If you have fallen into debt with the tax office or the Social Insurance Agency, the law prevents you from acquiring shares in an s.r.o. or setting up an s.r.o. You may be wondering how you can lawfully acquire a business share in an s.r.o., or set one up, if you are listed as a debtor by the tax office or the Social Insurance Agency.
There are several options. If you happen to be registered as a debtor with the tax office, the law does not expressly prohibit you from setting up a foreign company, such as an English company, which then becomes the owner of the s.r.o. This is one of the cheaper options.
Shareholder with a tax office debt — — > English company — — > Slovak s.r.o.
If you would rather not deal with English at all, there is a second solution. As with an English company, the law does not prohibit you from buying or setting up a Czech company, and that company may acquire a Slovak s.r.o.
Shareholder with a tax office debt — — > Czech company — — > Slovak s.r.o.
Another option, if you have debts with the tax office or the Social Insurance Agency, is that you do not need to use an English, Czech or other foreign company to own a Slovak s.r.o. at all. It can also be done through Slovak trading companies such as a joint-stock company, a general partnership or a limited partnership. The major drawback of a limited partnership or a general partnership, however, is that it requires at least two partners.
Shareholder with a tax office debt — — > joint-stock company — — > Slovak s.r.o.
A fourth alternative, besides creating a structure in which the Slovak company is owned by a foreign company, applies to international trade: you can do business directly through a foreign company, such as the English, Czech or even Hungarian companies mentioned above. Information on prices for setting up or buying other international companies – a Czech s.r.o., a Polish sp. z o.o., a Hungarian Kft., a VAT-registered English company (Ltd) or a US company (LLC or Inc.) – is available on the eTuls website.
Shareholder with a tax office debt — — >USA LLC / PL spzoo / HU Kft / UK Ltd. — — > Slovak s.r.o.
A fifth option applies if you are a director of the company rather than a shareholder. The law prohibits only shareholders, not directors, from acquiring an s.r.o. So for a person registered as a debtor with the tax office or the Social Insurance Agency, the prohibition targets only the company’s shareholders and does not apply to its directors.
English company
If you have become a debtor of the tax office or the Social Insurance Agency, one of the options mentioned above is to set up an English company. The total cost of forming an English company, including the registered office, is €150. Thereafter, every twelve months you pay €100 for the registered office and €100 for filing nil accounts.
Once the English company has been formed, it acquires the business share in the Slovak company.
Further information on setting up or buying an English company can be found on the eTuls website.
Czech company
Another way to acquire or set up an s.r.o. despite tax debts is to establish a Czech company. The total cost of forming a Czech company, including the registered office, is around €500–€900, after which the company must pay €200–€300 every twelve months for the registered office and €100–€200 for filing nil accounts and the tax return.
Once the Czech company has been formed, it acquires the business share in the Slovak company.
Further information on prices and procedures for setting up or buying a Czech company can be found on the eTuls website.
Other alternatives
There are, of course, other alternatives besides English or Czech companies: you can also use companies from other countries, such as the USA. If your business involves supplying services or goods to other EU member states, or trading within or outside the EU, you can trade directly through the foreign company.
The law and the prohibition on acquiring an s.r.o. with a tax office debt
Under the law, a person who has arrears in taxes, social insurance or customs duties is prohibited from setting up a Slovak company, buying an s.r.o. or selling an s.r.o. You cannot make these changes to a company while you have arrears.
You can check whether you have social insurance arrears here: https://www.socpoist.sk/zoznam-dlznikov-emw/487s
If you are unsure whether you have tax arrears, you can check on the Financial Administration website
If you would like to set up a company or transfer a business share, contact eTuls International SK s.r.o. – we will be very happy to help you.