Choice between opening a subsidiary or a branch office

There are many seasoned entrepreneurs searching for the opportunity to expand their services and products to Europe. Having an existing company abroad gives you a wider variety of options in starting your business in Slovenia, so you can decide between the choice to open a subsidiary or a branch office in Slovenia.

What is the difference between a branch office and a subsidiary in Slovenia?

When doing business in Europe, a foreign entrepreneur, who already has an existing LTD company abroad, has the choice to open either a subsidiary or a branch office in Slovenia.

The main difference between them is that a subsidiary is an independent legal entity while a branch office is not. So, a subsidiary does not depend financially or any other way on the parent company, while the branch office is completely dependent on parent company.

Choice to open a subsidiary in Slovenia

When opening a company in Slovenia, many experienced entrepreneurs make the choice to open a subsidiary. It is an LTD company, where the shareholder of the company is a foreign legal entity. But otherwise it has the same construction as an LTD opened by a natural person would have. It requires 7.500€ founding capital which the parent company has to provide. It also requires a Slovenian tax number for the parent company and the representatives. As all companies in Slovenia, it requires a business address. The subsidiary can have more than one shareholder. This means that more companies can decide to form subsidiaries together, or you can decide that part of the ownership is by a natural person and part by a foreign company.

Additionally, you would also have to provide an extract from the business registry of the parent company. It has to have appropriate international attestation and translation to Slovene language.

Subsidiary registration requires that the representatives of the parent company and future Slovenian company come to Slovenia personally to both sign the company registration documents as well as open the corporate bank account.

Choice to open a branch office in Slovenia

In comparison to the subsidiary, opening the branch office is usually the choice for foreign entrepreneurs who already have a well-developed product or service that they only wish to market in another country. This is because a branch office is not an independent legal entity and can only register the same business activities as the parent company has. While with a subsidiary, you can register entirely new business activities and not only promote your already existing services.

The branch cannot exist without the parent company. Also, the parent company has to include the branches business conduct within their yearly financial report.

But registering a branch office is the only company type that offers company registration via power of attorney. It has to be registered at the notary’s office but your physical presence is not required in Slovenia to complete the process. You will have to present the parent company’s act of establishment, extract from the business registry and yearly financial report. All have to be appropriately attested and translated to Slovenian language. Additionally, you have to prepare the decree of branch establishment and statement of the representative and obtain a business address. As with the subsidiary, you would also have to obtain Slovenian tax numbers for the parent company and the representatives.

The branch office also does not need a bank account in Slovenia and can use the parent company’s bank account.

So, depending on your type of business, you will have to make a choice which of these company types is more appealing to you.

Data offers full support in the company registration process!

Once you have made the choice which company type you will register, Data is here to help.

We can obtain the Slovenian tax numbers for you. You can also register a subsidiary in our licensed VEM point. Our consultants can also register the branch office via authorization at the notary’s office.

Our skilled legal department can help you to understand the differences between the company types so that the choice is easier to make.

Data also offers professional accountancy services and tax consultation to its clients.

Should you require a business address, we provide services of virtual office.

For more questions about company registration in Slovenia, you can write to us on our email data@data.si. You can also contact us over the phone 00386 1 6006 270 or 00386 40 530 718 (Viber, WhatsApp). You can also follow us on Facebook.