Why are foreigners no longer willing to buy existing companies in Slovenia?

Why are foreigners no longer willing to buy existing companies in Slovenia? Since the Law on labor and employment of foreigners has changed on 1.9.2015, foreigners, especially citizens of non-EU countries, are buying less and less existing companies in Slovenia.

Up until February of 2015, you could obtain a work permit for citizens of non-EU countries based on ownership of a LTD, specifically for majority owners. If you owned at least 51% of the LTD and had an EU representative, you could obtain a work permit based on majority ownership of your company.

Up until 1.9.2015 there was another possibility of obtaining a work permit – you could obtain a work permit for a director of the company based on profit amounting to two minimal gross salaries (approximately 1.600 EUR) in the last 6 months. This meant that the easiest way for a foreigner to obtain a work permit was to buy an existing company, older than 6 months, which had at least that amount as a profit.

Some foreigners still think that these conditions for obtaining a work permit are valid, having heard how others before them obtained the work permit this way and not consulting with experts on migration law or appropriate institutions. They might have also bought companies before checking the new conditions and with it have done nothing but buy the company, create debt and have to return the capital, whilst not obtaining a residence permit.

Bear in mind: opening or buying a company in Slovenia does not automatically give you the right to work in Slovenia.

Conditions for work and employment of foreigners in a LTD

Read the conditions for work and employment of foreigners in a LTD, which are valid from 1.9.2015:

In one LTD, you can obtain one residence and work permit for a foreign representative but all the rest have to be obtained with the labor market control.

The foreign representative can obtain a single work and residence permit if the company fulfills one of the following conditions:

• An investment to fixed assets of the company in the minimal amount of 50.000 EUR in the first 6 months after company registration
• Having at least 1 person employed for a full work-day for at least 6 months before submitting the application
• Having the company generate revenue in the amount of 10.000 EUR each month in the past 6 months before submitting the application (this is proven by issued invoices and their respective inflow to the company’s bank account).

If you have bought an existing company, where the previous owner withdrew the founding capital and you have paid him the purchase price of the company or maybe even notary expenses, and would now like to obtain the residence permit based on the investment of 50.000 EUR in the first 6 months from registration, you will still have to make the investment of 50.000 EUR in fixed assets, where the 7.500 EUR of founding capital would come in handy when purchasing items for the fixed assets.

If you have bought a company, which is older than 6 months, you cannot employ someone in retrospect and pay him then for the 6 months’ worth of salaries and contributions – it in not in accordance with the law. The law states that you have to enroll your employee into the Slovenian insurance funds before he starts to work for you and not when he is already working there. The last of the conditions (10.000 EUR in revenue) is unlikely, since usually people do not sell companies, which make such a high revenue each month.

Before you make the decision of business conduct in Slovenia, we advise you to consult our experts from the field of labor, migration and economic law so that you will have knowledge on how to work and conduct business legally.

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