We hear everywhere about the support of small and medium-sized enterprises and that they have a significant, up to 70%, share in the GDP of Slovakia. How does it work among foreign entrepreneurs? In their case too, most of them come to Slovakia as small and medium enterprises.
Foreign entrepreneurs are a dysfunctional group of entrepreneurs. They do not speak Slovak as well as Slovaks, do not know the mentality and often do not have the necessary contacts for their idea to break into the market. But people from abroad can overcome all this, because they often have experience and finances from their native country, and they are quite purposeful.
But the law on the stay of foreigners imposes severe restrictions on them as soon as their stay in the country is extended for the first time. Only those who have already earned at least 12,305 euros after taxes in the first year of their LLC, or at least 4,102 euros if it is a foreign person's business (designation for foreign individual entrepreneurs), can stay. Quite tough conditions, but okay, in the end, let them remain the best, namely, foreign entrepreneurs identify themselves with this. They do not resist, after all, they come to a new country and must comply with all conditions.
In order for such a purposeful foreigner to come to Slovakia to do business, he needs to obtain a residence permit for the purpose of doing business. Often, even if the purpose is proved by the decision of the general meeting of shareholders on the election of a managing director or a trade license in the case of a foreign person's business. The foreign police will immediately require a business plan with mandatory applications, which are signed contracts, orders and invoices.
The Ministry has time
What does it look like in practice? For example, a foreign theater troupe (and now the real story begins!) Had to schedule performances in advance, book them and transfer documents to the police for verification, which was supposed to send all this to the Ministry of Economy. Suppose they did so and ordered several events for the Christmas holidays, because it is at this time that they have the most work. At the same time, they documented everything that the administrative bodies wanted, even going beyond the law. Do you think they met the requirements of the Ministry of Economy?
No, they didn't, Christmas was over, and there were no performances. Everyone did not care about the deadlines, the state authorities did not try to comply with them at all, although one of the contracting parties from Slovakia asked for this. For what reason? The Ministry of Economy allegedly has no deadlines for a response, and they still did not recognize the documents as credible, so it is logical that they did not respond.
Stop brain drain
What about an IT professional who is already in business and goes as an additional managing director to an existing company that made a profit of €40,000 in 2017 as well as in 2018 and paid an income tax of over €8,000 each year. After all, the Ministry of Economy has a business certificate written in black and white.
Do you think such a business meets the interests of the Slovak Republic? Apparently not... After all, he, like an IT specialist, has no contracts, he is forced to receive them from Amazon and Google, with which he cooperates. How is it possible that in real life there are no such contracts, asks the Ministry of Economy? Because this is how the world of information technology works, an information technology specialist answers. The result sounds like an anecdote: an IT specialist with higher education was waiting for a temporary residence permit for a whole YEAR, and we REALLY have a 90-day period for granting a temporary residence permit. I confess that I apologized to a young intelligent IT specialist for the state of Slovakia and told him that in Slovakia doors are open for manual workers, and not for IT specialists and doctors.
I also know the case of a world-famous economist, and searching his name on Google gives 146 thousand results. He has been waiting since June and has a delay in production - according to the law, to the answer to the previous question, in reality - maybe forever, that is, to the answer of the Ministry of Health.
We need a system solution
I assess the economic environment for the arrival of small and medium-sized entrepreneurs in Slovakia as unfavorable. What do we need? Of course, a systemic solution that alone will reverse this depressing situation that does not suit anyone.
What I mean by a system solution:
I regret the situation in Slovakia. We are losing quality entrepreneurs with finances and ideas, but we are recruiting handymen for whom we have set the conditions of arrival so that they can start working immediately after applying for a residence permit, as our current situation allows. Recently, we lost an entrepreneur from Armenia who applied for a residence permit in February 2018 and, due to waiting without deadlines, surrendered and left for another state. He was an educated and decent gentleman with experience, resources and a clear vision of what and how he would like to do in Slovakia. Unfortunately, it seems that in our country there is no vision of controlled and profitable immigration for Slovakia.
Slovakia is often called a cheap assembly plant, which may have been appropriate 20 years ago, but as a society we should and can move forward from then on. However, the reality is that we, that is, the government, continue to do everything possible to ensure that we remain this assembly workshop. From the point of view of immigration, this means facilitating the arrival of unskilled workers and, conversely, complicating the arrival of foreign entrepreneurs in Slovakia, creating jobs and paying taxes.
Foreign entrepreneurs are a dysfunctional group of entrepreneurs. They do not speak Slovak as well as Slovaks, do not know the mentality and often do not have the necessary contacts for their idea to break into the market. But people from abroad can overcome all this, because they often have experience and finances from their native country, and they are quite purposeful.
