A subsidiary is one of the two forms of business that a foreign company may incorporate in Slovenia. It’s considered very advantageous because of the fast registration procedure and due to the limited liability of the shareholders. A company may be considered a subsidiary only if a large part of its capital it’s owned by a foreign company. Foreign investors interested in expanding their businesses in Slovenia can opt to do so by opening a subsidiary or a branch office in the country.
Our team of specialists in company registration in Slovenia can provide step-to-step assistance on the procedures necessary for opening a Slovenian subsidiary and can also inform on the documents that are requested for its registration. Investors can also request tax consultancy on the types of taxes available for this structure.
| Quick Facts | |
|---|---|
| Applicable legislation (home country/foreign country) |
Foreign country |
|
Best Used For |
Trading, manufacturing, IT, healthcare, services, etc. |
|
Minimum share capital (YES/NO) |
Yes, 7,500 EUR (LLC) or 25,000 EUR (PLC) |
| Time frame for the incorporation (approx.) |
Approx. 11 weeks |
| Management (Local/Foreign) | Foreign |
| Legal representative required (YES/NO) |
No |
| Local bank account (YES/NO) |
Yes |
| Independence from the parent company | Full independence |
| Liability of the parent company | Liable to the extent of the capital invested in the subsidiary |
| Corporate tax rate | 19% |
| Possibility of hiring local staff (YES/NO) | Yes |
| Special requirements related to the trading name (YES/NO) | No |
|
Activities permitted |
The subsidiary can complete various activities. |
|
Restrictions (if any) |
No, it is treated as a domestic company. |
| Special licensing requirements (if any) | Yes, in certain sectors, such as telecommunications |
| Local address required (YES/NO) |
Yes, a registered address is mandatory when opening a subsidiary in Slovenia. |
| Authority to be registered with |
Companies Registrar (local office in the city to operate) |
| Employment registration requirement (YES/NO) |
Yes |
| Option to transfer employees from the headquarters (YES/NO) |
Yes, it is possible to transfer employees from the parent company’s home country. |
| VAT registration requirement (YES/NO) |
Not from the beginning of the operations. |
| Applicability of the corporate tax | The corporate tax will be levied on all its income generated in a financial year. |
| Incorporation services availability (YES/NO) |
Yes, we offer subsidiary registration services in Slovenia. |
The subsidiary as a business form in Slovenia
The subsidiary is a limited liability company in which the shareholder is no longer a natural person, but a corporate one. The parent firm may own all of the stock of the business or just a percentage of it. It is a distinct legal entity that is solely associated with the parent business through ownership. Once the subsidiary starts making money, the parent company has a right to receive dividend payments. Additionally, it implies that when a Slovenian subsidiary business is formed, the parent company pays the share capital.
Our local agents can offer more information on how a subsidiary operates.
Suitable legal forms for opening a subsidiary in Slovenia
There are two types of companies that a foreign company may register in order to operate as a subsidiary. The limited liability company is a company based on a minimum share capital of EUR 7,500 and registration must be made by at least one founder.
The advantage of this type of company is that if there is only one shareholder, the registration can be performed online, while the registration of a private limited liability company with more shareholders must be made in person at one of the 200 registration offices.
The shares of this type of company are not transferable and also cannot be registered with the Stock Market. For more details about this type of company in Slovenia or for a personalized offer, feel free to ask for the help of our Slovenian company formation specialists.
The joint stock company in Slovenia is a company based on a share capital of EUR 25,000 divided into shares. The shares of this type of company are freely transferable. The management is assured by a board of management and in some cases, a supervisory board may be appointed. The members of the management or the supervisory board may be elected by the foreign company’s shareholders or stipulated in the articles of association written by them.
Incorporating a Slovenian subsidiary in 2024 – a process described by our specialists in company formation in Slovenia
The subsidiary’s articles of association must contain information regarding the name and address of the company, the name and address of the founders, details regarding the management and the supervisory board, and the duration of the company. The registration process of a subsidiary in Slovenia takes around days it’s considered one of the simplest in Europe.
The process of incorporating a Slovenian subsidiary begins with depositing the minimum share capital in a bank account and receiving a certificate of deposit. The notarized articles of association along with the certificate of deposit must be registered at the electronic one-stop-shop (VEM). Registration may be performed online only when there is only one shareholder or in person when there are several investors. The signature specimen of the founder must be deposited if the registration is performed online.
We also have an infographic related to this topic:
The newly incorporated Slovenian company will receive a registration number which will appear on the AJPES website if the registration tax is paid and all the documents are properly submitted. Our company formation consultants in Slovenia can handle the entire registration procedure for you.
Articles of Association of a Slovenian subsidiary
Just like in the case of other domestic companies, the main document that provides for the creation of a subsidiary in Slovenia is the Articles of Association. While there is nothing different about them in terms of drafting, there are a few aspects to take into account, among which:
- the shareholder in the case of a subsidiary company is the parent business and its details must be included in the bylaws;
- this document must also state the legal address of the Slovenian business, case in the parent company must secure such an address;
- the foreign business must also supply other information about itself, depending on the sector it will operate in;
- the details of the management structure must also be provided in them;
- if there is a supervisory board, its composition must be iterated in the Articles of Association;
- if established for a limited period, the date of the closing must also be supplied.
The Articles of Association must also contain other information, such as the share capital deposited for the operations and specific details.
Considering these are the most important papers that need to be drafted when opening a company in Slovenia, we invite you to address our local consultants if you need assistance in creating them.
Bank account opening requirements for subsidiaries
Many company owners ask whether they need to set up a new bank account for corporate use considering the parent company already has one. The main issue at this point is that a Slovenian subsidiary must have a local bank account, which is why the process must be completed again, in this country.
