The opportunities for foreigners to acquire real estate in the Slovak Republic used to be severely limited. Since the Slovak Republic joined the European Union (1 May 2004), these restrictions have been significantly liberalized. Foreigners can now acquire ownership of real estate located in Slovakia including agricultural land and forest.
The Foreign Exchange Act defines a 'foreigner' (cudzozemec) as a non-resident individual or legal entity.
However, there are some exceptions relating to the ownership of real estate whereby acquisition by foreigners is restricted by virtue of specific legislation (reciprocity principle). For example, legislation provides that the ownership of the agricultural land may not be acquired by a country, a citizen of a country, a natural person with residence or a legal entity with its registered seat in a country, whose legislation does not allow citizens of the Slovak Republic, natural persons with residence in the Slovak Republic or legal entities with their registered seats in the Slovak Republic to acquire ownership of agricultural land. This does not apply to inheritance and to the states of the European Union, the European Economic Area, Switzerland, or the states for which it follows from the international agreement by which the Slovak Republic is bound.
Act No. 497/2022 Coll. on Screening of Foreign Direct Investments entered into force as of 1 March 2023 which stipulates new mechanism for transactions from abroad to Slovak critical infrastructure entities (targets). The FDI Act applies to foreign investments, ie investments planned or implemented by a foreign investor that will enable the foreign investor to directly or indirectly acquire ownership right to use or dispose of the substantial assets of the target.
Last modified 13 Mar 2025
The concept of a permanent establishment does not apply to investment by foreign persons in real estate.
Nevertheless, the income from real estate investment by foreign persons is subject to taxation in Slovakia under the Slovak Income Tax Act and under relevant double taxation treaties.
Last modified 13 Mar 2025
There are five types of corporate vehicle which may be used for investment in real estate in the Slovak Republic:
[1] Please note that in January 2021, the Ministry of Justice of the Slovak Republic submitted a legislative intention for inter-ministerial consultations, which includes, inter alia, a proposal to abolish this type of corporate entity.
Last modified 13 Mar 2025
The registered capital is composed of predetermined contributions from shareholders. A limited liability company can also be established by a single person, either a natural person or a legal entity. A limited liability company with one shareholder cannot be the sole shareholder of another limited liability company. A natural person can be the sole shareholder in three limited liability companies at most. A limited liability company is liable for all its obligations. The shareholders are only liable for the company's obligations up to the amount of their unpaid shares registered with the commercial registry.
The registered capital is divided into stock with a certain nominal amount. A joint-stock company is liable for all its obligations. The stockholder is not liable for the obligations of the company.
In an unlimited partnership at least two people conduct business under the same business name and are liable jointly and severally to the extent of all their assets for all the firm's obligations.
In a limited partnership, one or more partners are liable for all of the company's obligations up to the amount of their unpaid shares registered with the commercial registry (komanditista); and in addition, one or more partners are liable for all the company's obligations to the full extent of their assets (komplementár).
The SJSC can be founded by one or more natural or legal persons. The participation in registered capital is reflected by number of shares with a certain nominal value and the aggregate of all the nominal values of issued shares shall be equal to the registered capital of the SJSC. The SJSC is liable for breach of its obligations with all its assets, however the shareholders of the company are not liable for the obligations of the company.
Last modified 13 Mar 2025
The minimum capital required to set up a limited liability company is €5,000 (the minimum contribution by each shareholder to the share capital amounts to €750). The total value of paid-up contributions must amount to at least 50% of the minimum amount of registered capital.
The minimum capital required to set up a joint-stock company is €25,000.
No minimum capital is required by law.
Not applicable. However, limited partners must contribute at least €250 to the partnership.
The minimum capital required to set up a simple joint-stock company is €1.
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Approximately €2,500 excluding the cost of legal services and the contributions to the share capital.
Approximately €3,000 excluding the cost of legal services and the minimum capital.
Approximately €2,000, excluding the cost of legal services.
Approximately €1,500 excluding the cost of legal services.
Approximately €2,500 excluding the cost of legal services.
Last modified 13 Mar 2025
Approximately two to three weeks in less complex cases.
Approximately one or two months in less complex cases and without a public share offering.
Approximately three to four weeks in less complex cases.
Approximately three weeks in less complex cases.
Approximately one to one and a half months in less complex cases.
Please note that this estimate was not tested in practice as the SJSC is a brand new corporate vehicle, effectively incorporated into the Slovak Commercial Code as of 1 January 2017.
