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Belarus

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

The GOB states attracting FDI is one of the priorities of the country’s foreign policy, and net inflows of FDI have been included in the list of government performance targets since December 2015.  The GOB also does not have any specific requirements for foreigners wishing to establish a business in Belarus. Investors, whether Belarusian or foreign, reportedly benefit from equal legal treatment and have the same right to conduct business operations in Belarus by incorporating separate legal entities.  However, the existing laws and practices often discriminate against the private sector, including foreign investors, regardless of the country of their origin.

Limits on Foreign Control and Right to Private Ownership and Establishment

The GOB asserts foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activity.  The GOB also states there are no general limits (statutory, de facto, or otherwise) on foreign ownership or control. In reality, however, the GOB establishes such limits on a case-by-case basis.  The limits on foreign equity participation in Belarus are above the average for the 20 countries covered by the World Bank Group’s Investing Across Borders indicators for Eastern Europe and the Central Asia region.  Belarus, in particular, limits foreign equity ownership in service industries. Sectors such as fixed-line telecommunications services, electricity transmission and distribution, and railway freight transportation are closed to foreign equity ownership.  In addition, a comparatively large number of sectors are dominated by government monopolies, including, but not limited to, those mentioned above. Those monopolies, together with the perceived difficulty of obtaining required operating licenses, make it difficult for foreign companies to invest in Belarus.  Another example is that under local law, foreign ownership cannot exceed 30 percent in charter funds of Belarusian insurance companies. Finally, the government may restrict investments in the interests of national security (including environmental protection, historical and cultural values), public order, morality protection, and public health, as well as rights and freedoms of people.

Although the GOB claims that it does not screen, review, or approve FDI, the above practices suggest the opposite.  Belarus retains elements of a Soviet-style command economy, with the President and his administration prescreening and approving all significant (multi-million dollar) foreign investment.

Belarus’ Ministry of Antimonopoly Regulation and Trade is responsible for reviewing transactions for competition-related concerns (whether domestic or international).

Other Investment Policy Reviews

The UN Conference on Trade and Development reviewed Belarus’ investment policy in 2009 and made recommendations regarding the improvement of its investment climate. http://unctad.org/en/Docs/diaepcb200910_en.pdf 

Business Facilitation

Individuals and legal persons can apply for business registration via the web portal of the Single State Register (http://egr.gov.by/egrn/index.jsp?language=en  ) – a resource that includes all relevant information on establishing a business.

Belarus has a regime allowing for a simplified taxation system for small and medium-sized and foreign-owned businesses.

Belarus defines enterprises as follows:

  • Micro enterprises – fewer than 15 employees;
  • Small enterprises – from 16 to 100 employees;
  • Medium-sized enterprises – from 101 to 250 employees.

Belarus’ investment promotion agency is the National Agency of Investments and Privatization (NAIP).  NAIP is tasked with representing the interests of Belarus as it seeks to attract FDI into the country.  The Agency states it is a one-stop shop with services available to all investors, including: organizing fact-finding missions to Belarus, assisting with visa formalities; providing information on investment opportunities, special regimes and benefits, state programs, and procedures necessary for making investment decisions; selecting investment projects; and providing solutions and post-project support, i.e., aftercare.

To maintain an ongoing dialogue with investors, Belarus also has the Foreign Investment Advisory Council (FIAC).  Its activities include, but are not limited to: developing proposals to improve investment legislation; participating in examining corresponding regulatory and legal acts; and approaching government agencies for the purpose of adopting, repealing or modifying the regulatory and legal acts that restrict the rights of investors.  The FIAC is chaired by the Prime Minister of Belarus and includes the heads of government agencies and other state organizations subordinate to the GOB, as well as heads of international organizations and foreign companies and corporations.

Outward Investment

The government does not promote or incentivize outward investment, nor does it restrict domestic investors from investing abroad.  According to government statistics, Belarusian businesses’ outward investments in 2018 totaled USD 5.67 billion.

5. Protection of Property Rights

Real Property

Property rights are enforced by the Civil Code.  Mortgages and liens are available, and the property registry system is reliable.  Investors and/or duly established commercial organizations with the participation of a foreign investor (investors) have the right to rent plots of land for up to 99 years.  According to the Belarusian Land Code, foreign legal persons and individuals are denied land ownership. According to the 2019 World Bank Doing Business Report, Belarus ranked fifth in the world on ease of property registration (http://www.doingbusiness.org/en/data/exploreeconomies/belarus  ).

Intellectual Property Rights

In 2015, Belarus was taken off the USTR’s Special 301 Report Watch List.  As of 2019, Belarus has made progress on improving legislation to protect IPR and prosecute violators.  However, challenges for effective enforcement include a lack of sufficiently qualified officers and limited focus to those areas that have the most impact on the economy.  The United States expects Belarus to continue improving its IPR regime as part of its WTO accession negotiations and will continue to assist Belarus with technical consultations to that end.

According to information provided by Belarus’ National Center of Intellectual Property, the government amended Article 4.5 of the Administrative Code in 2018 to allow greater prosecution of intellectual and industrial property rights violations.  Notably, in 2018 Belarusian law enforcement prosecuted five legal persons for distribution of counterfeit products under Article 9.21 of Belarus’ Administrative Code, based on a request filed by a U.S. company operating in Belarus.

As of February 2019, Belarus’ National Customs Register of IP objects, run by the State Customs Committee, included 70 trademarks whose rights holders were U.S. registered companies.  U.S. registered trademarks account for 23 percent of IP objects secured by the Register.

In 2018, the National Center of Intellectual Property continued discussions with U.S. Broadcast Music, Inc. on an agreement that could help secure the recording rights of U.S. property rights holders and enable the collection of royalties in Belarus.

In 2018, Belarusians paid a total of USD 50 million for using IPR.

Belarus does not appear in the USTR’s Out-of-Cycle Review of Notorious Markets report, nor does it appear in the Special 301 report.

The World Intellectual Property Organization (WIPO) provides 186 Country Profiles, including Belarus.  These profiles are available at: http://www.wipo.int/directory/en  

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/  .

Resources for Rights Holders

Monica Sendor
Economic Officer
tel.+375 (17) 210-1283
e-mail: usembassyminsk@state.gov

Croatia

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

Croatia is generally open to foreign investment and the Croatian government continues to make efforts, such as financial incentives, to attract foreign investors. All investors, both foreign and domestic, are guaranteed equal treatment by law, with a handful of exceptions described below.  However, bureaucratic and political barriers remain. Investors agree that an unpredictable regulatory framework, lack of transparency, excessive duration of administrative procedures, lack of structural reforms, and unresolved property ownership issues weigh heavily upon the investment climate. 

The Agency for Investment and Competitiveness (AIK) — previously a stand-alone Croatian government agency providing investors with various services intended to help with implementation of investment projects — became part of the Ministry of Economy, Entrepreneurship and Crafts at the start of 2019.  The Ministry’s Directorate for Investment, Industry and Innovation has assumed the assistance role previously offered by AIK. For more information, see: investcroatia.gov.hr. The Strategic Investment Act helps investors streamline large projects by gathering all necessary information the investor needs to implement the project and then fast-tracking the necessary procedures for implementation of the project, including acquiring permits and help with location. Various business groups, including the American Chamber of Commerce, Foreign Investors’ Council, and the Croatian Employers’ Association, are in dialogue with the government about ways to make doing business easier and to keep investment retention as a priority.

Limits on Foreign Control and Right to Private Ownership and Establishment

Croatian law allows for all entities, both foreign and domestic, to establish and own businesses and to engage in all forms of remunerative activities.  Article 49 of the Constitution states all entrepreneurs have equal legal status. However, the Croatian government restricts foreign ownership or control of services for a handful of national security-sensitive sectors:  inland waterways transport, maritime transport, rail transport, air ground-handling, freight-forwarding, publishing, education, and ski instruction. Apart from these, the only blocks to market access involve routine professional requirements (architect, auditor, engineer, lawyer, and veterinarian).  Over 90 percent of the banking sector is foreign-owned. 

