{"id":5874,"date":"2019-12-19T10:10:00","date_gmt":"2019-12-19T09:10:00","guid":{"rendered":"http:\/\/monitoringmsp.sk\/?p=5874"},"modified":"2022-03-15T11:24:03","modified_gmt":"2022-03-15T10:24:03","slug":"report-on-the-state-of-small-and-medium-sized-enterprises-in-the-slovak-republic-in-2018","status":"publish","type":"post","link":"https:\/\/monitoringmsp.sk\/en\/2019\/12\/19\/report-on-the-state-of-small-and-medium-sized-enterprises-in-the-slovak-republic-in-2018\/","title":{"rendered":"Report on the State of Small and Medium-Sized Enterprises in the Slovak Republic in 2018"},"content":{"rendered":"\n

The submitted Report on the State of Small and Medium Enterprises in the SR in 2018<\/em>\npresents a comprehensive view of the state and development of the business environment\nin the sector of small and medium-sized enterprises and support of\nSMEs in the period under review. The objective of Report<\/em> is to highlight the developmental trends and the most\nsignificant legislative changes in course of the year, which have an impact on\nSMEs. It also seeks to highlight the existing barriers, together with proposals\nfor measures to improve the business environment for the benefit of SMEs.<\/p>\n\n\n\n

The importance of small and medium-sized\nenterprises in the Slovak economy may be described using several indicators. In\n2018, they represented 99.9% of the total number of business entities in\nthe Slovak economy. SMEs employed approximately three quarters (73.2%) of the\nactive labour force in corporate economy and helped to create more than half\nof the added value (54.6%). Compared to 2017, the employment in SMEs\nincreased by 1.4%, the added value by 11% with the year-on-year growth being\nthe most significant in the last 8 years. The pre-tax profit generated\nincreased year-on-year by 18.4% and the gross production of SMEs by 7.8%.\nAccording to preliminary results of the SO SR, the year-on-year growth rate of\nSME exports also increased by 3.6%. Despite the positive development in several\nindicators, small and medium-sized enterprises were not successful in following\nthe previous positive development in investment activity. The decline in\ninvestment shows a possible slowdown in the economic performance of SMEs\nin the future.<\/p>\n\n\n\n

According to records of the Statistical Office of SR (hereinafter referred to as \u201cSOSR\u201d), the number of active business entities in 2018 reached 560,521, while SMEs represented 559,841 out of the above-stated figure. Compared to 2017, the number of active SMEs increased by 1.3%. Out of the total number of enterprises, microenterprises represented 96.8% (542,525), small enterprises 2.6% (14,328) and medium-sized enterprises 0.5% (2,988) and large enterprises 0.1 % (680). The position of the category of micro-enterprises in Slovakia is more significant in comparison with EU countries, given their achieved share in Slovakia.<\/p>\n\n\n\n

In recent years, the number of\nmicro-enterprises has oscillated around 97% of the total number of business\nentities. In the year 2018, their number decreased slightly (by 1.4%), mainly\ndue to a decrease in the number of active self-employed persons as well as\ncontinuous growth of employment in SMEs in the last three reporting periods,\nwhich led to the transfer of business entities to higher business categories\n(with a higher number of employees).<\/p>\n\n\n\n

In 2018, there was a positive trend in the\nnumber of established small and medium-sized enterprises with their number\nincreasing by almost one fifth (19.4%) year-on-year to 78 075 entities.\nThe most significant was the year-on-year increase in the self-employed\ncategory. Another positive fact in 2018 was a decrease in the number of\ndisestablished business entities by 0.8%, i.e. 52 168 entities. The net\nincrease in business entities was twice the amount compared to last year\n(25,907 business entities).<\/p>\n\n\n\n

The position of women in the business sector in\nSlovakia did not change significantly in 2018. Nevertheless, their share\nincreased by 0.2 pp compared to 2017, i.e. to 29.2%.<\/p>\n\n\n\n

The development of the age structure of natural\npersons – entrepreneurs, has recently been characterized by an increase in the\nrepresentation of entrepreneurs in younger age categories of less than 30\nyears of age. On the contrary, after the previous increase in 2018 the share of\n
<\/p>\n\n\n\n

natural persons – entrepreneurs aged 60 and over decreases. In the\nperiod under review, most entrepreneurs were included in the age group from 30\nto 49 years. <\/p>\n\n\n\n

