How to Register a Business in the US from Slovakia

Step 1: Benefits of starting your US business from Slovakia

Launching a US business from Slovakia offers a myriad of advantages that can significantly enhance entrepreneurial success. One key benefit is the access to the US market, one of the largest and most lucrative markets in the world. This access provides opportunities for exponential growth, allowing Slovakian entrepreneurs to expand their customer base far beyond local and regional boundaries. With a US business presence, Slovakian companies can tap into diverse consumer demographics and cater to a variety of needs, boosting both revenue and brand recognition.

Another substantial benefit is the favorable business environment the US provides. Known for its robust legal framework, ease of doing business, and comprehensive support systems for startups, the US offers a pragmatic and supportive landscape for new ventures. Moreover, the innovation-driven culture in the US, paired with advanced technological infrastructure, ensures that entrepreneurs can leverage state-of-the-art tools and practices to stay competitive. For Slovakian entrepreneurs, starting a business in the US can also mean better access to investment opportunities, networking with global industry leaders, and participating in world-class incubators and accelerators.

Step 2: How to start your US business from Slovakia

Starting a US business from Slovakia involves several key steps that can help streamline the process and ensure compliance with both US and Slovak regulations. First, you will need to decide on the business structure, such as a corporation, limited liability company (LLC), or partnership. This decision impacts everything from taxation to liability. Conduct thorough research or consult with legal experts to determine which structure best aligns with your business goals. After deciding on the business structure, you must select a unique business name and check its availability through the US Patent and Trademark Office (USPTO) or your chosen state's business registry.

Once the business structure and name are chosen, you will likely need to register your business with the appropriate US state authorities. This often involves filing formation documents and paying associated fees. Additionally, you will need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS), which functions much like a social security number for your business. Depending on the nature of your business, you may also require specific state or federal licenses and permits to operate legally. Resources such as the US Small Business Administration (SBA) and state business offices can provide extensive guidance and necessary forms. Finally, setting up a US-based bank account and understanding your tax obligations will be crucial steps in ensuring your business operates smoothly and compliantly.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Slovakia

Understanding Compliance Requirements for Running a US Business in Slovakia

Setting up a business in Slovakia as a US entity involves navigating various compliance requirements. These considerations include legal structures, registration, taxation, employment laws, and environmental regulations.

Legal Structures

There are multiple legal forms available for business operations in Slovakia, such as:

• Limited Liability Company (s.r.o.): This is the most common form and requires at least one shareholder.
• Joint-stock Company (a.s.): Suitable for larger enterprises, with more stringent requirements.
• Branch Offices: Allows a foreign company to conduct business through a local branch.

Company Registration

The registration process involves several key steps:

1. Choose a company name that complies with Slovak regulations.
2. Prepare a deed of incorporation and have it notarized.
3. Submit the required documents to the Slovak Commercial Register.
4. Register for a trade license if necessary.
5. Obtain a tax identification number from the Slovak Tax Office.

Taxation

Understanding the tax landscape is critical:

• Corporate Income Tax: The standard rate is 21%.
• Value Added Tax (VAT): Standard rate is 20%, with some reduced rates applicable.
• Withholding Taxes: Applicable on dividends, interest, and royalties, with rates varying based on international treaties.

Employment Laws

Compliance with Slovak labor regulations is essential:

• Employment Contracts: Must be in writing and compliant with Slovak Labor Code.
• Minimum Wage: Ensure adherence to the statutory minimum wage.
• Social Security Contributions: Both employers and employees must contribute to social security.

Environmental Regulations

Environmental compliance is also a critical consideration:

• Ensure adherence to waste management and recycling laws.
• Comply with emissions regulations if operating in manufacturing or industrial sectors.
• Obtain necessary environmental permits and licenses.

By understanding and addressing these compliance requirements, US businesses can successfully establish and operate in Slovakia, ensuring both legal conformity and operational efficiency.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Slovakia

Understanding Tax Obligations for Running a US Business in Slovakia

Expanding a US business into Slovakia can be a lucrative opportunity, but it's essential to understand the tax obligations involved. This guide highlights key considerations to help you navigate the Slovakian tax landscape effectively.

Corporate Income Tax

In Slovakia, corporate income tax is levied on the worldwide income of resident companies and on Slovak-source income for non-resident companies. The standard corporate income tax rate is 21%. US businesses operating in Slovakia must ensure they correctly determine their tax residency status and report income accordingly.

Value Added Tax (VAT)

Value Added Tax (VAT) in Slovakia is applied to most goods and services. The standard rate is 20%, with reduced rates of 10% on specific items like books, pharmaceuticals, and medical devices. US businesses must register for VAT in Slovakia if they exceed a certain turnover threshold or if they engage in specific taxable activities.

Withholding Taxes

Slovakia imposes withholding taxes on various types of income, including dividends, interest, and royalties paid to foreign entities. The standard rate is 19%, but this may be reduced under applicable tax treaties. The tax treaty between the US and Slovakia may provide relief or reduced rates for certain types of income.

Transfer Pricing

Transfer pricing rules in Slovakia require that transactions between related parties be conducted at arm's length prices. US businesses must ensure they comply with transfer pricing regulations to avoid tax adjustments and penalties. Proper documentation and justification of intercompany transactions are critical.

Personal Income Tax

For US citizens working in Slovakia, personal income tax considerations are also crucial. Slovakia uses a progressive tax system with rates ranging from 19% to 25%. The US-Slovakia tax treaty provides provisions to avoid double taxation, but individuals must still file tax returns in both countries.

Social Insurance Contributions

Employers and employees in Slovakia are required to make social insurance contributions, covering areas such as health, pension, unemployment, and accident insurance. The rates and bases for these contributions vary, and US businesses must ensure compliance with these obligations for their employees.

Double Taxation Avoidance Treaty

The US and Slovakia have a bilateral treaty aimed at preventing double taxation of income. This treaty provides guidelines for determining tax residency, allocating income between the two countries, and reducing or eliminating certain taxes. It's important for US businesses to understand and apply the treaty provisions correctly.

Professional Advice

Given the complexities involved in international taxation, seeking professional advice is highly recommended. Tax professionals with experience in US-Slovakia tax matters can provide valuable insights and help ensure compliance with all applicable tax laws and regulations.

In summary, understanding and meeting tax obligations is crucial for US businesses operating in Slovakia. By considering these key areas and seeking expert guidance, businesses can successfully navigate the Slovakian tax environment.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country