Slovak Holding Company

Various aspects of a Slovak holding company

• - a partnership;
• - a cooperative;
• - a limited liability company;
• - a limited partnership.

The main features of holding companies in Slovakia

Those who want to open holding companies in Slovakia, no matter if they are foreign or local investors, must comply with the provisions of the Company Law. However, it should be noted that a holding company has other features than trading companies.

 

Here are the main characteristics of holding companies in Slovakia:

• - the holding company has the role of a parent company and it can have one or multiple subsidiaries;
• - the holding must have a sufficient number of shares and capital which guarantees it voting rights in the subsidiaries;
• - the holding can control a subsidiary’s policies and management decisions, however, it cannot complete day-to-day activities in it;
• - holding companies can own various types of assets, among which real estate, shares, and even intellectual property rights.

Even if all business forms mentioned above can be used to create a Slovak holding company, foreign investors will usually prefer the limited liability company which ensures a limited responsibility of the shareholders.

 

If you want to open a company in Slovakia and need information about the requirements you need to respect, our local consultants are at your disposal for guidance.

 

Documents required for holding company registration in Slovakia

Just like in the case of other business entities, the incorporation of a holding company in Slovakia implies preparing a set of documents that need to be filed with the Trade Register. Among these, we remind the following:

• - information about the shareholder(s);
• - proof of depositing the share capital;
• - proof of the legal address in Slovakia;
• - the holding company’s statutory documents.

The documents that need to be filed with the Companies Register in Slovakia depend on the structure of the holding company. It is important to note that a Slovak holding needs to register with the tax authorities in this country.

 

We invite you to read about the opening of a holding company in Slovakia in the scheme below:

 

 

Special provisions on holding companies in Slovakia

Slovakia is an EU member state which is why holding companies here can obtain all the benefits resulting from this membership. However, Slovakia has other specific regulations which make this business form very appealing especially for foreign investors.

 

One of the most notable aspects of registering a holding company in Slovakia is that the shareholder can be a citizen or company from a non-EU country.  Companies located in offshore jurisdictions can also act as shareholders in holding companies in Slovakia.

 

Holding companies are also subject to a special taxation regime under which dividend payments are not taxed. Under the Income Tax Law in Slovakia, dividend payments are exempt from taxation if they are paid to a shareholder, a participant in the executive or supervisory body of a Slovak company. This is also the case of holding companies owning shares in their subsidiaries.

 

The EU Parent-Subsidiary Directive in Slovakia

Slovakia adopted the EU Parent-Subsidiary Directive which applies to holding companies here registered under the form of private limited liability companies, corporations or joint stock companies and limited partnerships. Also, the holding company must own at least 10% of the voting capital in the subsidiary located in another EU country.

 

In order to be applicable, it is important for the subsidiary company to be a tax resident of the country where it has its legal seat, while the Slovak holding company must have its legal address and be a tax resident of Slovakia. Another requirement is for none of the companies to be tax residents of non-EU states or by means of double taxation agreements with non-EU countries.

 

Holding companies in Slovakia can also take advantage of Slovakia’s bilateral investment agreements with various countries.

 

Our company registration advisors in Slovakia can offer more information the various promotion agreements applicable to holding companies.

Taxation of holding companies in Slovakia

Holding companies can be used as tax minimization vehicles through the Parent-Subsidiary Directive, but also thanks to the fact that their shareholders can be exempt from the withholding tax on dividends.

 

If the requirements to fall under the conditions of the two tax minimization solutions do not apply, the holding company will be subject to:

• - the standard corporate tax which is levied at a rate of 21%;
• - a 19% withholding tax on interest payments (unless a double tax treaty applies);
• - a 19% withholding tax on royalties payments (provided that a reduced rate applies under a double tax agreement);
• - a 19% tax on fees for technical advisory services provided by non-residents.

Our Slovak company formation agents can offer more information on the taxation of a holding company.
 

Advantages of opening a Slovak holding company

1. Tax exemption for dividend income (if the profits are being paid to one of the shareholders, a supervising member, or a member of the executive body).
2. There is no restriction to the nationality of the Slovak companies’ owners.
3. The holding company is protected from the losses of its subsidiaries and it cannot be pursued for remuneration.
4. Lower tax rates (if some parts of the business are strategically based in sectors with lower taxes).
5. Another advantage in a Slovak holding company formation is that the managers of the subsidiaries are responsible for their own operations and therefore the holding company is not liable for them.