To leave Slovakia or to set up a better structure? Where does Slovakia have advantages and where and when does going abroad make sense?

Slovakia is more and more often mentioned in business discussions as a country to “leave”. However, the reality is more complex. With the right setup of holdings, taxes and regulation, Slovakia can offer advantages that you will not find abroad or you will pay much more for them. That is why we are systematically addressing this issue in practice and we also raised it at our conference Protection of property and business: Slovakia or abroad.

Slovakia vs. abroad: why automatic departure often doesn’t make sense

In practice, we encounter that entrepreneurs think about transferring structures abroad intuitively rather than analytically. This is most often in response to consolidation of public finances, increasing regulation or concerns about tax controls. However, the problem is that the mere transfer of jurisdiction does not automatically address asset protection or business risks.

A closer comparison shows that the Slovak environment can be more flexible than neighbouring countries in some situations. This is especially true for intra-group transfers, the degree of assertiveness of controlling authorities or the complexity of administration, where Slovak law often allows for simpler and cheaper solutions than jurisdictions that are seemingly “safer”.

Holdings, transfers and transaction costs

One of the frequent reasons for moving structures abroad is the desire for greater legal certainty. Paradoxically, however, this is where we are faced with the reality that the more we move west, the more formalities, administrative burdens and transaction costs increase.

In intra-group transfers or reorganisations, the Slovak environment can in certain cases work with nominal values and without immediate tax implications. Abroad, the same steps are often assessed more strictly, with an emphasis on the economic value of the transaction, which leads to additional taxation or the need for demanding expert opinions.

Tax regimes Slovakia still offers

Slovakia has a number of tax regimes that are often underestimated in discussions, but in practice they can significantly affect the effective taxation of business.

In particular:

• Patent box and R&D super-deduction for technology and software firms,
• relatively low taxation of dividends,
• a preferential rate of corporation tax up to a certain turnover.

These tools alone are not a one-size-fits-all solution. However, in combination with the right holding structure, they can represent a legitimate alternative to moving business abroad.

Regulation, capital market and practical predictability

Another factor often overlooked by entrepreneurs is regulatory practice. Although Slovakia is perceived as a highly regulated country, it can be procedurally faster and cheaper than comparable foreign jurisdictions in some areas, especially for simpler fund or bond structures.

For entrepreneurs, predictability is often more important than the legislation itself. And this is where the Slovak environment, if set up correctly, can function more stably than is commonly assumed.

Asset protection is a process, not a one-off decision

The question “Slovakia or abroad” actually hides a more fundamental problem. Asset protection is not about the country, it is about the structure. Separation of operations from assets, proper setup of holding layers, financing and procedural defensibility are crucial.

Discussions with entrepreneurs also show that a quick move abroad without these basics often only leads to a transfer of problems, not to their solution.

Conclusion

Slovakia is not an ideal jurisdiction. At the same time, however, it is not automatically unsuitable either. In many cases, it is more efficient to optimise an existing structure than to replace it with a foreign one without deeper analysis.

That is why we at Highgate Group have been addressing this issue for a long time in both consultancy and professional discussions, with an emphasis on practical solutions, not shortcuts.

If you want to get a practical and contextual understanding of this topic of property and business protection, don’t miss our November conference – Why and How to Stay in Slovakia?

We are Highgate Group – modern advisors for your law, tax and accounting under one roof.

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PHOTO GALLERY FROM THE CONFERENCE

Do not hesitate to contact us:

• Peter Varga, e-mail: peter.varga@highgate.sk

Alternatively, you can address your specific questions in a consultation with our partner Peter Varga, who specialises in financial regulation and tax law. You can book a consultation here: