A notification of cross-border service provision must be submitted to the relevant chamber before any work begins. You may only start working once you receive official approval from the chamber.

The “Free Trade” Trap

The most common mistake made by Slovak entrepreneurs is relying on the fact that their activity is classified as an “unregulated” or “free” trade in Slovakia. However, the German list of regulated crafts is significantly broader and stricter.

It can easily happen that work which requires no special documentation at home is a regulated trade in Germany, subject to strict control. Therefore, check the exact classification of your activity under German law in advance to avoid unnecessary administrative delays at the project site.

In the German construction industry, main regulated trades include masons, carpenters, electrical engineers, and plumbers.

How to Prove Professional Qualification

During the notification process, the Chamber of Skilled Crafts checks in detail whether you have the necessary qualifications for the work. In practice, this means you must provide documentation of either relevant education in the field (such as a vocational certificate or diploma) or prove sufficient work experience.

If you do not have a formal education in the field, the only way is to submit a Certificate of Experience (Osvedčenie o povahe a dĺžke praxe), issued by the Slovak Trade Licensing Office upon request. Without these documents, the German chamber will reject your application, and you will lose valuable time, which could cost you a lucrative contract.

Choosing the Right Chamber

Please note: you cannot simply send the notification to any chamber of your choice. You must submit it to the competent chamber responsible for the location of your first project in Germany. If you address the application to the wrong office, it will be rejected due to lack of local jurisdiction, which will only prolong the process.

At the same time, you must account for the fact that German bureaucracy comes with a price. Fees vary significantly by region. While in some places you might pay dozens of euros, in Berlin, the administrative fee is currently as high as €370. However, once you obtain the certificate, it is valid for one year across the entire territory of Germany. For longer projects, you must apply for an extension in time.

No Certificate, No Work

The consequences of neglecting this duty can be very unpleasant. Besides the risk of heavy fines from German inspection authorities, you also face pressure from your clients. Nowadays, it is common for German partners to demand the chamber’s notification certificate before work even starts. If you do not have it in hand, they may deny you entry to the construction site or make the start of cooperation conditional on its submission. This stalls the entire project and seriously threatens your reputation and financial stability.

If you are unsure whether this obligation applies to you, please contact our experts. They will be happy to help you navigate German bureaucracy without unnecessary errors. ProfiDeCon has been helping companies and sole traders do business in German-speaking countries for more than 15 years. We can certainly help you too.

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How does a project become a permanent establishment?

Under the Double Taxation Treaty between the Slovak Republic and the Federal Republic of Germany, a so-called permanent establishment arises if a construction project or installation/assembly work exceeds a period of 12 months. This condition is generally assessed for a specific project at a specific site.
Attention: if certain conditions are met, the durations of different projects for the same customer may be aggregated, which can likewise result in the creation of a permanent establishment.

What does this mean for you? The profit attributable to the permanent establishment is taxable in Germany. Your company is therefore obliged to file a German tax return and pay corporate income tax in Germany. Since the income is taxed in only one country, this profit will not be taxed again in Slovakia; however, it is necessary to correctly apply the double taxation relief method in the Slovak tax return.

In such a case, we recommend turning to professionals who are familiar with both Slovak and German tax legislation, to avoid unnecessary complications.

What taxes can you expect in Germany?

In Germany, you need to consider not only corporate income tax (Körperschaftsteuer) at 15%, but also the solidarity surcharge (Solidaritätszuschlag) at 5.5% of the calculated tax. The effective rate of this tax is therefore approximately 15.83%.

In addition, trade tax (Gewerbesteuer) applies, the amount of which is determined by individual cities and municipalities. In practice, the overall effective tax burden in Germany often ranges from around 25% to 30%, depending on the specific location.

You must also keep an eye on taxes for posted employees

If you carry out construction work through posted employees within the permanent establishment, you should also expect an obligation to pay wage tax and to run payroll processes on the German side. This includes registration with the relevant authorities, maintaining payroll accounting, and paying wage tax to the German tax office.

Don’t forget planning and costs

Before starting construction work in Germany, it is therefore necessary to assess in advance whether a permanent establishment may arise in your project. Based on that, set your project and contractual terms in a way that helps you avoid unpleasant surprises and allows you to include German taxation already when preparing your budget.

Your costs will also include cooperation with a German tax advisor, since filing the tax return and communicating with the authorities takes place in German and according to local rules.