Other Investment Policy Reviews

The Organization for Economic Cooperation and Development (OECD) published an investment climate review for Croatia in June 2019:

https://www.oecd.org/publications/oecd-investment-policy-reviews-croatia-2019-2bf079ba-en.htm

The World Bank Group published a “Doing Business” Economic Profile of Croatia in 2018: http://www.doingbusiness.org/en/data/exploreeconomies/croatia

Business Facilitation

The Croatian e-government initiative “Hitro.hr” (www.hitro.hr  ) provides for 24-hour access to on-line business registration. Additionally, Hitro.hr offices are located in more than 60 Croatian cities and towns. In order to begin business activities, a company needs to register with the State Statistics Bureau to obtain a company identification number, then with a Notary Public, the Commercial Court, Tax Administration, and Health and Pension agencies.  This process can take from one to three days, depending on the efficiency of the local Commercial court, which processes the registration. Private sector participants have complained that the process can take as long as 60 days.  

In 2018, the Global Enterprise Agency rated Croatia’s business registration process 4 out of 10, while the World Bank Ease of Doing Business report ranks Croatia as 123 out of 190 countries.  The government has pledged to improve conditions for business registration. Croatia’s business facilitation mechanism provides for equitable treatment to all interested in registering a business, regardless of gender or ethnicity.

Outward Investment

Croatians have invested some USD 4 million in the United States.  Croatia has no restrictions on domestic investors who wish to invest abroad.

5. Protection of Property Rights

Real Property

The right to ownership of private property is enshrined in the Croatian Constitution and in numerous acts and regulations. A foreign physical or legal person incorporated under Croatian law is considered to be a Croatian legal person and has the right to purchase property. The Ownership and Property Rights Act establishes procedures for foreigners to acquire property by inheritance as well as legal transactions such as purchases, deeds, and trusts. Croatia has a well-functioning banking system, which provides mortgages, while courts and cadaster offices handle property records. 

However, real property ownership can be particularly challenging in Croatia owing to unique titling issues, separate ownership of buildings and the land on which they sit, reciprocity laws, special treatment of agricultural land and coastal regions, and zoning disputes more generally.  For all of these reasons, investors should seek competent, independent legal advice in this area. The U.S. Embassy maintains a list of English-speaking attorneys (https://hr.usembassy.gov/u-s-citizen-services/local-resources-of-u-s-citizens/attorneys/). The Croatian Agency for Investments and Competitiveness is also a helpful service for those seeking information about property status in Croatia.

While the cadaster offices reliably maintain records, there is a significant volume of property in Croatia which has changed hands without appropriate documentation of the transfer because the owners have sought to avoid paying the title transfer fees. The embassy routinely learns of companies or individuals who have bought property in Croatia, only to learn there are conflicting claims to the property.  These individuals and companies may spend years in court attempting to resolve these claims.  For this reason potential buyers should seek to verify that the seller possesses clear title to both the land and buildings (which can be titled and owned separately). 

In order to acquire property by means other than inheritance or as an incorporated Croatian legal entity, foreign citizens must receive the approval of the Ministry of Justice. Approval can be delayed, owing to a lengthy interagency clearance process. While citizens of EU member states are afforded the same rights as Croatian citizens in terms of purchasing property, the right of all other foreigners to acquire property in Croatia is based on reciprocity. 

In the case of the United States, reciprocity exists on a (sub-federal) state-by-state basis. Croatia’s Ministry of Foreign and European Affairs has confirmed the existence of positive reciprocity for real estate purchases for residents of the following states:  Alabama, Arizona, Alaska, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas Louisiana, Maine, Maryland, Massachusetts, Michigan, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin, Wyoming.  

Alternatively, for U.S. citizens from Arkansas, Hawaii, Kentucky, Minnesota, Mississippi, New Hampshire, Oklahoma and Vermont, property acquisition is only allowed with the condition of Croatian permanent residence.  Residents of other states could face longer waiting periods. The Foreign Ministry has confirmed that Croatian nationals can purchase real estate throughout the United States without restrictions. A foreign investor, incorporated as a Croatian legal entity, may acquire and own property without ministry approval, with the caveat that the purchase by any private party of certain types of land (principally land directly adjacent to the sea or in certain geographically designated areas) can be restricted to foreign investors for purposes of national security.

Inheritance laws have led to situations in which some properties can have claims by dozens of legal owners, some of whom are deceased and others of whom emigrated and cannot be found. 

It is also important to verify the existence of necessary building permits, as some newer structures in coastal areas have been subject to destruction at the owner’s expense and without compensation for not conforming to local zoning regulations. Investors should be particularly wary of promises that structures built without permits will be regularized retroactively. The Act on Legalization of Buildings and Illegal Construction is intended to resolve ambiguities regarding ownership of real estate.

Land ownership is distinct from ownership of buildings or facilities on the land. Investors interested in acquiring companies from the Ministry of State Owned Property should seek legal advice to determine whether any deal also includes the right to ownership of the land on which a business is located, or merely the right to lease the land through a concession. Property may be mortgaged. Inconsistent regulations and restrictions on coastal property ownership and construction have also provided challenges for foreign investors in the past. Croatian law restricts construction and commercial use within 70 meters of the coastline. 

When purchasing land for construction purposes, potential buyers should determine whether the property is classified as agricultural or construction land. The Agricultural Land Act provides for additional fees for re-zoning of up to 50 percent of the value of the land that is diverted from agriculture to construction purposes. The Agricultural Land Agency works with local governments to review potential agricultural land purchases. However, the Agricultural Land Act no longer covers the sale of privately owned farmland, which is now treated solely as the subject of a sales agreement between the parties. Buyers of this type of land should still proceed with caution and be aware of potentially unresolved legacy issues with land ownership. Land in Croatia is either publicly or privately owned and cannot be transferred to squatters solely based on physical presence.

The Ministry of Justice and the State Geodetic Office co-manage the National Program for Resolving Land Registration and Cadaster Issues. This program includes a One Stop Shop system, which is a single point for accessing land registry and cadaster data.  For more information see uredjenazemlja.hr. 

Croatia is also working with the World Bank on implementation of the Integrated Land Administration System project (ILAS) to modernize the land administration and management system in order to improve the efficiency, transparency and cost effectiveness of government services.  Croatia continues to process a backlog of cases and potential investors should seek a full explanation of land ownership rights before purchasing property. 

Note that Croatia’s land records are also available online (see www.pravosudje.hr   and www.katastar.hr  ). Katastar.hr includes information on over 14 million pieces of land throughout the country. 

The World Bank Ease of Doing Business 2018 report ranks Croatia as 51st out of 190 countries on ease of registering property, up eight spots from the 2017 ranking of 58th. 

There is no property tax in Croatia; a proposal to introduce a property tax failed in 2018.

Intellectual Property Rights

Croatian intellectual property rights (IPR) legislation includes the Patent Act, Trademark Act, Industrial Design Act, Act on the Geographical Indications of Products and Services, Act on the Protection of Layout Design of Integrated Circuits, and the Act on Copyrights and Related Rights. These acts define the process for protecting and enforcing intellectual property rights. Texts of these laws are available on the website of the State Intellectual Property Office (https://www.dziv.hr/en/ip-legislation/national-legislation/).

Legislation pertaining to Intellectual Property Rights can be found at http://www.dziv.hr/en/ip-legislation/national-legislation/  . The Law on Protecting Unpublished Information with Market Value went into force in 2018. 

