Sole Proprietorship in Slovenia

Located in Central Europe, Slovenia has a developed economy and is the wealthiest Slavic country in terms of nominal GDP per capita. The country is strategically located, bordering Italy, Austria, Hungary, and Croatia. Companies establishing a business in Slovenia can seamlessly enter the EU market and take advantage of its large customer base. 

Starting a business in Slovenia can be an exciting experience. The country provides a low tax rate, provides several tax incentives to attract foreign investors. 

One of the easiest ways to enter the Slovenian market is by establishing a sole proprietorship in the country. It requires less paperwork, making the registration process more straightforward. Read on to learn the process of setting up a sole proprietorship in Slovenia.

Who Can Be a Sole Proprietor in Slovenia? 

A sole proprietor is a person who owns and operates their own business. They are liable for their debts and keep all profits after taxes. Regarding accountability, the law makes no distinction between company and personal assets. 

Anyone can be a sole proprietor in Slovenia, irrespective of their nationality. Foreign nationals must have a residence permit if they are from a non-EU/ non-EEA country. 

Who cannot acquire the status of a sole proprietor in Slovenia?

According to Article 10a of the Slovenian Companies Act, anyone who matches the following cannot be a sole proprietor or is strictly barred from setting up a sole proprietorship in Slovenia.

• If someone has received a definitive prison sentence for committing crimes listed in the law governing corporations
• A person who has been published on the list of tax debtors or tax evaders in the last 12 months
• A person having a share of more than 25% in a company that is publicly listed for not submitting tax on time in the last 12 months
• If a person has received at least two fines as a result of a final judgment for an offense involving payment for work or an offense involving unreported work
• According to the laws controlling financial operations, insolvency, and forced dissolution procedures, a person directly had a share of more than 50% of the capital of a business that was removed from the Court Register.

Benefits of Sole Proprietorship in Slovenia 

The following are the advantages of starting a sole proprietorship in Slovenia:

• The person is not required to submit a separate business income tax return. Any individual-level tax paid by the sole proprietor and any business gain or loss would be recorded.
• Starting a sole proprietorship in Slovenia is a relatively simple process with lower operational expenses than other business models.
• The business is entirely within the sole proprietor’s control and decision-making authority. As the person is the only owner of the company and has no partners, they have complete control over how it is run.

Documents Required for Registering Your Business in Slovenia 

Here are some necessary documents that are required for setting up a sole proprietorship in Slovenia:

• Complete DR-02 form
• A valid personal document (for identification)
• Confirmation of the Slovenian tax number
• A Personal Identification Number (PIN)
• Written consent of any representative (if there is any). If the representative has a verified power of attorney from the sole proprietor, they may also apply for the sole proprietor’s registration in the Slovenian Business Registry.
• Suppose the sole proprietor is not the property owner at the proposed business address. In that case, a certified declaration from the property owner demonstrates that they permit business conduct at the address listed in the application.

Other Criteria for Registering a Sole Proprietorship in Slovenia

The following are some additional criteria to start a sole proprietorship in Slovenia:

• Foreign citizens who intend to operate as sole proprietors must have a current personal identification document (passport or ID card) that can be used to verify their identity.
• Any foreign person who wants to register as a sole owner must have a personal identification number (EMSO) received by registering in the Central Population Register and a Slovenian tax number obtained by registering in the Tax Register. Anyone in a tax office can request to be registered in the Tax Register.

It must be specified in the application that the tax number is required to establish a sole proprietorship in the Slovenian Tax Register, after which the tax office will also handle registration in the Central Population Registry and the issuance of a personal identity number (EMSO).

How to Register a Sole Proprietorship in Slovenia?

Setting up a sole proprietorship in Slovenia is simple, fast, and cost-free. Typically the average time needed to register as a sole proprietor is less than three working days. 

• An individual can form and register a sole proprietorship in Slovenia via E-vem, in addition to a digital certificate. Alternatively, a person can register as a sole proprietor at one of the SPOT (VEM) offices or VEM points. To successfully register as a sole proprietor in Slovenia, a person is required to fill in three applications. 

1. 1. An application to the Slovenian Business Register
   2. An application to the Tax Administration of the Republic of Slovenia
   3. An application to the compulsory social insurance system

• A sole proprietor needs to register three months before formally opening for business. Submitting all three applications simultaneously is often advised for an easy and fast registration process. However, applications to the Tax Administration and the Slovenian Institute of Health Insurance can be made up to 8 days following the foundation of a sole proprietorship in Slovenia.
• The name of the business must be distinguishable from that of other businesses. Make sure the name is similar to the AJPES business register before registering.
• To solidify the business entity legally, the sole proprietor must establish a head office and procure a legitimate business address before the company gets operational. 
• Substantially, at the time of registration via SPOT (VEM), the following are the documents needed for successful implementation:

1. 1. The AJPES business registration entry
   2. Application of the sole trader to the Tax Administration of the Republic of Slovenia
   3. Application of the sole trader to the compulsory health insurance/self-employment scheme

• Sole Traders will get a response to their registration application by post the day following the deadline for the establishment date. Following this, they can open a bank account at the bank of their choice after receiving approval from AJPES about registration.

Conclusion 

Slovenia offers exciting new trade opportunities in collaboration with the European Union. Companies must employ an external auditor for businesses like a sole proprietorship in Slovenia. 

This is where you can collaborate with global EOR platforms like Multiplier. 

Multiplier is a market-leading EOR with local business operations in more than 150 nations. With Multiplier on board, you can easily connect with payroll and personnel demands worldwide. Even your most remote companies are connected effortlessly via our unified system of records, making it simple to manage both permanent employees and contract workers no matter where they are located.

Our one platform handles international employment, payroll, compliance, and benefits, easily overcoming all cross-border problems. Enjoy seamless cooperation and support for your global team.

Reach out to us!