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SLOVAKIA Ideal Investment & Business Destination

SLOVAKIA Ideal Investment & Business Destination . Slovakia – Growing Heart of Europe. Establishment: 1st January 1993 Official name: Slovak Republic Area (km2): 49,035 Population: 5,437,126 Capital: Bratislava Member of: OECD, WTO, NATO, EU, Schengen area

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SLOVAKIA Ideal Investment & Business Destination

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  1. SLOVAKIAIdeal Investment & Business Destination

  2. Slovakia – GrowingHeart of Europe • Establishment: 1st January 1993 • Official name: Slovak Republic • Area (km2): 49,035 • Population: 5,437,126 • Capital: Bratislava • Member of: OECD, WTO, NATO, EU, Schengen area • Official currency: EURO • Official Language: Slovak • Government: Parliamentary democracy • Election term: 4 years • Neighbours: Austria, Czech Republic, Hungary, Poland, Ukraine • Time zone: GMT + 1hour Source: SARIO, 2011

  3. MacroeconomicOverview GDP Prediction for 2011 EC 3 % OECD3,6% IMF3,8 % National Bank of SR 3,4 % GDP Prediction for 2012 OECD 4,4 % GDP growth Source: International Monetary Fund, Eurostat, Slovak Statistics Office, Central office of Labour, social affairs and family

  4. Ratings& Outlook Source: www.standardandpoors.com,www.moodys.com, www.fitchratings.com, www.jcr.co.jp, www.r-i.co.jp, www.oecd.org

  5. 1st Rank in CEE in DOING BUSINESS 2012 ! Methodology Starting a business Construction permits Registering property Paying taxes Enforcing contracts Protecting investors The Doing Business project provides objective measures of business regulations and their enforcement across 183 economies and selected cities at the subnational and regional level. Closing business Trading across borders Getting credit Source: World Bank Group – Doing Business Report 2012

  6. Low Labour Cost & High Labour Productivity Gross monthly salary Slovakia reaches the highest labor productivity 976 € 23 951 CZK Czech Republic 806 € 3 224,98PLN Poland 769 € Slovakia 760 € 202 576 HUF Hungary 472 € 1936 RON Romania 328 € 642 BGN Bulgaria GDP (in PPS) per hour worked as compared to EU15 (100)Source: Eurostat 2011 Data for 2010Source: National Statistical offices of Czech republic, Hungary, Poland, Slovakia, Bulgaria, Romania exchange rate (as of 23March 2011)

  7. Member of theEurozone € 1st January 2009 Slovakia joined the EURO Zone EURO IMPLEMENTATION IMPACT: • Limitation of Foreign Exchange Risk • Lowering Transaction Costs • Growth in Foreign Trade • Increased Financial Stability Source: SARIO, 2011

  8. Simple and Fair Taxes 19% Flat Tax Rate 19% Corporate Income Tax Personal Income Tax Value Added Tax - VAT Dividend tax Inheritance and Gift Tax Real Estate Transfer Tax Repatriation of profits 20% 0% 100% Source: SARIO 2011

  9. 686 € 10,86% 594 € 17,75% 657 € 9,51% 716 € 16,78% 18,86% 635 € 8,17% 705 € 991 € 4,63% 11,76% 636 € RegionalDifferences in Unemployment Levels Source: Central Officeof Labour, Social Affairs and Family, 2011

  10. NEW LaborCode since Sept. 1st, 2011!!! …more flexible, more motivating & business friendly! 3/6 months/ upon agreement- probation period 1/2/3 months – noticeperiod depends on length of employment <1/ 1-5/ 5+ yrs 40 hours - Weekly working time + 30 min unpaid break longer working times for Managers up to 56 hrs./agreement Introducing “flexi account” of working time + 150 hours/year- Unpaid overtime can be orderedby the employer/ max. up to 400hrs. + 250 hours/year – Agreed overtime with employeesin managerialpositions/max. 550hrs. 20 days/ 25 days after 15 years of work - Annual leave 5 weeks in case employee reaches 33 yrs. (January, 2012) Reduction of Labor Unions Influence Shorter period for recruitment ban; easier process of collective redundancies; work in night shift in 2 weeks in a row,… Bonuses for: above the law overtime: 25% of hour wage andbank holidays: 50% of hour wage Source: SARIO, 2011

