Employing in Slovakia

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Expanding into Slovakia

Expanding into Slovakia which is characterised by an excellent infrastructure, a well-educated workforce, and a strategic location landlocked in Central Europe- can bring excitement to the possibilities and significant stress to ensure the entity with the country’s structure and structure laws.

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Ensuring compliance without sufficient knowledge of the country’s laws also adds stress to getting your new entity off the ground and ready to test new markets. Going at it without the proper support can increase the costs, time and risks involved

Global expansion is a step to make for any business, regardless of what you wish to achieve. The opportunities that can come with an expansion can be both incredibly exciting as well as intimidating and confusing, especially when you consider all the registration procedures that need to be done and the documentation required.

Each new markets bring new challenges, and these can be worked through more efficiently and cost-effectively with the support of a Professional Employer Organisation (PEO) such as Bradford Jacobs, especially through our Employer of Record (EOR) framework.

This can be best utilised when businesses are just beginning their expansion process and require more information before committing to incorporating an entity and fully establishing themselves in that market.

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Country EOR Guide - Bradford Jacobs

Download our Guide to Slovakia

Learn all about expanding into Slovakia and see what we can do to make your expansion easier.

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Download our Guide to Slovakia

Learn all about expanding into Slovakia and see what we can do to make your expansion easier.

Country EOR Guide - Bradford Jacobs
DOWNLOAD GUIDE

Hiring Staff
in Slovakia

Slovakia is a developed country with an advanced high-income economy, ranking very high on the Human Development Index. It also performs favourably in measurements of civil liberties, press freedom, internet freedom, democratic governance, and peacefulness. The country maintains a combination of a market economy with a comprehensive social security system, providing citizens with universal health care, free education, and one of the longest-paid parental leaves in the OECD.

Slovakia is a member of the European Union, the Eurozone, the Schengen Area, the United Nations, NATO, CERN, the OECD, the WTO, the Council of Europe, the Visegrád Group, and the OSCE. Slovakia is also home to eight UNESCO World Heritage Sites.

In 2007, Slovakia obtained the highest GDP growth among the members of the OECD and the EU, with a record level of 14.3% in the fourth quarter. In 2014, GDP growth was 2.4%; in 2015 and 2016, Slovakia’s economy grew by 3.6% and 3.3%, respectively. The GDP per capita equalled 78% of the average of the European Union in 2018. It ranges from 188% of the EU average in Bratislava to 54% in Eastern Slovakia.

The OECD reported in 2017 that the Slovak Republic continues exhibiting robust economic performance, with solid growth backed by a sound financial sector, low public debt and high international competitiveness drawing on significant inward investment. Although regional income inequality is high, 90% of citizens own their homes. The ratio of government debt to GDP in Slovakia reached 49.4% by the end of 2018, far below the OECD average.

In 2021, Slovakia was ranked by the International Monetary Fund as the 45th richest country in the world (out of 226 countries and territories), with a purchasing power parity per capita GDP of EUR 32,710 (USD 34,815). As of 2021, with a population of only 5 million, Slovakia is the 61st largest economy in the world (out of 216 countries and territories). In 2021, Slovakia met a growth of 4.4%, hindered by supply shortages that affected the automotive sector (which accounts for almost 14% of GDP alone).

Slovakia ranks 45th out of 190 economies in terms of ease of doing business, according to the 2020 World Bank Doing Business Report and 57th out of the 63 countries and territories in terms of a competitive economy, according to the 2020 World Competitiveness Yearbook Report.

Country:
Slovakia
Local Currency:
Euro (EUR)
Time Zone:
CET (UTC+1/+2 when DST)
Country Dial Code:
+421
Tax Year:
Calendar Year (1st January – 31st December)
VAT:
20%
National Minimum Wage:
EUR 646/month (USD 691/month)
Taxpayer Identification Number (TIN):

A unique 10-digit tax identifier code that natural and legal entities or individual entrepreneurs must obtain.

Under legislation in force Financial Administration assigns TIN to a taxpayer within a registration procedure.

An SK (code for Slovakia) prefix was added to the TIN for VAT purposes: SK-TIN.

Main trading partners:

Main Imports partners: Germany, Czech Republic, Poland, Hungary, South Korea, Russia, France and China.

Main Exports Partners: Germany, Czech Republic, Poland, France, Italy, UK, Hungary and Austria.