ProfiDeCon has a team of tax experts directly in Germany who will be happy to help you with this complex agenda. We have been helping companies do business in German-speaking countries for more than 15 years.

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Germany: Increase of more than 8%

In Germany, the statutory general minimum wage increased noticeably as of 1 January 2026. It rose from €12.82 to €13.90 per hour. This rate is not only relevant for general activities, but also applies to the construction sector and to work covered by the German construction holiday fund (SOKA-BAU).

However, pay close attention to specific skilled professions where collectively agreed (tariff) wages are traditionally higher. For example, in the electrical trade, the minimum hourly wage increased to €14.93, and for scaffolders to €14.35.

Austria: Higher wages in the metalworking industry

The situation is more complex in Austria, where there is no uniform statutory minimum wage. Remuneration is determined by collective agreements, which differ by sector and region.

From January 2026, wages were increased again in sectors such as the metalworking industry—relevant for a large proportion of posted technical workers.

Switzerland: Wages are also determined by cantons

Switzerland also does not have a generally binding nationwide minimum wage. Here, too, it is essential to monitor wage levels in the relevant collective agreements applicable to a particular industry and canton. With the start of the new year, for example, minimum wages increased in the cantons of Geneva, Jura, and Neuchâtel, as well as in sectors such as gastronomy and hospitality. As this is a complex topic, we will be happy to provide advice tailored to your specific case.

Keep an eye on rules and sanctions

Compliance with minimum wage rules is not just a formality. German customs authorities and Austrian supervisory bodies are carrying out increasingly intensive on-site inspections at construction sites and workplaces. They focus not only on pay levels, but also on working time records and the availability of payroll documentation in German. Non-compliance can result in fines of up to €500,000 and exclusion from future contracts.

If you want to avoid sanctions and be confident that your cross-border operations are fully compliant, ProfiDeCon is here to help. We are experts in German and Austrian legislation and can support you throughout the entire process.

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As of 1 September 2025, major new rules for temporary employment agencies came into force. This is far more than a cosmetic update. The Central Office of Labour, Social Affairs and Family (ÚPSVaR) now assesses a number of additional requirements both when issuing permits and during ongoing supervision. The most important changes include verifying the reliability and integrity of the entity and the persons acting on its behalf, assessing clean criminal record, clearly specifying the premises where the agency will operate, and the obligation to demonstrate equity of at least EUR 30,000 on top of the company’s registered capital. In this article, we explain these changes in more detail.

These requirements apply not only when applying for registration, but must also be met throughout the entire validity period of the permit. For this reason, it is advisable to entrust the preparation of the required documentation to professionals. Which key areas should you keep under control under the amended rules?

Reliability

First and foremost, the focus is on reliability and good standing. ÚPSVaR now assesses the reliability of the agency, including individuals acting on its behalf (e.g., statutory representatives). An entity—whether legal or natural—will be considered unreliable if its permit to operate as a temporary employment agency has been revoked within the last three years. The same applies to a person who served as a statutory representative of an agency whose permit was revoked.

The clean criminal record requirement must also be met—where the applicant is a legal entity—by the natural person acting on behalf of the agency. ÚPSVaR verifies this condition using an extract from the criminal records register.

Registered office and financial requirements

Another important change is that a virtual registered office is no longer sufficient. In the application, you must state the address of real, physically accessible premises and submit either a lease agreement or the consent of all owners, including confirmation that the premises will be used for TEA purposes.

The application must also specify the scope of occupations at least by a four-digit code under the Statistical Classification of Occupations.

Perhaps the most significant change is the requirement for higher financial coverage than before. The agency must have equity of EUR 30,000 available throughout the entire permit period. For legal entities, registered capital will no longer be included in equity for these purposes. ÚPSVaR verifies compliance via the Register of Financial Statements. If your TEA permit was issued before 1 September 2025, you must meet this requirement no later than the end of 2026.

Electronic submissions only

And one final important note: since September, applications for permits can be submitted exclusively electronically via the slovensko.sk portal, and the application must be signed with a qualified electronic signature.

Ignoring the new requirements is not worth the risk. ÚPSVaR may suspend or revoke an already issued permit—not only following inspections by the authority, but also based on notifications from the labour inspectorate, an affected employee, or another competent authority.