Croatian law enforcement officials keep public records of seized counterfeit goods. According to the latest available report from the Customs Office, in 2018, customs officials stopped 540 international deliveries that resulted in a total of 593 procedures for temporary detainment of goods, which included 88,827 items.  Customs also detained 137 domestic deliveries, which contained 18,384 counterfeit goods. They initiated 3 criminal proceedings against those who were involved in the transportation of seized goods. Croatian customs officials and Ministry of Interior work together to locate and seize goods.

Although some areas of IPR protection remain problematic, Croatia is currently not on the U.S. Special 301 Watch List nor is it in the Notorious Markets List. Problem areas are piracy of digital media and counterfeiting. Due to its geographic position, Croatia is also one of the transit routes for various illegal products bound for other countries in the region. There have been no problems reported with regard to registration of intellectual property in Croatia by American companies. In May 2016, the American Chamber of Commerce in Croatia delivered to the Croatian government Recommendations for Improving the Enforcement of Intellectual Property Protection in Croatia based on discussions with their members in regard to treatment of intellectual property http://www.amcham.hr/position-papers-d207   (please scroll down to the 15th line). The American Chamber of Commerce continues dialogue with the Croatian government in regard to intellectual property rights issues.

As a WTO member, Croatia is a party to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Croatia is also a member of the World Intellectual Property Organization (WIPO). For a list of international conventions to which Croatia is a signatory, consult the State Intellectual Property Office’s website at www.dziv.hr  .

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/  .

Georgia

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

Georgia is open to foreign investment.  Legislation establishes favorable conditions for foreign investment, but not preferential treatment for foreign investors.  The Law on Promotion and Guarantee of Investment Activity protects foreign investors from subsequent legislation that alters the condition of their investments for a period of ten years.  Investment promotion authority is vested in the Investment Division of Enterprise Georgia, a legal entity of public law under the Ministry of Economic and Sustainable Development. The Investment Division’s primary role is to attract, promote, and develop direct foreign investment in Georgia.  For this purpose, it acts as the moderator between foreign investors and the Georgian government, ensures access to updated information, provides a means of communication with government bodies, and serves as a “one-stop-shop” to support investors throughout the investment process. (http://www.enterprisegeorgia.gov.ge/en/about  ).

To enhance relations with investors, Georgia’s then-Prime Minister created the Investors Council in 2015, an independent advisory body, with the objective of promoting dialogue among the private business community, international organizations, donors and the Georgian government for the development of a favorable, non-discriminatory, transparent, and fair business and investment climate in Georgia. (http://ics.ge  ).  The Business Ombudsman, who is a member of the Investors Council, is another tool for protecting investors’ rights in Georgia.  (http://businessombudsman.ge  )

Limits on Foreign Control and Right to Private Ownership and Establishment

Georgia does not screen foreign investment in the country, other than imposing a registration requirement and certain licensing requirements as outlined below.  Foreign investors have participated in most major privatizations of state-owned property. Transparency of privatization has been an issue at times. No law or regulation authorizes private firms to adopt articles of incorporation or association that limit or prohibit foreign investment, participation, or control.  Cross-shareholder or stable-shareholder arrangements are not used by private firms in Georgia. Georgian legislation does not protect private firms from takeovers. There are no regulations authorizing private firms to restrict foreign partners’ investment activity or limit foreign partners’ ability to gain control over domestic enterprises.

There are no specific licensing requirements for foreign investment other than those that apply to all companies.  By law, the government has 30 days to make a decision on licenses, and if the licensing authority does not state a reasonable ground for rejection within that period, the government will approve the license or permit for issuance.  The government only requires licenses for activities that affect public health, national security, and the financial sector. The government currently requires licenses in the following areas: weapons and explosives production, narcotics, poisonous and pharmaceutical substances, exploration and exploitation of renewable or non-renewable substances, exploitation of natural resource deposits, establishment of casinos and gambling houses and the organization of games and lotteries, banking, insurance, securities trading, wireless communication services, and the establishment of radio and television channels.  The law requires the state to retain a controlling interest in air traffic control, shipping traffic control, railroad control systems, defense and weapons industries, and nuclear energy. Only the state may issue currency, banknotes, and certificates for goods made from precious metals, import narcotics for medical purposes, and produce control systems for the energy sector.

Other Investment Policy Reviews

In January 2016, the World Trade Organization (WTO) concluded its second Trade Policy Review of Georgia.  In this review, WTO members reiterated their approval of Georgia’s broadly open, transparent, and predictable trade and investment regimes.  During the review period, Members noted that Georgia had undertaken an impressive range of reform initiatives aimed at streamlining, liberalizing, and simplifying trade regulations and their implementation.  The review lauded Georgia’s trade openness and its commitment to the multilateral system through its responsible contribution to the work of the WTO.

WTO members commended Georgia for the ratification of the Trade Facilitation Agreement, which would benefit Georgia’s role as a trade transit corridor in the region, and the related notification to the WTO of Category A, B and C commitments.  Members also noted that Georgia was an observer to the Government Procurement Agreement and was currently assessing the prospects for joining the Agreement. Members welcomed the announcement that Georgia was considering joining the expanded Information Technology Agreement, which would constitute a significant step forward for attracting further investment.  See more at https://www.wto.org/english/tratop_e/tpr_e/tp428_crc_e.htm  

Business Facilitation

Registering a business in Georgia is relatively quick and streamlined, and Georgia ranks fourth in registering property among countries assessed in the World Bank’s 2019 Doing Business Report.  Registration takes one day to complete and Georgia has a single window registration process. Registration of companies is carried out by the National Agency of Public Registry   (NAPR) (www.napr.gov.ge   – webpage is in Georgian only), located in the Public Service Halls (PSH) under the Ministry of Justice of Georgia.  The web page of the PSH (http://www.psh.gov.ge/main/page/2/85  ) outlines procedures and requirements for business registration in English.  For registration purposes, the law does not require a document verifying the amount or existence of charter capital.  A company is not required to complete a separate tax registration. The initial registration includes both the state and tax registration.

The following information is required to register a business in Georgia:  personal information of the founder and principal officers, articles of incorporation, and the company’s area of business activity.  Other required documents depend on the type of entity to be established.

To register a business, the potential owner must first pay the registration fee, register the company with the Entrepreneurial Register and obtain an identification number and certificate of state and tax registration.  Registration fees are: GEL100 (around USD35) for regular registration, GEL200 (USD70) for expedited registration, plus GEL1 (bank fees). Second, the owner must open a bank account (free).

Georgia’s business facilitation mechanism provides equitable treatment of women and men.  There are a variety of state-run and donor-supported projects that aim to promote women entrepreneurs through specific training or other programs, including access to financing and business training.

Outward Investment

The Georgian government does not have any specific policy on promoting or restricting domestic investors from investing abroad and Georgia’s outward investment is insignificant.

5. Protection of Property Rights

Real Property

Georgia ranks high in World Bank’s Doing Business 2019 report in general, but especially in the category of “registering property.”  Processes are streamlined and transparent, and takes minimal time. It takes one day and is conducted at Public Service Halls.

In June 2017, the Parliament adopted a legislative amendment that placed a moratorium on the sale of agricultural land to foreign citizens and stateless persons.  Under the amendment, foreigners, legal entities registered abroad, and legal entities registered by foreigners in Georgia were not able to purchase agricultural land in Georgia.  Furthermore, the new Constitution that came into force in December 2018, imposed restrictions on the sale of agricultural land. Currently the parliament is considering a draft law that would allow foreigners to purchase land under a relevant investment plan and other preconditions.

Mortgages and liens are registered through the public registry and information can be obtained from the webpage www.napr.gov.ge  .

The government has taken multiple steps to regulate land titling, including facilitating simplified procedures, free registration campaigns, and mediation services.  The National Public Registration Agency reported that from August 2016 through February 2019, 300 thousand hectares of land were registered under the land reform project, increasing the share of titled land to 45 percent.  Unclear or unregistered titling bears the potential to hamper investment projects.