Hiring Staff
in Slovakia

Slovakia is a developed country with an advanced high-income economy, ranking very high on the Human Development Index. It also performs favourably in measurements of civil liberties, press freedom, internet freedom, democratic governance, and peacefulness. The country maintains a combination of a market economy with a comprehensive social security system, providing citizens with universal health care, free education, and one of the longest-paid parental leaves in the OECD.

Slovakia is a member of the European Union, the Eurozone, the Schengen Area, the United Nations, NATO, CERN, the OECD, the WTO, the Council of Europe, the Visegrád Group, and the OSCE. Slovakia is also home to eight UNESCO World Heritage Sites.

In 2007, Slovakia obtained the highest GDP growth among the members of the OECD and the EU, with a record level of 14.3% in the fourth quarter. In 2014, GDP growth was 2.4%; in 2015 and 2016, Slovakia’s economy grew by 3.6% and 3.3%, respectively. The GDP per capita equalled 78% of the average of the European Union in 2018. It ranges from 188% of the EU average in Bratislava to 54% in Eastern Slovakia.

The OECD reported in 2017 that the Slovak Republic continues exhibiting robust economic performance, with solid growth backed by a sound financial sector, low public debt and high international competitiveness drawing on significant inward investment. Although regional income inequality is high, 90% of citizens own their homes. The ratio of government debt to GDP in Slovakia reached 49.4% by the end of 2018, far below the OECD average.

In 2021, Slovakia was ranked by the International Monetary Fund as the 45th richest country in the world (out of 226 countries and territories), with a purchasing power parity per capita GDP of EUR 32,710 (USD 34,815). As of 2021, with a population of only 5 million, Slovakia is the 61st largest economy in the world (out of 216 countries and territories). In 2021, Slovakia met a growth of 4.4%, hindered by supply shortages that affected the automotive sector (which accounts for almost 14% of GDP alone).

Slovakia ranks 45th out of 190 economies in terms of ease of doing business, according to the 2020 World Bank Doing Business Report and 57th out of the 63 countries and territories in terms of a competitive economy, according to the 2020 World Competitiveness Yearbook Report.

Country:
Slovakia
Local Currency:
Euro (EUR)
Time Zone:
CET (UTC+1/+2 when DST)
Country Dial Code:
+421
Tax Year:
Calendar Year (1st January – 31st December)
VAT:
20%
National Minimum Wage:
EUR 646/month (USD 691/month)
Taxpayer Identification Number (TIN):

A unique 10-digit tax identifier code that natural and legal entities or individual entrepreneurs must obtain.

Under legislation in force Financial Administration assigns TIN to a taxpayer within a registration procedure.

An SK (code for Slovakia) prefix was added to the TIN for VAT purposes: SK-TIN.

Main trading partners:

Main Imports partners: Germany, Czech Republic, Poland, Hungary, South Korea, Russia, France and China.

Main Exports Partners: Germany, Czech Republic, Poland, France, Italy, UK, Hungary and Austria.

The Main Sectors of the Slovakian Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

Agriculture

The agriculture sector is underdeveloped and represented only 2.2% of the GDP and 2.8% of employment in 2021 (World Bank). Today, only about two-fifth of Slovakia’s territory is arable. On the fertile lowlands, wheat, barley, sugar beets, corn (maise), and fodder crops are the most important crops, whereas, on the relatively poor soils of the mountains, the principal crops are rye, oats, potatoes, and flax. Tobacco and fruits are grown in the Váh valley, and vineyards thrive on the slopes of the Carpathian ranges in Západní Slovensko Kraj (region). On the plains, farmers raise pigs and cattle. Sheep raising is prevalent in mountain valleys. In 2021 the country’s agricultural sector recorded a decrease of -14.3%, according to preliminary data from Eurostat, which the ongoing COVID-19 pandemic can explain.

The secondary sector represents 26.4% of the GDP and employs 36.1% of the workforce. Heavy industry sectors – such as metal and steel – are still restructuring. High-value-added industries, like electronics, engineering, and petrochemicals, are installed in the western part of the country. Sectors like automobile and consumer goods experienced a sizeable contraction during the pandemic but have started to recover relatively fast and are offering attractive opportunities to foreign investors. The World Bank estimates that manufacturing alone accounts for more than one-fifth of Slovakia’s GDP (26.4%). Bratislava, Košice, and the towns along the Váh River are Slovakia’s leading manufacturing centres. Important industries include automobiles, machinery, steel, ceramics, chemicals, textiles, food and beverage processing, arms, and petroleum products. From electrical engineering companies, Foxconn has a factory at Nitra for LCD TV manufacturing and Samsung at Galanta for computer monitors and television sets manufacturing.

