Foreign companies may carry out their business activities in Slovenia through a subsidiary. The Company Act, which implements the Directive concerning disclosure requirements in respect of branches, in a separate chapter lists those activities which may be carried out through subsidiaries.
Types of Secondary Establishments
- A subsidiary is a unit which is organisationally separated from the main registered office of the company which is at the head of this unit (parent company); the unit operates largely independently.
- Agency – a business or service authorised to act for other companies.
- Representation is a smaller unit under a registered office of a company for which it carries out certain tasks.
Controlled and controlling company: A controlled company is legally independent company which is directly or indirectly controlled by another company (controlling company).
Groups and group companies are composed of:
- one controlling and one or more controlled companies, which are associated under one headquarters of the controlling company (actual group);
- companies associated under a controlling contract (contractual group), or
- legally independent companies under unified management, involving two relatively equal companies, which combine to become one legal entity.
Without legal entity
A subsidiary may be founded by a national or foreign legal entity. There is no authorised capital. A foreign company may perform a profitable activity in Slovenia, if it has a registered subsidiary (or has set up a new company). A foreign company from a third-party country (a country which is not a member of the EU) may set up a subsidiary in Slovenia, if it has has a registered office for at least two years in the country in which it is situated.
A subsidiary acts in the name and on the behalf of a foreign company, using the registered name and the seat of the parent company, and its own registered name. It is a part of a foreign company. A company may also have subsidiaries which are separated from the company's seat. Subsidiaries are not legal entities, but they are entitled to perform any tasks which are performed by a company.
A foreign subsidiary is legally independent and has the nationality of the country of its registration, although it depends on the foreign company, which is its owner both in whole or has a majority share in this subsidiary. The provisions of the Companies Act apply mutatis mutandis to subsidiaries.
Many of the requirements and procedures for opening a secondary establishment are the same as for starting up a business.
The Services Directive: Points of single contact
The Services Directive is a European law that aims to make life easier for businesses that wish to provide services in the European Union – in their home country or abroad. The Directive defines the rules that apply to entrepreneurs wishing to establish a business or perform temporary services in the EU/EEA area (the 27 EU member states, plus Iceland, Liechtenstein and Norway). It obliges member states to eliminate unnecessary bureaucracy, simplify formalities for businesses and make public administrations more efficient.
For the implementation of the Directive, each member state had to set up ‘Points of Single Contact (PSC)’ , e-government portals which help businesses complete their administrative procedures on-line. The PSCs provide comprehensive information on all administrative matters related to setting up or expanding a services business in a given country. This includes for example:
- Which licences, notifications or permits do I need to obtain to start a business (at home or abroad)?
- What do I need to do when I want to offer my services abroad on a temporary basis?
- What do I need to do to apply for a licence? Which authority is responsible?
- Are the licences subject to a fee? What kinds of deadlines apply?
- Which acts and decrees apply in my sector?
- What do I need to do to establish, for instance, a restaurant or a shop? Or to work as a tour operator in another country without actually setting up a company?
- Where can I turn for personalised advice and further information?
With the PSCs, you no longer need to approach various authorities one by one!! The PSC allows you to find all relevant information and to send in your online applications to the responsible authority through one single contact point, the PSC. You can complete your administrative formalities electronically through the PSC. Just contact the PSC of the country that you want to do business in.
All PSCs are part of the European EUGO network; through a central website you can easily access all PSCs in Europe. Of course, the services of the PSCs are optional. You may always address yourself directly to the relevant authorities, too.
The registration procedure of a foreign company's subsidiary shall be conducted in the office of a notary public. After being entered in the Register the business operations may be carried out only within the activity which is recorded in the register. If other acts require special conditions for the performance of a registered activity, the company may only commence its business operations after it fulfills the special conditions required by other acts.
The bodies or persons authorised to conduct business activities in accordance with the Companies Act will be deemed to be the management of this company.
The employment of or work done by a foreign worker in the subsidiary of a foreign company in Slovenia is possible only if he obtains a work permit, which is as a rule issued on the basis of a worker's application.
The procedure and conditions for the issuance of a resident's permit or a certificate on the registration of a place of residence in Slovenia, may differ regarding the type of permit, which may be a permit for the permanent residence of a citizen from the European Economic Area or for a citizen from non-EU countries. All the formalities relating to a resident’s permit may be conducted in the Migration Division of the Ministry of Interior Affairs.
An Extract from the judicial records, must be enclosed with a person’s application for a job post. It can be acquired only from the Ministry of Justice.
A foreign company must enter its subsidiary in the Court Register, although it is not a legal person. For this purpose e-OSS Website offers access to the special registration form. A subsidiary may also be founded before a notary.
A foreign company must also submit:
- an extract from the Register on the content and registration of a foreign company;
- the decision by the management on setting up a subsidiary;
- a copy of the regulations or a shareholder' agreement, acknowledged by a notarial deed, and
- a certified financial report for the previous financial year.
More detailed information on regulations for subsidiaries is availale in the Decree on the Entry of Companies and other Legal Entities in the Court Register .
Any foreign entity which conducts business in Slovenia must be entered in the Tax Register (form DR-04), before the commencement of business activities, and obtain a tax number. It also must obtain an identification number for VAT, and for this purpose must submit form DDV-P3. A certificate that a foreign entity is a taxable person subject to VAT in the country of its seat of management, and proof that shows that a foreign entity intends to conduct business in Slovenia, must be enclosed as well.
Foreign entities conducting their business in Slovenia through a subsidiary will charge for and pay VAT through their subsidiary, which acts in the name and on behalf of that foreign entity, and in doing so the foreign entity must use a registered name and the seat of the parent company and its own name.
At least once per year the subsidiary of a foreign company from the EU must submit the annual report of the company to the Agency of the Republic of Slovenia for public and legal records and services (AJPES).
Each subsidiary must appoint a person who will be the representative of the foreign company.
Basic support may also be found on the e-VEM Portal, which provides an opportunity for foreign companies to submit their applications for 'setting up a subsidiary in Slovenia' electronically.
The AJPES Portal collects and processes the data, including the annual reports of companies.
Information is also available on the website.