Ease of Doing Business Rank: 45
The Slovak Republic, or Slovakia, is a landlocked country in Central Europe. Poland and the Czech Republic lie to the north, Ukraine lies to the east, Hungary lies to the south and Austria lies to the west.
The official and national language of the Slovak Republic is Slovak. Approximately 85% of the population speaks a Slovak dialect.
Minority languages include Hungarian, Romani, Czech, Ukrainian, German and Polish. The most widely-spoken foreign language is Czech.
The 2019 population estimate is 4.57 million.
According to the Statistical Office of the Slovak Republic, Bratislava is the largest city (432,864), followed by Košice (238,757). All other cities have populations of less than 100,000.
The top industries in the Slovak Republic are automotive, electronics, mechanical and chemical engineering, mining, tourism and information technology.
The Times Higher Education World Rankings does not include any Slovak Republic universities in the top 1,000 in the world.
The Legatum Prosperity Index ranks the Slovak Republic’s education system 26th out of 149.
The most common type of business entities in the Slovak Republic are General Partnership, Limited Partnership, Limited Liability Company and Joint Stock Company.
The overwhelming majority of businesses are in the form of a Limited Liability Company.
The Slovak government offers various investment incentives to qualifying foreign businesses. These may include corporate tax credits, discounts on the cost of publicly owned real estate and financial support for job creation or the acquisition of long-term assets.
Investment incentives primarily revolve around industry, technology or shared services centers and tourism. Upon approval, companies may enjoy up to ten years of tax relief, not including the year they’re approved.
Research and development companies may enjoy a super deduction which includes 100% of R&D costs incurred, including any amount above the average. These deductions apply to up to three preceding tax periods. Unused credits can typically be applied against future earnings.
The Slovak Republic also offers a tax exemption for intangible assets. It grants a 50% exemption on income earned from patents, software or a utility model. Additionally, companies may enjoy a similar exemption of 50% for goods that were manufactured under one of these patents or utility models.
The country also has a foreign tax credit for businesses whose host country has a Double Taxation Treaty with the nation.
Bratislava is the capital and financial center of the country.
The country includes 7 UNESCO World Heritage sites, including the fortified medieval town of Bardejov. It offers well-preserved town walls and a town hall, burgher’s houses, churches and a Jewish quarter.
Banska Stiavnica is another UNESCO site, because it is the oldest mining town in the Slovak Republic. It was established in the 13th century, but includes Bronze Age evidence of mining in the area. The urban center was built it the 16th century and features Late Gothic and Renaissance architecture as well as a Baroque-style gate.
St. Elisabeth Minister cathedral in Kosice is the largest church in the Slovak Republic. It was built in the Gothic style between 1380 AD and 1477 AD and is one of the easternmost Gothic cathedrals in Europe. Its interior is adorned with a number of original Gothic frescoes once hidden under a layer of plaster during the Reformation.
Bratislava has a small, well-preserved medieval city center. Bratislava Castle and other important architectural buildings such as the Summer Archbishop’s Palace and Grassalkovich Palace are found in the area. Above, a massive monument looms over the city commemorating lost Soviet soldiers during World War II.
The Slovak Republic also includes many areas of outstanding natural beauty. The Dunajec River in Pieniny National Park features traditional wooden rafting. Hike or take a cable car to the top of Lomnicky Peak, the second highest in the High Tatras. Jasná Nízke Tatry offers skiing during the winter and hiking, and mountain biking in the warmer months. Piestany is the largest and best-known spa town in the Slovak Republic due to its thermal water.
The Domica Cave on the underground Styx River is one of 712 found in the area. The history of tropical and glacial effects of over tens of millions of years can be seen within its walls and it is home to many native bats.
Slavs settled in the area in the 6th century AD. They were conquered by the Avars, but regained control of the region by the end of the 8th century.
By the 9th century, the present-day Slovak Republic was part of Great Moravia, which included parts of Germany, Hungary and Poland. The Moravian Empire lasted from 830 AD until 906 AD and converted the inhabitants to Christianity.
During the early 10th century, the Magyars (Hungarians) came to power and ruled Hungary and Slovak lands. The area flourished during the Middle Ages due to mining and exports. Many Germanic peoples settled in the area at this time too.