At ProfiDeCon, we are experts in labour law. We support businesses operating—especially in German-speaking countries—and we handle administrative matters for foreigners working and living in Slovakia. We will be happy to help you as well.

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Doing business in Austria has its specifics, and those who don’t know them can run into unpleasant surprises. That’s why it’s always a good idea to consult experts who can guide you safely through the maze of Austrian bureaucracy.

Protection against non-payers

One of the pitfalls awaiting foreign construction companies in Austria is a 25% deduction from the invoiced amount. This isn’t a penalty, but a legal mechanism designed to prevent failures to pay into the social and tax system.

The client commissioning your work is liable to ensure that, as a subcontractor, you pay statutory contributions and wage tax. If you have arrears, they can be held jointly liable for up to 25% of the invoiced amount (20% for social insurance and 5% for tax). For this reason, many prefer to automatically deduct the amount from the invoice and immediately pay it to the specialized DLZ office, which falls under the Austrian social insurance institution. Of course, such a deduction means you receive a quarter less than you invoiced, which can cause unexpected complications for your company’s liquidity.

Are Austrian contributions worth it?

Can the deduction be avoided? Yes, but it’s not simple. Your company must be listed in the so-called HFU list (companies exempting clients from liability). However, the conditions for registration are strict. You usually have to prove at least three years of performing construction work and meet other administrative and contribution criteria.

One of these is that at least one of your employees is registered in the Austrian social system. In other words, you must employ at least one worker for whom you pay Austrian contributions. From our experience, HFU is not a realistic solution for many foreign companies, since they usually keep all employees insured in their home country. For them, the option of registering in the HFU list falls away.

Ask for your money back!

If the client has already deducted 25%, that doesn’t mean you have to lose your money. You can ask the Austrian authorities to refund it. First, however, check whether your client actually paid the amount to the DLZ office. There are opportunists who don’t make the payment but still deduct a quarter from the invoice! If the amount was not transferred to the DLZ, your refund application will be rejected. Always request an official confirmation of payment from the client.

You must apply for the withheld amounts separately at the Austrian tax office and at the relevant health insurance fund. Our specialists will be happy to help you prepare the complete documentation for the refund of the deducted amounts.

We are experts in doing business in Germany, Austria, and other countries. ProfiDeCon has been helping entrepreneurs for more than 10 years. We’ll be happy to help you, too.

The post Did they withhold 25% from you in Austria? Ask for your money back! appeared first on ProfiDeCon.

You are working on a construction site in Germany and suddenly you get an unpleasant surprise. Withholding tax has been deducted from your invoice without warning! Don’t panic, the amount may not be gone forever.

15% percent down

The client of your work in Germany is obliged to deduct withholding tax from you if you do not have an exemption, the so-called Freistellungsbescheinigung. But if you do have one, you must be careful that it is valid not only during the construction work itself, but especially at the moment when the client plans to pay you the invoices issued. This is not a small amount of money – the withholding tax itself is 15% of the invoiced amount. However, it is calculated on the amount including VAT, so the withholding tax can climb to almost 18%.

If this is your case, fortunately, nothing is lost yet. You can apply for a tax refund. Our experts will advise you on how to do this.

Watch out for problems

To get a tax refund, you need a written confirmation from the customer that he has deducted and paid the withholding tax. And be careful, the confirmation must be in the form prescribed by law! In practice, we also encounter cases where the withholding tax was deducted from invoices, but the customer did not pay it to the German tax office. He kept it. In such a case, the German tax office would not refund you any amount. Of course, such a case also needs to be addressed.

Watch out for deadlines

The withholding tax will not be refunded to you until after the end of the calendar year in which the withholding tax was deducted. This means that you may wait for your money for months. In addition, you must be registered, have a German tax number and cannot have any debts to the German tax office. The authorities check all of this in detail.

Also, do not delay in applying for a refund of withholding tax. If you miss the legal deadline, you will not see a cent of the money.

We provide a complete consulting service for clients who work or do business in Germany. We will issue a Freistellungsbescheinigung, prepare the necessary applications and documentation and safely guide you through the maze of German bureaucracy. ProfiDeCon experts have been helping entrepreneurs for over 10 years.

The post Are you working on a German construction site and have your withholding tax deducted? Claim it back! appeared first on ProfiDeCon.

