Setting Up a Subsidiary in Slovenia: Complete Guide

Introduction

Slovenia is a strategically located country at the heart of Europe, offering a developed economy to investors. It is considered one of the wealthiest Slavic countries in terms of GDP per capita. 

Slovenia is the gateway to entering the EU business market as a part of the EU. Located at the crossroads of TEN-T corridors, the country provides an entry point to European countries with over 700 million customers. The country also offers a stable export-driven economy, innovative workforce, and quality infrastructure to companies starting a business in Slovenia. 

Opening a subsidiary in Slovenia is quite exciting and profitable. However, companies need to comply with the Slovenian subsidiary laws and regulations for setting up a subsidiary company here. Read on to learn how to register a subsidiary company in Slovenia. 

What Are the Types of Subsidiaries in Slovenia?

Before the incorporation of a wholly owned subsidiary in Slovenia, a company should know the various types of subsidiaries in Slovenia. Here is a list of the various types of Slovenian subsidiaries:

 Limited Liability Company

• The limited liability company is the most commonly found subsidiary type in Slovenia. Most small or medium companies have opted to open a limited liability company (LLC). 
• All the LLCs in Slovenia must have the Article of Association, as it is the ultimate act that regulates the association among the partners. 
• The holder of an LLC must invest a share of a minimum of EUR 7,500, along with a minimal input of EUR 50. 
• The shareholders can give their share capital either in cash or kind. 
• A limited liability company (LLC) should hire an auditor if its share capital crosses EUR 100,000.  

Joint Stock Company

• A joint stock company in Slovenia should have at least one single investor or more than one investor. These investors can either be natural persons or legal entities like a corporation. 
• This type of company is divided into several shares which shareholders own. 
• The shareholders are not considered to be the owner of the company. Shareholders are allowed to invest in the shares in cash or kind. 
• For setting up a joint stock subsidiary business in Slovenia, the company should have a minimum deposit of EUR 25,000.

Unlimited Liability Company

• This type of company is a partnership business of two or more personnel. These partners are liable for all the personal assets of the company. 
• Two individuals willing to execute their business together must pursue an unlimited liability company. 
• This kind of subsidiary should have the name of at least one partner in the company’s name. 
• Slovenian law does not specify minimum capital share while establishing an unlimited liability company.  

Limited Partnership

• The limited partnership subsidiaries consist of two or more partners, from which one can be a general partner and the second is a limited partner. 
• The general partner is liable for all the assets of the company.  
• A limited partner has limited liabilities toward the company’s obligation. Their contributions and duties are not as frequent as the general partners. Therefore, Slovenian law has made many restrictions on limited partners. 
• No minimum share capital is required to set up a limited partnership in Slovenia. 

How to Set Up Subsidiaries in Slovenia?

Here are the steps a company needs to follow to establish an LLC in Slovenia:

1. In the first step of establishing an LLC, the company must create a blueprint of the company’s name, address, founders, supervisory board, and age of the company. This procedure is known as the article of association. 
2. Next, the company must open a Slovenian bank account which must possess the minimum capital of the company’s share. After this, the company should collect the certificate of deposit from the bank.
3. The certificate of deposit and article of association must be notarized for establishing an LLC.
4. After notarizing, these documents should be registered at the VEM.
5. A company will receive its final registration number at the AJPES website after following these steps and paying the taxes. 

Benefits of Setting Up a Slovenia Subsidiary

Here are the benefits of setting up a subsidiary company in Slovenia:

• Foreign companies will directly enter the EU business market by choosing Slovenia for business.  
• Subsequently, by setting up a subsidiary in Slovenia, a company can set up EU renders and enjoy a smooth flow of goods. 
• Most foreign companies in Slovenia use the limited liability subsidiary structure, allowing the parent company to work independently.
• In Slovenia, the tax is deducted from 19% of the profit. As it is one of the lowest tax deduction rates in the European Union, opening a subsidiary in Slovenia benefits any company. 

Documents to Prepare When Opening a Subsidiary in Slovenia

A company must complete all the required documentation while incorporating a wholly-owned subsidiary in Slovenia. These documents must be submitted to the Commercial Registry at the Chamber of Commerce. After the compilation of the paperwork, it is needed to be notarized and converted into Slovenian.  

Here is the list of documents required for opening a subsidiary in Slovenia:

• The foreign company needs to establish evidence of its existence with the help of proper documents before establishing a subsidiary in Slovenia
• Registration certification from the Trade Registry of its home country.
• The parent company’s name and office address
• The foreign company must appoint a Slovenian officer with an appointment letter. The appointment letter for hiring a Slovenian office is an important document; hence, it should be submitted at registration.
• Memorandum and Articles of Association

Other than submitting valid documents, there are certain criteria that Slovenian law implies for a foreign company before opening a subsidiary. One of them is that the name of the company should remain the same as the parent company. Before registration, the company must cross-check its name from the AJPES register. 

What Business Forms can Slovenia Subsidiaries Take?

Slovenian law offers various forms of subsidiaries to foreign companies. A foreign company can establish any kind of subsidiary like a limited liability company (LLC),  joint stock company,  unlimited liability company, or joint stock company. However, most companies prefer establishing a limited liability company (LLC) in Slovenia.  

Post-Incorporation Compliance in Slovenia

Post-incorporation compliance companies need to follow the following steps to set up a subsidiary in Slovenia. These steps are:

• Companies need to hold meetings with the finance department to discuss their capital requirements.
• The next task of the company executives is to decide their employees’ job roles.
• Any foreign subsidiary business in Slovenia must abide by the law’s double-entry bookkeeping system while calculating their account.
• Lastly, a company should hire a legal expert who can guide them with the subsidiary laws of Slovenia. 

Taxes on Subsidiaries in Slovenia

Here are the various taxes that the foreign subsidiaries need to pay:

Corporate Income Tax

• Residents and non-residents generally pay Slovenia’s corporate income tax (CIT). 
• Non-profitable activities of the subsidiaries are excluded from paying the CIT. 
• The rate of corporate income tax (CIT) is 19%. 
• It does not apply to pension insurance and funds.

Tonnage Tax

A subsidiary must pay the tonnage tax if it uses international shipping facilities. The tonnage tax is calculated by calculating the tax for each ship. The tax for each day is calculated by taking out the product of the working days and the daily tax rate.  

Value-added Tax

• In Slovenia, the value-added tax (VAT) rate is 22%. 
• Medical supplements, transportation, educational supplements, etc., have a VAT rate of 9.5%. 

Tax Incentives for Companies Setting Up a Subsidiary in Slovenia

By setting up a subsidiary in Slovenia, a company can enjoy all the tax incentives which the government provides. 

• In Slovenia, the investment allowance on intangible assets is around 40%. The new law implemented in 2022 has allowed a 40% investment allowance on artificial intelligence (AI), cloud computing, and other modern technologies. 
• The Slovenian government allows tax relief for hard-to-place workers. These unemployed people did not get a job in the past six months. Therefore, for the first 24 months, their tax allowance is around 45%. 
• Slovenia offers a 100% research and development incentive to any company, irrespective of location, within a specific tax limitation. A company can utilize up to 63% of the allotted allowance on various R&D experiments and equipment. 

How Can Multiplier’s Employer of Record Help You Hire & Expand in Slovenia?

Multiplier EOR can easily handle this work for your company. Our experts help you to employ talent in the country without the need to establish a subsidiary. Company to easily explore, grow and establish its business adhering to the local labor law and government.