Foreign companies can choose between national and international banks, which simplifies things a lot. Even so, please expect the procedure associated with the opening of such an account to take a few weeks. For this step, you can rely on our company formation agents in Slovenia who can start the process in your absence, while a representative can come to sign the necessary documents.
Even if setting up a subsidiary as a limited liability company in Slovenia has many advantages, it must adhere to all local laws that are related to rules, taxes, and other matters. Such enterprises require a minimum share capital of 7,500 EUR.
The subsidiary will be governed by Company Law as it is similar to resident firms. For example, your business will be required to pay the 19% corporate income tax of Slovenia. To maintain its accounts, it is also required to adhere to Slovenia’s double-entry bookkeeping system. In this sense, we can also provide you with accounting services.
What are the reporting requirements for a Slovenian subsidiary?
According to the applicable legislation in Slovenia, a subsidiary is considered a separate legal entity from its parent company, although the parent company owns shares in the company. This means that the company will be able to make its management decisions without the prior approval of the parent company. At the same time, the subsidiary is liable to the Slovenian tax system, since it is incorporated under the Commercial Law in Slovenia.
Those opening a company in Slovenia as a subsidiary in 2024 must also be aware of the tax implications of this structure, as well as the accounting requirements that must be fulfilled during a financial year. Companies incorporated in Slovenia that run multiple subsidiaries in this country and outside the Slovenian territory have to comply with the Slovenian Accounting Standards. In this particular case, it is necessary to prepare consolidated annual reports.
Currently, the Slovenian legislation, which follows the European Directives, distinguishes between subsidiaries registered by companies registered in the European Union (EU) and subsidiaries set up by companies registered outside the EU. In the first case, the subsidiary can submit the annual report of the parent company, as these documents are generally prepared in accordance with the EU accounting regulations.
In the case of a Slovenian subsidiary that is set up by a foreign company registered outside the EU, the subsidiary can submit the parent company’s annual reports only as long as they are prepared following the regulations prescribed under the EU Directives 76/660/EEC and 83/349/EEC; our team of consultants in company formation in Slovenia can present further information on other reporting requirements.
Why register a Slovenian limited liability company in 2024?
As we presented above, the subsidiary can take the form of a limited liability company or a joint stock company. Limited liability is generally preferred as it provides attractive conditions for its founders and it benefits from a lower capital. Its registration can differ based on the legal nature of its founders (natural persons or legal entities).
In the case in which the company’s founder is represented by a legal entity, the company must prepare the following documents for the registration of the limited liability company: an extract of the foreign company issued by the Company Register operating in the country where the parent company was incorporated and the personal documents of the founders/representatives, but the investors must also be prepared to the deposit the share capital.
With regards to the taxes applicable to this company type, it is necessary to know that the entity will be charged with a set of corporate taxes, including the corporate tax, which is applicable at a rate of 19%; our specialists in Slovenian company formation can provide an extensive presentation on the tax regulations available for this structure.
If you have any questions related to the taxation of foreign companies in this country, our local consultants can answer them. Also, for any questions on how to create a subsidiary in Slovenia in 2024, do not hesitate to send them to our specialists.
What is the data on foreign companies in Slovenia?
Foreign companies operating in Slovenia are major contributors to the country’s gross domestic product and they also employ a large share of the Slovenian workforce. Numerous foreign companies investing in Slovenia are from other European countries, the highest share being from countries such as Austria, Germany, and Switzerland; the following data is available:
- at the level of 2021, there were 20,017 new companies registered in Slovenia;
- compared to 2020, this represented an increase of 16%;
- 48.5% of them had as main object of activity management consultancy;
- 20.9% of them operated in the scientific and technical sectors;
- also 3 out 10 companies were registered in the tourism and hospitality sectors.
At the level of 2023, there are 113,066 businesses in Slovenia. Services, with 59,160 enterprises, is the industry in Slovenia with the most registered businesses, followed by wholesale trade and construction, with 10,010 and 8,853 businesses, respectively.
2024 is expected to be a better year from an economic point of view and foreign companies seeking to expand can choose to open subsidiaries in Slovenia through which they can operate in various sectors.
A Slovenian subsidiary can also be used to complete other operations than the parent company and it can represent a great opportunity for those interested in exploring new markets in 2023.
Slovenia’s Gross Domestic Product increased by 1.3% in the first half of 2023 compared to the same period the previous year, according to updated information gathered by the European Commission. For 2024, the economy is expected to register a 2% increase at a faster rate compared to 2023. It is also anticipated that employment will increase by 0.9% in 2024, and 0.7% in 2025.
It is also expected that by 2025, the unemployment rate would have decreased even more, from 4.0% in 2022 to 3.6%. Over the 2023–2025 timeframe, wage growth is anticipated to outpace inflation following 2022 purchasing power losses.
According to data, inflation will reach 7.5% in 2024 and 3.9% in 2025. It’s also predicted that, by 2025, inflation will drop to 2.4%, if energy and food are excluded.
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Other aspects related to the establishment of a subsidiary in Slovenia
The registration of a Slovenian subsidiary with the Health Insurance Institute must be performed no later than five days after employing the first worker. A subsidiary opened in Slovenia may benefit from special tax treatment if certain conditions are met. For example, the taxation on dividends, interests, or royalties paid to the foreign company is abolished or minimized based on the series of double tax treaties concluded by Slovenia.
Usually, the withholding tax on dividends is 15% for a non-treaty country. Our company registration specialists in Slovenia are at your disposal for any company formation matter. Do not hesitate to contact us. Our specialists can also provide information on the procedure of opening a Slovenian branch office, another option available for foreign companies expanding on the local market.