A branch is one way for a company to set up a business in Slovakia. Opening a branch has many drawbacks. The foreign parent carries full liability for the branches operations, there may be lengthy and complicated dealings with the tax authorities regarding the branches tax obligations.
The disadvantages of a branch office are:
- The parent company is fully liable for the liabilities of the branch
- The branches representatives may be held jointly and severally liable for tax debts
- The financial statements of the parent must be lodged at the Companies Registry
- The branches obligations are the same as the parent, including filing VAT returns, employees returns and corporation tax returns, so there are few savings in administering a branch
- Banks and clients may prefer dealing with a Slovakia company rather than a branch
- A branch is rarely ideal for substantial projects because the parent company runs the entire risk
- Upon registration of a branch, evidence has to be provided of the legal existence of the parent
- Any public act by the branch, is likely to need ratification by the board of the foreign parent.
The advantages are:
- Less obligations to present accounts than with corporations
Features of a branch office in Slovakia
A branch is usually an adequate vehicle for low cost projects. However, it is not the ideal choice for substantial projects because the parent company and branch offices activities are not differentiated, the parent company is fully liable for the branches liabilities.
From a tax point of view, branches are permanent establishments of non-resident companies and a Slovakian branch is not a separate legal company from its parent.
The branch must have the same name as the parent company.
A branch must appoint a resident individual to represent it in its dealings with the tax authorities, and supply its own trading address in the country of branch registration. The representative may be held jointly and severally liable for the tax debts incurred by the branch.
To register a branch, evidence has to be provided of the existence of the parent, certified copies of the Articles or Statues, the names of the directors, the share capital, the registered office, and the names of the representatives who will act for you.
Various documents will need to be translated, the documents include:
- your parent’s registration certificate
- your company’s articles of association
- the names of the company’s directors and secretary
After your branch is registered
All stationery, order forms and similar documents used by your branch are required to show:
- The place of registration of the parent
- The number with which it is registered
- The legal classification of the company
- The address of its trading office
Also the following particulars must be shown at the branch office:
- The company name
- The name of the country in which the company is incorporated
- The parent of the branch has limited liability
If you would like to proceed with the registration of a branch office please email us at: email@example.com