Many foreigners, who want to start their business in Europe, think that buying a company is easier than opening a new company. But they sometimes do not realize that buying an existing company can also have disadvantages and adverse effects. We will be explaining what kind of disadvantages you can expect when buying an existing company in Slovenia.
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Data d.o.o. can help youin starting your business in Slovenia. Our 40 experts from various fields can make sure that you are aware of all disadvantages when buying an existing company. The legal department can also help you to understands the advantages of company registration of a new company in Slovenia. In addition, we also provide accounting services and services of virtual office.
Disadvantages of buying an existing company in Slovenia, EU
Many times, foreigners think that by buying an existing company they would avoid the timeframe of company registration as well as opening the bank account for the company. But the timeline does not change by much. Even when buying an existing company, you would need to obtain Slovenian tax numbers for new owners and representatives and the time period for issuing it takes at least 8 days. Then you would also have to do the transfer of ownership which you would have to do at the notary. This will also take its time and would require you visiting Slovenia anyway.
Sometimes entrepreneurs think that buying an existing company would also mean taking over the corporate bank account. But when ownership changes the bank will also be notified and they will assess the new owners of the company. This means that if after assessment the bank sees that the new owners do not comply with the bank’s internal policy for clients, they can still decide to close the bank account. It means that you would not gain anything by buying a company as you would have a company without bank account, for which you can also receive a fine by the government which is also a disadvantage.
Transferring ownership of the company and adverse consequences
In addition to possibly having your corporate bank account close, buying an existing company would also have disadvantages in other fields. Buying a company means transferring ownership from one person to another. But when buying a company, the previous owners do not leave the founding capital in the company but withdraw it in most cases. As the minimal share capital is at least 7500€, you would need to put the money back into to company to avoid the company being capitally inadequate. This means that you did not gain anything money-wise, as you would need to put the share capital inside anyway. Additionally, you would also need to cover notary expenses which can add up to 600€. Whereas registering a new company is a free-of-charge process, if you do it at a licensed VEM point.
Transferring debt and restrictions for employment when buying an existing company
Buying an existing company can also have adverse disadvantages when it comes to employment. Employing non-EU staff requires the employees to obtain a work and residence permit for Slovenia. For them to obtain it, the company employing them has to fulfill specific conditions proving active business conduct. But when buying an existing company, it is possible that the company that you buy has restrictions when it comes to employing foreigners. This is possible due to a decree that the company received earlier, usually connected to unpaid tax obligations. You would not be able to know about such restrictions up until you are already the owner of the company.
Also, you cannot check all the company’s financials in detail before becoming the new owner of the company. Some of the information is publicly accessible, like previous yearly financial reports. But they sometimes do not include all the debt that the company carries within. You would be aware of them only when already becoming the owner of the company.
To avoid these disadvantages, we recommend registering a new company. Data d.o.o. would be happy to offer full support.
For more information on company registration in Slovenia, EU, send us an e-mail to [email protected]. 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.