Many expats dream of becoming self-employed. But can foreigners work as freelancers in Slovakia? What are the formalities to work as a freelancer?
Who is a self-employed person in Slovakia?
A self-employed person (SZCO) is a person who is at least 18 years old and has earned income from a business under Slovak law in the year that is decisive for the assessment of compulsory sickness and old-age insurance. A foreign self-employed person in Slovakia, on the other hand, obtains income under the law of the country in which his/her income is being taxed. According to the law; a self-employed person is defined as someone who performs a business activity at his/her own liability in order to gain profit and besides the general conditions such as adult age, legal capacity and integrity of the person, on special conditions require proof of professional qualification. A self- employed person in Slovakia:
- is entitled to run his/her business,
- engages in agricultural production and is registered,
- is a partner of a public limited company or limited partnership company,
- performs sports activities without being employed, operates as a sales representative, or
- is entitled to perform special activities, such as working as an advocate.
- is registered in the Business Register (filed by the district court) or
- carries out business on the basis of a trading licence
There are also some specific conditions applicants need to fulfil, based on the type of a trade licence:
- free trade licence – it is necessary to fulfill the three above-mentioned conditions;
- craft trade licence –applicants are required to have a certificate issued by an education facility stating they are professionally competent in a selected craft;
- fixed trade licence – applicants need to have a confirmation of their professional competence acquired outside of education.
How to be a freelancer in Slovakia?
EU/EEA and Swiss citizens are not required to have a residence permit in Slovakia in order to pursue freelancing jobs. But non-EU/EEA citizens do need to obtain a residence permit (permanent or temporary) first to run their business.
In order to obtain a trade license, applicants must submit all the documents to the respective Trade Licencing Office (either in person or electronically). After the submission of all the documents, the Trade Licencing Office checks the validity of all necessary documents. The office issues a certificate of Trade Authorisation) three days after submitting the request. Also, the applicant has to provide an extract from the criminal record, register in the system of mandatory health insurance (unless the person is not yet registered in the system of mandatory health insurance in another EU Member State), and also provide data required for registration with the tax administrator.
The permanent residents of Slovakia can obtain their criminal records from the General Prosecutor’s Office while the foreigners with temporary permits need to obtain it from their home countries. The documents cannot be older than three months and must be translated into the Slovak language.
Applications can be submitted online at www.slovensko.sk as well. The online applicants need to submit the same data as scanned documents as they would submit it in paper form and sign the documents online using their ID cards. fill in an e-form, which requires the same data as the paper form. Applicants, however, need to sign it via electronic signature, for which they need an ID card with an electronic chip.
What are the responsibilities that self-employed people carry?
The responsibilities of a self-employed person in Slovakia depends on their country of citizenship. The foreigners outside of the EU/EEA, OECD countries and Switzerland, need to register in the Commercial Register. These residents need to have at least a temporary residence permit to be able to register in the Commercial Register. You can start utilizing your trade license right after the day of entry into the Commercial Register. Registration in the Commercial Register is not required if the resident has permanent residence in an EU/EEA/OECD country or Switzerland.
After obtaining the trade license, you will be required to pay for public insurance and register at the Social Insurance Agency after 1 year of activities. You can be registered in one of the public insurance companies in Slovakia (Všeobecná zdravotná poisťovňa, Dôvera, zdravotná poisťovňa) by the Trade Licence Office directly. Obligation to pay social insurance depends on the income after it reaches the required limit of 5,298 euros.
Regarding paying taxes, the first step is to identify whether the licence owner is a tax resident in Slovakia or not. These people have permanent residence in Slovakia who need to pay taxes in Slovakia on the income they receive both in Slovakia and abroad. It also depends on the international agreement Slovakia has with the country of citizenship of the applicant in order to prevent double taxation.
Overall, obtaining a freelancing licence in Slovakia is a relatively easy and inexpensive process. If you are planning to obtain your licence from the trade authorities in person, you will need to pay 5 euros for the free trade certificate and 15 euros for the craft and fixed trade certificate which can be paid via cash, bank transport, or e-tax stamp. However, if you apply electronically at www.slovensko.sk, you can get the free trade certificate with no costs and for € 7.50 in the case of craft and fixed trade licences. If you would like to know more about the economy of Slovakia, the process of opening a business, and available investment incentives, visit our website yeyeagency.com.