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Create a Slovakian Limited Partnership (k.s.)

Updated on Friday 24th February 2023

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Create a Slovakian Limited Partnership
 
Our company formation advisors can assist you to open a Slovak limited partnership (Slovakian k.s.) as a useful tool for a tax-free dividend income for individuals from several CEE countries (acting as general partners in a Slovak k.s.).
 
While this legal entity became very popular for clients from Poland and Austria, it is suitable also for individuals from Romania, Turkey, Hungary or Switzerland.
 

How to start a limited partnership in Slovakia

The procedure of setting up a limited partnership implies registration with the Companies House, just like in the case of other entities. However, an important difference implies the documents that need to be filed for its creation. Namely, a Slovak limited partnership does not require Articles of Association, but the establishment deed which also decreases registration costs.
 
Here are the steps for the creation of a Slovak limited partnership:
 
  1. drafting the settlement document;
  2. filing the papers with the Companies Register;
  3. registering for taxation;
  4. obtaining a VAT number (not mandatory).
 
From several points of view, this type of entity resembles the private limited liability company in terms of liability of the participants.
 
The limited partnership must have two types of participants: general and limited ones. The second type is the one that has a limited responsibility towards the business’ obligations. However, so are their decisions in relation to the administration of the entity.
 
If you are interested in the creation of a Slovak limited partnership, you can address our company formation specialists. 
 

Why open a limited partnership in Slovakia?

 
All the countries mentioned above have a DTT (double tax treaty) with Slovakia enabling tax exemptions for dividends received by individuals (representing the general partner of a Slovak limited partnership) in their countries of residence because:
 
- the dividend income received by a Slovak limited partnership is entirely exempt from paying taxes in Slovakia;
- the dividends paid from a Slovak k.s. to a non-resident general partner are not taxed in Slovakia by any withholding tax;
- due to the exemption procedure implemented in the DTT between Romania and Slovakia, the dividends are excluded from personal income tax in the country of residence of a non-resident general partner (individual). Our Slovak company formation professionals can offer more details on this matter.
 
If the above-described scheme is used, the dividends sent by an EU subsidiary to the partnership in Slovakia and to other foreign partners in EU countries will not be taxed.
 
The above-mentioned exemptions are particularly convenient for owners of holding structures from Cyprus, Luxembourg or in the Netherlands whereas shares in the holding companies from these jurisdictions can be entrusted the assets of the Slovak k.s. and the dividends paid to the final owner are tax-free.
 

Characteristics of a limited partnership in Slovakia

 
The limited partnership for holding purposes (spólka komandytowa) is formed by general partners who are citizens of a country which has signed a double tax treaty with Slovakia up to the moment. 
 
The general partners are liable for all the business debts and liabilities and take all the important decisions and structure the company strategies for the Slovak market while the limited partners are liable to the extent of their capital contribution to the partnership and have no decisional powers. 
 
The general partner (komplementar) cannot bring any capital in the limited partnership in Slovakia, while the limited partner (komanditista) must bring capital at the moment of the company registration. Usually, this contribution should be of maximum SKK 10,000 (EUR 1,047).
 
The number of limited partners cannot be more than 50, while the general partners do not have an imposed limit in their number.
 
The partnership is founded on an agreement which contains the modality of dividing the income among the limited and general partners. The profits of the limited partners are initially taxed with an income tax rate of 19% and then dispersed to the limited partners, while the profits belonging to the general partners are not taxed at all (called direct profit). Our Slovakia company formation representatives can give you more information on this subject.
 
It is possible for a limited partnership to register for EORI in Slovakia if it engages in trading activities.
 

Special requirements to consider about Slovak limited partnerships

 

Just like other companies, the limited partnership can engage in various activities, however, there are cases where special licenses are required. These can be obtained from the authorities in charge of the economic activity to be carried out.
 
Another important thing to keep in mind is that this legal form is rather small one, which makes it more suitable for certain operations only. Among these, for various medical practices and for professionals who need a simple legal form to complete their activities in association with their partners.
 
In most cases, the Slovak limited partnership is used as a vehicle for investment funds. So, if you are a foreign investor interested in exploring such possibilities in Slovakia, you can rely on our company registration specialists for support in setting up a fund.

 

The limited partnership from a taxation point of view

 
When setting up a limited partnership in Slovakia, taxation is one of the most important aspects taken into account by the owners. From this point of view, here is what you can expect:
 
  • - this type of partnership is subject to the corporate tax which has a lower rate of 15% for a turnover of less than EUR 100,000;
  • - for higher amounts, the rate increases to 21%;
  • - partners must also pay a withholding tax on dividends which is set at 7%.

 

How our company formation advisors in Slovakia can help

 
Opening a limited partnership in Slovakia can prove to be a complex and time-consuming procedure, requiring knowledge of the local specific legislation, as well as that for the successful registration of the limited partnership with the Company Register in Slovakia.
 
This is how our Slovak company formation experts can help: we can offer all the required data connected to opening a limited partnership here, we prepare all the necessary documents and we contact the State Offices. All you have to do is simply sign the appropriate documents at a Notary or your Slovak Embassy.
 
Our services include:
 
Opening a limited partnership in Slovakia;
Advising prior to, during and after the company registration;
Getting ready all the necessary documents for opening a limited partnership. All you have to do is just sign the required documentation;
Applying for registration with the Trade Register which will issue the business license;
Applying for registration with the Slovak Business Register and paying the registration fee;
Registering the business with the Tax Office for the corporate income tax.
 
If you would like to open a limited partnership in Slovakia, or for advice on setting up any other legal entity in this country, we invite you to get in touch with our Slovakia company formation representatives.

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Call us now at +421 915 980 808 to set up an appointment with our consultants, who are handling company formation in Slovakia. Alternatively you can incorporate your company without traveling to Slovakia.

As our client, you will benefit from the joint expertize of local accountants and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Slovakia.

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