Starting a company is a relatively straightforward process, but it is essential to pay attention to certain specifics. If this is your first time going through the company formation process, the text we have prepared for you should serve as your first step. The second step should be seeking the support of a qualified advisor. With the help of an experienced legal consultant, you can avoid the most common issues entrepreneurs face when setting up a business in Slovenia.
If you would like an overview of the business environment and the fundamental legal, tax, and employment aspects of operating in the Western Balkan countries — including Slovenia — we invite you to watch our webinar here and to download our detailed brochure here. These resources are intended for potential investors and entrepreneurs planning to expand their business to Bosnia and Herzegovina, Serbia, North Macedonia, Montenegro, Croatia, and Slovenia.
In this article, however, we will focus on a slightly different topic. Below, you will find the seven most common mistakes made during the process of company formation in Slovenia, along with advice from our legal consultant on how to avoid them.
Mistakes when establishing a company in Slovenia
More than 20 years of experience have shown us that the process of establishing a company in Slovenia can run smoothly and without significant difficulties. The key is to have the right approach and the support of professionals.
Through our work with clients and cooperation with state institutions, we have observed that most entrepreneurs tend to make similar mistakes, namely:
- Disregarding the business environment,
- Choosing an inappropriate company name,
- Difficulties in opening a business bank account,
- Incomplete documentation,
- Unclear definition of ownership and management rights,
- Issues with VAT registration,
- Non-compliance with business obligations.
Disregarding the business environment
We understand that for anyone starting a company, registration formalities are a top priority. Entrepreneurs want to comply with the law, handle the paperwork, and complete the incorporation process. And we fully agree — this is important. As a company whose core business includes legal advisory services, we know very well how essential legal compliance and proper procedures are. However, ignoring the business environment can create significant challenges when establishing and running a business.
Before initiating the process of setting up a company in Slovenia, we strongly recommend evaluating the market and competition, macroeconomic trends, the legal framework, the customer and supplier base, infrastructure, and access to other key resources (such as workforce, technology, and financing).
Conducting thorough market research before the incorporation process may require considerable time and effort, but in the long run, it will save you money and help ensure the stability and success of your business.
Choosing an inappropriate company name
Today, countless companies are being established, and selecting a suitable name can often be a challenge. However, for the incorporation process in Slovenia to be successful, the company name must be unique. It must not be identical to or too similar to already registered names or trademarks. The use of certain words, such as “Slovenia”, “state”, or “European”, requires special approval and cannot be used freely. On the other hand, the use of the word “Ljubljana” is permitted.
The Agency of the Republic of Slovenia for Public Legal Records and Related Services (AJPES) will not approve company registration if the proposed name is not unique. Without approval, the incorporation process cannot be completed. Furthermore, if your chosen name turns out to be identical or similar to a protected name or brand, this may lead to serious consequences, such as:
- The company whose name you used could initiate legal proceedings against you and request that you change the name.
- You may be required to compensate for damages if the use of the name caused confusion among consumers or harmed the reputation of an existing brand.
Therefore, we strongly recommend checking the availability and suitability of your chosen name before submitting the incorporation proposal. If necessary, the name can also be reserved (company name reservation).
The verification can be carried out on the official AJPES portal.
Difficulties in opening a business bank account (TRR)
Banks are extremely cautious when opening new business accounts. Before approving the opening of a transaction account (TRR), they conduct thorough Know Your Customer (KYC) and anti–money laundering (AML) procedures. They also verify the ultimate beneficial owners. The assessment typically includes evaluating the entrepreneur’s background, the nature of the business activity, operational methods, and related factors. Often, extensive documentation and evidence are required.
In cases where a risk or suspicion arises, banks may even close already opened accounts — sometimes without providing a clear explanation.
For this reason, it is highly advisable to choose your bank in advance and check the conditions for opening a business account (TRR), as banks also have the right to refuse account opening altogether.
Opening a business account can often be a lengthy and complex process. We are well aware of these challenges, so feel free to contact us if you require assistance in this area.
Incomplete documentation for company registration in the court register
When starting the process of establishing a company in Slovenia, entrepreneurs are often surprised by the volume of documentation required. Indeed, the list can be extensive. It is necessary to provide:
- personal identification documents of the founders,
- consent for the registration of the company’s address and registered office,
- the founding act,
- a power of attorney if an authorized representative carries out the procedure,
- extracts and certificates from foreign registers.
If the company is being established with foreign capital or foreign management, the documents must be certified and translated into Slovenian, and in some instances, they must also be apostilled.
Unclear definition of ownership and management rights
When preparing the documentation for establishing a company in Slovenia, it is essential to clearly define who will be the owner, who will serve as a member of the management board, as well as the rights and obligations of both the owners and the management. If these matters are not adequately regulated in advance, conflicts and delays in the incorporation process may arise.
A helpful tip to remember is that these rights and obligations can be explicitly outlined in the founding act, which also regulates situations where internal approval is required, the type of majority needed for voting, the conditions for concluding business transactions, and the procedures for resolving disputes.
Issues with VAT registration
In some cases, companies seek immediate VAT registration. To obtain this, it is necessary to demonstrate to the Financial Administration of the Republic of Slovenia (FURS) the intention to conduct business in the Slovenian market. FURS requires detailed explanations and evidence of business activities. These may include contracts with customers, letters of intent, purchase orders, and similar documentation.
Problems may arise if the company fails to provide sufficient evidence of its business intentions (e.g., contracts, letters of intent). In such cases, FURS may reject the application. Unfortunately, this is not the only situation in which an application may be denied. Rejection can also occur if FURS concludes that the company does not have realistic plans or reliable business partners in Slovenia. FURS carefully evaluates whether the business activity is genuine or merely “fictitious” with the purpose of reclaiming VAT.
The examples above refer to cases where a company wishes to obtain voluntary VAT registration. In these situations, FURS may refuse the request if the business intentions are not sufficiently convincing. However, once a company exceeds the threshold of EUR 60,000 in taxable turnover within the last 12 months, VAT registration becomes mandatory, and FURS is obliged to issue a VAT number. At that point, VAT identification is compulsory.
Non-Compliance with business obligations (accounting and other legal requirements)
Every company is required to maintain accounting records, submit annual reports (to AJPES), and file tax returns in accordance with applicable legislation.
In Slovenia, the obligation to maintain accounting records is prescribed by the Companies Act (ZGD-1). Article 54 of ZGD-1 clearly states:
“A company must keep accounting records and close them once a year in accordance with the law and Slovenian Accounting Standards, or International Financial Reporting Standards, if so required by law.”
The Slovenian Accounting Standards and the Tax Procedure Act further set out detailed rules and technical requirements for keeping accounting records.
It is essential to carefully choose those who will manage your accounting and provide you with ongoing financial support. Accounting and consultancy services are an integral part of your business, and it is vital to select a partner that fits your needs — ideally, a one-stop shop.
In addition, companies must comply with laws related to employment, personal data protection, and other regulations relevant to their specific business activity.
Conclusion
We know that establishing a company in Slovenia is an essential step on your entrepreneurial journey. At first glance, this step may seem simple. There are countless articles explaining how to set up a company, offering helpful advice, and we are confident that you could succeed if you decided to go through the process on your own.
However, as you have seen, some pitfalls can cost you time, money, and unnecessary stress. Our advice remains the same: do not go through the process alone.
A good legal and accounting advisor is not an expense — it is an investment in peace of mind and secure business operations. Ultimately, your role is to develop your idea and grow your business, while the role of experts in company formation is to ensure that every legal and financial step is structured correctly and safe for you.