  11. RoadNetwork Source: National Motorway Company, 2011

  12. AerospaceNetwork Krakow (PL) 180 km Krakow (PL) 180 km Prague Prague Prague Brno (CZ) 120 km Brno (CZ) 120 km Prague Vienna Bratislava Prague Vienna Bratislava Prague Sliač All major European cities All major European cities Budapest (HU) Vienna (AT) All major European& Worldcities All major European& Worldcities Source: www.slovak-airports.net

  13. Railway Infrastructure Source: Ministry of Transport, Post and Telecommunications of the Slovak Republic, SARIO, 2011

  14. TOP SECTORS OF THE SLOVAK ECONOMY Electronics Leading Slovak Exporter – driver of economic and technological growth Automotive 1st in world car production in 2010 SSC/ICT SR is becoming a hive of SSC and ICTs

  15. KeySector: Automotive CarProduction in Slovakia 1st Place in 2010 103/1000 inhabitants in World Car Production/1000 inhabitants Full Capacity of 3 automobile companies 1,000,000 cars/year Source: SARIO 2011, Slovak Automotive Industry Association ZAP,VW, KIA, PSA-Peugeot

  16. established 1991 7.000 employees VW plants: Bratislava, Martin and Košice Three World Car Producers in Slovakia • established 2003 • 3.000 employees • PSA plant in Trnava • established 2004 • 1st production plant in EU • 3.000employees • KIA plant in Žilina, and 2nd • KIA engine plant is under • construction Source: www.volkswagen.sk; www.kia.sk; http://psa-slovakia.sk/

  17. Key Sector: Electronics • Assembly of Bravia models for the European market doubled in 2008 to 4mil. • 3D TV from April 2010 • Production of LCD 10 mil pcs. • Assembly of LCD • Logistic center • Europe service center • 3D TV from February 2010 • Production of LCD moduls • Only 1 in Europe • Headquarter for Europe • 3000 new jobs • Investment 191,3 mil Eur Source: SARIO, 2011

  18. Map of SSCs & CCs Success StoriesTop Destinations Over 48 SSCs & CCs …employing> 25 800+ professionals

  19. Insight into Investment Incentives

  20. InvestmentIncentives: ELIGIBLE PROJECTS • Industry • Shared ServiceCenters • R&D Centers • Tourism

  21. InvestmentIncentives: Aid is calculated from... • ELIGIBLE ARE COSTS OF: • LAND • BUILDINGS • NEW MACHINERY & TECHNOLOGY EQUIPMENT • LICENSES &PATENT RIGHTS • OR • WAGE COSTS OF NEW EMPLOYEES DURING 2 YEARS

  22. InvestmentIncentives: Forms & Intensity • INCOME TAX RELIEFup to 10taxperiods • - IN ALL DISTRICTS • CASH GRANT(paid ex post,based on annual costs report) • CONTRIBUTIONS ON NEW JOBS (paid ex post,based on annual costs report) • IN THE CASE OF INDUSTRY APPLICABLE ONLY IN DISTRICTS WITH HIGHER UNEMPLOYMENT • THE TOTAL AMOUNTIN ALL REQUESTED FORMS CANNOT EXCEEDTHE MAX. INTENSITY IN DISTRICT 20% -50% OF THE ELIGIBLE COSTS.

