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Slovakia

Slovakia. Investing in competitive businesses and high quality jobs. The Ministry of Economy of the Slovak Republic. Strategic Location. Area (km 2 ): 49,035 Population: 5,379,000 Population density: 109.7 persons/km 2 Capital: Bratislava Travel distance: 5 hours by car

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Slovakia

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  1. Slovakia Investing in competitive businesses and high quality jobs The Ministry of Economy of the Slovak Republic

  2. Strategic Location Area (km2): 49,035 Population: 5,379,000 Population density: 109.7 persons/km2 Capital: Bratislava Travel distance: 5 hours by car (West-East) Neighboring countries: Austria, Czech Republic, Poland, Ukraine, Hungary The Ministry of Economy of the Slovak Republic

  3. Contents / Competitive Advantages of Slovakia • Reforms improving business environment & economic growth • High quality labour & flexible labour market • Automotive industry fastest growing sector • Investment aid policy • Succesful investment stories The Ministry of Economy of the Slovak Republic

  4. Being internationalized….. The Ministry of Economy of the Slovak Republic

  5. GDP Growth Comparison Source: Eurostat & NBS,* forecast The Ministry of Economy of the Slovak Republic

  6. per year in millions of USD cumulative in millions of USD FDI is growing enormously FDI cum. as of 2006* (14 747 mil. USD) * Source: SARIO , as of June 2006 The Ministry of Economy of the Slovak Republic

  7. Major FDI Factors • Strategic Location, Logistics and Transportation Costs • Labour Costs, High Quality Labour & Labour Availability • Taxation and Business Environment • Access to a market of 450 million consumers • Investment Aid Policy • Legislative and regulatory framework fully compatible with the EU • Full benefits resulting from the free movement of goods, services, capital, and labour in the EU The Ministry of Economy of the Slovak Republic

  8. Education • approx. 90 % of population has high school education • over 13 % of population holds a university degree from one of 25 universities in Slovakia • graduates speaking at least two foreign languages – english, german, french, etc. The Ministry of Economy of the Slovak Republic

  9. Labour Cost Comparison The Ministry of Economy of the Slovak Republic

  10. Taxation system 19% Simple, Fair, Neutral, Effective Corporate & Individual Income Tax, VAT: 19% FLAT No double taxation Dividend tax: 0% Inheritance and Gift Tax: 0% Real Estate Transfer Tax: 0% Repatriation of profits:100% The Ministry of Economy of the Slovak Republic

  11. Reforms Improving Business Environment Banking & FinanceAs of December 2005 the banking sector has been privatized with 97% foreign ownership. This sector has undergone a dramatic recovery New Pension system Individual pension saving accounts in pension administration companies Flexible Labour Code Recognized by the World Bank as one of the most flexible in the EU. It allows layoffs to meet economic cycles, low degree of labour unrests Health Care System Introduction of market principles into the health care system Social System New measures to avoid abuse of the social system, better aimed targeting of social allowances. Introduction ofEmployers' Obligation to Pay Sickness Insurance Benefits in first 10 days of employee’s illness leave has resulted in a 3% sickness rate, the lowest in all EU countries Commercial Registry Amount of time required to register a new company has been reduced by 50 % to approx. 5 days; the same applies to the issuance of trade license Investment Aid PolicyFaster and transparent aid approval process, company can determine the potential amount of State aid, new investment aid act to be introduced in 2007 The Ministry of Economy of the Slovak Republic

  12. Trnava Vrable Košice Poprad Malacky D.N. Ves Bratislava Zilina Sladkovicovo VW -Lozorno Roznava Industrial Zones & Supplier Clusters Cluster for VW Slovakia Cluster for Peugeot Citroen Cluster for Samsung Cluster for Kia Motors Kys.Nové Mesto Martin Presov Dubnica n.Vahom Trenčín Humenne Banská Bystrica Nove M.n.Vahom Zvolen Hlohovec Nitra Galanta Wood processing zone Steel processing industry, heavy industry zone Chemical orientated zone The Ministry of Economy of the Slovak Republic

  13. Automotive Industry in Slovakia Stages of Development & Growth Conditions until 1991 • 35 Slovak companies supplying SKODA car maker • Supplies in the field of transport and special technical production • State-owned enterprises • Planned economy, monopoly position of suppliers • Low qualitative ability • Own research and development • Beginning of the problems caused by industrial conversion • Entry of VW company to the Slovak republic, acquiring BAZ company The Ministry of Economy of the Slovak Republic

  14. Automotive Industry in Slovakia CAR PRODUCTION - in 1996 15. The Ministry of Economy of the Slovak Republic

  15. Slovakia = Largest CarProducer in the world per capita in 2009 Volkswagen 1991 – 2000:549.6 mil. EUR output:350 000 cars/year 2003 – 2006:700 mil. EUR output:300 000 cars/year 2004 – 2009:1.500mil. EUR exp. output:300 000 cars/year The Ministry of Economy of the Slovak Republic

