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Doing Business in Slovakia

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Doing Business in Slovakia Doing business in Slovakia 2019 2 Content Page Content 3 Foreword 4 Country profile 6 Regulatory environment 12 Finance 15 Imports 20 Business entities 23 Labour 29 Financial reporting and audit 34 Contact details 51 “Our team of highly ambitious and experienced people are prepared to serve the demands of our clients. Being part of an international organization allows us to understand the needs of our international clients. We always deliver a professional service with a personal touch and a smile”. Wilfried Serles, Managing Partner Grant Thornton Slovakia 3 Foreword Grant Thornton Audit, s.r.o. in Slovakia Grant Thornton Consulting, k. s. in Slovakia Valid as of January 2019 Member of Grant Thornton International Our services: Grant Thornton Consulting, k. s. and Grant Thornton Audit, s.r.o. offer you: AUDIT Obligatory and voluntary audits of annual financial statements and group financial statements Audits of non-profit organisations and foundations Due diligence Audits under capital market law as reviews of prospects and reviews of management reports High Level Reviews Agreed upon procedures Special reviews (in case of change, merger, reviews under securities law, etc.) Implementation and audit of financial analyses Analysis of risk of misappropriation and fraud TAX National and international tax planning, tax optimization Preparation of tax returns, review of adjustment notices Support for the preparation of transfer pricing documentation Representation in dealings with financial authorities, including tax audits and local inquiries Help for solution of particular tax issues Consultancy related to business reorganisations and acquisitions Consultancy for tax proceedings before courts Elaboration of appeals Tax due diligence Tax trainings Newsletters and legal updates ACCOUNTING Complex processing of accounting and automatic processing of data and accounting documents Cloud accounting including approval processing of incoming invoices Regular reporting and analyses of financial situation of the company 4 Preparation of annual financial statements, assistance by audit and the preparation of annual report Preparation of all tax returns on behalf of the company Representation of clients in front of the tax authority and other institutions PAYROLL Complex processing of payroll, including regular reporting Annual tax reconciliation and health insurance of employees Support and representation by audit and communication with social and health insurance company and tax authorities Personnel consultancy ADVISORY (Grant Thornton Advisory, s.r.o.) Forensic and investigation services Internal Audit Business consulting Transactional services Business risk services Valuation Corporate finance Grant Thornton is one of the world’s leading organisations of independent assurance, tax and advisory firms. These firms help dynamic organisations unlock their potential for growth by providing meaningful, forward looking advice. Proactive teams, led by approachable partners in these firms, use insights, experience and instinct to understand complex issues for privately owned, publicly listed and public sector clients and help them to find solutions. More than 50,000 Grant Thornton people, across over 135 countries, are focused on making a difference to clients, colleagues and the communities in which we live and work. If you require any further information, please do not hesitate to contact your nearest Grant Thornton member firm. This guide has been prepared for the assistance of those interested in doing business in Slovakia. It does not cover the subject exhaustively but is intended to answer some of the important, broad questions that may arise. When specific problems occur in practice, it will often be necessary to refer to the laws and regulations of Slovakia and to obtain appropriate accounting and legal advice. This guide contains only brief notes and includes legislation in force as of 1 January 2019. “Grant Thornton” refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton International Ltd (GTIL) and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. 