Last modified 13 Mar 2025
The company must have a managing director (konateľ) and a general meeting (valné zhromaždenie). In addition, it may appoint a supervisory board (dozorná rada). The company must be managed by one or more managing directors, who may, either independently or jointly, act and sign on the company's behalf. Management is governed by the articles of association. A general meeting of shareholders makes decisions on matters as set down by law and provided for in the articles of association.
The company must have three corporate bodies: a board of directors (predstavenstvo), a general meeting (valné zhromaždenie) and a supervisory board (dozorná rada). The company is managed by a board of directors consisting of individuals only. The board of directors is normally appointed by the general meeting or in some cases by the supervisory board.
The partnership is managed by each partner solely and independently unless the articles of association stipulates joint management by all partners. The articles of association may allow a high degree of flexibility in corporate governance, voting rights and profit allocation.
Each partner has full liability for the obligations of the partnership and this cannot be limited.
The partnership has two categories of partners: general partners (komplementár) and limited partners (komanditista). Limited partners must contribute a minimum amount of €250 to the partnership.
Day-to-day management can only be conducted by general partners, but other matters are decided by all partners. There are no restrictions on the allocation of voting and profit rights by the articles of association.
Similar to joint-stock companies and limited liability companies, SJSC shall create the following corporate bodies: a board of directors (predstavenstvo) and a general meeting (valné zhromaždenie). However, creation of a supervisory board is voluntary and depends on the respective articles of association.
Last modified 13 Mar 2025
Management and accounting costs depend on the size of company and the scope of its business activities. Audited accounts are required if at least two out of the following three conditions are met: (i) the total value of all assets exceeds €4 million; (ii) the net annual turnover exceeds €8 million; and/or (iii) the average recalculated number of employees exceeds 50 in one accounting period. These criteria of size relate to the accounting period beginning on 1 January 2021 (or beginning during the course of 2021, if the entity’s accounting period is a financial year), and shall be further increased with respect to the accounting period beginning on 1 January 2022 (or beginning during the course of 2022), as of which the criteria of €4 million/ €8 million / 50 shall apply.
Management and accounting costs depend on the size of company and the scope of its business activities. A public joint-stock company's accounts must be audited. A private joint-stock company's accounts must be audited under the same conditions as set forth in case of limited liability companies (see above).
Management and accounting costs depend on the size of partnership and the scope of business activities. Audited accounts are required under the same conditions as set forth in case of limited liability companies (see above).
Management and accounting costs depend on the size of company and the scope of its business activities. Audited accounts are required under the same conditions as set forth in case of limited liability companies (see above).
Last modified 13 Mar 2025
Taxation of income
The taxable income is the rental income minus tax deductible expenses (for example, depreciation and administrative costs).
Corporate income tax is payable at the rate of 21%. As of 1 January 2025 a reduced rate of 10% for companies whose taxable income (revenues) do not exceed UER100,000 in the tax period is applicable, as well as an increased rate of 24% for companies whose taxable income (revenues) exceed EUR5 million in the tax period.
Taxation of distributions of current income to an investor
The distribution of profit after tax in the form of dividends to shareholders — natural persons — is taxed (7%). In the case of shareholders — legal entities, the dividends are not subject to income tax, save for certain statutory exceptions, where, for instance, the withholding tax rate of 35% applies to dividends paid by the Slovak companies to all residents from non-treaty countries or blacklisted countries by the EU.
Taxation of capital gains
Capital gains on the sale of shares held by individuals and corporate investors are subject to tax (19%).
Double taxation treaties usually stipulate that capital gains from the sale of shares are taxed in the foreign investor's country of residence, but they may also be taxed in the country where the company is incorporated if the company's assets consist mainly of real estate.
Taxation of income
Since a partnership is transparent for income tax purposes, any profits generated are regarded as the profits of individual partners and are therefore treated as personal income.
Taxation of distributions of current income to investors
Not applicable.
Taxation of capital gains
Since a partnership is transparent for tax purposes, capital gains are regarded as the profits of individual partners and taxed accordingly.
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Does the concept of a 'permanent establishment' apply when a foreign person invests in real estate and, if so, how much does it cost to set up such a permanent establishment, how long does it take and what corporate governance requirements apply?
The concept of a permanent establishment does not apply to investment by foreign persons in real estate.
Nevertheless, the income from real estate investment by foreign persons is subject to taxation in Slovakia under the Slovak Income Tax Act and under relevant double taxation treaties.
Last modified 13 Mar 2025