  16. Automotive Industry in Slovakia Stages of Development & Growth Present position • Automotive industry is considered to be fastest growing industry in Slovakia • Local acting of VW and SKODA companies • Being up to standards in the field of quality, productivity, logistics, environment and human resources certification • Over 150 Slovak companies are currently supplying the automotive industry • 3/4 of suppliers active in the world purchasing network • Peugeot Citroen and KIA – new impulse for continuous growth of Slovak automotive industry • Globalization and recession in world automotive industry The Ministry of Economy of the Slovak Republic

  17. Automotive Industry in Slovakia VW Polo in 2005: supply comparison selection moduls The Ministry of Economy of the Slovak Republic

  18. Automotive Industry in Slovakia CAR PRODUCTION - in 2009 1. The Ministry of Economy of the Slovak Republic

  19. Central Europe:Leading Destination for Automotive Companies BY PL D UA CZ SK A H CH RO I The Ministry of Economy of the Slovak Republic

  20. Structural Funds of the EU Foreign Direct Investments Foreign Trade Slovak Investment & Trade Development Agency Mission Statement: actively contributing to make the Slovak Republic a country with growing market economy and satisfied population with high quality of life. To achieve the goals, SARIO will enforce and validate its contacts both in Slovakia and abroad. SARIO CORE DIVISIONS The Ministry of Economy of the Slovak Republic

  21. FDI: Strategy • Diversification of FDI (sectors and regions) • Competitive Investment Aid Policy • Continuous Improvement of Business Environment • Improvement of Infrastructure, especially motorway connection to remote regions, development of air transportation (passenger and cargo) • Increase Mobility of People (commuting) • Adjust education system (foreign languages, qualifications and skills based on market needs) • Full Assistance to Foreign Investor The Ministry of Economy of the Slovak Republic

  22. FDI:Expected Development • Currently over 120 active projects worth over 3.4 bil. eur with employment over 32,000 • In short and medium term, effect from largest automotive and electronics companies recently established, 1st & 2nd tier supplier effect • Major recent projects: • Samsung LCD production • with suppliers over 350 mil. eur, up to 3500 new jobs • Sony LCD assembly • up to 100 mil. eur, 3000 new jobs The Ministry of Economy of the Slovak Republic

  23. Investment Aid Policy Projects Targeting • TECHNOLOGY CENTERS, R&D CENTERS • PROCESSING INDUSTRY • TOURISM DEVELOPMENT Forms of Investment Aid • Direct forms • Cash grants for fixed assests(buidings, technology, machinery, etc.) • Subsidies for new jobs created and training subsidies • Indirect forms • Tax relief to be utilized for 10 years • Transfer of real estate from state/municipality to investor at costs • lower than market value The Ministry of Economy of the Slovak Republic

  24. Major US Investors in Slovakia US Steel Delphi Tower Automotive IBM Hewlett Packard Invensys AT&T AIG – Insurance company Pepsi Cola Coca Cola Glacier Tribometal CSC Computers Energizer Oracle PWC Whirlpool On Semiconductor Johnson Controls Johns Manville Molex Citibank Dell Accenture Emerson Electrics Lear Taylor-Wharton Harsco Kraft Foods Teleflex UPS Visteon The Ministry of Economy of the Slovak Republic

  25. Existing SSC in Bratislava The Ministry of Economy of the Slovak Republic

  26. JOHNS MANVILLE SLOVAKIA Location Trnava, West Slovakia Cummulative Investments: 750 mil USD(new furnace) Workforce: 1250 Production: approx. 150 000 tons of glass fibres The Ministry of Economy of the Slovak Republic

  27. Hewlett-Packard European IT Operation Center Already employing over 1000 IT experts for B2B technical support NEW top job openings! What has Bratislava to offer to a company that achieved a $73.1 billion turnover? "Among decisive factors that contributed to the Slovakia's first place in our investigation were very good language skills of Slovaks, competitive voice and data networks, stable economy and political environment, as well as geographic location of Bratislava which is very close to the majority of our EMEA customers operating in Western Europe, while the city is also close to the Eastern Europe that represents an important emerging market for us," said Rolf Lobreyer, EMEA Delivery Manager. The Ministry of Economy of the Slovak Republic

  28. Johnson Controls R&D and technical center for passenger car seats Location Trencin, West Slovakia Current Workforce 350 designers Investments in R&D center 20 million EUR The Ministry of Economy of the Slovak Republic

  29. IBM Slovakia Current Workforce 1200 people in Bratislava • IBM Slovakia • HW & SW Support • Business Services • Accounting & Financing • Strategic Outsourcing The Ministry of Economy of the Slovak Republic

  30. DELL Computers 1400 employees in Bratislava center Support services in german and english additional 800 employees planned • DELL Shared Services & Call Center • Technical Support • Sales • Customer Service • Marketing • Finance & Accounting The Ministry of Economy of the Slovak Republic

  31. Thank you for your attention For more information on Slovakian business opportunities or to join a May 12th – 19th trade mission to Central Europe, contact: Noel Nevshehir Director International Business Center Automation Alley Phone: (248) 457-3200 E-mail: nevshehirn@automationalley.com The Ministry of Ecoomy of th Slovak Republic

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