The Slovenia Times

Go Start Your Own Business (if you dare)!



But there is no need to panic. The legal framework for establishing a business is similar to elsewhere in the world, but there are some peculiarities you need to know about. They can spare you some frustration and anger when navigating your way through the bureaucratic jungle. Choosing a legal form for your business Slovenian laws for commercial companies have been almost completely modelled on the German ones, so being familiar with German or any other continental system can make things much easier. Businesses can be established in the form of a self-employed person or as a commercial company, like a limited liability company, a company limited by shares, a general partnership, a limited partnership or a limited partnership by shares. The first two are the most frequently encountered and deserve a closer look. Self-employed person (in Slovene: samostojni podjetnik posameznik, abbreviated as s.p.) The status of a self-employed person is given to those people running a personal business as sole proprietor. Founding capital is not required and the founder assumes unlimited liability upon his personal property. All it takes for one to become a self-employed person is to register himself with Slovenian Tax Authority (slov. Davcna uprava Republike Slovenije). Registering will require quite a bit of paperwork - filling out a few forms, and presenting notary-attested signatures. A working permit is required for foreigners. Processing the registration and assigning a matriculation number should take 8 days, but a person can start with their business operations right away. Limited liability company (druzba z omejeno odgovornostjo, d.o.o.) A limited liability company has the status of a legal person. Its foundation requires a minimum of 1 and a maximum of 50 shareholders, with their liability limited to their founding capital. The minimum founding capital is SIT 2,100,000 (9,000 Euro)and at least one third of it must be paid in cash. Other parts can be contributed in different forms. Before becoming the proud owner of a d.o.o., a candidate is put on the costly endurance test around institutions: a visit to the notary will provide him with the agreement of incorporation, then he has to open a bank account to which the founding capital is paid. Another visit at the notary will get him an application for commercial registry at the commercial court. If the legal requirements are met, the company will be matriculated in the registry. Afterwards, the AJPES (an agency that collects statistical data from the companies) must be notified, the company seal must be created and the company must announce its existence in the official gazette of the Republic of Slovenia (Uradni list RS). For certain activities such as catering, winemaking, gambling etc. special permissions are necessary. The cost of founding a company will therefore cost up to SIT 300,000 (1300 Euro) since every activity mentioned above requires a fee, without taking into account time wasted with filling out all kinds of forms and other paperwork. And that is only the beginning. With the actual operations, the entrepreneur will have to cope with complicated accounting procedures, making an annual report, unreliable tax authorities and a sometimes unsupportive banking system. An anti-bureaucratic action programme is still missing It is obvious the institutional environment is far from being entrepreneur friendly. The government therefore announced it was making "an anti-bureaucratic action programme" last year. As a future member of the EU, Slovenia had to prepare the report and commit itself to promoting entrepreneurship, but little has been done to date, and the results are yet to be seen. A survey among entrepreneurs showed that the main impediments for a business boom are the all-present bureaucracy, rigid labour legislation, the burdens of contributing to social, health, and pension security and finally, the unfavourable and unstimulating form of personal taxation. Another big problem for newly established business is access to capital, both bank credits and venture capital, as the capital market is underdeveloped. It seems the anti-bureaucratic action programme has been a stillborn child. The government is assuring the public of the opposite. The main cause for delays is said to be a lack of cooperation between different government institutions - obviously it is hard to persuade a bureaucrat to fight against himself. So a due date for launching the anti-bureaucratic plan has been postponed from November 2003 to some unknown period in the future. In the meantime, the entrepreneurs will have to manage their way through the administrative labyrinth as usual.


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