Property ownership cannot revert to other owners when legally purchased property stays unoccupied.

Intellectual Property Rights

Georgia acceded to the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in 2000.  The Ministry of Economy and Sustainable Development is responsible for WTO compliance.

The legal framework for protection of intellectual property rights (IPR) in Georgia is approximated to international standards.  Six laws regulate IPR in Georgia: the Law on Patents, the Law on Trademarks, the Law on Copyrights and Neighboring Rights, the Law on Appellation of Origin and Geographic Indication of Goods, the Law on Topographies of Integrated Circuits, and the Law on IP-Related Border Measures.  Georgian law now provides protection for works of literature, art, science, and sound recordings for 50 years.

The National Intellectual Property Center of Georgia (Sakpatenti) provides legal protection for IPR in Georgia:  it issues protective documents on invention, utility model, trademark, design, geographical indication and appellation of origin, new animal breeds and plant varieties, and ensures the deposit of copyrighted work.  The Revenue Service, which is part of the Ministry of Finance, is responsible for enforcing IPR listed in the Register of Intellectual Property Subject-Matter. The Revenue Service is responsible for border control and can halt import or export of items based on the register data.  After the registration procedure is complete, the Revenue Service is able to suspend the movement of counterfeit goods for up to 10 working days, which may be extended by the Revenue Service for an additional 10 working days. The Law of Georgia on Border Measures Related to Intellectual Property provides for the possibility of destruction of counterfeit goods on the basis of a court decision.

IPR infringement of industrial property rights, copyrights, performers’ rights, rights of makers of databases, trademarks or other illegal use of commercial indications can incur civil, criminal, and administrative penalties.  Depending on the type and extent of the violation, penalties include fines, corrective labor, social work, or imprisonment.

Sakpatenti is an active and engaged partner of the United States in training to educate the public on IPR issues.  Sakpatenti coordinates the government’s approach to IPR enforcement under the Interagency Coordination Council (Council) for IPR Enforcement.  The Council is an efficient platform for government institutions to exchange their views on IPR enforcement issues. Georgia is improving IPR enforcement, but some problems persist, especially software licensing and pirated content available online.  Many judges and lawyers lack sufficient knowledge of IPR laws and issues; pirated video and audio recordings, electronic games, and computer software are sometimes available; and unlicensed content free for users to download or stream is available on some websites. The U.S. government Commercial Law Development Program continues to provide assistance to Sakpatenti and other governmental entities to build capacity to effectively deal with IPR-related issues.

In line with Georgia’s commitments under the Deep and Comprehensive Free Trade Area (DCFTA) agreement with the EU, to prevent and suppress IPR infringement and to ensure the implementation of appropriate sanctions, Sakpatenti drafted a package of amendments to the IP legislation, which the Parliament adopted on December 23, 2017, and entered into force on January 11, 2018.  The amendments apply to the following legislative acts regulating intellectual property: the Patent Law of Georgia, the Law of Georgia on Copyright and Related Rights, the Law of Georgia on Design, the Trademark Law of Georgia, the Code of Civil Procedure of Georgia, the Law of Georgia on Pesticides and Agrochemicals, and the Law of Georgia on Drugs and Pharmaceutical Activity.

According to the new amendments, in the case of IPR infringement, the rights holder is endowed with authority to demand that infringing objects be removed from circulation or destroyed, any images related to the objects are destroyed and any related material published online that infringes on exclusive rights be deleted, and any technical devices used to make the infringing objects also be destroyed.  According to the amendments, the rights holder is entitled to define, at their discretion, the caused damage and received benefit, and can demand a lump sum compensation payment. The amendments also stipulate provisional measures to preserve relevant evidence related to protection of IPR subject-matter, which is especially important in terms of effective enforcement of rights.

Georgia also approximated laws on “border measures related to IPR” with the EU regulation N608/2013.  Amendments were introduced in 2017 and identify intellectual property objects to be protected at the border, including: design, patent, utility model, topographies of integrated circuits, new breeds of animals, and varieties of plants.  Under these new amendments, customs authorities are entitled to take ex-officio actions at the border and detain suspected IPR infringing goods. Parliament approved the amendments on December 13, 2017, and they entered into force on February 7, 2018.

Development of an effective system of Internet Service Providers (ISP) Liability is also an obligation under the DCFTA.  In order to implement an ISP Liability in Georgian legislation, in 2017, Sakpatenti drafted amendments to the Law of Georgia “On Copyright and Related Rights” that include ISP-related provisions.  The amendments were drafted on the basis of the draft Law of Georgia “On Electronic Commerce,” prepared by the Ministry of Economy and Sustainable Development of Georgia.

In 2018, the Ministry of Finance’s Investigation Service initiated 16 cases under Article 196 of the Criminal Code of Georgia (unlawful use of trademark, service marks, or other commercial designations).  Out of 16 cases, 12 were initiated ex-officio. As a result, 40,268 counterfeit goods were seized, with the total value of USD 45,000.

In 2018, the Revenue Service’s Customs Department issued 119 orders to suspend products.  In 82 of these cases the rights holder and the owner of the products agreed to destroy the products, with a total value of USD 30,500.  In 16 cases, the rights holder filed a lawsuit, and in 21 cases the goods were released, either because it was not proven that the goods were counterfeit or the rights holder did not file a lawsuit.

Georgia is not listed in USTR’s Special 301 Report.  Similarly, Georgia is not included in the Notorious Markets List.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at:  http://www.wipo.int/directory/en/ .

For a list of lawyers in Georgia, please visit: https://ge.usembassy.gov/u-s-citizen-services/attorneys/.

Hungary

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

Hungary maintains an open economy and its high-quality infrastructure and central location are features that make it an attractive destination for investment.  Attracting FDI is an important priority for the GOH, especially in manufacturing and export-oriented sectors. According to some reports, in other sectors, including banking and energy, however, government policies have resulted in some foreign investors selling their stakes to the government or state-owned enterprises.  Hungary was a leading destination for FDI in Central and Eastern Europe in the mid-nineties and the mid-two-thousands, with annual FDI reaching over USD 6 billion in 2005. The pace of FDI inflows slowed in subsequent years as a result of the 2008 global financial crisis and increasing competition for investment from other countries in the region.  In 2017, net annual FDI amounted to USD 5.6 billion while total gross FDI amounted to USD 98 billion.

As a block, the EU accounts for approximately 89 percent of all FDI in Hungary in terms of direct investors and 62 percent in terms of ultimate controlling parent investor.  Germany is the largest investor, followed by the United States, Austria, France, the United Kingdom, Italy, Japan, the Netherlands, and China. The majority of U.S. investment falls within automotive, software development, and life sciences sectors.  Approximately 450 U.S. companies maintain a presence in Hungary.

The GOH actively seeks foreign investment and has implemented a number of tax changes to increase Hungary’s regional competitiveness and attract investment, including a reduction of the personal income tax rate to 15 percent in 2016, reducing the business income tax rate to 9 percent in 2017, and the gradual reduction of the employer-paid welfare contribution from 27 percent in 2016 to 19.5 percent in 2018.  As of 2016, the GOH streamlined the National Tax and Customs authority (NAV) procedure to offer fast-track VAT refund to customers categorized as “low risk” based on their internal controls and previous tax record.

Many foreign companies have expressed displeasure with the unpredictability of Hungary’s tax regime, its retroactive nature, slow response times, and the volume of legal and tax changes.  According to the European Commission (EC), a series of progressively-tiered taxes implemented in 2014 disproportionately penalized foreign businesses in the telecommunications, tobacco, retail, media, and advertisement industries, while simultaneously favoring Hungarian companies.  Following EC infringement procedures, the GOH phased out most discriminative tax rates by 2015 and replaced them with flat taxes.

