In online discussions, you often come across people who are looking for a job or considering a career change, and they ask themselves what the most suitable form of work is. However, there is no universal answer. Both entrepreneurship and employment have their own advantages and disadvantages.
The business environment in Slovakia is full of obstacles
Entrepreneurship in Slovakia is not a walk in the park. Many are discouraged by endless bureaucracy, high taxes, and various strict regulations. Other issues that many entrepreneurs face in Slovakia include insufficient financing and access to loans, the lack of quality consulting services and business support programs, almost no support for innovation and research, and weak transport and technological infrastructure.
Despite these challenges, approximately 300,000 companies are currently operating in Slovakia. About 99.9% of them are small and medium-sized enterprises (SMEs), while large companies make up only 0.1%. SMEs are thus the dominant part of the business environment in Slovakia.
The most common form of business is sole proprietorship
Slovaks most often engage in business as sole proprietors, i.e., as individuals with a license to conduct business. The reason for this is the relative simplicity and flexibility in establishing and running a sole proprietorship. Sole proprietors have fewer administrative obligations and lower startup costs compared to other business forms, such as joint-stock companies or limited liability companies.
Job stability also brings high taxes
It is estimated that around 2.5 million people in Slovakia are currently employed. For many Slovaks, employment offers advantages such as a stable monthly income, benefits like paid vacations, sick leave, and various employee perks, making it attractive for those who prefer security and predictability.
On the flip side, the tax burden for employees in Slovakia is one of the highest in the surrounding countries. For instance, as reported by the Trend portal, from an average gross salary of €1,430, an employee is left with only around €745 net. This means roughly half of the salary is deducted. The biggest cuts from an employee’s salary are for social security and health insurance contributions.
This is why many employees opt to establish a one-person limited liability company (s.r.o.) or become sole proprietors, allowing them to keep more money “in hand.” However, the downside is lower pension benefits, less income stability, more bureaucracy than in employment, and sometimes difficulties in securing a mortgage. Despite these facts, sole proprietors represent the third largest working group in Slovakia after employees and contractors. Currently, more than 400,000 sole proprietors are working in Slovakia.
If you are unsure whether to pursue entrepreneurship or employment, our company offers expert business consulting services. We will help you set up your business, handle all the administrative tasks, and advise you on how to optimize your tax burden. Consider your options and leave the bureaucracy and legal formalities to us so that you can focus on what truly matters to you.