More than three-quarters (76.4%) of small and\nmedium-sized enterprises in Slovakia performed their main business activities in\nthe following four sectors: business services, trade, construction and\nindustry. In terms of the sectoral structure of small and medium-sized\nenterprises, more than one quarter (26.7% meaning 149,528 entities) were small\nand medium-sized enterprises operating in the business services sector. Almost\none fifth of SMEs (19% meaning 106,643 entities) performed their core\nbusiness in the trade sector. This was followed by the construction sector,\nwith a share of 17% (95,315) of active SMEs. In the industrial sector, a total\nof 76,454 small and medium-sized enterprises (SMEs) performed their core\nbusiness and their share in terms of sectoral structure reached 13.7%. The\nshare of other sectors in the monitored category of SMEs did not exceed 10%,\nwhile the lowest share in the long term was reported by the agriculture sector\n(4.1%) together with the accommodation and catering sector (3.3%).<\/p>\n\n\n\n

As for the foreign-trade exchange of goods,\nlarge enterprises have maintained their long-term dominant position. According\nto the preliminary results of the SO SR, the growth rate of SME exports\nincreased by 3.6% in 2018, which means that it is also the highest growth rate\nrecorded in the last 3 years. On the other hand, due to a stronger acceleration\nin the growth of large enterprise exports compared to SMEs, there was a\nyear-on-year decrease in the share of SMEs in total exports (27.4% in 2018)\nwhich means the lowest share since 2010 in terms of SME monitoring. There\nwas also an increase in the SME passive balance, which has been observed\ncontinuously for the fifth monitoring period.<\/p>\n\n\n\n

The business environment in Slovakia is\ncharacterized by frequent legislative changes affecting, among other things,\nobligations and requirements with an impact on the SME sector. In 2018, a\nnumber of major legislative changes affecting SMEs were recorded. The most\nimportant of these are adoption of the Act against bureaucracy, adoption of the\nAct on social economy and social enterprises, amendment to the Act on Public\nProcurement referring to the introduction of reserved contracts, extensive\namendment to the Land Registry Act and legal enshrining of new tax on non-life\ninsurance. The Value Added Tax Act introduced a reduction in the tax rate on\naccommodation services, and a new provision regulating the recreational\nvouchers for employees was added as part of the Act on Support of Tourism.<\/p>\n\n\n\n

The adoption of the Act against\nbureaucracy, which came into force on 1 September 2018, can be considered a\npositive. The aim of the adopted Act is to reduce the administrative burden of\nnatural and legal persons and to exempt them from the obligation to submit the\nmost frequently requested extracts from registers in the most common life\nsituations in which citizens communicate with the state.<\/p>\n\n\n\n

Another positive fact is the adoption of the\nSocial Economy Act, which entered into force on 1 May 2018. The Act is part of\nthe overall strategy of social economy development in the Slovak Republic and\nestablishes social economy entities, social enterprises, organizations of the social economy sector, providing\nsupport for enterprises in the wider area of \u200b\u200bsocial economy, defines the\nsocial economy sector and state administration in the social economy sector.\nThe aim of the law is to create space for a socially oriented economy as\nan integral part of the public economy, by defining the conditions for the\ncreation of social economy entities and their support. Social economy entities\nshould focus on meeting societal objectives by achieving measurable positive\nsocial impact. The Act, in its wording, distinguishes the positive social\nimpact by fulfilling the public or community interest. The Act specified the\nconditions for granting the status of \u201cregistered social enterprise\u201d while\nstipulating that a registered social enterprise is obliged to meet the\nconditions of the granted status at all times. Registration has the effect of\nobtaining state support (in direct or indirect form). The use of direct forms\nof support in the form of investment and compensatory financial assistance\nis graded depending on the social economy entity. In addition, a registered\nsocial enterprise can receive aid in the form of support for demand in the form\nof service vouchers, income tax relief (from that part of the profit it decides\nto use to achieve its main objective), a reduced VAT rate of 10% (after fulfilment\nof the condition that 100% of its profits will be invested in the fulfilment of\nthe main objective) and support in the form of substitute fulfilment.<\/p>\n\n\n\n

Furthermore, it was an extensive amendment to\nthe Cadastral Act, the purpose of which is to accelerate and improve the\nregistration of real estate, as well as to create legislative conditions\nreflecting the requirements of application practice. Currently, it is possible\nto request a list of real estate, which is a summary of data on all properties\nlocated in the territory of the Slovak Republic owned by one person.<\/p>\n\n\n\n

Another positive fact also includes the\nreduction of the VAT rate on accommodation services, from the original 20% to\n10%, effective from 1 January 2019. This reduced tax rate applies not only to\nhotel and similar accommodation services but also to accommodation services in\nstudent homes or dormitories or accommodation in workers’ dormitories and the\nlike.<\/p>\n\n\n\n

On the other hand, during the monitoring period,\nthe formation or extension of several obligations occurred together with legal\nintroduction of a new insurance tax. The subject of the tax is insurance in the\nnon-life insurance sectors, which are listed in the annex to the relevant Act.\nInsurance tax does not apply to mandatory-contracting-insurance (MCI). The tax\nbase rate is 8% for the relevant insurance.<\/p>\n\n\n\n

