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Business environment & FDI opportunities in Slovenia 4Qs4U Four Qs For You ime in priimek SLOVENIA: dynamic EU member • Area: 20,273 sq. km • Capital: Ljubljana • Population of 2 million • EU member state - May 2004 • Euro area - January 2007 • Schengen Space - December 2007 • EU presidency - first half of 2008 • Invited to Join the OECD • GDP per capita (2008) = 92.1% EU-27 • Average GDP annual growth of 4% in past 10 years Slovenia EU countries Non-EU countries SLOVENIA – macroeconomic indicators 2010 GDP – current prices EUR 36.4 billion GDP – real growth rate 0.9% GDP per capita EUR 17,866 GDP per capita, PPS* 86.8% EU-27 *Purchasing Power Standard EXPORTS of goods and services real growth rate 4.1% IMPORTS of goods and services real growth rate 1.8% INFLATION, annual average 1.5% Unemployment rate (by ILO) 6.7% Source: Institute of macroeconomic analysis and development, 2010 Export driven economy Sectors, 2008 _____________ Transport equipment; 20% • High value-added products and services exported • Nearly 70% of exports destined for EU • EUR 19.9 bn exports of goods and services in 2008; 60% of GDP Food and beverages; 3% Crude materials and fuels; 3% Products for investments; 20% Manufactured goods; 34% Geographic distribution, 2008 ______________________ Russian Other countries federation; of Former USA; 1.4% 4.0% Yugoslavia; EFTA; 1.1% 8.7% Other; 7.2% Croatia; 8.6% Consumer goods; 20% Source: Institute of macroeconomic analysis and development, 2009 EU; 69.0%; of which DE 18.9%, IT 12.1%, AU 7.9%, FR 6.5% SLOVENIA – The Right Mix of Qualities 4Qs4U (Four Qs For You) Quality of life • High standard of living • Low crime rate • Cultural and geographical diversity • At the intersection of Roman, German and Slavic culture • Nestled between Alps and Adriatic Sea • Mixture of Alpine, continental and Mediterranean climates • Huge continuous forest ecosystem – 3rd in Europe after Finland and Sweden Quality of workforce • • • Technologically-minded (long industrial tradition), innovative spirit Highly educated: 16% university degree, 62% secondary school Excellent IT & foreign language skills (English, German, Italian, Serbo-Croatian …) Not cheap but cost-effective 60 50 Minimum gross wage • € 734.15 40 30 20 10 0 France Austria Italy Germany Slovenia Czech Rep. productivity (GDP per employee per hour, US$) compensation (per employee per hour, US$) Source: IMD World Competitiveness Yearbook 2009 Slovakia Est. monthly gross labour costs: • low skilled € 700 • skilled € 1,000 • engineer € 1,700 • computer engineer: € 2,200 Full-time working hours may not exceed 40 hours a week Quality link to regional markets • Strong export orientation • Well established links with neighbouring countries and countries of former Yugoslavia • Hub for foreign companies to serve the EU and Central European markets • Advantages: Economic and political stability Knowledge of circumstances, language, culture, people Geographical location with a strategic edge • Slovenia is an important investor in the SE Europe Quality infrastructure • Well-developed general infrastructure at the intersection of 5th and 10th European transportation corridor Welldeveloped ICT infrastructure • Port of Koper – ideal as a logistics and distribution centre – the fastest developing port in the Adriatic basin – the shortest sea connection between Central Europe and Asia Taxes Corporate income tax 20% Tax relief - 20-40% of the amount invested in R&D - tax relief on employment of certain workers - up to 30% of the amount invested in equipment and intangible long-term assets Profit repatriation tax 0% on dividends paid abroad for EU residents Capital gains tax 0 – 20% (depending on a holding period) VAT (Value added tax) 20% - standard rate; 8.5% - reduced rate Property tax 0% Immovable Property Transfer Tax 2% Social security contributions 16.1% paid by employer; 22.1% paid by employee Payroll tax abolished in 2009 Personal income taxes progressive tax rates: 16%, 27% and 41% FDI in Slovenia FDI stock end-2008 Sectoral distribution of FDI 9.543 4.000 2.000 0 6.822 5.580 5.047 6.000 6.434 8.000 1998 Financial services & insurance 46% Retail 15% Chemicals 10% Engineering 4% Business services & leasing 3% Telecoms & transport 3% Motor vehicles and trailers 3% Main investing countries into Slovenia 2.370 EUR million 10.000 10.996 12.000 2003 2004 2005 2006 2007 2008 Italy; 5% year Germany; 5% France; 7% Netherlands; 7% Belgium; 4% Luxembourg ; 3% Croatia; 3% Other; 8% Switzerland; 11% Source: Bank of Slovenia, 2009 Austria; 47% Financial incentives Estimated Foreign direct investment (FDI) grant scheme for 2010: VALUE OF INVESTMENT NUMBER OF NEW JOBS € 1 million 25 Strategic services € 0.5 million 10 R&D € 0.5 million 5 ACTIVITY Manufacturing projects Amount of incentives • up to 30% of the total eligible investment costs • amount of the incentive may be increased by 10 percentage points for medium-sized companies, and 20 percentage points for small companies Decree on Financial incentives for FDI ARTICLE 22 Special procedure for grant incentives without public tender Terms of project: • investment value higher than € 12 million • 50% more new jobs created than provided for specific activity • significant impact on Slovene economy development (considered after evaluation of the commission). For any further information, please contact FDI support team: [email protected] JAPTI – Public Agency for JAPTI – Javna agencija RS Entrepreneurship & Foreign za podjetništvo in tuje Investments investicije- Divisions DIVISION FOR DIVISION FOR FOREIGN DIRECT ENTREPRENEURSHIP INVESTMENTS, SME development INTERNATIONALIZATION and REPRESENTATIVE OFFICES OF activities JAPTI ABROAD • Business support Foreign direct investment services for • Investor services (information, site micro and SME’s selection, fact-finding visits etc.) • Entrepreneurial support • Investor’s growth and development • Environment and culture • Image building development • Policy advocacy • Entrepreneurial • Financial incentives support education Internationalization promotion •Voucher consulting and • Internet portal for Slovenian Network of foreign offices qualifications companies Milan •VEM network • Services for foreign buyers of Düsseldorf •Slovenian Centre for Slovenian goods Shanghai Competitiveness and • Business Delegations Kazan • Co-financing Business Clubs Innovation Sao Paulo Thank you for your attention! JAPTI – Public Agency of the Republic of Slovenia for Entrepreneurship and foreign Investments Verovškova ul. 60 SI-1000 Ljubljana Phone: +386 1 5891 870 [email protected] www.InvestSlovenia.org