jurisdiction

1. Are members of the armed forces permitted to hold shareholdings in private companies, including startups, provided that they do not participate in management?

The Slovenian Law on Defence (»ZObr«) covers military personnel, civilians in the armed forces and staff of the Ministry of defence (»Ministry«). Under Article 88(1) ZObr, the Law on Public Servants (»ZJU«) applies to them unless ZObr provides otherwise. In principle, members of the armed forces may hold shareholdings in private companies, including startups, if they do not take part in management. However, certain restrictions apply.

Article 91(1) ZObr prohibits work that would hinder military service, harm the reputation of the Ministry or the armed forces or be incompatible with the Ministry's activities. Article 91(2) allows work in companies, or similar work for another body, only with the Minister's written consent, except for scientific, teaching and publishing work and non-professional work in associations. The ZObr consent requirement in Article 91(2) is tied to "performing work" in companies, not to holding shares as such. A passive investment, meaning acquiring and holding shares and receiving dividends without any operational role, is therefore not "work" under Article 91(2).

There is one important exception. Under Article 104(1) ZObr, the following four activities may not be carried out as profit-making activities:

  • civil defence preparations and training;
  • military professional training;
  • operating defence information and telecommunication systems; and
  • cryptographic and anti-electronic protection of defence data transmission.

According to the Ministry, the ban is substantive and form-neutral, so a member may not found or hold a shareholding, even a passive one, in a company whose purpose is an Article 104 activity. The Minister's consent under Article 91(2) cannot change this. This exception is especially relevant for defence-tech and cybersecurity startups working on cryptographic protection or defence ICT.

The passive character of the investment must also be genuine. A member who acts as a managing director, procurator or board member, works on the startup's product, is employed by the company or is an operationally active founder is "performing work in a company" under Article 91(2) ZObr. This requires the Minister's prior written consent. Doing so without consent constitutes a serious disciplinary breach under Article 57(4), point 13 ZObr. This follows from the Ministry's broad interpretation of "performing work", which it applies regardless of the legal form chosen.

2. Is notification or approval required before acquiring a shareholding or establishing a company?

Acquiring and holding a shareholding without any management or operational role requires neither notification nor consent. Under Article 111(3), point 3 ZJU-1, managing one's own assets is expressly exempt from the Article 111(1) duty to notify the head of the authority.

That exemption applies to members through Article 88(1) ZObr. Because a passive shareholding is not "performing work in companies", the Minister's written consent under Article 91(2) ZObr is not triggered either. However, the passive character of the investment does not override Article 104 ZObr. If the company's purpose is one of the four activities listed in Article 104(1), the shareholding is not permitted at all, according to the Ministry.

If a member establishes a company and takes on a management, employment or operational role in it, they need the Minister's prior written consent under Article 91(2) ZObr.

The only exceptions in Article 91(2) cover scientific, teaching or publishing work and non-professional work in cultural, artistic, sports, humanitarian and similar associations. They do not cover commercial work in a company.

Even with consent, the work must satisfy the Article 91(1) test: it must not hinder military service, harm the reputation of the Ministry or the armed forces or be incompatible with the Ministry's activities.

3. Are there any notable limitations, thresholds or conflict-of-interest rules?

The Article 104 ban. The most significant limitation is the statutory ban in Article 104(1) ZObr. The following may not be carried out as profit-making activities:

  • civil defence preparations and training;
  • military professional training;
  • operating defence information and telecommunication systems; and
  • cryptographic and anti-electronic protection of defence data transmission.

The list must be interpreted broadly. According to the Ministry, it allows no exception for members and applies regardless of the legal form used, whether employment, sole trader, founding a company or holding shares. The only statutory carve-out, in Article 104(2), concerns individual projects or works commissioned by the Ministry from external contractors.

The wording of Article 104(1) is objective. It restricts the activity itself for anyone, not only members.

The Ministry also stresses that the Minister's consent under Article 91(2) cannot lift this ban. In practice, the analysis therefore always starts with Article 104 and only then moves to Article 91.

Separately from Article 104, Article 91(1) ZObr prohibits any work that would hinder military service, harm the reputation of the Ministry or the armed forces or be incompatible with the Ministry's activities.

Article 111(2) ZJU-1 lists the grounds on which the head of the authority must prohibit another activity:

  • breach of a statutory non-compete obligation or a contractual non-compete clause;
  • the activity could affect the impartial performance of the servant's work;
  • the servant could misuse non-public information obtained in service; and
  • the activity harms the authority's reputation.

Through Article 88(1) ZObr, these grounds are relevant to members wherever ZObr does not provide otherwise.

They matter especially where a member's company does business with the Ministry or the armed forces. They overlap with the Article 91(1) ZObr criteria relating to reputation and compatibility with the Ministry's activities and, in practice, the Ministry is likely to take them into account when deciding whether to grant consent.

Furthermore, there is no general shareholding percentage threshold for members under ZObr or ZJU-1. The only percentage threshold in the materials reviewed is in Article 111(7) ZJU-1. It provides that legal entities in which a senior official under Article 91(2) ZJU-1, or their spouse, children, adopted children, parents, adoptive parents, siblings or persons in a common household or cohabitation, holds more than 5% may not do business with the authority where the official works and any contract concluded in breach of this rule is void. This rule applies only to officials holding positions covered by Article 91(2) ZJU-1, such as heads of authority and similar senior positions, not to ordinary members of the armed forces. There is no equivalent rule in ZObr.