The automotive sector is among the fastest-growing sectors in Slovakia. Passenger car production was 1,040,000 units in 2016 and 1,090,000 in 2018, which makes Slovakia the largest automobile producer in produced cars per capita. 275,000 people are employed directly and indirectly by the automotive industry. Figures from the national statistical office show that in the first eleven months of 2021, industrial production decreased by 8.9% year-on-year. Such contraction can be explained, among other factors, by the fact that automotive production, a crucial sector of the Slovak economy, had its main production plants closed for the majority of the first half of 2021.

Resources and Power

Slovakia has limited brown coal and lignite reserves, located in the foothills near Handlová to the west and Modrý Kameň to the south. Brown coal has been used in thermal power stations, as fuel in the home, and as raw material in the chemical industry. Pipelines import Russian oil (to a major refinery at Bratislava) and natural gas, supplementing existing coal gas supplies. In the 21st century, Slovakia added pipelines to Austria, the Czech Republic, and Hungary, a diversification of supply that took on additional import in the wake of the crisis in Ukraine in 2014.

The services sector contributes 61.0% of the GDP and employs around 61.1% of the active population. It is dominated by trade and real estate. Tourism development may also become important for the Slovak economy in the coming years, as it was one of the country’s most dynamic sectors before the outbreak of the COVID-19 crisis (6.2 million tourists before the pandemic. Slovakia features natural landscapes, mountains, caves, medieval castles and towns, folk architecture, spas and ski resorts. The most attractive destinations are the capital of Bratislava and the High Tatras.

Slovakia remains strongly dependent on external markets, with foreign exchange reaching 170.6% of its GDP in 2020 (World Bank, latest data available). Since 2009, the economic growth of Slovakia has been driven by its exports. The country represents a platform of re-exportation for the European automotive industry (28% of the country’s total exports in 2020). Slovakia has an overall positive trade balance, though it has decreased over the last few years and amounted to only 0.9% of GDP in 2020 (World Bank).

The Main Sectors of the Slovakian Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

Agriculture

The agriculture sector is underdeveloped and represented only 2.2% of the GDP and 2.8% of employment in 2021 (World Bank). Today, only about two-fifth of Slovakia’s territory is arable. On the fertile lowlands, wheat, barley, sugar beets, corn (maise), and fodder crops are the most important crops, whereas, on the relatively poor soils of the mountains, the principal crops are rye, oats, potatoes, and flax. Tobacco and fruits are grown in the Váh valley, and vineyards thrive on the slopes of the Carpathian ranges in Západní Slovensko Kraj (region). On the plains, farmers raise pigs and cattle. Sheep raising is prevalent in mountain valleys. In 2021 the country’s agricultural sector recorded a decrease of -14.3%, according to preliminary data from Eurostat, which the ongoing COVID-19 pandemic can explain.

The secondary sector represents 26.4% of the GDP and employs 36.1% of the workforce. Heavy industry sectors – such as metal and steel – are still restructuring. High-value-added industries, like electronics, engineering, and petrochemicals, are installed in the western part of the country. Sectors like automobile and consumer goods experienced a sizeable contraction during the pandemic but have started to recover relatively fast and are offering attractive opportunities to foreign investors. The World Bank estimates that manufacturing alone accounts for more than one-fifth of Slovakia’s GDP (26.4%). Bratislava, Košice, and the towns along the Váh River are Slovakia’s leading manufacturing centres. Important industries include automobiles, machinery, steel, ceramics, chemicals, textiles, food and beverage processing, arms, and petroleum products. From electrical engineering companies, Foxconn has a factory at Nitra for LCD TV manufacturing and Samsung at Galanta for computer monitors and television sets manufacturing.

