Overview
Several distribution channels are open to U.S. goods in the Slovenian marketplace, including wholesaling and retailing, franchising, joint ventures, and licensing. A wide variety of merchants, agents, intermediaries, wholesalers, and retailers are available in Slovenia. Any firm may carry out both foreign and domestic trade.
Slovenia’s major distribution centers are located in Brnik and Koper. The Port of Koper, located on the Adriatic Sea, is Slovenia’s only seaport. Jože Pučnik Airport in Brnik is the nation’s largest commercial airport, 20 kilometers north of the capital and largest city, Ljubljana. Smaller distribution centers are also available in major cities such as Ljubljana and Maribor, Slovenia’s second largest city.
Using an Agent or Distributor
A carefully selected local agent or distributor may be cheaper and more efficient than direct sales by a U.S. exporter unfamiliar with Slovenia’s market. The U.S. Embassy in Slovenia can assist American companies in screening potential Slovenian partners. More information on how the U.S. Embassy can help companies seeking to do business in Slovenia is available at https://www.trade.gov/slovenia-contact-us.
Late payments to suppliers are not uncommon in Slovenia. U.S. firms are advised to obtain a confirmed irrevocable letter of credit when conducting business with a new local partner. Credit rating agency Bisnode (phone: +386-1-080-3903; email: info.si@bisnode.com) or the Chamber of Commerce and Industry of Slovenia (email: info@gzs.si, phone: +386-1-5898-000; fax: +386-1-5898-100, attn: INFOLINK Office) may be helpful in assessing the creditworthiness of a potential local partner.
In Slovenia, non-citizens may establish any legal organizational structure described in the Companies Act, including limited-liability companies, joint-stock companies, limited partnerships with share capital, limited partnerships, and general partnerships. Non-citizens may be exclusive or part owners of such companies.
All companies registered in Slovenia acquire the status of a legal person upon entry into the court register. Prior to entry into the court register, a number of formalities must be performed. In some instances, it may be beneficial to consult a lawyer early in the process to avoid difficulties that may arise while establishing a company, from adopting the memorandum and articles of association to certification by a notary public and entry into the court register.
Foreign-owned companies have the same rights, obligations, and responsibilities as domestic companies conducting business in Slovenia. On entry into the court register, a foreign-owned business becomes a Slovenian legal entity, regardless of the origin of its capital. The same principles of commercial enterprise, free operation, and national treatment apply to the operations of foreign as well as domestic companies.
Basic rights of foreign and domestic companies are guaranteed by the Companies Act and the Law on Foreign Transactions, including:
- the right to manage or participate in the management of companies in proportion to invested funds;
- the right to transfer contractual rights and obligations to other foreign and domestic natural and legal persons;
- the right to participate in profits in proportion to invested funds, and the right to free transfer and reinvestment of profits;
- the right to recover investments in companies and their share in net assets after the dissolution of companies.
Certain commercial activities, such as road transport, catering, and other professions, require government certification. Find more detailed information here on the types of legal entities in Slovenia.
Companies intending to enter into distribution, franchising, and agency arrangements must ensure the agreements they put into place are in accordance with EU and member state national laws. The EU’s Council Directive 86/653/EEC establishes certain minimum standards of protection for self-employed commercial agents who sell or purchase goods on behalf of their principals. The Directive establishes the rights and obligations of the principal and its agents, the agent’s remuneration, and the conclusion and termination of an agency contract, including the notice to be given and indemnity or compensation to be paid to the agent. U.S. companies should be particularly aware that the Directive states that parties may not derogate certain requirements. Accordingly, European courts will likely rule invalid the inclusion of a clause specifying an alternate body of law to be applied in the event of a dispute.
