Slovakia – Economic Tiger of Central
Europe
Nine years ago Slovakia embarked on an ambitious plan of deep structural
reforms with the vision of becoming one of the best business locations
within the European Union (EU). Today Slovakia is widely seen as a success
model for other EU countries for creating an investment and business-friendly
environment. Slovakia is a full member of the EU, NATO and the OECD and
has been described in media headlines as:
“Slovakia - Detroit of the East” The Financial
Times, 20 February 2007
“Today, the country of 5.4 million is fast becoming a model for
change among the ten countries that joined the European Union in May
2004.” The Wall Street Journal, 12 January 2005
“An economic tiger purrs in once backward East Europe.” The New York Times, 28 December 2004
“Slovakia is now widely seen as Europe’s fastest reformer”. Newsweek, 29 November 2004
“Slovakia is the leading reformer.” in “Doing Business
in 2005: Removing Obstacles to Growth” Report by The World Bank,
8 September 2004
Slovakia is generally recognized as an open market economy whose ability
and willingness to pay its liabilities puts it, according to prestigious
rating agencies, on the “Investment” level, a level that is
expected to increase. According to the Standard and Poor’s credit
rating agency, Slovakia has become the leader of the Central European
region.
Best
Investment Opportunities
To utilize the knowledge of the Slovak people, investment incentives focus
on investment projects from the high-tech sector and strategic services.
The impact of state aid in these projects could reach 50% of the eligible
investment costs represented by five forms of investment incentives (tax
relief, financial grant, job creation grant, training grant, discounted
price for land). For more information on the state incentive criteria please
refer to www.sario.sk. Companies can also benefit from the positive effects
of the business-friendly environment and the talent base in Slovakia.
Today’s best business opportunities can be found
in these areas:
FDI
Successful Stories
Since becoming an independent nation in 1993, Slovakia has handled several
hundred successful investment projects from various countries and in a
wide range of industrial sectors. These investment projects have had a
substantial impact on the economic growth of the country. The total volume
of FDI inflow to Slovakia reached 14.747 million USD as of 30 June 2006.
According to the Slovak National Bank Report, there are more than 1400
companies with foreign equity capital in excess of USD 35.000. The table
below is an overview of the major foreign investors in Slovakia. It includes
only new Greenfield or Brownfield investments, not acquisitions or takeovers:
A
Base for Exporters
Slovakia is currently exceptionally attractive for investors whose
production is aimed at exports. This is most significantly demonstrated
by the automotive
sector, which is to become the dominant sector of the Slovak economy
when the Hyundai/Kia plant begins production, following PSA Peugeot
Citroen
and the very successful Volkswagen factory. According to foreign investors
in Slovakia, the main advantages include:
- low taxes;
- strong state incentives;
- flexible labor legislation;
- very good workforce price/ performance ratio;
- strong engineering tradition;
- large selection of industrial land;
- great geographical location;
- reliable ICT and transportation infrastructure in the region.
Given these factors and the need of European companies for shared-service
centers, global outsourcers have been focusing on boosting their
capabilities in the CEE region. Slovakia has become the destination
of almost 30
IT centers, including HP, Dell, Accenture, T-System, Lenovo, IBM,
SkyEurope, Kraft Foods, AT&T and ON Semiconductor.
SETTING UP AND OWNING A SLOVAK COMPANY
ALLEN & OVERY, s.r.o. has produced a brochure entitled "Setting Up and Owning a Company in Slovakia" which outlines the key issues in setting up a Slovak entity and describes the main differences between an s.r.o. and an a.s.. It mentions also a few useful points to be considered in terms of the corporate governance of these kinds of entities. This brochure also includes the relevant changes to the Commercial Code which was amended as of 1st January, 2002. The brochure, including this extract, was first published by Allen & Overy, s.r.o. in May, 2002 and is subject to copyright. For futher information please visit www.allenovery.com.
Disclaimer
AmCham Slovakia is not responsible for the information and opinions
contained in the links from its web site.
For more information, please contact either Igor Pálka or Hugh Owen at:
ALLEN & OVERY, s.r.o., Carlton Savoy Building
Mostová, 5th Floor, 811 02 Bratislava
Tel: +421 2 5920 2400, Fax: +421 2 5920 2424
Website: www.allenovery.com
WHY
TO INVEST IN SLOVAKIA? 
