KNOWLEDGE BASE

EUROPEAN HOLDING COMPANIES

The Slovak Holding Company

Overview Related Resources Slovakia Key Elements

HOW TO PROCEED

OVERVIEW

The Slovak Holding Company is an ordinary company which falls within the scope of general tax law.

There are no limitations on the activities of the company.

Legal Form

A Slovak company can be constituted either as a “spolocnost s rucenim obmedzen?m” (private limited company- SRO) or an “akciová spolocnost” (public limited company- AS).

Formation

The minimum share capital for incorporation of a Slovak company is SKK200.000 for a private limited company and SKK1.000.000 for a public limited company.

For companies incorporated as private limited companies, a minimum participant deposit of SKK30.000 is required while for companies incorporated as public limited companies at least 30% of the share capital must be paid up in cash prior to the founding shareholders’ meeting.

Companies incorporated in Slovakia may have bearer shares.

Taxation

As from 1st January 2004 Slovakia introduced a flat tax for individuals and corporations at a flat rate of 19%.

A 15% corporate tax is levied on companies engaging agricultural business.

Income

Corporate income tax is charged on its worldwide profits reported in financial statements of companies resident in Slovak Republic subject to adjustments.

Dividends Exemption

Dividends paid to residents or non-residents are not subject to tax and therefore not included in taxable income, unless paid out of profits derived prior to 1 January 2004.

Capital Gains Exemption

Capital gains are not subject to tax in Slovakia provided that the seller of the shares is not an entity subject to unlimited tax liability in Slovakia.

Interest and Royalties

See income above.

Some Advantages of the Slovak Holding Company

Besides the common advantages of a holding company, the Slovak Holding Company may also enjoy from the following:

Exemption from Withholding Tax on Payment of Dividends

As from 1 January 2004, dividends paid by Slovak companies to shareholders (corporate and individuals) are not subject to withholding tax.

Exemption from Withholding Tax on Payment of Interest and Royalties

Dividends and royalties paid by Slovak Holding companies to resident shareholders are not subject to withholding tax.

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RELATED RESOURCES

Double Tax Treaties

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SLOVAKIA KEY ELEMENTS

Formation
Legal Form: Private limited company (AS);
Public limited company (SRO)
Minimum Subscribed Capital: SKK1.000.000 (AS)
SKK200.000 (SRO)
Minimum Paid-Up Capital: SKK300.000 (AS)
SKK30.000 (SRO)
Number of Shareholders: 2 (AS)
1 to 50 (SRO)
Type of Shares: Registered or bearer
Substance Requirements: Nil
Taxation
Capital Duty: 0%
Net Worth Tax: 0%
Corporate Income Tax: 19%;
15% for agricultural business
Double Tax Treaties: 48
Dividends Exemption: 100%
Holding Requirements:
Capital Gains Exemption: Yes
Holding Requirements:
Tax Credit: Yes
Relief of Losses: Carry forward 5 years 20
CFC Rules: No
Debt-to-Equity Ratio: 4:1
Withholding Taxes
Dividends: EU Parent Co- 0%2
Treaty Countries- 0%-25%
Others- 15%
Interest: EU Parent Co- 0%
Treaty Countries- 0%-15%
Others- 15%-25%21
Royalties: EU Parent Co- 0%
Treaty Countries- 0%-25%
Others- 25%
Liquidation: Nil

2 If conditions are met.

20 Deducted in equal proportion during the 5 years period if the amount of the losses deducted is invested in acquisition of tangible fixed assets.

21 The 25% rate is applied on payments of interest others than participation certificates, debentures, certificates of deposit, treasury bonds and equivalent securities.

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FREE INITIAL CONSULTATION

A bespoke 'offshore' solution can be complex and requires careful planning and execution. We therefore encourage our clients to contact us directly, without obligation.

While all of our consultants in our offices provide a Free Initial Consultation, the office and consultant listed below has particular expertise in this area and will gladly assist with advice on how to approach your unique challenge.

Alternatively, to select one of our multilingual offices, click here for a list of our office contact details.

OCRA (Isle of Man) Limited
Grosvenor Court
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Ramsey, Isle of Man IM8 1JA
British Isles
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