Ottoman forces defeated the Magyars. However, most of present-day Slovak Republic resisted the Ottomans and became a province of the Austrian Habsburg monarchy and part of the Austro-Hungarian Empire.
During the 18th century, a sense of national identity emerged among the Slovak people. In 1848, Slovaks tried to separate from the Kingdom of Hungary during the Hungarian Revolution. They were defeated and Hungarian power waned. Slovaks used the period to promote their national goals.
However, in 1867 Habsburg territories were divided under a dual monarchy, with Slovak lands under Hungarian rule, extinguishing any possibilities of separation. By the end of the century, Slovaks joined forces with Czechs for support in succession from the Kingdom of Hungary.
During World War I, the desire for an independent Czech-Slovak state drew dramatically. When Austria collapsed in 1918, Czechoslovakia became a reality.
German people living near the border during World War II wanted to join Hitler and he coveted their lands. In 1938, Allied forces ceded this area to the Germans. In 1939, Germany occupied the Czech Republic and the Slovak Republic declared independence, but remained under Nazi German control.
In 1944, Slovaks rebelled during the Slovak National Uprising, but failed. Allied powers restored Czechoslovakia in 1945.
The Czechs and Slovaks held elections in 1946. The Democratic Party won in Slovakia, but the Czechoslovak Communist Party won in the Czech region and the total vote in the election. By 1948, the country was effectively a satellite state of the Soviet Union under communist rule.
During the sixties, a Slovak headed the government and introduced reforms. However, the Soviets and their Warsaw Pact allies did not welcome the changes, invaded the country in 1968, and imposed a dictatorship.
After the disintegration of the Soviet Union in 1989, a series of public protests led to the downfall of Communist Party rule in Czechoslovakia. The country formed a transitional government and held free elections the following year. In 1993, the Czech Republic and the Slovak Republic peacefully agreed to become separate countries.
Today, the Slovak Republic operates under a parliamentary representative democratic republic and has a mixed market economy. They are a member of the European Union.
According to the 2011 census, 80.7% of the population identifies as Slovak, followed by Hungarian (8.5%), Roma (2.0%), Czech (0.6%) and Rusyn (0.6%).
The same census reports 65.8% of Slovaks identify as Catholic, followed by Protestant (8.9%), Orthodox (0.9%), Jehovah’s Witnesses (0.3%) and others.
According to Forbes’ 2019 Best Countries for Business, the Slovak Republic is the 38th best country in the world for conducting business.
The 2019 Index of Economic Freedom rates the Slovak Republic 65th globally and states, “The Slovak Republic is still affected by widespread corruption and a judicial system that remains weak, inefficient, and vulnerable to political interference.”
World Bank’s “Doing Business” rankings rate the Slovak Republic 42nd for ease of doing business in the world.
Blueback Global provides a one-stop integrated solution to managing all aspects of your global operations. We can take the burden off you or your company’s internal resources by managing Entity Setup, Local Payroll, Accounting, Tax Reporting, HR Admin and Regulatory Compliance matters associated with operating in a foreign country. Our services are designed to be flexible and customized, so whether you are starting from entity registration, or have already registered but need support in setting payroll or hire employees, we can help at every point of the process.
The common scenarios that may give rise to the need for Blueback Global’s services include the following:
With our integrated approach, you can expect the following experience:
We have an initial complimentary meeting to discuss the scope, objectives and plans for your expansion plan into Slovakia. After this meeting, you can expect a follow-up proposal from Blueback Global within 1 to 3 business days, that outlines that the approach, scope of work and expected deliverables and outcome. Thereafter, our implementation team will then work closely with your team to register the local entity, set up payroll, accounting process, employee social security and benefits. We will then develop a mutually agreed timeline and approach for ongoing payroll, accounting, tax reporting and HR support. Blueback Global will set up a compliance calendar so that you know exactly what and when compliance items such as tax reporting and payroll returns are due. We will of course facilitate all of these, so you do not have to keep track of the compliance dates.
Our goal is to make the process as smooth, simple and successful as possible, and remove the anxiety of operating in a foreign location, to deliver a great customer experience.