Purchasing and selling real estate as a business activity

The real estate market is on the rise in Slovenia. There are several properties in construction and for sale and this business activity is especially popular with foreign investors. As purchasing real estate as a natural person is not possible for most non-EU citizens, foreigners tend to establish a company here to engage in this business activity.

Purchasing and selling real estate as a business activity – company registration

Most non-EU citizens cannot be purchasing real estate as a natural person. Therefore they have to establish a company in Slovenia in order to be able to buy property. Non-EU citizens can open a LTD company. It requires having a business address in Slovenia, 7.500€ founding capital and Slovenian tax numbers for all shareholders and representatives. Once you have established the company you can proceed to doing your business in Europe.

Taxes involved in purchasing and selling real estate in Slovenia

As purchasing and selling real estate is a legal transaction, it also has tax implications. When doing this business in Slovenia, your company can become a subject of either real estate transfer tax or value added tax (VAT).

When taxable entities are selling real estate, they have to charge VAT. But this is valid only when:

• the property will be inhabited or used for the first time,
• or the entity is selling it earlier then in two years from when it was first inhabited or used.

The age of the property does not matter but just the fact if it was already inhabited and for how long. So, if you will be purchasing the real estate from a taxable entity, the entity will also have to charge 22% VAT to the price.

The exceptions to this rule are residential properties for permanent residence or if they are a part of the social politics. This includes real estate if their usable surface does not surpass 120 square meters in a multi-dwelling or 250 square meters in an independent house.

Purchasing and selling real estate are most commonly a subject of real estate transfer tax. This tax amounts to 2% and has to be paid when the VAT was not charged during the purchase. So, in cases when selling real estate that is not a part of social politics and was inhabited and used at least 2 years before selling it, the seller of the property has to pay the real estate transfer tax. Usually, the seller has to pay this tax but the seller and the buyer can agree within the contract of sale to transfer this responsibility to the buyer.

Purchasing and selling real estate as a business activity can also be grounds for business immigration to Slovenia

If you plan on doing business of purchasing and selling real estate and you also want to be present in Slovenia to oversee your business, you can use the purchased real estate as ground for your business immigration.

A Slovenian company gains a right to employ non-EU citizens when it fulfills one of the following conditions:

• investing 50.000€ into fixed assets of the company,
• or employing an EU citizen for 6 months
• or showing company turnover 10.000€/month for 6 consecutive months.

If the real estate you purchased costs more than 50.000€ and you will be purchasing it within the first 6 months from company registration, it can be grounds to fulfill the first condition.

Register a company with the assistance of Data!

When establishing a company, it is good to have a reliable partner helping you along the way. Data can support you from start to finish.

We can obtain the Slovenian tax numbers on your behalf. You can also register your company at our VEM point free-of-charge.

Data offers professional accountancy services. The tax advisor can also help you to understand the taxes related to purchasing and selling real estate.

We also have our own legal department helping you to understand the Slovenian business legislation. They can also draft internal regulations for you and review the contract of purchase when purchasing real estate.

If your company needs a business address, we can offer services of virtual office.

For more information on company registration in Slovenia, EU, you can write to our email [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.