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flag Slovakia Slovakia: Investing

In this page: FDI in Figures | Why You Should Choose to Invest in Slovakia | Procedures Relative to Foreign Investment | Investment Opportunities

 

FDI in Figures

In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), FDI flows to developing economies reached a new high of US$759 billion. However macroeconomic fragility and policy uncertainties are driving investors to caution.

Working in partnership but also sometimes in competition, French and German companies together represent over 60% of foreign direct investment in Slovakia, especially in the key energy, automotive, telecommunications and services sectors.

The 2008-2009 fall in international investment and the crisis of the euro zone which deepened in 2011 have had an impact on the country and continue to weigh heavily on foreign investment flows bound for Slovakia. The country is indeed highly vulnerable, given that a very large share of its FDI directly depends on the euro zone. The FDI influx in 2013 totalled USD 2.8 billion.

Despite the crisis in Europe, the continued upgrading of national infrastructure since  2012 still presents great opportunities for FDI and the country remains attractive to foreign investors. However, Slovakia's economy is now more than ever dependent on the economic health of its European neighbours, especially Germany and France.

Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).

 

Country Comparison For the Protection of Investors

  Slovakia Eastern Europe & Central Asia United States Germany
Index of Transaction Transparency* 3.0 7.0 7.0 5.0
Index of Manager’s Responsibility** 4.0 5.0 9.0 5.0
Index of Shareholders’ Power*** 6.0 9.0 5.0
Index of Investor Protection**** 4.7 5.9 8.3 5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

 
Foreign Direct Investment 201120122013
FDI Inward Flow (million USD) 3,4912,826591
FDI Stock (million USD) 51,98055,81658,832
Performance Index*, Ranking on 181 Economies 144--
Potential Index**, Ranking on 177 Economies 52--
Number of Greenfield Investments*** 916469
FDI Inwards (in % of GFCF****) 15.715.43.1
FDI Stock (in % of GDP) 54.261.161.4

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

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Why You Should Choose to Invest in Slovakia

Strong Points
The country's main advantages are:
- A strategic geographical position: the country is situated in the center of Europe;
- A workforce that is inexpensive and well qualified;
- its advantageous tax system, with a single tax rate of 19%;
- The existence of several financial aids favoring foreign investment and can range from 20 to 50% of investment costs, depending of the projects;
- A large growth potential;
- The adoption of the Euro since January 1st, 2009, which has made disappear the risks of foreign exchange;
- A low cost of living in relation to the rest of Europe.
Weak Points
The main weak points of the country are:
- Important technical and administrative barriers: requirement of import licenses especially for raw materials, energy and some agricultural products;
- High energy costs: Slovakia must import 90% of its energy needs.
- Deficient infrastructures. Although, governmental reforms have been set up, the infrastructures are not yet well developed and the country has no access to the sea.
- The small size of its domestic market with a population that has a low purchasing power.
Government Measures to Motivate or Restrict FDI
The Slovak government encourages foreign investment, since it is one of the main driving forces of the economy. It has also established financial incentives such as tax credits and subsidiary systems. These aids are granted depending on the type of project, geographical location and the sector of activity.
The country's low tax rate is one of the key elements that attracts FDI. Slovakia also benefits from European financial aids and many investors can benefit of the large renovation and modernization projects of the country.

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Procedures Relative to Foreign Investment

Freedom of Establishment
Foreign investors have freedom of establishment.
Acquisition of Holdings
A majority holding interest in stock of a local company is legal in Slovakia.
Obligation to Declare
Several authorizations are necessary to set up a factory (planning license, building permit, occupation license). An authorization is also needed to carry out commercial activity. It has to be obtained from the competent local authorities.
Requests For Specific Authorizations
There are special authorizations in the sectors of electricity, telecommunications, banking services and insurance.

Learn more about Foreign Investment in Slovakia on Globaltrade.net, the Directory for International Trade Service Providers.

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Investment Opportunities

Investment Aid Agency
Slovak Investment and Trade Development Agency (in English)
Tenders, Projects and Public Procurement
Slovakian Public Procurement Office
Tenders Info, Tenders in Slovakia
Globaltenders, Tenders & Projects from Slovakia
Ted - Tenders Electronic daily, Business opportunities in EU 27
DgMarket, Tenders Worldwide
Other Useful Resources
"Invest in Slovakia" a SARIO document (in English)
The Slovak Ministry of the Economy on investment (in English)
National agency for the development of SMEs, NADSME (in English)
 
 

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Learn more about Investing in Slovakia on Globaltrade.net, the Directory for International Trade Service Providers.

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Last Updates: December 2014