Slovenia - Distribution & Sales Channels

Distribution & Sales Channels

Last published date: 2024-03-18

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.

Well-known American companies with a local agent/distributor or representative offices include Goodyear, Merck, Coca-Cola, UPS, IBM, Philip Morris, Oracle, 3M, McDonald’s, Apple, Microsoft, Pfizer, Mars Overseas Holdings, Deloitte, Cisco, Ernst & Young, Johnson & Johnson, Proctor & Gamble, and Eli Lilly.

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, general partnerships, and silent 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.

The European Commission’s Directorate General for Competition enforces legislation concerned with the effects of “vertical agreements” on competition in the internal market. U.S. small- and medium-sized companies (SMEs) are exempt from these regulations because their agreements generally qualify as “agreements of minor importance,” meaning they are considered incapable of affecting competition at the EU level but are useful for cooperation between SMEs. Generally speaking, companies with fewer than 250 employees and an annual turnover of less than €50 million are considered small- and medium-sized undertakings. In addition, the EU has indicated that agreements affecting less than 10 percent of a particular market are generally exempt from such regulations as well (Commission Notice 2014/C 291/01 ).

EU addresses issues regarding payment delays in regard to all commercial transactions within the EU, public or private. Consumer transactions do not typically fall within the scope of this Directive. When a seller does not receive payment for goods and services rendered within 30 days of the payment deadline, EU Directive 2011/7/EU entitles the seller to collect interest at a rate of eight percent above the European Central Bank rate as well as EUR 40 as compensation. For business-to-business transactions, a 60-day period may be negotiated subject to conditions. The seller may also retain the title to goods until payment is completed and may claim full compensation for all recovery costs.

Agents and distributors of companies registered in the EU and subjected to inefficient management by an EU institution or body may take their complaints to the European Ombudsman. The Ombudsman acts upon such complaints by investigating cases in which EU institutions fail to act in accordance with the law, fail to respect the principles of good administration, or violate fundamental rights. In addition, SOLVIT, a network of national centers, offers online assistance to citizens and businesses who encounter problems with transactions within the borders of the single market.

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
Silent 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. The Ministry of Economic Development and Technology must grant approval for a limited liability company to have more than 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:

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; or

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 is located in and through 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. The best known U.S. franchises in Slovenia are McDonald’s, Subway, KFC, and Re/Max. 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 following provides a brief overview of the most important provisions flowing from EU-wide rules on distance-selling and on-line commerce.

Processing Customer Data

The EU has strict laws governing the protection of personal data, including the use of such data in the context of direct marketing activities. For more information on these rules, please see the privacy section.

Alternative Dispute Resolution

In 2013, the European Union adopted rules for alternative dispute resolution mechanisms, which provide consumers the right to turn to quality alternative dispute resolution entities for all types of contractual disputes, including purchases made online or offline, domestically or across borders. An Online Dispute Resolution Regulation has set up an EU-wide platform to handle consumer disputes that arise from online transactions.

Distance Selling of Financial Services

EU Directive 2002/65/EC ensures customers are appropriately protected with respect to financial transactions taking place in which the consumer and the provider are not face-to-face. In addition to prohibiting certain abusive marketing practices, the Directive establishes criteria for contract information and withdrawal.

Direct Marketing Over the Internet

The EU’s eCommerce Directive (2000/31/EC) imposes specific requirements on direct marketing businesses. For example, such businesses may not mislead customers through promotional offers and terms to qualify for such offers must be easily accessible and clear. The Directive further stipulates that marketing e-mails must be identified as such to the recipient and that companies targeting customers online must regularly consult national opt-out registers where they exist. When orders are placed, service providers must acknowledge receipt quickly through electronic means, although the legal effect of placing and acknowledging an order is a matter of national law and not covered by the Directive. Vendors of electronically-supplied services (such as software, which the EU considers a service and not a good) must also collect VAT (see Electronic Commerce section below).

Distance Selling Rules

The EU’s Directive on Distance Selling to Consumers (97/7/EC and amendments in 2014) sets out a number of obligations for companies doing business at a distance with consumers. While the Directive may read like a set of onerous “do’s” and “don’ts,” in many ways it represents a list of best practices for customer relations with legal effect. Direct marketers must provide clear information on their corporate identity as well as their suppliers, full details on prices including delivery costs, and the period for which an offer remains valid before the conclusion of a contract. Customers generally have the right to return goods without any required explanation within seven days, and retain the right to compensation for faulty goods thereafter. Similarly, the Doorstep Selling Directive (85/577/EEC) is designed to protect consumers from sales occurring outside of a normal business premises (e.g., door-to-door sales) and assure the fairness of resulting contracts.

In 2011, the EU overhauled its consumer protection legislation and merged several existing rules into a single rulebook - “the Consumer Rights Directive.” The provisions of this Directive apply to contracts concluded after June 13, 2014. The Directive includes provisions on core information to be provided by traders prior to the conclusion of consumer contracts, regulates the right of withdrawal, provides rules on the costs for the use of means of payment, and bans pre-ticked website boxes. Companies are advised to consult the information available via the hyperlinks, to check the relevant sections of national Country Commercial Guides, and to contact the U.S. Commercial Service at the U.S. Mission to the European Union for more specific guidance. Additional information is available at the websites below:

EU Consumer Affairs

Distance Selling

Door-to-Door Selling

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.

The following firms operating in Ljubljana may also assist in performing due diligence on potential Slovenian partners:

Dun&Bradstreet d.o.o.

Stegne 13 G

1000 Ljubljana

Tel: +386-080-39-03

Web: www.dnb.com/sl-si

Email: info.si@dnb.com

Creditreform d.o.o.

Leskoskova cesta 9E

1000 Ljubljana

Tel: +386- 59 017 366

Web: e-creditreform.si