When you are doing business in Europe, each country uses different terminology for business terms. We have gathered the most commonly used terminology which you would use as an entrepreneur in Slovenia.
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Terminology of company types
Let us start off by explaining the basic terminology regarding business in Slovenia, namely the company types.
The most commonly used terminology for limited liability company is the abbreviation LTD or in Slovene – d.o.o. It means a private company limited by shares. It is a legal entity with shareholders and representatives. Also, it holds liability for business conduct with the amount of share capital.
An LTD company can also be a subsidiary. The other terminology for subsidiary is also daughter company. Here, the owner of a limited liability company is a foreign legal entity.
You can also establish a branch office. This is the terminology for a representative office, so a part of another company in a new market. It is not a separate legal entity but can conduct the parent company’s business activity in a new market or location.
Terminology used for company registration
Below are also quick explanations for terminology you will find when registering a company in Slovenia.
Share capital or founding capital is a word for the amount of money you deposit in the process of opening an LTD company. It is the amount of money the company is liable for when doing business. The shareholder deposits share capital in the process of company registration.
A shareholder is a person or legal entity who is the owner of an LTD company. It has to be at least one person or legal entity or you can divide ownership among several parties.
Similarly, the LTD company also needs a legal representative. Here, it has to be a natural person who is of legal age. This person is responsible for business conduct and is responsible for the company as well as signing legal documents. It has to be at least one person but there can also be more.
Business address is the terminology which we use for the legal address of the company. It is a requirement for all company types and can be in a residential or commercial building. You need consent from the owner to register your business there. Certain business activities can have this address at virtual office provider, but certain business activities require renting or buying actual office premises.
Act of establishment is a terminology for a document which either a notary or a VEM point consultant prepares in the process of company registration. It includes all the main information on the company: owners, representatives, amount of capital, business address and business activities of the company. This document can also be amended later, after company registration.
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Terminology used for business immigration
The terminology for business immigration itself is a term we have to explain. Business immigration means relocating to another country for business purposes.
Here, there is also specific terminology in Slovenia. The main part of business immigration is that the company shows active business conduct. This term is defined in the Slovenian legislation as the company fulfilling one of three conditions – investment to fixed assets, employment of EU citizens or company revenue. Only by fulfilling one of these conditions, the Slovenian company can employ foreigners.
Another terminology is widely used in business immigration – this is labor market control. It is a special process which a foreign employee has to pass before they are eligible to apply for work and residence permit. The company employing them posts a job vacancy at the Slovenian employment office and if there are no suitable Slovenian candidates, the foreign employee can apply for work and residence permit.
The terminology for work and residence permit itself is something that requires an explanation. In Slovenia, the majority of foreign employees receive a single work and residence permit. It means that they only apply in one application and receive a work permit and residence permit all in one card. Within this card, consent from employment office (work permit) is issued, along with consent from administrative unit (residence permit).
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Basic terms for doing business with a Slovenian company
When doing business in Slovenia, you will often hear the following terminology:
- VAT: it means value added tax. It is a tax mostly used in sales of services or products. In Slovenia, the standard rate is 22%, while the reduced rate is 9,5%.
- Corporate income tax – this is a tax a company pays on profit. The company only pays it, if it has profit after the end of the business year. In Slovenia, it is 19%.
- Dividends – it is the profit paid to shareholders of the company. A company can only pay dividends to the shareholders after it has paid corporate income tax. The standard rate in Slovenia for tax on dividends is 27,5%.
- Yearly financial report, or sometimes called annual tax report or balance sheet is terminology used for the financial report of profit or loss of the company. It has to be submitted after the end of the business year, usually by the end of March next year. Here, it determines whether the company generated profit or loss in the previous business year.
Are you planning to start your business in Slovenia? Contact DATA for full support!
Do not miss the unique opportunity to learn about business immigration and support of company DATA with business in Slovenia! Contact us to for more information. Send us an email to data@data.si. You can also call us on +386 1 6006 270, Viber/Whatsapp +386 40 530 718 or skype data.business7.
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