In 2017, the GOH passed a regulation that gives the government preemptive rights to purchase real estate in World Heritage areas.  The rule has been used to block the purchase of real estate by foreign investors in the most desirable areas of Budapest.

A 2014 law required retail companies with over USD 53 million in annual sales to close if they report two consecutive years of losses.  Retail businesses claimed the GOH specifically set the threshold to target large foreign retail chains.  The EC determined that the law was discriminatory and launched an infringement procedure in 2016, which resulted in the GOH repealing the controversial legislation in November 2018.

The GOH publicly declared that reducing foreign bank market share in the Hungarian financial sector is a priority.  Accordingly, GOH initiatives over the past several years have targeted the banking sector and reduced foreign participation from about 70 percent before the financial crisis in 2008 to just over 50 percent by the end of 2018.  In addition to the 2010 bank tax and the 2012 financial transaction tax levied on all cash withdrawals, regulations between 2012-2015 obligated banks to retroactively compensate borrowers for interest rate increases on foreign currency denominated mortgage loans, even though these increases were spelled out in the original contract with the customer, and were permitted by Hungarian law.

While the pharmaceutical industry is competitive and profitable in Hungary, multinational companies complain of numerous financial and procedural obstacles, including high taxes on pharmaceutical products and operations, prescription directives that limit a doctor’s choice of drugs, and obscure tender procedures that negatively affect the competitiveness of certain drugs.  Pharmaceutical firms have also taken issue with GOH moves to weigh the cost of pharmaceutical procurement as more important than efficacy when issuing tenders for public procurement.

The Hungarian Investment Promotion Agency (HIPA), under the authority of the Ministry of Foreign Affairs and Trade, encourages and supports inbound FDI.  HIPA offers company and sector-specific consultancy, recommends locations for investment, acts as a mediator between large international companies and Hungarian firms to facilitate supplier relationships, organizes supplier training, and maintains active contact with trade associations.  Its services are available to all investors. For more information, see: https://hipa.hu/main  

Foreign investors generally report a productive dialogue with the government, both individually and through business organizations.  The American Chamber of Commerce enjoys an ongoing high-level dialogue with the GOH and the government has adopted many AmCham policy recommendations in recent years.  In 2017, the government established a Competitiveness Council, chaired by the Minister of Economy, which includes representatives from multinationals, chambers of commerce, and other stakeholders, to increase Hungary’s competitiveness.  Many U.S. and foreign investors have signed MOUs with the GOH to facilitate one-on-one discussions and resolutions to any pending issues. For more information, see: http://www.kormany.hu/en/ministry-for-national-economy   and https://www.amcham.hu/  

The US-Hungary Business Council (USHBC) – a private, non-profit organization established in 2016 – aims to facilitate and maintain dialogue between American corporate executives and the top government leaders on the U.S.-Hungary commercial relationship.  The majority of significant U.S. investors in Hungary have joined USHBC, which hosts roundtables, policy conferences, briefings, and other major events featuring senior U.S. and Hungarian officials, academics, and business leaders. For more information, see: http://ushungarybc.org/  

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign ownership is permitted with the exception of some “strategic” sectors including defense-related industries, which require special government permit, and farmland.  There are no general limits on foreign ownership or control.

Foreign law firms and auditing companies must sign a cooperation agreement with a Hungarian company to provide services on Hungarian legal or auditing issues.

According to the Land Law, only private Hungarian citizens or EU citizens resident in Hungary with a minimum of three years of experience working in agriculture or holding a degree in an agricultural discipline can purchase farmland.  Eligible individuals are limited to purchasing 300 hectares (741 acres). All others may only lease farmland. Non-EU citizens and legal entities are not allowed to purchase agricultural land. All farmland purchases must be approved by a local land committee and Hungarian authorities, and local farmers and young farmers must be offered a chance to purchase the land first before a new non-local farmer is allowed to purchase the land.  For those who do not fulfill the above requirements or for legal entities, the law allows the lease of farmland up to 1200 hectares for a maximum of 20 years. The GOH has invalidated any pre-existing leasing contract provisions that guaranteed the lessee the first option to purchase, provoking criticism from Austria and Austrian farmers. Austria has reported the change to the European Commission, which initiated an infringement procedure against Hungary in October 2014.  In March 2018, the European Court of Justice ruled that the termination of land use contracts violated EU rules, opening the way for EU citizens who lost their land use rights to sue the GOH for damages. In March 2015, the EC launched another – still ongoing – infringement procedure against Hungary concerning its restrictions on acquisitions of farmland.

The GOH passed a law on investment screening in 2018 that requires foreign investors seeking to acquire more than a 25 percent stake in a Hungarian company in certain “sensitive sectors” (defense, intelligence services, certain financial services, electric energy, gas, water utility, and electronic information systems for governments) to seek approval from the Interior Ministry.  The Ministry has up to 90 days to issue an opinion and can only deny the investment if it determines that the investment is designed to conceal an activity other than normal economic activity. As of publication, we are not aware of any instances in which the Ministry has reviewed an investment.

Other Investment Policy Reviews

Hungary has not had any third-party investment policy reviews in the last three years.

Business Facilitation

Hungary maintains an open economy and its high-quality infrastructure and central location make it an attractive destination for investment.  Attracting FDI is an important priority for the GOH, especially in manufacturing and export-oriented sectors.  In 2006, Hungary joined the EU initiative to create a European network of “point of single contact” where existing businesses and potential investors can access all information on the business and legal environment, as well as connect to Hungary’s investment promotion agency.  Over the past two years, the government has strengthened investor relations and, in addition to signing strategic agreements with key investors, established a National Competitiveness Council to discuss competitiveness challenges, formulate pro-competitiveness measures, and build constructive stakeholder relationships.

The registration of business associations is compulsory in Hungary.  Firms must contract an attorney and register online with the Court of Registration.  Registry courts must process applications to register limited liability and joint-enterprise companies within 15 workdays, but the process usually does not take more than three workdays.  If the Court fails to act within the given timeframe, the new company is automatically registered. If the company chooses to use a template corporate charter, registration can be completed in a one-day fast track procedure.  Registry courts provide company information to the Tax Office (NAV) eliminating the need for separate registration. The Court maintains a computerized registry and electronic filing system and provides public access to company information.  The minimum capital requirement for a limited-liability company is HUF 3,000,000 (USD 10,800); for private limited companies HUF 5,000,000 (USD 17,900), and for public limited companies HUF 20,000,000 (USD 71,400). Foreign individuals or companies can establish businesses in Hungary without restrictions.

Further information on business registration and the business registry can be obtained at the GOH’s information website for businesses: http://eugo.gov.hu/starting-business-hungary   or at the Ministry of Justice’s Company Information Service: http://ceginformaciosszolgalat.kormany.hu/index  

Hungarian business facilitation mechanisms provide equitable treatment for women, but offer no special preference or assistance for them in establishing a company.

Outward Investment

The stock of total Hungarian investment abroad amounted to USD 28.7 billion in 2017.  Outward investment is mainly in manufacturing, services, finance and insurance, and science and technology.  There is no restriction in place for domestic investors to invest abroad. The GOH announced in early 2019 that it would like to increase Hungarian investment abroad and it is considering incentives to promote Hungarian investment.

5. Protection of Property Rights

Real Property

Hungary maintains a reliable land registry, which provides public information for anyone on the ownership, mortgage, and usufruct rights of the real estate or land parcel.  Secured interests in property (mortgages), both moveable and real, are recognized and enforced but there is no title insurance in Hungary.

According to the Land Law of 2013 only private Hungarian citizens or EU citizens resident in Hungary with a minimum of three years of experience in agriculture, or holding a degree in an agricultural field, can purchase farmland.  The law allows the lease of farmland up to 1200 hectares for a maximum of 20 years. There is no restriction for purchase or lease of non-farmland properties.

