Banks & Finances Slovakia

In Slovakia, most banks are open to collaborating with foreigners, but requirements and conditions may vary.

 

Tatra banka: Actively attracts foreign customers by offering services in English and specialized products for expats; provides current accounts, consumer loans, credit cards, and travel insurance.

 

Slovenská sporiteľňa: The largest commercial bank in Slovakia; has a wide branch network; offers services in English and various banking products, including current accounts and online banking.

 

VÚB Banka: Offers a wide range of services for individuals and businesses; provides services in English.

 

ČSOB: Offers a variety of banking products and services, including current accounts, loans, and investment products; provides services in English.

 

mBank: Known for its online services; offers convenient and accessible banking products; provides services in English.

 

Before choosing a bank, it is recommended to review service conditions, fees, and document requirements to select the most suitable option.

The procedure for opening an account may vary depending on the bank and the client's status. Below are the general steps and requirements for opening an account in a Slovak bank.

 

Selecting a bank: It is recommended to review service conditions, fees, and the availability of services in English to choose the most suitable bank.

 

The following documents are usually required to open an account:

- Identification: A valid international passport.

- Proof of residence address: A document confirming your address in Slovakia or abroad may be required (e.g., a lease agreement, utility bill).

- Residence permit: Some banks require a temporary or permanent residence permit in Slovakia.

- Additional documents: Depending on the bank, employment contracts, certificates from educational institutions, or other documents confirming a connection with Slovakia may be required.

 

Please note that requirements may vary depending on the bank.

 

Account opening procedure

Most banks require personal presence to open an account.

After document verification, an account opening agreement is signed.

A bank card is usually issued immediately or within a few days.

 

Features for non-residents: Some banks open accounts for non-residents, but conditions may be stricter. For example, at ČSOB, a foreigner can open an account regardless of the validity period of an open Schengen visa if they have a valid international passport and a second document issued by the state where they reside permanently.

Using ATMs: In Slovakia, ATMs that accept cards from international payment systems such as Visa, Mastercard, and UnionPay are widely available. ATMs are accessible in cities, shopping malls, and at stations.

 

Fees and currency conversion

 

Local bank fees: Some Slovak banks may charge a fee for withdrawing cash with a foreign card. The fee amount depends on the specific bank and may vary.

 

Your bank's fees: Your issuing bank may also charge a fee for international transactions. It is recommended to clarify conditions with your bank in advance.

 

Dynamic currency conversion (DCC): When withdrawing cash, an ATM may offer to select the transaction currency — local (euro) or your home currency. Choosing your home currency may lead to a less favorable exchange rate. It is recommended to always choose the local currency (euro) for more favorable conversion.

 

Cash withdrawal limits

Cash withdrawal limits depend on your bank and the specific ATM. Some ATMs may limit the amount of a single transaction or daily limit. If you need to withdraw a large sum, you may need to make multiple transactions. Your bank may also impose its own limits on international withdrawals.

 

Recommendations

ATM Selection: It is preferable to use ATMs of major banks such as Tatra banka, VÚB Banka, or ČSOB, which may offer more favorable conditions.

Check Fees: Before confirming the transaction, an ATM usually displays the fee information. Carefully review it and cancel the operation if necessary.

Contact Your Bank: Before traveling, notify your bank about your planned transactions abroad to avoid card blocking.

Alternatives: Consider using international services like Wise, which offer cards with beneficial terms for withdrawing cash abroad. However, note that they may also have their own limits and fees.

Bank Transfers (SWIFT Payments)

Most Slovak banks offer international transfer services through the SWIFT system. You need to provide the recipient's details, including:

- Recipient's name and address

- Recipient bank's name and address

- Recipient bank's SWIFT/BIC code

- Recipient's account number or IBAN

Fees and processing times depend on the specific bank.

 

Online Money Transfer Services

There are specialized online platforms that allow sending money abroad with minimal fees and at favorable exchange rates:

Wise: Offers low fees and transparent exchange rates. Transfers are made to bank accounts in more than 50 currencies.

Revolut: A mobile app that allows making international transfers, exchanging, and storing currency. Supports transfers to Slovakia and other countries.

Profee: Provides fast transfers to Visa, MasterCard, or through SEPA. Over 90% of transfers are credited within minutes.

 

Money Transfer Systems

International systems like Western Union allow sending money in cash or to bank accounts. Western Union has a wide network of branches and service points. Fees depend on the transfer amount and the destination country.