A key prerequisite for your company to lease employees to Austria is to have a valid temporary employment agency license issued by the Central Office of Labour, Social Affairs and Family of the Slovak Republic. Before starting the leasing process, you must notify the Austrian Federal Ministry for Labour and Economy. The Ministry will check whether your company meets all legal requirements – without its approval, you cannot send any workers to Austria.

Same Conditions

Before your employee starts work with the Austrian client, you must submit a ZKO-4 notification. This contains basic information about the employee, the Slovak agency, and the Austrian company where the employee will work, along with the expected duration of the assignment. Preparing the required documentation is best entrusted to experts in Austrian labour law to avoid unnecessary bureaucratic complications and unpleasant surprises.

Austria strictly protects its labour market from wage dumping, so you must ensure that your temporarily assigned employees have at least the same wage and working conditions as an Austrian colleague in the same position. This means checking in advance the applicable collective agreement wages, bonuses, and other entitlements at your client’s company.

Additional Contributions

If employees perform construction work in Austria, there are extra obligations – mainly registration and monthly contributions to the BUAK holiday fund. On top of this, there are contributions to the Social and Training Fund (SWF), which applies to all agency workers. These mandatory contributions can significantly increase the total cost per leased employee.

Mandatory Deductions

An unpleasant surprise may also come from invoice deductions. Austrian clients are legally required to withhold 20% of the invoiced amount and remit it directly to the Austrian tax office. You can avoid this deduction entirely only if you run payroll accounting in Austria for your assigned employees and voluntarily pay wage tax there. In that case, you can apply for an exemption from the withholding. Without such an exemption, the 20% will be deducted automatically. While you can request a refund later, the process is often lengthy and bureaucratically demanding.

For construction work, the Austrian client may also deduct an additional 25% under the so-called Auftraggeberhaftung – a principal contractor’s liability mechanism. If both deductions are applied, your company could temporarily lose up to 45% of the invoiced amount, which could significantly affect the profitability of the entire project.

Temporary assignment of employees to Austria involves many obligations that should not be underestimated. To be even closer to Slovak businesses leasing or posting workers to Austria, ProfiDeCon has opened a new branch directly in Hainburg an der Donau. Our experts will be happy to advise you so you can avoid mistakes, penalties, and unnecessary financial risks when leasing or posting workers.

The post Employee Leasing to Austria: Beware – You Could Lose 45% of Your Invoiced Amount! appeared first on ProfiDeCon.

Good News

Among the most important positive measures in the new law is the extension of the validity of national visa type D (for third-country nationals) from 90 to 120 days. This gives foreigners more time to arrange their arrival in Slovakia and book an appointment at the foreign police. Another improvement is that applicants will no longer need to submit a photograph with their application, and in some cases, the requirement to prove sufficient financial means for residence has been removed.

Bad News

However, the approved amendment also brings bad news that could further complicate life for foreigners in Slovakia. The most problematic is the introduction of nonsensical quotas for business visas. From more than 10,000 business residence applications filed last year, the government plans to limit approvals to just 700 per calendar year. How and why the government arrived at this mysterious number remains unclear.

In addition, foreigners will be required to submit a business plan with their application for temporary residence for business purposes, which will be subject to approval by the Ministry of Economy. As a result, the actual number of approved applications will likely decrease even further. Given the current demographic trends and weak public finances, every single entrepreneur should be welcomed in Slovakia.

Moreover, foreigners will only be able to submit their application at Slovak consulates in their home country, without any territorial exceptions. The quotas are further distributed across individual countries in a way best described as “scattered to all four corners of the world.” One example: Taiwan, a global leader in many industries with a population of 23 million, has been allocated exactly one business visa slot. North Macedonia, with 1.8 million people, gets 16. Is this really the most economically and politically sensible way to attract innovative business ideas? Definitely not.

Our Experience

We’ve been visiting the foreign police on behalf of our clients for years. We see and experience firsthand how the system has been collapsing for a long time. It’s easy to announce in the media that “use of the reservation system is now legally required, and visiting the Foreign Police without an appointment will not be allowed.” But in reality, the reservation system does not work as it should. For some critical life situations, appointments are virtually impossible to obtain. If you try too hard to get one, the system may block your access altogether, and appointment slots continue to be traded on an unofficial market.

What’s Next?