The automotive sector is among the fastest-growing sectors in Slovakia. Passenger car production was 1,040,000 units in 2016 and 1,090,000 in 2018, which makes Slovakia the largest automobile producer in produced cars per capita. 275,000 people are employed directly and indirectly by the automotive industry. Figures from the national statistical office show that in the first eleven months of 2021, industrial production decreased by 8.9% year-on-year. Such contraction can be explained, among other factors, by the fact that automotive production, a crucial sector of the Slovak economy, had its main production plants closed for the majority of the first half of 2021.

Resources and Power

Slovakia has limited brown coal and lignite reserves, located in the foothills near Handlová to the west and Modrý Kameň to the south. Brown coal has been used in thermal power stations, as fuel in the home, and as raw material in the chemical industry. Pipelines import Russian oil (to a major refinery at Bratislava) and natural gas, supplementing existing coal gas supplies. In the 21st century, Slovakia added pipelines to Austria, the Czech Republic, and Hungary, a diversification of supply that took on additional import in the wake of the crisis in Ukraine in 2014.

The services sector contributes 61.0% of the GDP and employs around 61.1% of the active population. It is dominated by trade and real estate. Tourism development may also become important for the Slovak economy in the coming years, as it was one of the country’s most dynamic sectors before the outbreak of the COVID-19 crisis (6.2 million tourists before the pandemic. Slovakia features natural landscapes, mountains, caves, medieval castles and towns, folk architecture, spas and ski resorts. The most attractive destinations are the capital of Bratislava and the High Tatras.

Slovakia remains strongly dependent on external markets, with foreign exchange reaching 170.6% of its GDP in 2020 (World Bank, latest data available). Since 2009, the economic growth of Slovakia has been driven by its exports. The country represents a platform of re-exportation for the European automotive industry (28% of the country’s total exports in 2020). Slovakia has an overall positive trade balance, though it has decreased over the last few years and amounted to only 0.9% of GDP in 2020 (World Bank).

Commercial Laws in Slovakia

Tax Authorities in Slovakia

The Financial Administration came into existence on 1 January 2012 through the merger of the former Tax Administration and Customs Administration into a single organisation. It comprises the Financial Directorate of the Slovak Republic (Finančné riaditeľstvo Slovenskej Republiky), Customs offices, Tax offices, and the Criminal Office of the Financial Administration.

The primary mission of the Financial Administration is to effectively collect and administer duties and tax to provide revenue for the state budget of the SR and the European Union (“EU”), protect the state’s economic interests, and guard state budget expenditure.

The Ministry of Labour, Social Affairs and Family of the Slovak Republic is the central state administration body responsible for employment support, social care, labour inspection, and the functioning of the pension scheme.

It designs and implements state policy concerning labour protection and manages and controls the National Labour Inspectorate. The role of the Ministry of Labour, Social Affairs and Family of the Slovak Republic is to modernise labour legislation to increase employment continually. It strives to create a balanced labour market while equally protecting employees and fulfilling employers’ requests.

The Section of Labour of the Ministry of Labour, Social Affairs and Family of the Slovak Republic establishes the measures oriented toward increasing employment by assisting job seekers, employees and employers. Protecting employees at their workplaces and combating illegal work and employment are significant parts of its work.

Commercial Laws in Slovakia

Tax Authorities in Slovakia

The Financial Administration came into existence on 1 January 2012 through the merger of the former Tax Administration and Customs Administration into a single organisation. It comprises the Financial Directorate of the Slovak Republic (Finančné riaditeľstvo Slovenskej Republiky), Customs offices, Tax offices, and the Criminal Office of the Financial Administration.

The primary mission of the Financial Administration is to effectively collect and administer duties and tax to provide revenue for the state budget of the SR and the European Union (“EU”), protect the state’s economic interests, and guard state budget expenditure.

The Ministry of Labour, Social Affairs and Family of the Slovak Republic is the central state administration body responsible for employment support, social care, labour inspection, and the functioning of the pension scheme.

It designs and implements state policy concerning labour protection and manages and controls the National Labour Inspectorate. The role of the Ministry of Labour, Social Affairs and Family of the Slovak Republic is to modernise labour legislation to increase employment continually. It strives to create a balanced labour market while equally protecting employees and fulfilling employers’ requests.

The Section of Labour of the Ministry of Labour, Social Affairs and Family of the Slovak Republic establishes the measures oriented toward increasing employment by assisting job seekers, employees and employers. Protecting employees at their workplaces and combating illegal work and employment are significant parts of its work.

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