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Foreign Direct Investment (June 2000)

Germany 22%
Austria 20%
Netherlands 15%
United States 12%
United Kingdom 6%
Czech Republic 8%

About half of all investment is in the manufacturing sector (49.2%), especially of automotive components, consumer electronics and precision engineering. Futher important sectors are financial services (19.6%) and trade (19.5%) followed by real estate (3.3%) and communication (3.1%).

According to the recent research of the SARIO agency covering the top 250 existing foreign investors in Slovakia, the average number of employees in foreign owned enterprises is 500, the average level of fixed capital expenditure is $28.6 million and over half of those companies exported in excess of 90% of output. Moreover, around 90% reported further expansion plans, what is a clear sign of the confidence they have in Slovakia.

Slovak Investment and Trade Development Agency (SARIO) is a subsidiary of the Slovak National Property Fund (FNM) providing routine site selection service free of charge. A fee is usually   charged for in-depth research and value added services in terms of granting special permits etc.

Establishing Business in Slovakia
Foreigners are allowed to conduct trade activities under the same conditions as Slovak entrepreneurs

The most common types of businesses (legal entities regulated by the Commercial Code):

Limited Liability Company
Spolocnost s rucenim obmedzenym (s.r.o.)
Minimal capital SKK 200,000

Joint Stock Company
Akciova spolocnost (a.s.)
Minimal capital SKK 1,000,000
 

Investor Confidence
Over 90% of more than 200 existing foreign
investors in Slovakia have further expansion plans (in Slovakia).
All mentioned companies and institutions are linked to, so that you can visit their web sites, contact them and share their experience.

Economic Stability
A very tight monetary policy, one of the lowest inflation rates in Central and Eastern Europe and one the highest GDP growth in the region.
Slovak Finance Minister Brigita Schmögnerova won Euromoney magazine's award as the "Best Finance Minister of the Year 2000" award (received at the IMF and World Bank annual meeting in Prague).

Tax Incentives
Tax cuts for qualified foreign investors.
Please contact  SARIO agency to learn more.

Intellectual Capital
One of the highest literacy rates in the world, high percentage of secondary level graduates, and in terms of scientists and engineers per capita, the highest rate in the region, with excellent information technology graduates as a favored target of the Western European headhunters.

Cost Efficiency
Slovakia is a source of highly cost-effective well
qualified labor.
According to Business Central Europe: "Slovakia makes most of the other Visegrad countries (Poland, Czechia and Hungary) look expensive".

Productivity
Existing foreign investors, like Volkswagen and Sony have cited the pace of productivity increases as a key factor fueling their expansion plans.

Labor Availability
Small volume of foreign direct investment before 1998 (during Meciar's government), compared to neighboring Czechia, Hungary and Poland, means less competitive pressure on the labor market. Moreover, with average unemployment at 17% and approaching 30% in some districts, competitive wage rates will be sustained for the medium term.

Strategic Location
Slovakia lies at the crossroads of one of the world's oldest trading routes: east-west water route along the River Danube and the overland route from the Baltic to the Mediterranean. The direct neighbors are Poland, Ukraine, Hungary, Austria and Czechia.
Vienna is only 60 km from the Slovak capital Bratislava (Vienna airport only 40 km), Prague 350 km and Budapest 200 km from Bratislava. Kosice is 220 km from Budapest, 200 km from Cracow and 90 km from the Ukrainian border.

Industrial Heritage
Slovakia has a long tradition of manufacturing excellence and international trade.
Mechanical and electrical engineering, for example, accounts for almost 20% of GDP and around a quarter of all exports. And in another important sector, Slovakia's petroleum processing company Slovnaft increased sales to over $2 billion and exports over half of output. The established manufacturing infrastructure enables foreign companies to source more products and services locally. 50% of foreign investment has been in industrial production.

Culture
Slovakia is located exactly in the geographical center of Europe, it is in Central Europe. (Calling it an East European country refers to the previous political East/West division of Europe.) Therefore the culture, most customs, food, etc. are very similar to those of other Central European countries, incl. Austria and Germany. 

Assistance
The whole thing naturally has also its drawbacks; the paperwork is relatively complicated and quite slow. Most problems with bureaucracy are identical with those faced by foreign investors in Czechia. Actually, starting operations in any country is not easy. And for Americans, also incorporating in Germany would be a terrible experience. For more information, please contact Verbatoria Consulting or other professionals.
 

According to the International Institute for Management Development's World Competitiveness Yearbook 2001, released in April 2001, Slovakia (being evaluated for the first time) took the 37th place among 49 analysed countries. The first place was taken by the United States, followed by Singapore and Finland. The competitiveness of the Slovak economy is higher than that of the Slovene or Polish economies, but still lags behind Hungary and the Czech Republic (number 35).

The European Bank for Reconstruction and Development (EBRD) was established in 1991.It exists to foster the transition towards open market-oriented economies and to promote private and entrepreneurial initiative in the countries of central and eastern Europe and the Commonwealth of Independent States (CIS) committed to and applying the principles of multiparty democracy, pluralism and market economics.