 

Postal Transfers

Slovenská pošta offers international postal transfer services. However, this method may be less convenient and more time-consuming compared to electronic methods.

Foreign nationals can obtain a loan or mortgage in Slovakia, but the conditions and requirements for them may differ from those for the country's citizens. Banks evaluate the applicant's creditworthiness, residency status, and income stability.

 

Types of Loans for Foreigners

Mortgage Loans: Intended for purchasing real estate. Banks may provide up to 70-80% of the property's value.

Consumer Loans: Issued for personal needs; however, obtaining them for foreigners may be difficult without a permanent residence.

 

Requirements for Foreigners

Residency Status: Possession of a temporary or permanent residence permit in Slovakia. Holders of a permanent residence permit have a better chance of loan approval.

Stable Income: Proof of regular income in Slovakia, such as an employment contract or income from business activities.

Credit History: Banks check the applicant's credit history, including possible debts and previous loans.

 

Recommendations

Consultation with a Financial Consultant: A specialist will help select optimal conditions and prepare the necessary documents.

In Slovakia, the payment for large purchases such as real estate or cars is regulated by legislation that sets limits on the use of cash. According to Slovak law, the following cash transaction limits apply:

 

Between individuals: The maximum amount of a cash payment is 15,000 euros.

 

Between an individual and a legal entity or between legal entities: The maximum amount of a cash payment is limited to 5,000 euros.

 

These restrictions aim to prevent money laundering and ensure transparency in financial transactions.

 

Payment for Real Estate: When purchasing real estate in Slovakia, payment is usually made by bank transfer. This ensures the security of the transaction and complies with legislative requirements. A bank transfer allows documenting the transaction and confirming the payment.

 

Car Payment: When purchasing a car, especially a new one, the payment is most often made cashlessly. For used cars purchased from private individuals, cash payment is possible, but the amount must not exceed the established limits (15,000 euros between individuals).

 

Recommendations

 

Checking Limits: Before making a large purchase, check the current cash payment limits to avoid violations.

Cashless Payments: It is preferable to use bank transfers for large transactions to ensure security and compliance with legislation.

Consultation with a Lawyer: It is recommended to consult a lawyer or financial consultant when conducting significant transactions to ensure proper documentation and compliance with all requirements.

In Slovakia, various tools are available for saving and investing, allowing efficient management of savings and capital growth. Let's consider the main ones:

 

Bank Deposits

Bank deposits remain a popular saving method among Slovaks. According to a survey by Slovenská sporiteľňa bank, 67% of the population prefer traditional savings deposits.

Term Deposits: Funds are placed for a fixed period with a predetermined interest rate. Interest rates depend on the term and amount of the deposit.

Savings Accounts: Offer more flexible terms with the ability to add and withdraw funds, but interest rates may be lower than term deposits.

 

Investment Funds

About 40% of Slovaks invest in investment and pension funds.

Mutual Funds: Combine investors' funds to invest in a diversified portfolio of assets. The level of risk and potential return depend on the fund's strategy.

Pension Funds: Designed for long-term retirement savings with the ability to choose an investment strategy.

 

Securities

Investments in stocks and bonds are becoming increasingly popular, with 21% of Slovaks investing in securities.

Stocks: Provide the opportunity to become a part-owner of a company and receive dividends. Stock investments are associated with higher risk but also potentially high returns.

Bonds: Debt instruments with fixed returns and a lower level of risk compared to stocks.

 

Real Estate

Investments in real estate are considered a reliable way to preserve and grow capital. 23% of Slovaks invest in real estate.

Residential Real Estate: Buying apartments or houses for rent or subsequent sale.

Commercial Real Estate: Investments in office, retail, or warehouse spaces.

 

Alternative Investments

Cryptocurrencies: Digital currencies such as Bitcoin or Ethereum offer high potential returns but are associated with high volatility and risks.

Precious Metals: Investments in gold, silver, and other metals for portfolio diversification and protection against inflation.

 

Recommendations for Investors

Consultation with Professionals: Consulting financial advisors or investment companies can help choose the optimal strategy and tools for investing.

The tax obligations of foreign citizens in Slovakia depend on their tax status, income sources, and duration of stay in the country.

 

Tax Status: Resident or Non-resident

 

Tax Resident: A person is considered a tax resident of Slovakia if they have a permanent residence in the country or actually reside in Slovakia for more than 183 days in a calendar year. Tax residents are taxed on worldwide income, meaning income earned both in Slovakia and abroad.

