(Last updated: 05 Nov 2008)

Business etiquette

Business tips

Business practices and etiquette in the Slovak Republic are a cross between those of western Europe and the USA on the one hand, and eastern Europe and Russia on the other. While English is increasingly accepted as a business language in the Bratislava area, German is more common throughout the country. Russian is widely understood but may not always be welcomed. Many Slovak companies have English speakers among their top managers.

Successful business in the Slovak Republic generally requires the establishment of a good personal relationship and a feeling of mutual trust. Social conversation prior to business is the norm, and launching directly into business may impede the development of a good personal relationship with the Slovak business partner.

To initiate and maintain effective business relations, you should have regular face-to-face meetings, and maintain frequent telephone, fax and email contacts in between visits. After an initial meeting, written summaries of goals, objectives, and points of agreement or disagreement are encouraged to minimise misunderstandings between business parties.

Dress conservatively for official meetings. During meetings with business partners, in banks, public offices and during official or cultural events men wear business suits with tie.

Use surnames until you are invited to use first names.

Ask if a meeting can be conducted in English and provide an interpreter if necessary.

Use titles and positions as these are highly regarded and routinely appear on business cards.

Do not arrange a visit during the summer holiday months of July and August. Be aware that many companies are closed between 24 December and 2 January.

Please also note:

Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

Tariff

A customs union between the Slovak and Czech Republics has been established (in accordance with GATT, Paragraph XXIV) which allows the duty free exchange of goods between the two countries free from other barriers to trade. A common external tariff (based on the previous Czechoslovakian tariff) is in place for imports from third countries entering both republics.

The external rate is a two column tariff based on the Harmonized System with most duties are ad valorem (%), based on the GATT Valuation Code (approximately CIF value - Incoterms 2000).

MFN rate applies to Australian goods.

Customs authority contact details:

Director General de l’Administration
Customs Administration of the Slovak Republic (Colne riaditelstvo)
Mierova 23815 11
Bratislava
Tel: +421 2 4827 3111, 4333 7580 or 4333 7100
Fax: +421 2 4333 5282 or 4333 6029
Web: www.colnasprava.sk

Non-tariff barriers

Import restrictions

All monopoly on foreign trade and all price controls have been abolished.

Any firm or individual that is registered may now import goods from any country.

Administration of import registration and licensing is controlled by the License Office of the Ministry of Economy of the Slovak Republic.

Import licences are not required for most goods, although certain items are still subject to this requirement, these include crude oil, natural gas, black and brown coal and some other chemicals, poisons and narcotises,  firearms and some agricultural products are subject to an automatic licensing system.

It is strictly forbidden to import poisons and sensitive chemicals.

Import of military material, poisons and narcotises is under special procedure of personal license.

All import deposits have been removed.

Product certification, labelling and packaging

Labelling and marking

Instructions for use, description of a product (especially food) and warranty manual has to be written in Slovak.

Price bar code has to be printed on the package.

Any specific requirements will be stipulated in the contract.

Special certificates

Health certificates, issued by the appropriate authority in the country of origin, are required for shipments of animals and their products and plant and vegetable products (see 'Public health requirements').

Since 1 September 1997, a new law covering general product safety, being identical with the law prevailing in the European Union (EU), has been launched: A special certificate issued by the Slovak State Testing Office is asked by customs officers at the Slovak border. Obtaining the mentioned certificate is in full responsibility of importer. A certificate from a country of origin serves to Slovak State Testing Office as a background.

The Slovak Republic follows EU rules.

Packaging

Goods should be securely packed, having due regard to the nature of the goods, means of transport and likely climatic conditions during transit and delivery. The outer containers should bear consignee's mark and port mark and should also be numbered (to accord with a packing list) unless their contents can be otherwise readily identified. The sales contract number and country of origin must be shown on containers.

Methods of quoting and payment

Quotations in Pound Sterling or US dollars FOB, C&F and CIF (Incoterms 2000). Method of payment will be stipulated in the contract - credit terms may be requested.

Documentary requirements

Commercial invoice

Note: Documentation requirements are normally detailed in each individual contract.

There is no prescribed form. A minimum of three copies is required, and must contain all details relevant to the shipment, including the sales contract number. 