Hungarian law allows acquisitive prescription for unoccupied real property if the user of the property occupies it continuously for at least 15 years.

Intellectual Property Rights

Hungary has an adequate legal structure for protecting intellectual property rights (IPR), although it lacks deterrent-level sentences for civil and criminal IPR infringement cases.  There has been no new major IPR legislation passed over the last year. According to some representatives of the pharmaceutical and software industries, enforcement could be improved if the Prosecution Office were to establish specialized units to combat IPR violations.  The most common IPR violations in Hungary include selling counterfeit goods, the sale of imported counterfeit pharmaceuticals, and Internet-based piracy. Most counterfeit goods sold in Hungary are of Chinese origin.

Hungary acceded to the European Patent Convention in 2003 and has accordingly amended the Hungarian Patent Act.  Hungary is a party to the World Trade Organization (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement and most other major international IPR agreements, including the most recent World Intellectual Property Organization (WIPO) Copyright Treaty and the WIPO Performance and Phonograms Treaty.  It is also a party to the EU Information Society Directive and implemented the EU Enforcement Directive in 2005.

The United States and Hungary signed a Comprehensive Bilateral Intellectual Property Rights Agreement in 1993 that addresses copyright, trademarks, and patent protection.

In July 2010, the U.S. Patent and Trademark Office (USPTO) and the Hungarian Intellectual Property Office (HIPO) launched a pilot program to facilitate patent recognition between the United States and Hungary.  Due to the pilot’s success, in April 2012 the USPTO and HIPO signed a Memorandum of Understanding to further streamline and expedite patent recognition. More details about this Patent Processing Highway (PPH) program can be found on USPTO’s website at www.hipo.gov.hu/English/szabadalom/pph/  .

Hungary is not listed in the United States Trade Representative (USTR) Special 301 Report or the Notorious Markets List.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/  .

Resources for Rights Holders

Embassy Point of Contact for IPR issues:

Donald Brown
Economic Officer
brownda8@state.gov

Hungary prosecutes IPR violations and authorities have the relevant statistical data.  In 2017 the total number of IPR related crime cases was 631, the total value of these crimes amounted to USD 5.7 million and authorities seized USD 2.5 million worth of counterfeit products.

Romania

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

Romania actively seeks foreign direct investment, and offers a market of around 19 million consumers, a relatively well-educated workforce at competitive wages, a strategic location, and abundant natural resources.  To date, favored areas for U.S. investment include IT and telecommunications, energy, services, manufacturing – especially in the automotive sector, consumer products, and banking. InvestRomania is the government’s lead agency for promoting and facilitating foreign investment in Romania.  InvestRomania offers assistance and advisory services free of charge to foreign investors and international companies for project implementation and opening new offices or manufacturing facilities.

Romania’s accession to the European Union (EU) on January 1, 2007 has helped solidify institutional reform.  Conversely, legislative and regulatory unpredictability, as well as weak public administration, continue to negatively impact the investment climate.  As in any foreign country, prospective U.S. investors should exercise careful due diligence, including consultation with competent legal counsel, when considering an investment in Romania.  Allegedly, in past cases, governments in Romania have allowed political interests or budgetary imperatives to supersede accepted business practices in harmful ways to investor interests.

The energy sector has suffered from recent changes.  In 2018, offshore companies benefited from a streamlined permitting process, but were hit with a windfall profit tax that previously applied only to onshore production.  Additionally, in February 2018 the reference price for natural gas royalties was changed from the Romanian market price to the Vienna Central European Gas Hub (CEGH) price, resulting in a significant increase in royalties.  Energy producers have expressed concern about additional regulatory requirements in EO114, which caps the price of wholesale natural gas, among other modifications. Business associations, including the American Chamber of Commerce in Romania (AmCham), the Foreign Investor Council (FIC), and the Coalition for Romania’s Development, have criticized EO114’s new taxes and how it reverses natural gas market liberalization.

Investments involving public authorities can be more complicated than investments or joint ventures with private Romanian companies.  Some allegations cite that large deals involving the government – particularly public-private partnerships and privatizations of key SOEs – can be stymied by vested political and economic interests, or delayed due to a lack of coordination between government ministries.

In May 2018, the Public-Private Partnership (PPP) Law was revised through emergency ordinance (EO) and responsibility for PPPs of national interest was shifted to the National Strategy and Prognosis Commission.  PPPs of regional or local interest are governed by local authorities. The initiative of implementing a project through a PPP lies exclusively with the public partner. The contribution of the public partner can be in cash, provided the public contribution complies with state aid rules and with public finance legislation.  The public partner can cover costs for stages prior to project implementation, including feasibility studies, and can assume payment obligations or provide guarantees to the project company. According to the PPP law, the public partner initiates the PPP project and awards it according to public procurement rules. Implementation of the PPP legislation will be of considerable interest to investors over the next few years.  The EO is subject to parliamentary review.

In April 2018, the Foreign Investors Council (FIC) issued an open letter to the government and Parliament underscoring business climate uncertainty from the government’s failure to finalize EO 79.  In 2017, EO 79 shifted the burden of mandatory payroll deductions for pensions, healthcare, and income taxes from employers to employees. Parliament has yet to confirm or modify the law, leaving employers uncertain.  To avoid reductions in employee net pay, many companies voluntarily increased salaries to offset employee losses. Other companies, wary of further possible changes, offered monthly bonuses rather than formally amending contracts.

As an example of changes to the taxation regime and ongoing systemic tax disputes between the government and foreign investors, the Ministry of Health (MOH) announced February 2018 an increase in “the clawback tax” for Q4 2017, from 19.42 percent to 23.45 percent.  Pharmaceutical companies pay the clawback tax on all sales of drugs reimbursed through the public health system. The MOH calculates the tax to recover the cost for reimbursed drug sales in the previous quarter that exceed its budget. The pharmaceutical industry, both generic and innovative, immediately decried the tax increase.  Industry sees itself as financing the growth in drug consumption in Romania while the MOH’s budget has remained flat since 2011. The International Innovative Pharmaceutical Producers Association (ARPIM) issued a press release noting that from 2013-2017, pharmaceuticals paid USD 1.75 billion in clawback taxes, exceeding one year of the MOH’s annual budget for drugs in the public health system.  Since implementation of the clawback tax in 2009, the pharmaceutical industry has suggested numerous solutions to address the lack of predictability and transparency in the National Health Insurance House’s computations, but the GOR has shown no interest in increasing government spending for medicine to reduce the tax burden on private companies.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities are free to establish and own business enterprises, and to engage in all forms of remunerative activity.  Romanian legislation and regulation provide national treatment for foreign investors, guarantee free access to domestic markets, and allow foreign investors to participate in privatizations.  There is no limit on foreign participation in commercial enterprises. Foreign investors are entitled to establish wholly foreign-owned enterprises in Romania (although joint ventures are more typical), and to convert and repatriate 100 percent of after-tax profits.

Romania has taken established legal parameters to resolve contract disputes expeditiously.  Mergers and acquisitions are subject to review by the Competition Council. According to the Competition Law, the Competition Council notifies Romania’s Supreme Defense Council regarding any merger or acquisition of stocks or assets which could impact national security.  The Supreme Defense Council then reviews these referred mergers and acquisitions for potential threats to national security. To date, the Supreme Defense Council has not blocked any merger or acquisition. The Romanian capital account was fully liberalized in 2006, prior to gaining EU membership in 2007.  Foreign firms are allowed to participate in the management and administration of the investment, as well as to assign their contractual obligations and rights to other Romanian or foreign investors.

Other Investment Policy Reviews

Romania has not undergone any third-party investment policy reviews through multilateral organizations in over ten years.  The Heritage Foundation’s 2019 Economic Freedom Report indicates that secured interests in private property are recognized.  The Report also notes declines in judicial effectiveness and investment freedom, which outweigh improvements in property rights, the tax burden, and government spending.  The Report identifies labor shortages and political instability as the greatest economic risks.