 

Tax Non-resident: A person who does not meet the above criteria is considered a tax non-resident and is taxed only on income from sources in Slovakia.

 

Taxable Income

 

For tax residents, all types of income are subject to taxation, including:

- Salary

- Income from entrepreneurial activities

- Income from renting property

- Interest income and dividends

 

Tax non-residents are taxed only on income sourced from Slovakia, such as:

- Wages for work performed in Slovakia

- Income from renting real estate located in Slovakia

- Income from activity carried out in Slovakia

 

Tax Rates

 

Slovakia applies a progressive income tax scale:

- 19% for income up to a certain threshold

- 25% for income exceeding this threshold

Specific threshold values and rates may vary, so it is advised to verify the current data on the official website of the Slovak tax office.

 

Double Taxation Avoidance Agreements

Slovakia has concluded double taxation avoidance agreements with several countries, which helps to prevent double taxation of the same income. It is recommended to become familiar with the specific agreement conditions between Slovakia and your country of residence.

 

Tax Deductions and Allowances

Tax residents may be eligible for certain tax deductions and allowances, such as:

- Deductions for spouses with low income

- Deductions for children

- Deductions on mortgage interest

 

Tax non-residents whose income from sources in Slovakia accounts for at least 90% of their total income may also be eligible for some deductions.

 

Recommendations

Consultation with a tax specialist: Since tax legislation can be complex and frequently change, it is recommended to consult a professional to obtain current information and assistance in meeting all obligations.

In Slovakia, the process of filing a tax return for foreign citizens depends on their tax status, sources of income, and duration of stay in the country.

 

Determining Tax Status

Tax residents are required to declare and be taxed on all their income, regardless of its source.

Tax non-residents are required to declare only income sourced from Slovakia.

 

Obligation to File a Tax Return

Tax residents: Are required to submit an annual tax return if their income exceeds a certain minimum or if they have received income from abroad. The deadline for submitting the return is usually by March 31 of the following year.

Tax non-residents: Are required to file a return if they received income from sources in Slovakia that are not taxed at the source of payment.

 

Tax Return Submission Process

Registration with Tax Authorities: Foreign citizens receiving income in Slovakia must register with the local tax office within 30 days from the receipt of income.

Return Form: There are two main forms of tax returns for individuals:

Type A: For individuals receiving only income from employment.

Type B: For individuals with other types of income, such as business activities, property rental, etc.

Submission Methods: The return can be submitted in person, by mail, or electronically through the Slovak Financial Administration portal. For electronic submission, registration on the portal and an electronic signature are required.

 

Tax Payment

After submitting the return, the calculated tax must be paid by the specified deadline. Payment can be made by bank transfer or other methods specified by the tax authorities.

 

Recommendations

Consultation with a tax specialist: Since tax legislation can be complex and frequently change, it is recommended to consult a professional to obtain current information and assistance in meeting all obligations.

Timely Submission of Returns: Compliance with deadlines for filing tax returns and paying taxes will help avoid fines and other sanctions.

Registration and Legal Status

To start an activity, it is necessary to register as a sole proprietor in the Slovak Commercial Register. This allows providing services or selling goods legally within the country.

 

Tax Rates and Obligations

Income Tax: The income of self-employed individuals is subject to income tax on a progressive scale:

- 19% for income up to a certain threshold.

- 25% for income exceeding this threshold.

 

Value Added Tax (VAT): Mandatory VAT registration is required if the annual turnover exceeds 50,000 euros. The standard VAT rate is 20%.

 

Tax Benefits and Deductions

Fixed Expenses: Self-employed individuals can deduct fixed expenses from their taxable income without the need to provide supporting documents. As of 2024, the maximum amount of such expenses is 20,000 euros.

Tax Deductions: Additional deductions may be available, for example, for low-income spouses or children.

 

Social and Medical Contributions

Self-employed individuals are required to pay contributions to social and medical funds. The amount of contributions depends on the level of income and is set annually.

 

Accounting and Reporting

Bookkeeping can be simplified when using fixed expenses. However, more detailed accounting is required if certain income thresholds are exceeded or upon voluntary registration as a VAT payer.

 

Recommendations

Consultation with a Tax Specialist: Since tax laws may change, it is recommended to consult a professional for up-to-date information and assistance in fulfilling all obligations.

Timely Submission of Declarations: Meeting deadlines for filing tax returns and paying taxes will help avoid fines and other penalties.