But the law on the stay of foreigners imposes severe restrictions on them as soon as their stay in the country is extended for the first time. Only those who have already earned at least 12,305 euros after taxes in the first year of their LLC, or at least 4,102 euros if it is a foreign person's business (designation for foreign individual entrepreneurs), can stay. Quite tough conditions, but okay, in the end, let them remain the best, namely, foreign entrepreneurs identify themselves with this. They do not resist, after all, they come to a new country and must comply with all conditions.
In order for such a purposeful foreigner to come to Slovakia to do business, he needs to obtain a residence permit for the purpose of doing business. Often, even if the purpose is proved by the decision of the general meeting of shareholders on the election of a managing director or a trade license in the case of a foreign person's business. The foreign police will immediately require a business plan with mandatory applications, which are signed contracts, orders and invoices.
The Ministry has time
What does it look like in practice? For example, a foreign theater troupe (and now the real story begins!) Had to schedule performances in advance, book them and transfer documents to the police for verification, which was supposed to send all this to the Ministry of Economy. Suppose they did so and ordered several events for the Christmas holidays, because it is at this time that they have the most work. At the same time, they documented everything that the administrative bodies wanted, even going beyond the law. Do you think they met the requirements of the Ministry of Economy?
No, they didn't, Christmas was over, and there were no performances. Everyone did not care about the deadlines, the state authorities did not try to comply with them at all, although one of the contracting parties from Slovakia asked for this. For what reason? The Ministry of Economy allegedly has no deadlines for a response, and they still did not recognize the documents as credible, so it is logical that they did not respond.
Stop brain drain
What about an IT professional who is already in business and goes as an additional managing director to an existing company that made a profit of €40,000 in 2017 as well as in 2018 and paid an income tax of over €8,000 each year. After all, the Ministry of Economy has a business certificate written in black and white.
Do you think such a business meets the interests of the Slovak Republic? Apparently not... After all, he, like an IT specialist, has no contracts, he is forced to receive them from Amazon and Google, with which he cooperates. How is it possible that in real life there are no such contracts, asks the Ministry of Economy? Because this is how the world of information technology works, an information technology specialist answers. The result sounds like an anecdote: an IT specialist with higher education was waiting for a temporary residence permit for a whole YEAR, and we REALLY have a 90-day period for granting a temporary residence permit. I confess that I apologized to a young intelligent IT specialist for the state of Slovakia and told him that in Slovakia doors are open for manual workers, and not for IT specialists and doctors.
I also know the case of a world-famous economist, and searching his name on Google gives 146 thousand results. He has been waiting since June and has a delay in production - according to the law, to the answer to the previous question, in reality - maybe forever, that is, to the answer of the Ministry of Health.
We need a system solution
I assess the economic environment for the arrival of small and medium-sized entrepreneurs in Slovakia as unfavorable. What do we need? Of course, a systemic solution that alone will reverse this depressing situation that does not suit anyone.
What I mean by a system solution:
- Cancellation of the Methodological Instruction of the Ministry of Economy of the Slovak Republic of 2017, which is inaccessible to foreigners and has quite significant gaps in application.
- Establishing clear conditions in the Law on the Residence of Foreigners, and not in the Methodological Instructions.
- Establishing clear deadlines for the Ministry of Health to respond and cooperate with foreigners or their legal representatives when deciding on an application.
- Support from the SBA, which is responsible for supporting small and medium-sized entrepreneurs.
I regret the situation in Slovakia. We are losing quality entrepreneurs with finances and ideas, but we are recruiting handymen for whom we have set the conditions of arrival so that they can start working immediately after applying for a residence permit, as our current situation allows. Recently, we lost an entrepreneur from Armenia who applied for a residence permit in February 2018 and, due to waiting without deadlines, surrendered and left for another state. He was an educated and decent gentleman with experience, resources and a clear vision of what and how he would like to do in Slovakia. Unfortunately, it seems that in our country there is no vision of controlled and profitable immigration for Slovakia.
Slovakia is often called a cheap assembly plant, which may have been appropriate 20 years ago, but as a society we should and can move forward from then on. However, the reality is that we, that is, the government, continue to do everything possible to ensure that we remain this assembly workshop. From the point of view of immigration, this means facilitating the arrival of unskilled workers and, conversely, complicating the arrival of foreign entrepreneurs in Slovakia, creating jobs and paying taxes.
Current articles by Alona Kurotova are also available at dennikn.sk