According to the World Bank, economic growth rates have increased, but the benefits have not been felt by all Romanians.  Progress on implementing reforms and improving the business environment has been uneven. The World Bank’s 2019 Doing Business Report and Doing Business in the European Union Report indicates that Romania ranks below the EU average in the ease of starting a business, dealing with construction permits and setting up utility services.  Starting a business was made more cumbersome by introducing fiscal risk assessment criteria for value-added tax applications, thereby increasing the time required to register as a value-added taxpayer. Numerous international bodies including the European Commission, the Group of States Against Corruption, the Venice Commission, and Transparency International have expressed concern about what has been seen as an attempt to roll-back anti-corruption efforts and called on the Romanian government to focus on strengthening anti-corruption efforts, including introducing stronger corporate ethics standards and implementing existing anti-corruption legislation.  No substantive progress has been made in these areas.

Business Facilitation

The National Trade Registry has an online service available in Romanian at https://portal.onrc.ro/ONRCPortalWeb/ONRCPortal.portal  .  Romania has a foreign trade department within the Ministry of Business Climate, Trade, and Entrepreneurship and an investment promotion department in the Ministry of Economy.  InvestRomania is the government’s lead agency for promoting and facilitating foreign investment in Romania. InvestRomania offers assistance and advisory services free of charge to foreign investors and international companies for project implementation and opening new offices or manufacturing facilities.  More information is available at http://www.investromania.gov.ro/web/  .

According to the World Bank, it takes 6 procedures and 35 days to establish a foreign-owned limited liability company (LLC) in Romania, compared to the regional average for Europe and Central Asia of 5 procedures and 13 days.  In addition to the procedures required of a domestic company, a foreign parent company establishing a subsidiary in Romania must authenticate and translate its documents abroad. Foreign companies do not need to seek an investment approval.  The Trade Registry judge must hold a public hearing on the company’s application for registration within 5 days of submission of the required documentation. The registration documents can be submitted, and the status of the registration request monitored, online.

Companies in Romania are free to open and maintain bank accounts in any foreign currency, although, in practice, Romanian banks offer services only in certain hard currencies including: Euros, U.S. dollars, Swiss francs and Romanian Leu.  The minimum capital requirement for domestic and foreign LLCs is RON 200 (USD 47). Areas for improvement include making all registration documents available to download online in English. Currently only some are available online, and they are only in Romanian.

Romania defines microenterprises as having less than nine employees, small enterprises as having less than 50 employees, and medium sized enterprises as having less than 250 employees.  Regardless of ownership, microenterprises and SMEs enjoy “de minimis” and other state aid schemes from EU funds or from the state budget. Business facilitation mechanisms provide for equitable treatment of women in the economy.  According to the World Bank Doing Business Report, women are able to register a LLC with the same amount of time, cost, and number of procedures as men.

Outward Investment

There are no restrictions on outward investment.  There are no incentives for outward investment.

5. Protection of Property Rights

Real Property

The Romanian Constitution, adopted in December 1991 and revised in 2003, guarantees the right to ownership of private property.  Mineral and airspace rights, and similar rights, are excluded from private ownership. Under the revised Constitution, foreign citizens can gain land ownership through inheritance.  With EU accession, citizens of EU member states can own land in Romania, subject to reciprocity in their home country.

Companies owning foreign capital may acquire land or property needed to fulfill or develop company goals.  If the company is dissolved or liquidated, the land must be sold within one year of closure, and may only be sold to a buyer(s) with the legal right to purchase such assets.  Investors can purchase shares in agricultural companies that lease land in the public domain from the State Land Agency.

The 2006 legislation that regulates the establishment of specialized mortgage banks also makes possible a secondary mortgage market, by regulating mortgage bond issuance mechanisms.  Mortgage loans are offered by commercial banks, specialized mortgage banks, and non-bank mortgage credit institutions. Romania’s mortgage market is now almost entirely private. The state-owned National Savings Bank, CEC Bank, also offers mortgage loans.  Since 2000, Romania has had in place the Electronic Archives of Security Interests in Movable Property (AEGRM) that represents the national recording system for the priority of mortgages structured by entities and assets, ensuring the filing of transactions regarding mortgages, assimilated operations, or other collateral provided by the law, as well as their advertising.  Most urban land has clear title, and the National Cadaster Agency (NCA) is slowly working to identify property owners and register land titles. According to the National Cadaster Plan, 2023 is the deadline for full registration of lands and buildings in the registry. According to NCA data, 12.5 million (31 percent) of the estimated real estate assets (land and buildings) were registered in the cadaster registry as of March 2019.

Romania has made marginal improvement in implementing digital records of real estate assets, including land.  The 2019 World Bank Doing Business report ranks Romania 44 for the ease of registering property. The cadaster property registry is far from complete, and the lack of accurate and complete information for land ownership continues to be a challenge for private investors ‎and SOEs alike.

Intellectual Property Rights

Romania remains on the U.S. Trade Representative (USTR) Special 301 Watch List in 2019.  It also hosts illicit infringing websites that are included in the 2018 Notorious Markets List.  As elsewhere in the EU, Internet piracy – both Torrent site peer-to-peer (P2P) file sharing and business-to-consumer piracy – remains the top intellectual property rights (IPR) concern.  Despite the low priority placed on IPR enforcement at the policy level, cooperation between law enforcement authorities, including prosecutors and police officers, and intellectual property-based private industry continues at the working level.  This has led to innovative approaches to prosecuting IPR crimes within this constrained legal and fiscal environment: in order to increase the odds of IPR cases advancing in court, law enforcement authorities, when appropriate, are bundling related charges of fraud, tax evasion, embezzlement, and organized crime activity alongside IPR violations.  Not only has this increased the odds of IPR cases going to court, it also strengthens the evidence of “social harm” stemming from IPR violations, as a lack of social harm was often previously cited as a reason for dismissing IPR cases.

Romania’s Customs Authority reported the seizure of approximately 703,221 pieces of counterfeited goods in 2018 compared to 1.4 million pieces of counterfeit goods in 2017 and 1.52 million pieces in 2016.  The declining trend continues at an accelerated pace, in line with growing purchasing power and demand for genuine physical goods. Sweets, cigarettes, clothing, and footwear accounted for the majority of those seizures.  The amount of seized pharmaceuticals had fallen from 370 pieces in 2016 to zero in 2017 and 2018. According to both the National Customs Authority and the national police, the vast majority of counterfeit goods seized in Romania originate in China.

Romania is a signatory to international conventions concerning IPR, including the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and has enacted legislation to protect patents, trademarks, and copyrights.  Romania has signed the Internet Convention to protect online authorship. While Romania’s IPR legal framework is generally good, enforcement remains weak and ineffective, especially in the area of internet piracy. The once-flagrant trade of retail pirated goods has largely been eliminated, but unlicensed use of software and personal use of pirated audio-video products remains high.  While Romania has passed broad IPR protection enforcement provisions, as required by the WTO, judicial enforcement remains lax.

Romania is on the Special 301 Watch List primarily due to weak enforcement efforts against online copyright piracy.  Customs officers have ex-officio powers and so can seize counterfeit goods and, after the rights holder inspects the goods and drafts a declaration, destroy them.  The government is responsible for paying for the storage and destruction of the counterfeit goods. Counterfeit goods are not prevalent in the local market.

Patents

Romania is a party to the Paris Convention for the Protection of Industrial Property and subscribes to all of its amendments.  Romanian patent legislation generally meets international standards, with foreign investors accorded equal treatment with Romanian citizens under the law.  Patents are valid for 20 years. Romania has been a party to the European Patent Protection Convention since 2002. Patent registration can be filed online.  Since 2014, Romania has also enforced a distinct law regulating employee inventions. The right to file a patent belongs to the employer for up to two years following the departure of the employee.