In 2018, support for SMEs was mainly provided\nfrom the resources of the European Structural and Investment Funds (hereinafter\nreferred to as \u201cESIF\u201d) and from the state budget. Non-repayable assistance in\nthe form of grants prevailed. Based on the documents received from individual\ninstitutions, the number of funds disbursed through SMEs amounted\nto EUR 686,846,194. In 2018 the disbursements reached the volume seen\ntwo years ago. Non-financial form of assistance included providing\nbusiness-related information and consultancy, business education, organizing\nand supporting participation in exhibitions, national, international or\ncooperation events or other activities focused on promoting enterprising. A more\ndetailed overview of the assistance provided to SMEs in the previous year is\nprovided in Chapter 3. Support programs, measures and initiatives in relation\nto SMEs.<\/p>\n\n\n\n

In 2018, the Slovak Business Agency continued\nto meet the objectives of providing comprehensive assistance focused on the SME\nsector, while continuing to support them through the implementation of several\nnational or international projects. In the previous monitoring year, the SBA\nlaunched several national projects funded by the OP Research and Innovation,\noffering a wide portfolio of services for SMEs and business enthusiasts,\nwhether in Bratislava or in individual regions of the Slovak Republic.<\/p>\n\n\n\n

SBA also actively assessed materials and provided\nits opinions and commentaries through the Better Regulation Centre (hereinafter\nreferred to as \u201cBRC\u201d). In 2018, the BRC assessed (from the content and\nprocedural point of view) the reality of the captured impacts in all the Business Environment Impact Analysis<\/em>\n(143 in total with impact on the business environment) and provided detailed\nopinions containing suggestions for better capturing the impacts of the\nnew regulation on business environment. Impact assessment was carried out\nthrough the SME test (ex ante and ex post). At the same time, the BRC has been\nactively and on its own initiative involved in providing content-related\ncomments on new regulatory proposals (consultations), which have resulted in\nthe incorporation of some important BRC initiatives, which has somewhat\nreduced the regulatory impact on SMEs.<\/p>\n\n\n\n

As part of the Bureaucratic Nonsense of the\nYear poll, the Better Regulation Centre expertly evaluated the collected\nsuggestion, quantified the extent of their impact on the businesses concerned,\nand drafted material measures to optimize the regulatory burden. At the same\ntime, it participated in the preparation of the training manual for the SME\nTest of the Uniform Methodology, especially in order to increase the importance\nof the development of the SME Test as well as the actual updating of the\nUniform Methodology. Furthermore, BRC’s proposals contributed to the\ndevelopment of the 2nd and 3rd package of the Proposal for measures to Improve\nthe Business Environment. In addition to the above, BRC won the national\nEuropean Enterprise Promotion Award in 2018 in the Business environment support\ncategory and participated in several conferences and seminars with an emphasis\non entrepreneurship, informing about the content of these via social networks.<\/p>\n\n\n\n

The\nsubmitted Report on the State of Small\nand Medium Enterprises in the SR in 2018<\/em>  contains also\ncomprehensive proposals and recommendations for further improvements of the\nbusiness environment in the SME sector the main goal of which is to support positive\ntrends and to contribute to a growth of the SME sector and its dynamics and in\nparticular to enhance its competitiveness.<\/p>\n\n\n\n

In line with the needs of SMEs, it is necessary\nto continue to streamline support for SMEs. At the same time, however, it is necessary\nto continue in a systematic cooperation and coordinated approach of all\nrelevant departments, as well as taking into account the proposals and\nrecommendations of individual entities. Improving business conditions should\ncontribute to the overall improvement of the quality of the business\nenvironment in Slovakia.<\/p>\n","protected":false},"excerpt":{"rendered":"

The submitted Report on the State of Small and Medium Enterprises in the SR in 2018 presents a comprehensive view of the state and development of the business environment in the sector of small and medium-sized enterprises and support of SMEs in the period under review. The objective of Report is to highlight the developmental trends and […]<\/p>\n","protected":false},"author":2,"featured_media":5282,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","cybocfi_hide_featured_image":"","footnotes":""},"categories":[39],"tags":[],"class_list":{"0":"post-5874","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news"},"yoast_head":"\nReport on the State of Small and Medium-Sized Enterprises in the Slovak Republic in 2018 - Monitoring MSP<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/monitoringmsp.sk\/en\/2019\/12\/19\/report-on-the-state-of-small-and-medium-sized-enterprises-in-the-slovak-republic-in-2018\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Report on the State of Small and Medium-Sized Enterprises in the Slovak Republic in 2018 - Monitoring MSP\" \/>\n<meta property=\"og:description\" content=\"The submitted Report on the State of Small and Medium Enterprises in the SR in 2018 presents a comprehensive view of the state and development of the business environment in the sector of small and medium-sized enterprises and support of SMEs in the period under review. 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