Establishing an Office
Establishing a company in Slovenia may take up to 30 days. Slovenia’s Companies Act recognizes the following types of businesses:
Partnerships (organized according to general provisions of continental law):
• Limited partnership
• General partnership
Corporate forms:
Persons wishing to establish a commercial enterprise in Slovenia may choose from the following types of business organizations:
- Delniška družba (d.d.) – a public limited company/a joint-stock company
- Družba z omejeno odgovornostjo (d.o.o.) – a company with limited liability/private limited company
- Samostojni podjetnik posameznik (s.p.) – a sole proprietorship/sole proprietor/sole trader
- Družba z neomejeno odgovornostjo (d.n.o.) – a general partnership
- Komanditna družba (k.d.) – a limited partnership
- Dvojna družba – a dual-listed company
- Komanditna delniška družba (k.d.d.) – a limited partnership/partnership limited by shares (Kommanditgesellshaft auf Aktien, the German model)
- Podružnica – branch office (legally organized unit of foreign legal entity, in which the parent company is responsible for all liabilities arising from the operations of its branch)
The most common types of commercial enterprise in Slovenia are limited liability companies (d.o.o.) and joint stock companies (d.d.). Most foreign companies operating in Slovenia establish a limited liability company or a branch office in Slovenia.
Establishing a Limited Liability Company
Founders/shareholders: Such entities have a minimum of one and a maximum of 50 shareholders.
Capital: The minimum founding capital requirement for a limited liability company is EUR 7,500. Each shareholder must contribute a minimum of EUR 50. Before registration, at least 25 percent of each shareholder’s cash contribution must be paid, and the sum of all paid contributions must be at least EUR 7,500. Contributions in kind must be transferred in full before registration. Where the value of contributions in kind exceeds EUR 100,000, their value must be assessed by a certified independent accountant.
Agreements of Incorporation: A limited liability company is established through a notarized agreement on incorporation, signed by all shareholders. Agreements of incorporation may be signed by a proxy, with an appended notarized authorization.
The agreement of incorporation must include the following information:
- A list of all shareholders, including names and addresses;
- The name, address, and activities of the company;
- The amount of founding capital and a list of particular shareholders’ contributions;
- The duration;
- The eventual liabilities of shareholders to the company other than payments of the company’s contributions and liabilities to the shareholders.
Management: Management rights of shareholders are governed by the agreement of incorporation. In the absence of such provisions in the agreement of incorporation, the authority of shareholders is established by the Companies Act. The shareholders’ meeting is the limited liability company’s primary organizing body. Normally, each shareholder has one vote for each EUR 50 contributed, but the agreement of incorporation may stipulate otherwise. The agreement of incorporation may also provide for the establishment of a supervisory board. A limited liability company typically has one or more managers appointed for at least a two-year renewable mandate.
Establishment procedure:
Establishment procedure:
- Preparation of articles/agreement of incorporation;
- Notarization of articles/agreement of incorporation (and decision on the appointment of managers if not included in the articles/agreement of incorporation);
- Conclusion of a deposit agreement with a domestic commercial bank to open a temporary account into which the foreigner will transfer the capital required to establish a company;
- Application for court registration must be filed by the manager and accompanied by:
- name, registered office, and address;
- agreement of incorporation;
- list of shareholders and value of their shares;
- report on contributions in kind;
- bank receipt for capital contributions to the temporary account; and
- certified accountant’s report on the value of contributions in kind.
- Application for court registration of companies must be filed within 15 days of the adoption of the agreement of incorporation with the court in the location of the registered office of the company;
- After the court registration is approved, documentation must be forwarded to the Statistical Bureau to obtain an identification number;
- Production of the company’s official rubber seal.
- Commercial bank order to transfer resources to the permanent account, at which time the company may freely dispose of such assets.
Dissolution:
A limited liability company may be dissolved in the following cases:
- Expiration of the term of duration;
- Upon a vote by three-quarters of the shareholders;
- Invalidation of court registration;
- Bankruptcy;
- Reduction of capital below the level required by the law; ror
- Merger, amalgamation, or transformation into another corporate structure.
A new company may be established by an individual or legal entity directly, by a notary, through one of the Slovenia Business Point offices, known as SPOT or VEM offices (“all in one place”), or even on the web. A list of SPOT/VEM offices and information on how to establish a company in Slovenia is is available here.
