Slovakia: Investing in Slovakia
According to UNCTAD’s World Investment Report 2023, Slovakia attracted USD 2.9 billion in foreign direct investment inflows in 2022. At the end of the same period, the total stock of FDI stood at USD 57.3 billion, around 50.5% of GDP. Given that a very large share of Slovakia's FDI directly depends on the Eurozone, the country is dependent on the economic health of its European neighbors, especially Germany and France, and is sensitive to regional tensions (the Russia-Ukraine conflict). Data from the Slovak Central Bank show that, as of the end of 2022, the majority of FDI stocks were held by the Netherlands (22.9%), Austria (15.9%), Czechia (13.4%), South Korea (7.1%), and Germany (6.5%). Cumulatively, Europe accounted for 91.3% of the stock. As per sectors of activity, manufacturing and industrial production, financial and insurance services, wholesale, and retail are those that attract the most investments. The latest figures from OECD show that FDI inflows were negative by USD 287 million in the first half of 2023, compared with a positive inflow of USD 1.22 billion recorded in the same period one year earlier.
Slovakia is an attractive FDI destination due to a relatively low-cost yet skilled labor force, and a favorable geographic location in the heart of Central Europe. However, some regions have failed to attract major investment, which has aggravated regional disparities in many economic and social areas. The overall outlook for public and private investment is favorable, but the ongoing global crisis may pose some risks (especially for the manufacturing sector, which attracts most of FDIs to the country). Recent increases in corporate taxes, changes to the Labor Code, slow dispute resolution as well as recurring corruption issues are the factors that can undermine the attractiveness of the Slovak market. Furthermore, as of 1 March 2023, Slovakia introduced an FDI screening mechanism that requires compulsory screening in the case of critical investments (energy, transportation, healthcare, chemicals, IT, military, digital services, media, news, etc.) or voluntary screening for non-critical investments. For the legislation purpose, are considered foreign investors not only natural persons that are not nationals of an EU member State and legal persons without a seat or place of business in the EU, but also any other person (including Slovak legal persons) linked to any person of a third country as defined in the FDI Act. Overall, Slovakia has a good business climate and ranks 45th among the 132 economies on the Global Innovation Index 2023 and 35th out of 184 countries on the latest Index of Economic Freedom.
Foreign Direct Investment | 2020 | 2021 | 2022 |
FDI Inward Flow (million USD) | -2,404 | 59 | 2,905 |
FDI Stock (million USD) | 64,293 | 59,367 | 57,375 |
Number of Greenfield Investments* | 27 | 46 | 47 |
Value of Greenfield Investments (million USD) | 2,276 | 2,907 | 3,608 |
Source: UNCTAD, Latest available data
Note: * Greenfield 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.
Country Comparison For the Protection of Investors | Slovakia | Eastern Europe & Central Asia | United States | Germany |
Index of Transaction Transparency* | 3.0 | 7.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 4.0 | 5.0 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 7.0 | 6.8 | 9.0 | 5.0 |
Source: Doing Business, Latest 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 main assets of the country are:
The main weak points of the country are:
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Latest Update: May 2024