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What is the difference between an individual entrepreneur and a company in Slovakia?

10.06.2018

ПРЕДПРИНИМАТЕЛЬСТВО

  All people who have decided to emigrate on the basis of a business to Slovakia are wondering “Which legal form to choose for doing business in Slovakia?  Which is better: an entrepreneur or a company? ”In the following table we show the main advantages and disadvantages of individual entrepreneurs and companies in Slovakia:

Items Entrepreneur (živnostník, podnikateľ) Company (spoločnosť)
Conditions for obtaining a residence permit The presence on the company account of 5,000 euros, on a personal account of 2,600 euros. The presence on the company account of 22,000 euros, on a personal account of 2,600 euros.
Conditions for prolongation a residence permit Taxes paid in the amount of not less than 300 euros for the reporting year; availability of a personal account of 2600 euros Taxes paid in the amount of not less than 3500 euros for the reporting year; availability of a personal account of 2600 euros
Taxes and Deductions 19% tax on the income of individuals; if the previous year's turnover exceeds more than 6,000 euros, social and pension contributions must be paid in the amount starting from 150 euros/month; compulsory deduction for insurance 69 euro / month. 21% income tax; 7% - withdrawal dividends. There are no social and pension contributions, if there are no employees.
Tax Bonuses 350 euro per child every year NO
Compulsory insurance The entrepreneur has the right to state insurance, under the terms of which he is obliged to pay 69 euros per month for insurance. All children of an entrepreneur under 18 are also entitled to state. insurance. In this case, you do not need to pay extra, the payment always remains 69 euros per month. The amount of payment depends only on last year’s turnover, and not on the physical health of the entrepreneur or his children. The director of the company is not entitled to state insurance. The director is required to have commercial insurance. Cost com. insurance depends on the physical health of the insured, the package of covered services, the number of calls for honey. services in the past. For each family member, the director of the company needs to issue a separate com. insurance that must be paid separately. We recommend commercial insurance from AXA (you can apply online
Ease of access to funds You can withdraw or deposit money without restrictions. You can only move assets through the withdrawal of dividends, or through administrative expenses that need to be documented.
Number of directors Only entrepreneur Up to 50 pers. in 1 company
Number of employees No limits No limits
Liability responds with all his possessions. The company has limited liability only for its assets and share capital.
Restrictions on operating in the EU There are no restrictions in the presence of the certificate of the payer of the VAT. There are no restrictions in the presence of the certificate of the payer of the VAT.
VAT payer Voluntary at any time, or mandatory in excess of the turnover of more than 50,000 euros per year Voluntary at any time, or mandatory in excess of the turnover of more than 50,000 euros per year
Additional benefits Fewer requirements for extending a residence permit. The compulsory insurance of 69 euros / month covers both the entrepreneur and all his children. High status and solidity of a European company. At high turnover total taxes are less than entrepreneur .
Whom is suitable? For small businesses, for example: hairdresser, cleaning services, retail trade in ice cream, coffee, etc. And also for employees who work with the employer under the agreement. For any business with high turnover.

  In order to answer in the affirmative the question what will be better for you, an entrepreneur or a company, you need to answer a few questions for yourself:

● What is the real purpose of my plan to move to Slovakia?  To run your own business, or employment to the employer?

● Do I have a large enough start-up capital?  For a company, you need to show at least 22,000 euros on your account, for individual entrepreneurs – 5,000 euros.

● Am I ready (and) to ensure that the conditions for extending a residence permit are met?  For the company – the minimum amount of taxes paid is 3,500 euros, for individual entrepreneurs – at least 300 euros.

   In fact, if a person initially knows what kind of business he will be engaged in, has start-up capital for renting an office, salary for employees, purchasing equipment, then it is more logical to open a company right away.  In the future, at high speeds, taxation is less than on an entrepreneurship  with the same business with the same indicators.  In addition, when applying for a renewal of a residence permit, a really working company has a much higher status in the eyes of the police for foreigners than the individual entrepreneur.  The company is suitable for: opening a cafe or restaurant, beauty salon, shop, wholesale, road transport services, travel services, production and other activities.

  If a person plans to engage in a small business or find a job with an employer under a service agreement, then it is better to be registered as an entrepreneur.  It is suitable for small businesses such as retail, beauty services, taxis, Internet services, and other.  If a person works for an employer, then in the status of an entrepreneur he will have a number of advantages: getting the full amount of profit to your account without deducting taxes that you have to pay yourself (taxes can be optimized), you can change jobs at any time without losing the status of a residence permit  , because the entrepreneur is not tied to a specific employer, as in the case of a labor permit.  In both cases, the individual entrepreneur is entitled to a tax bonus of 250 euros per child, and the entrepreneur’s insurance automatically covers the insurance of his children.

Is it possible to simultaneously be an entrepreneur and have a company?

   Yes!  There is a situation where a person can immediately get an entrepreneurship, obtain a residence permit based on this, move to Slovakia, start developing their activities, and later with an increase in turnover and business expansion, you can easily register or buy a ready-made company.  By the way – this can be done with the help of our company.  Registration of a new company will take 2-3 weeks, buying a ready-made company without a history will take about a week.  The procedure will be quick and inexpensive, since the person will already have a residence permit, and he can immediately become the founder and director of his company.

   In this case, the basis for the extension of the residence permit will remain entrepreneurship, and the requirements will be checked only for individual entrepreneurs (we are talking about a minimum tax of 300 euros).  To extend the residence permit to the company requirements are not set.  The police checks only the company’s debt to the state.  In this case, the company can be both unprofitable and profitable.  It makes no sense to climb out of the skin to make a turnover for a company of at least 15,000 euros per year, and pay a tax of at least 3,500 euros to extend a residence permit (as if a person has only a firm, and initially received his first residence permit based on it).

  We tried to open this topic “without water” and unnecessary official information, based on frequently asked questions by our clients.  In addition, we offer you to watch our video, where Vladimir talks about the difference between the company and the entrepreneurship, their advantages and disadvantages:

If you have more questions on this topic, you can write or call us for more free advice.


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