5 Country profile Summary In 2004 the Slovak Republic became a member of the European Union and NATO. These events represent an important progress in political, economical and military reforms in Slovakia. Since 2009 the official currency is Euro, whereby the exchange rate is 30,126 SKK/1 EUR. Geography and population The Slovak Republic is situated in the heart of Europe. The Slovak Republic shares borders with the Czech Republic, Hungary, Poland, Austria and Ukraine. The capital city is Bratislava. Due to its location Bratislava became a significant connection between Western and Eastern Europe. Capital city: Bratislava Area: 49 035 km2 Population: 5.4 million Main cities: Bratislava, Košice, Nitra, Žilina Languages: Slovak Political and legal system Government Form of Government Republic President Andrej Kiska Prime Minister Peter Pellegrini Electoral system Universal direct suffrage - Proportional representation (5 % thresh.) National government Multi-party government Regional governments 8 regions Language The official language is Slovak. Business hours/time zone Mo-Fri 8.00 – 18.00 CET 6 Public holidays The public holidays in 2019 1 January 2019 New Year 6 January 2009 Epiphany 19 April 2019 Great Friday 22 April 2019 Easter Monday 1 May 2019 Labor day 8 May 2019 Day of victory against the fascism 5 July 2019 Saint Cyril and Method day 29 August 2019 Slovak national uprising day 1 September 2019 Constitution of Slovak republic day 15 September 2019 Saint Maria day 1 November 2019 All Saints day 17 November 2019 Freedom´s fight day 24 December 2019 Christmas 25 December 2019 Christmas 26 December 2019 Christmas Economy According to the latest statistics total export has increased by 6,7% in year 2017 in comparison with the year of 2016 and total import has also increased by 8%. The largest proportion of export and import is realized with the automobile and machinery industry. The volume of foreign investments continued to rise after drop which was caused by world economy crises. After the Slovak Republic joined the EU and NATO standard foreign investors in Slovakia come from EU and OECD countries. Annual Balance of GDP Average CPI foreign Unemployment Year growth wage Inflation trade rate (%) (%) (€/month) rate (%) (mld. €) 2013 1,5 0,4 4,2 14,2 824 2014 2,8 -0,1 4,7 13,2 858 2015 3,9 -0,5 3,3 11,5 883 2016 3,3 0,2 3,6 9,7 912 2017 3,4 1,9 3,2 8,1 954 Source: https://www.focus-economics.com/countries/slovakia 7 Year 2013 2014 2015 2016 2016 GDP 1,5 2,8 3,9 3,3 3,4 growth (%) GDP growth (%) 4,5% 3,9% 4,0% 3,4% 3,5% 3,3% 3,0% 2,8% 2,5% 2,0% 1,5% 1,5% 1,0% 0,5% 0,0% 2013 2014 2015 2016 2017 Year 2013 2014 2015 2016 2017 Annual CPI Inflation 0,4 -0,1 -0,5 0,2 1,9 rate (%) Annual CPI Inflation rate (%) 2,5% 2,0% 1,9% 1,5% 1,0% 0,4% 0,5% 0,2% -0,1% -0,5% 0,0% 2013 2014 2015 2016 2017 -0,5% -1,0% 8 Year 2013 2014 2015 2016 2017 Balance of foreign 4,2 4,7 3,3 3,6 3,2 trade (mld. €) Balance of foreign trade (mld. €) 5 4,7 4,5 4,2 4 3,6 3,5 3,3 3,2 3 2,5 2 1,5 1 0,5 0 2013 2014 2015 2016 2017 Year 2013 2014 2015 2016 2017 Unemployment 14,2 13,2 11,5 9,7 8,1 rate (%) Unemployment rate (%) 16,0% 14,2% 14,0% 13,2% 12,0% 11,5% 9,7% 10,0% 8,1% 8,0% 6,0% 4,0% 2,0% 0,0% 2013 2014 2015 2016 2017 9 Year 2013 2014 2015 2016 2017 Average wage 824 858 883 912 954 (€/month) Average wage (€/month) 1000 954 950 912 900 883 858 850 824 800 750 2013 2014 2015 2016 2017 Major imports Machines, equipment and electronic equipment Automobiles Raw materials Products of chemical industry Major exports Automobiles Parts and accessories of automobiles, tires Electronic equipment Main trading partners (for the period January – December 2017): Exports Imports 20,6 % Germany 16,8 % Germany 11,5 % Czech republic 10,5 % Czech Republic 7,6 % Poland 7,4 % China 6,3 % France 5,7 % South Korea 6,0 % Austria 5,4 % Poland 6,0 % Italy 4,9 % Hungary 6,0 % UK 4,7 % Russia 6,0 % Hungary 3,3 % Italy 3,0 % Spain 3,2 % France 2,8 % USA 3,0 % Austria 24,2 % Others 35,1 % Others 10 Economic growth Economic growth continues in Slovakia in 2017. Household consumption has increased, benefiting from a record-low and still dropping unemployment rate, record- high labour force participation, dynamic growth increase, strong consumer trust and a lower inclination to savings. Investments have a positive impact on GDP and despite the volatile foreign trade dynamics, the contribution of net exports could have helped the economic growth. Employment levels Employment grew throughout the year, but the unemployment rate remains high. The 2017 unemployment rate of 8,1 % represents decrease by approx. 1,6 % in comparison with the previous year 2016. On the other hand, Slovakia has at its disposal an inexpensive and highly qualified manpower. Bratislava declares the lowest unemployment and as a capital city offers a lot of work opportunities with the best remuneration. The highest unemployment is shown in Eastern of Slovakia.
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