Bill of lading

The original is required for clearing goods through customs and issued in the number of copies requested by importer. 'To Order' bills acceptable.

Packing list

Not obligatory, but it facilitates clearance.

Certificate of origin

May be requested within the terms of the contract - otherwise, only required for wine and wine distillates cleared under the MFN tariff. Imported food including package has to be certified by the Slovak Testing Office prior distribution.

Public health requirements

After European Union (EU) accession import policy follows EU rules.

The Licence Authority of the Slovak Ministry of Economy must license imports of animals, animal products, plants and vegetable products. The individual items are subject to the Public Notice #15/98 and Act 576/2001 of Ministry of Economy of the Slovak Republic stipulating conditions to grant an official permit for import and exports of goods and services, and Act #147/96 of Collection.

These products from import administration point of view can be split into two groups. The first group covers live animals, foodstuffs and foodstuffs of animal origin and fodders, requires veterinary certificates by the State Veterinary Administration of the Slovak Republic. The second group, includes plants and seeds, requires phytopathological sanitary certificate and in some cases even additional declaration by FITO Service.

These certificates are issued by the approved authority in the country of origin, in Australia this is usually the Australian Quarantine and Inspection Service (AQIS), Commonwealth Department of Primary Industries or the State Department of Agriculture.
Specific requirements are normally stated in the sales contract, and consignments undergo either a phytopathological or veterinary examination at the frontier station of entry.

Pharmaceuticals require an import licence issued by the Ministry of Health. At the same time any pharmaceutical is subject to the registration by the State Institute of Pharmaceutical Control prior to import.

Electrical appliances, toys, fireworks and cosmetics must conform to safety regulations being identical with those of EU.

Insurance

Depending on Incoterms (2000).

Weights and measures

The metric system.

Setting up in the Slovak Republic

Setting yourself up to do business in the Slovak Republic is a complex (but perfectly achievable) undertaking requiring plenty of planning and forward thinking. Obtaining the necessary permits and papers and setting up appropriate entities in the Slovak Republic takes time, and people considering doing business in the Slovak Republic should allow adequate time to be ready by their desired deadlines. Always check the legal, tax and accountancy regime well in advance, but get regular updates as the law can change frequently.

Austrade is prepared to advise you and search for adequate partner for your business activities. The partner search will depend on whether you are merely plan to export or trade in the Slovak Republic or whether you are intending to establish a permanent presence or purchase a business or company there. You will need to find out what permits or licences are required, which may include work/residency permits, trade licences and industry-specific permits relating to financial services regulations or environmental regulations, for example.

Taxation

There are two Value Added Tax (VAT) rates, 19 per cent for goods and 10 per cent for certain selected goods and services (ie. specific agricultural products, essential food, coal and other sources of energy, pharmaceutical products, paper products and electric-driven vehicles).

Basic rate for services is 19 per cent with a rate of 10 per cent for some selected services (ie. some repairs and maintenance, some lawyer services for public not for business, equipment for blind and disabled people, medical equipment healthy service for public, contact lenses and frames if not made from precious metals, accommodation services, etc.)

VAT is levied on all sales of goods and services.

Excise taxes are applied to hydrocarbon fuels and lubricants, spirits and distilled liquors, beer, wine and tobacco products that are produced in or imported to the Slovak Republic.

The tax period is the calendar year from 1 January to 31 December.

There is a flat income tax rate of 19 per cent.

Banking and finance

The Slovak Republic’s commercial banking sector is fairly mature. As at December 31 2006, total assets, loans and deposits amounted to US$62.5 billion, US$26 billion and US$37.7 billion, respectively.

The competitive landscape in the Slovak Republic is dominated by three institutions:

• VUB, the local subsidiary of Italy’s Banca Intesa, accounts for about 17 per cent of total assets and 18 per cent of loans.
• Slovenska Sporitelna, which is majority owned by Austria’s Erste Bank, has a market share of around 21 per cent in assets, 14 per cent of loans and 26 per cent of deposits.
• For Tatra Banka, the largest foreign operation of Austria’s Raiffeissen Bank, the bank constitutes 15 per cent of assets.

The top three banks in the Slovak market have strong positions but are not crushingly dominant.