HOW TO START UP A BUSINESS IN SLOVENIA:
1. Establishment of a company in Slovenia:
The establishing, managing and organization of companies is regulated by the Companies Act. The Companies act provides various organizational forms, but the most common practice (of foreign companies establishing a business entity in Slovenia or natural persons) is to set up a limited liability company (d.o.o.) or a branch office (podruznica).
a)Limited liability Company
A limited liability (druzba z omejeno odgovornostjo – d.o.o.) is a company whose capital is made up of the basic shares contributed by partners. The shares are not securities.
A limited liability company is liable with all its assets for its obligations, whereas the shareholders are not liable for the company’s obligations.
Limited liability companies are legal persons that obtain such status upon court registration. The name of the company must contain the abbreviation d.o.o..
Simple limited liability company with one or more funders may be registered at “VEM” points in Slovenia. Certain conditions have to be met; prescribed form of Act on Establishment has to be used and capital has to be wholly paid in cash. In other cases, registration has to be done trough notary public. If an application for registration is made by proxy, the applicant shall have an officially certified power for registration. The signature on the authorization can be authenticated abroad and afterward certified at the Ministry of Foreign Affairs of the Republic of Slovenia or embassy of Slovenia. In case that the funders are citizens of the member states of the Hague convention, the procedure is simplified.
Founders
A limited liability company may be established by one or more domestic or foreign, legal or natural persons by signing the act of incorporation. A limited liability company may have a maximum of 50 partners. If a limited liability company has more than 50 shareholders the approval of the minister responsible for economic affairs must be obtained.
Capital
The minimum founding capital is EUR 7,500. The minimum contribution of each shareholder is EUR 50. The value of the contributions may differ.
Before registration at least 25 percent of each shareholder’s cash contribution must be paid in; the sum of all paid contributions must be at least EUR 7,500. The requirement that at least 1/3 of the founding capital must be paid in cash was abolished in 2006. It is possible to contribute all the initial share capital in the form of a non-cash contribution or non-cash acquisition only.
Contributions in kind must be made in full before registration. Where the value of contributions in kind exceeds EUR 100,000. their value must be assessed by a certified independent accountant.
Shares
On the basis of their contributions the partners acquire a business (equity) share that is expressed as a percentage of the company’s capital. Partners may only have one business share. Securities must not be issued for the business shares. The shares are transferable, but the other shareholders have a pre-emptive right.
Management
Management rights of shareholders are provided by the act of incorporation. In the absence of such provisions in the act of incorporation, the authority of the shareholders is provided by the Companies Act.
Managers
A limited liability company has one or more managers (directors) appointed by the shareholder’s meeting (the supervisory board, if the company has one) for at least a two-year renewable mandate. There are no restrictions regarding the residence or nationality of managers.
Supervisory board
The limited liability company may have a supervisory board if the act of incorporation provides one, but it is not obligatory. There are no restrictions regarding the residence or nationality of board members. Where the company has a supervisory board, the companies Act’s provisions on supervisory boards in joint-stock companies are applied if the act of incorporation does not provide otherwise.
Shareholder’s meeting
The main body of the limited liability company is the shareholder’s meeting. Normally, each shareholder has one vote for each EUR 50 of their contribution, although the act of incorporation may provide otherwise.
A shareholder’s meeting may be summoned by the manager or shareholders representing at least 10 percent of the voting capital. The shareholder’s meeting decides on the distribution of profit, the appointment of managers and proxies, measures for supervising and controlling manager’s work, capital increases and decreases and other matters provided by the law or the act of incorporation.
The shareholders meeting adopts its decisions by ordinary majority vote except where provided by the act of incorporation and the law (statutory changes, alterations of capital, dissolution), a 75-percent majority is required.
Dissolution
A limited liability company is dissolved in the following cases:
- expiration of the term of duration:
- upon the shareholder’s decision adopted by a 75-percent majority vote; o invalidation of court registration; o bankruptcy;
- reduction of capital below the prescribed minimum; and o merger, amalgamation or a transformation to another corporate form.
b) Branch
Foreign companies and foreign sole traders must conduct their business activities through a branch (podruznica) registered in Slovenia.
The branch has no legal personality, but it may perform all business activities the parent company may perform.
The branch performs its business activities in the name and on behalf of the parent company. The name and address of the parent company must be used in business transactions. The parent company is liable for all obligations of the branch.
Company law states that provisions concerning registered names, registered offices, economic activities, representations and business secrets also apply to branch.
The appointment of a proxy is compulsory although it is not required that he proxy must have a permanent residence in Slovenia.
Registration
The branch must be registered with the competent court in Slovenia through a notary public.
There are no longer any legal restrictions on the registering of branches since the legal requirement that undertakings from non-EEA countries may only establish a branch in Slovenia after being registered in their own country for at least two years was abolished in 2009.
An application for court registration must state the branch’s activities, its proxy and must be accompanied by:
- a copy of the registration of the parent company; o the decision of the managing body on establishing the branch; o a notarized copy of the Articles of Association; and
- a verified business report of the last business year of the parent company in short form.
Annual reports
The branches of foreign companies have to submit annual reports. The law distinguishes between the branches of EU companies and those of third-country companies. A branch of an EU company can submit the annual report of its parent company provided that it has been prepared in compliance with the legislation of an EU country. According to amendments to the Companies Act, a branch of a third-country company can submit the annual report of its parent company only if the report was prepared in compliance with EU Directives 76/660/EEC and 83/349/EEC. Otherwise, the branch will have to produce and publish its own annual report prepared in accordance with theserequirements:
2. The cost of setting up and running of the company
To set up a limited liability company in Slovenia:
- minimum founding capital – 7.500,00 EUR;
- composition of the social contract and legal support approx. 2.000,00 EUR (necessary only in the case of more complex forms of Act of incorporation) o notary costs 300,00 to 500,00 EUR
- translation of documents into Slovenian language by a court interpreter; 50 EUR per page.
Running costs of Limited Liability Company are approx. 500 EUR per year for accounting services.