Detailed information about Slovenia’s status corporation rules to establish and operate companies can be found at Invest Slovenia. For the latest Investment Climate Statement (ICS) which includes information on investment and business environments in foreign economies pertinent to establishing and operating an office and to hiring employees, visit the U.S. Department of Department of State’s Investment Climate Statements website.
Franchising
Franchising opportunities are limited only by Slovenia’s small market size. No special legal requirements are necessary to acquire a franchise license, although for local tax reporting purposes a legal entity must be the holder of the franchise license.
U.S. businesses interested in franchising within the EU will find the market quite robust and friendly. A number of laws govern the operation of franchises within the EU, but the legislative requirements are broad and do not generally affect or restrict the competitive position of U.S. businesses. Potential franchisees should familiarize themselves not only with EU regulations but also local laws concerning franchising.
Direct Marketing
A wide range of EU legislation affects the direct marketing sector. Compliance requirements are stiffest for marketing and sales to private consumers. Companies need to focus, in particular, on the clarity and depth of the information they provide to consumers prior to purchase and on their approaches to collecting and using customer data. The EU General Data Protection Regulation (GDPR) has been governing the EU’s data protection policy since May 2018, applying to all businesses processing EEA citizens’ personal data. For details on the GDPR and EU regulations regarding direct marketing, please consult the https://www.trade.gov/country-commercial-guides/eu-market-overview?section-nav=2950
In March 2022, the United States and the European Commission announced that they have agreed in principle on a new Trans-Atlantic Data Privacy Framework (DPF), which will foster trans-Atlantic data flows and enable trans-Atlantic commerce in all sectors of the economy, including for small and medium enterprises.
Regular updates on this framework are published on DOC-run Privacy Shield website.
Joint Ventures/Licensing
In addition to establishing their own companies, foreigners may also invest in existing companies. For private companies and limited-liability companies, investments are allowed with the agreement of the partners and by joining in the partnership agreement. Takeovers of joint-stock companies are much more frequent and less dependent on the individual partners/shareholders, as the shares are quoted on the Stock Exchange, although this does not apply to shares of closed companies.
Takeovers may be accomplished through mergers or acquisitions. Slovenia’s Law on Takeovers and the Companies Act regulate takeovers and establish conditions for the purchase of stocks/shares sold by individual companies and issuers of stocks when specific legal or natural persons acquire or wish to acquire a stake in a company that gives the buyer more than 25 percent of the voting rights.
Takeovers are possible for both public companies with stocks quoted on the market and private companies through direct offers to shareholders. If the company conducting a takeover acquires a controlling interest in another company, it must inform the issuer of shares, the Securities Market Agency (SMA), and the Stock Exchange within seven days of the date it acquires a majority stake. Per Official Gazette no. 47/97, issuers who receive such a notice must publish it within ten days in daily newspapers or on the premises of the Stock Exchange.
Both domestic and foreign legal and natural persons may freely conclude all types of commercial contracts, including agency contracts, distribution contracts, and license contracts. Slovenian law does not require different administrative procedures for the performance of individual foreign trade transactions or contracts. Contractual parties in international legal transactions may select the law that will regulate their mutual relationships and the court or arbitration tribunal of competent jurisdiction that will hear disputes.
Express Delivery
All major international express delivery firms are present in Slovenia, including UPS, DHL, TNT, and FedEx. UPS and DHL have the largest market share, followed by TNT. All providers are reliable, with routine delivery times of one to two working days for documents and small packages up to two kilograms and four to six working days for larger packages. Customs clearance takes place at Ljubljana’s Jože Pučnik Airport, generally within one working day. Slovenia has no special express delivery restrictions.
Due Diligence
Product safety testing and certification is mandatory in the EU market. U.S. manufacturers and sellers of goods must perform due diligence in accordance with mandatory EU legislation prior to importing into the European Union. U.S. companies doing business in Slovenia are advised to perform appropriate due diligence on their business partners and agents. The U.S. Embassy in Ljubljana offers an “International Company Profile” service, which provides detailed information on a company, its financials, and possible media exposure.