Although the amendment brings a few small improvements, without real digitalization, a transparent reservation system, and increased staffing at the foreign police, no meaningful change will come. If you want the raw truth about Slovakia’s attractiveness and its approach to foreigners—who could clearly benefit our economy—just consider this: between 2021 and 2023, Slovakia issued 62 Blue Cards for the residence and employment of highly qualified foreigners. Poland issued 15,313 in the same period. So it’s no surprise that Slovakia’s economy is gasping for air.

If you’re also facing challenges hiring foreign workers, feel free to reach out to us. The experts at ProfiDeCon have been helping Slovak companies hire foreign talent for more than 10 years. We’d be happy to help you too.

The post Foreigners’ Stay in Slovakia from July 1, 2025 Under New Rules: Good News vs. Bad News. Who Will Win? appeared first on ProfiDeCon.

Entrepreneurs posting their employees to Germany have several legal obligations towards the local authorities. In addition to timely submission of the customs notification (Zollmeldung), there is also a requirement to keep documentation available directly on German territory. Customs authorities regularly carry out inspections at construction sites and workplaces, and they may request the immediate presentation of documents related to the posted workers. If you cannot present them on the spot, you risk a fine of up to €15,000—even if you provide the documents later within the given deadline. That’s why it’s wise to consult with experts to avoid potential problems.

Documents Must Be at a Specific Location

In the customs notification, you must indicate the exact address in Germany where the documents will be located. Often, this is the actual place of work, such as the address of a construction site. In such cases, however, it is absolutely necessary that all required documents are physically present and easily accessible at that location. During an inspection, they must be available immediately—otherwise, it is considered a breach of duty.

What Must Be Presented Immediately

Mandatory documents that must be available at the worksite include the employment contract or posting agreement, which must specify wage conditions. You also need to have records of working hours showing when the employee started and finished work and how long they worked. Employers must also provide payslips, proof of wage payment, and confirmation of the customs notification submission.

A particularly important document is the A1 certificate, which proves that the employee is socially insured in the employer’s country—such as Slovakia. All of these documents must be available in German and kept for the entire duration of the posting, but no longer than two years.

We also recommend informing responsible employees—especially the contact person listed in the customs notification—so that they can present the required documents during an inspection and know exactly where they are kept at the worksite.

It’s important that employers do not underestimate these documentation duties and that they prepare thoroughly for any potential inspection. We are experts in doing business in Germany, Austria, and other countries. The experts at ProfiDeCon have been helping entrepreneurs for over 10 years. We’d be happy to help you, too.

The post German Authorities Are Very Strict About This During Employee Inspections! appeared first on ProfiDeCon.

To establish a classic GmbH in Germany, you need a minimum share capital of €25,000, with at least €12,500 paid in before registration in the commercial register. That’s not a small amount… If you’re looking for an easier way to start a business in Germany, there’s also a form of LLC called a UG (Unternehmergesellschaft), which you can set up with a symbolic contribution starting at just €1. This form is ideal for new entrepreneurs, but it does come with some restrictions and obligations regarding the creation of a reserve fund. It’s definitely worth consulting experts in German business and labor law.

Other Mandatory Fees

In addition to the capital contribution, you’ll also incur notary fees, registration fees for the commercial register, and administrative fees for registering the business. Once established, your German LLC will become a member of either the Chamber of Crafts or the Chamber of Industry and Commerce, depending on your business activity. Membership fees are not fixed—they typically depend on turnover, legal form, and are set by the specific chamber.

Higher Costs in Big Cities

The corporate income tax in Germany, including for GmbHs, is 15%. On top of that is a solidarity surcharge (5.5% of the tax), bringing the effective rate to about 15.83%. You also need to add the trade tax, which is set individually by cities and municipalities. On average, this is around 15%, but it’s highest in large cities like Berlin, Munich, Frankfurt, and Hamburg. Total tax burden can therefore reach up to 30%.

How Much Will You Pay Employees?

If you decide to hire employees in Germany, the general minimum hourly wage is currently €12.82. Some industries and sectors have higher minimum wages—for example, in electrical or installation work, the minimum hourly wage is €14.41. Employee income tax depends on their earnings and tax class, ranging from 14% to 45%.

Want to Ensure Your GmbH Formation Goes Smoothly?

We are experts in doing business in Germany, Austria, and other countries. ProfiDeCon experts have been helping entrepreneurs for over 10 years, and we’re happy to help you too.

The post Do You Want an LLC in Germany? It Can Be Done for Just 1 Euro! appeared first on ProfiDeCon.