  23. MILESTONES WORKS ON PROJECT CAN START EVALUATION SARIO DRAFT OF AID OFFERMoE AID OFFERMoE APPROVAL GOVERNMENT 30 days 10 days 20 days 30 days 30 days SUBMISSION TO MoE STATEMENT MoE EVALUATION MINISTRIES ACCEPTANCE INVESTOR

  24. InvestmentIncentives: Industrial Projects

  25. InvestmentIncentives: INDUSTRYMin. Investment & Share of New Machinery CA NO SK SL TS KM BJ BY SP DK ML ZA KK PU SB PB PP LM SV LE MT RK HE IL PO VT TN SN SA TR GL NM PD BR BB MY SO BN MI KE KS RV RA SE ZH PN PE TV DT TO ZV ZC TT PT HC MA BS ZM RS PK LC NR KA 14 mil EUR & 60% SC BA GA LV VK SA NZ 7 mil EUR & 50% DS KN 3.5 mil EUR & 40% * Region Bratislava is excluded

  26. InvestmentIncentives: INDUSTRY - Max. Aid

  27. InvestmentIncentives: Shared Service Centers

  28. InvestmentIncentives: SSCs- Max. Aid

  29. InvestmentIncentives: Technology Centers

  30. InvestmentIncentives: Technology Center - Max. Aid

  31. InvestmentIncentives: Tourism

  32. InvestmentIncentives: TourismMin. Investment & Share of New Machinery CA NO SK SL TS KM BJ BY SP DK ML ZA KK PU SB PB PP LM SV LE MT RK HE IL PO VT TN SN SA TR GL NM PD BR BB MY SO BN MI KE KS RV RA SE ZH PN PE TV DT TO ZV ZC TT PT HC MA BS ZM RS PK LC NR KA 10 mil EUR/40% SC BA GA LV VK SA NZ 5 mil EUR/20% DS KN 3 mil EUR/20% * Region Bratislava is excluded

  33. State Aid Effectivity In the period 2002 – 2011: • 109approved investment project • 41,057number of newly created jobs • 25% - average intensity of state aid • 29,000 EUR– average intensity of state aid per 1 newly created job

  34. Importantfacts • Investment must be implemented withinmax. 36 months • Submission of investment planbefore start of the work on project • Work on the project can start after the Ministry of Economy issues a preliminary statement (takes approx. 40 days) • The investor must meet his investment plan in all material aspects (especially amount and no. of newly created jobs) • The beneficiary of the aid is obliged to keep investmentat least 5 yearsafter completion of investment plan • Also newly created position must be maintainedat least 5 yearsafter their creation

  35. Slovakia´s Success Stories Source: SARIO, 2010

  36. Small CountryofGreat Opportunities Golf opportunities Wellness Visit the mysterious caves Beautiful mountains Skiing opportunities Charming Castles A place where history meets future Rafting Spa resorts Aqua parks Delicious Slovak Food Source: SARIO, 2010

  37. SARIO – Closer to You Strategy Key Focus New Services18 October 2011, Košice

  38. SARIO Who We Are Government Funded Organization under the direction of the Slovak Ministry of Economy MISSION EXECUTED THROUGH 3 CORE SECTIONS Foreign Direct Investment Foreign Trade Structural Funds of the EU

  39. SARIO Services From providing General services & informationto all subjects interested in FDI in Slovakia Tailor-made solutions for potential investors exploring Slovakia such as Best Location for Your Investment Best Location for Your Expansions Through Assistence in STATE AID application processfor investments into: INDUSTRY SHARED SERVICE CENTERS R&D CENTERS TOURISM Support foreign trade via match-making & subcontracting To AFTERCARE services- for established foreign companies Governmental Agency: Services Free of Charge

  40. Business Development Department Gateway for Investors • Broad network of cooperation partners • Promotion of Slovakia home & abroad • Latest developments in business environment: • Comprehensive investment package (tax, legal, HR, costs, …) • Investment incentives information • Sector & regional analyses • Assistance to incoming commercial & official delegations

  41. CorporateDevelopment Department Dedicated to Investor’s Needs • Extensive experience in supporting business & investment activities • Local presence in each region of Slovakia • Individual client approach • Updated database of existing investors • Contacts to sub-suppliers and other business entities

  42. Thank you for your attention! Foreign Direct Investment Section For more information, you can contact us at: Address: Slovak Investment and Trade Development Agency Martincekova 17 821 01 Bratislava Slovak republic Tel.: +421 2 58260 100 Email:invest@sario.sk Source: SARIO, 2011

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