Slovakia: A Business-Friendly Environment with Competitive Tax Rates

Slovakia has emerged as a popular destination for foreign investors due to its favorable business climate and competitive tax rates. In recent years, the country has offered a range of benefits that make it an attractive location for businesses.

Competitive Tax Rates

One of the key advantages of doing business in Slovakia is its competitive corporate income tax rate of 21%. This is one of the lowest rates in the European Union, making it an attractive option for foreign investors.

Withholding Taxes

Dividends distributed by Slovak-resident entities to individuals resident in Slovakia or countries with which Slovakia has concluded a treaty are subject to a 7% withholding tax. Interest and royalties paid to non-residents are taxed at 19%, unless reduced under a tax treaty or the EU interest and royalties directive.

Customs Policy

Slovakia does not impose customs duties on goods or services imported from EU countries, while imports from non-EU countries are subject to the EU common customs duty, VAT, and excise duty. The country is also party to several free trade agreements (FTAs) with other countries, including the European Union.

Social Security System

The Slovak social security system includes state pensions and insurance for sickness, permanent disability, unemployment, injury, and employer insolvency. Both employers and employees are required to make social security contributions, which are withheld by the employer on a monthly basis.

Labor Environment

Employment contracts in Slovakia must be in writing and include details such as job description, place of work, date of employment commencement, salary, and other working conditions. Employment contracts can be for a fixed or indefinite term, and employers can also enter into collective bargaining agreements with employees.

Free Trade Agreements

Slovakia is party to several FTAs with other countries, including the European Union, which provides preferential treatment for goods from member states. The country has also concluded bilateral agreements with other countries, such as China, India, and Turkey.

Business-Friendly Environment

Slovakia’s business-friendly environment is supported by a range of incentives, including tax breaks, subsidies, and investment aid. The country has a highly skilled workforce, modern infrastructure, and a strategic location in the heart of Europe.

Overall, Slovakia offers an attractive combination of competitive tax rates, favorable customs policies, and a business-friendly environment, making it an ideal destination for foreign investors looking to establish operations in Central Europe.

Key Benefits

Competitive Tax Rates

• Corporate income tax rate: 21%

Favorable Customs Policy

• No customs duties on goods or services from EU countries
• Party to several free trade agreements (FTAs) with other countries

Business-Friendly Environment

• Highly skilled workforce
• Modern infrastructure
• Strategic location in the heart of Europe