenia:
- The skilled and highly educated workforce is one of Slovenia’s main attractions for foreign direct investment (FDI).
- The Slovenian workforce in the industry sector is highly productive and has the best price performance in the region.
- The country has a high literacy rate and provides an excellent education at all levels.
Quality of life
Slovenia is an attractive destination for individuals looking to live and establish a business due to its provision of high-quality public services, healthcare, and education to its resident.
- According to the OECD Better Life Index, about 71% of the working-age population aged 15 to 64 has a paid job in Slovenia.
Other advantages
Slovenia is a parliamentary republic with a multi-party system governed by a coalition government. The climate for establishing and running civil society organizations is positive and stable. Incorporating a company in Slovenia is considered an easy process due to the following reasons:
- Slovenia is an EU member and Schengen Area, providing access to the EU market with 500 million customers and no customs and duties.
- Slovenia is also an excellent starting point for entry into the markets of Eastern Europe and the Balkans, where free trade agreements favor it.
- The country offers a stimulating and low-risk business environment. The unemployment rate is 5.6%, and the gross monthly earnings are €1,952.05 (2021), while the net monthly earnings are €1,256.24 (2021).
Requirements for Starting a Business in Slovenia
To start a business in Slovenia, the following requirements must be met:
- Obtain a Slovenian tax number before setting up a business in Slovenia.
- Choose the legal form of the company with which the entrepreneur will do business in the market.
- Prepare a business plan to see if the idea is marketable.
- Prepare certain documentation to begin the process.
- Appoint at least one company director for all companies except sole traders.
- Obtain a Slovenian Identity number (EMŠO) and business address if opening a sole proprietorship. {EMŠO stands for “Enotna matična številka občana”, which is a personal identification number in the Republic of Slovenia}
Other requirements for foreigners to start a business in Slovenia are:
Work pass
Non-EU nationals can start a business in Slovenia by following these steps:
- Obtain a visa to enter Slovenia
- Register a company, which can be done quickly and easily
- To get a residence and work permit, companies must: invest €50,000 in the company’s fixed assets, have a monthly revenue of €10,000 for six consecutive months, or hire an EU citizen for a minimum of six months
- Apply for a single work and residence permit
Company name
To set up a business in Slovenia, use the Slovenian Business Point webpage or one of the SPOT point locations to register a company name. You must pick a short and long name for your company, which must be unique. It should distinguish other firms as well as an abbreviation of the company type.
Company address
The company’s head office and business address must be set up before the company is established. The registered address has to be in Slovenia, but it can be in any municipality. You can register your business address at the SPOT/VEM point.
Taxation
There are various taxes that businesses in Slovenia may be subject to, including personal income tax, value-added tax (VAT),and corporate income tax. The tax year in Slovenia is either the calendar year or the financial year, and consolidated returns are not permitted.
Business Capital
€7,500 for a limited liability company and €25,000 for a joint-stock company is the minimum requirement to start a business in Slovenia. Companies have to pay a minimum of half of the share capital upfront, with the remainder due within two years.
Directors and Company Secretary
To start a business in Slovenia, you must appoint at least one director responsible for running the business. The director can be an EU citizen or a citizen of a non-EU country. In a joint-stock company, the board can comprise both executive and non-executive directors. Directors have certain rights and obligations, and Slovenian law permits both one-tier and two-tier systems.
Types of Business Structures in Slovenia
Some common types of business structures in Slovenia include:
- Private Entrepreneur – To establish private entrepreneurship, one does not need founding capital. You can establish a private firm by joining the compulsory social insurance system.
- Limited Liability Company – LLC has one or more domestic or foreign owners. These owners or members are not responsible for the company’s liability.
- Unlimited Liability Company – An unlimited liability company is a business entity in Slovenia where two or more persons are responsible for the company’s obligations with all their assets. A taxable entity must pay corporate income tax at a rate of 20%.
- Public Limited Company – It has a minimum subscribed capital of €25,000 and is divided into shares. The company’s shareholders are not personally liable, but the company is completely liable for the number of its assets.
- Limited Partnership – Companies can establish a limited partnership with at least two local or foreign individuals or businesses who decide to perform a business activity together. No specific minimum capital requirements exist to establish a limited partnership in Slovenia.
- Limited Partnership with Share Capital – This type of company combines elements of a limited partnership and a public limited company. Limited Partnership Act governs all legal aspects between general partners and shareholders. One advantage of registering a limited partnership in Slovenia is that there is no fixed minimum share capital.
How to Register a Company in Slovenia
A company registration process in Slovenia requires the following steps:
- Start the business registration process in Slovenia by finalizing the company’s name. You can check the availability of the company name in the AJPES business register.
- Appoint a director and a supervisory board. Ensure the director is not employed somewhere else, a student or retired.
- Next, arrange a head office of the company and get a business address before establishing a company. All the company’s activities are performed in the head office.
- Prepare the company’s Articles of Association and Memorandum of Association.
- Open a bank account for the company and deposit the minimum share capital.
- Register the company with the Slovenian Business Register and obtain a registration number.
- Register for VAT and obtain any necessary permits or licenses.
- Register the company’s employees with the Slovenian Tax Administration.
- Keep accurate records and file annual financial statements with the Slovenian Business Register and the Tax Administration.
How Much Does it Cost to Incorporate a Company in Slovenia?
The cost of company registration in Slovenia varies depending on the type of business chosen.
Registration fee
The registration procedure is fast and straightforward, and it takes about 4-5 hours to complete all the steps. The registration agency sends the documentation to the court, which takes 2-3 working days to register the new company if all conditions are met. The following table represents a clear idea.
Entity Type | Average Fee per Engagement |
Tax resident LLC | €15,822 |
PLC | €16,822 |
Branch of a foreign company | €17,222 |
Representative office | €16,622 |
Are Foreigners in Slovenia on Certain Passes Allowed to Start a Business in Slovenia?
Foreigners from non-EU countries can start a business in Slovenia by obtaining a single permit to reside and work there. The procedure for company registration in Slovenia is the same for all EU citizens. In order to apply for a work and residence permit, one can start a business in Slovenia and fulfill certain conditions, such as investing € 50,000 into the company’s fixed assets or generating € 10,000 monthly revenue for six months.
Government Assistance to Foreign-owned Businesses
There are several funding opportunities for entrepreneurs and startups in Slovenia. These include:
- The Slovenian Enterprise Fund provides small-scale incentives through vouchers, substantive support for innovative young enterprises, and training abroad for high-tech enterprises.
- The Ministry for Economic Development and Technology also offers monetary funds to strengthen the economy’s competitiveness.
- There are national programs such as Startup Slovenia that aim to encourage entrepreneurship and provide comprehensive support networks for launching and building startup companies throughout Slovenia.
The Slovenian government supports employers in the financial or insurance businesses Group K according to the standard classification of activities. {According to Slovenia’s standard classification of activities, Group K refers to financial and insurance businesses.}
How Can Multiplier Help?
Multiplier offers a cloud-based solution for businesses looking to expand in Slovenia. We can help companies to hire and pay remote workers while complying with local laws and regulations.
One can ease the setup process by partnering with Multiplier. Our specific SaaS-based platform simplifies payroll and compliance for global teams, allowing for seamless onboarding, payment, compliance with regulatory laws, and benefits provision across borders.