Slovakia

Investing in Slovakia

FDI in figures | Why you should choose | Administrative procedures relative to foreign investment | Finding assistance or further information

FDI in figures

Foreign direct investment (FDI) has increased considerably over the last few years. In 2006, it represented 30 327 million dollars, i.e. 55% of GDP.
According to the UNCTAD 2007 report on worldwide investment, Slovakia is in 52nd place out of 141 countries studied in terms of potential attractiveness of FDI and 29th at the performance level.

Foreign Direct Investment	2005	2006	2007
FDI of inward flow (millions USD)	2,107	4,165	3,265
FDI inward stock (millions USD)	23,655.9	38,334.6	40,702.1
Performance Index*, world ranking	29	27	49
Potential Index**, world ranking	52	53	n.c.
Number of Greenfield investments	117	114	100
FDI inwards (in % of GFCF)	29.8	16.5	27.7
FDI stock (in % of GDP)	49.9	68.4	54.1

Source: UNCTAD, World Investment Report

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.

Why you should choose Slovakia

Strong points: Slovakia offers various advantages:
- its strategic geographical position: the country is situated in the center of Europe;
- its workforce: it is inexpensive and well qualified;
- its advantageous tax system: single rate of 19%;
- frequent aid for foreign investment which can range from 20 to 50% of investment costs according to the investment project;
- large growth potential.
Weak points: Slovakia has:
- widespread technical and administrative barriers: import licenses especially for raw materials, energy and some agricultural products;
- high energy costs: Slovakia imports 90% of its energy needs which increases the energy bill considerably;
- defective infrastructures: although governmental reforms have been set up, the infrastructures are not yet well developed and the country has no access to the sea.

Moreover, Slovakia is a small country whose population is not large in comparison with neighboring countries such as Poland for example.
Government measures to motivate or restrict FDI: The Slovak government encourages foreign investment, the main driving force of the economy. This investment is motivated by tax credits, subsidies, etc. Aid is granted according to the type of project, where it will be set up (geographical area) and the sector.
For further information, consult the website of the Slovak Investment and Trade Development Agency (SARIO).

Administrative 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.