Trademarks

In 1998, Romania passed a trademark and geographic indications law, which was amended in 2010 to make it fully consistent with equivalent EU legislation.  Romania is a signatory to the Madrid Agreement relating to the international registration of trademarks and the Geneva Treaty on Trademarks. Trademark registrations are valid for ten years from the date of application and renewable.  Since 2014, trademark registrations can be filed online. In 2007, Romania ratified the Singapore Treaty on the Law of Trademarks.

Copyrights

Romania is a member of the Bern Convention on Copyrights.  The Romanian Parliament has ratified the latest versions of the Bern and Rome Conventions.  The Romanian Copyright Office (ORDA) was established in 1996 and promotes and monitors copyright legislation.  The General Prosecutor’s Office (GPO) provides national coordination of IPR enforcement, but copyright law enforcement remains a low priority for Romanian prosecutors and judges.  Many magistrates still tend to view copyright piracy as a “victimless crime” and this attitude has resulted in weak enforcement of copyright law. Due to the popularity of downloading pirated content, copyright infringement of music and film is widespread throughout Romania.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

Serbia

1. Openness To, and Restrictions Upon, Foreign Investment

Policies towards Foreign Direct Investment

Serbia is open to FDI, and attracting FDI is a priority for the government. Even during its socialist past, Serbia prioritized international commerce and attracted a sizeable international business community. This trend continues, and the Law on Investments extends national treatment to and eliminates discriminatory practices against foreign investors. The law also allows the repatriation of profits and dividends, provides guarantees against expropriation, allows customs duty waivers for equipment imported as capital in kind, and enables foreign investors to qualify for government incentives.

The Government’s investment promotion authority is the Development Agency of Serbia (Razvojna agencija Srbije – RAS: http://ras.gov.rs/  ). RAS offers a wide range of services, including support of direct investments, export promotion, and coordinating the implementation of investment projects. RAS serves as a one-stop-shop for both domestic and international companies. The government maintains a dialogue with businesses through associations such as the Serbian Chamber of Commerce, American Chamber of Commerce in Serbia, Foreign Investors’ Council (FIC), and Serbian Association of Managers (SAM).

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities have the right to establish and own businesses, and to engage in all forms of remunerative activity.

For some business activities, licenses are required, e.g. financial institutions must be licensed by the National Bank of Serbia prior to registration. Licensing limitations apply to both domestic and foreign companies active in finance, energy, mining, pharmaceuticals, medical devices, tobacco, arms and military equipment, road transportation, customs processing, land development, electronic communications, auditing, waste management, and production and trade of hazardous chemicals.

Serbian citizens and foreign investors enjoy full private property ownership rights. Private entities can freely establish, acquire, and dispose of interests in business enterprises. By law, private companies compete equally with public enterprises in the market and for access to credit, supplies, licenses, and other aspects of doing business. Serbia does not maintain investment screening or approval mechanisms for inbound foreign investment. U.S. investors are not disadvantaged or singled out by any rules or regulations.

Agribusiness: Foreign citizens and foreign companies are prohibited from owning agricultural land in Serbia. EU citizens are exempt from this ban, as of August 28, 2017, although they may only buy up to two hectares of agricultural land under certain conditions. They must permanently reside in the municipality where the land is located for at least 10 years, practice farming on the land in question for at least three years, and own adequate agriculture machinery and equipment. Foreign ownership restrictions on farmland do not apply to companies registered in Serbia, even if the company is foreign-owned. Unofficial estimates suggest that Serbian subsidiaries of foreign companies own some 20,000 hectares of farmland in the country.

Defense: The Law on Investments adopted in 2015 ended discriminatory practices that prevented foreign companies from establishing companies in the production and trade of arms (for example, the defense industry) or in specific areas of the country. Further liberalization of investment in the defense industry continued via a new Law on the Production and Trade of Arms and Ammunition, adopted in May 2018. The law enables total foreign ownership of up to 49 percent in seven state-owned companies, collectively referred to as the “Defense Industry of Serbia,” as long as no single foreign shareholder exceeds 15 percent ownership. The law also cancels limitations on foreign ownership for arms and ammunition manufacturers.

Other Investment Policy Reviews

Serbia has not conducted an investment policy review through the Organization for Economic Cooperation and Development (OECD), World Trade Organization (WTO), or United Nations Conference on Trade and Development (UNCTAD).

Business Facilitation

According to the World Bank’s 2019 Doing Business report, it takes five procedures and 5.5 days to establish a foreign-owned limited liability company in Serbia. This is faster than the average for Europe and Central Asia. In addition to the procedures required of a domestic company, a foreign parent company establishing a subsidiary in Serbia must translate its corporate documents into Serbian.

Under the Business Registration Law, the Serbian Business Registers Agency (SBRA) oversees company registration. SBRA’s website is available in English at www.apr.gov.rs/home.1435.html  . All entities applying for incorporation with SBRA can use a single application form and are not required to have signatures on applications notarized.

Companies in Serbia can open and maintain bank accounts in foreign currency, although they must also have an account in Serbian dinars (RSD). The minimum capital requirement is symbolic at RSD 100 (less than USD 1) for limited liability companies, rising to RSD 3 million (approximately USD 31,000) for a joint stock company. A single-window registration process enables companies that register with SBRA to obtain a tax registration number (poreski identifikacioni broj – PIB) and health insurance number concurrently with registration. In addition, companies must register employees with the Pension Fund at the Fund’s premises. Since December 2017, the Labor Law requires employers to register new employees before they start their first day at work; previously, the deadline was registration within 15 days of employment. These amendments represent an attempt by the government to decrease the grey labor market by allowing labor inspectors to penalize employers if they find unregistered workers.

Some U.S. companies that have ownership by investment funds have reported challenges opening a local bank account due to concerns over compliance requirements on reporting ultimate beneficial ownership. This comes as Serbia has increased its efforts to comply with international best practices to combat money laundering, and is working to implement new procedures.

Pursuant to the Law on Accounting, companies in Serbia are classified as micro, small, medium, and large, depending on the number of employees, operating revenues, and value of assets.

RAS supports direct investment and promotes exports. It also implements projects aimed at improving competitiveness, supporting economic development, and supporting small-and medium-sized enterprises (SMEs) and entrepreneurs. More information is available at http://ras.gov.rs  .

Serbia’s business facilitation mechanisms provide for equitable treatment of both men and women when a registering company, according to the World Bank’s 2019 Doing Business report. The government has declared 2017-2027 a Decade of Entrepreneurship, with special programs to support entrepreneurship by women.

Outward Investment

The Serbian government neither promotes nor restricts outward direct investment. Restrictions on short-term capital transactions—i.e. portfolio investments—were lifted in April 2018 through amendments to the Law on Foreign Exchange Operations. Prior to this, residents of Serbia were not allowed to purchase foreign short-term securities, and foreigners were not allowed to purchase short-term securities in Serbia. Now, Serbian residents are allowed to purchase foreign short-term securities issued in the European Union, or by international financial organizations. Also, foreigners are now allowed to purchase Serbian short-term securities. There are no restrictions on payments related to long-term securities.

Capital markets are not fully liberalized for individuals. Citizens of Serbia are not allowed to have currency accounts abroad, or to keep accounts abroad, except in exceptional situations listed in the Law on Foreign Exchange Operations (such situations may include work or study abroad).

5. Protection of Property Rights

Real Property

Serbia has an adequate body of laws for the protection of property rights, but enforcement of property rights through the judicial system can be very slow. A multitude of factors can complicate property titles: restitution claims, unlicensed and illegal construction, limitation of property rights to rights of use, outright title fraud and other issues. Investors are cautioned to investigate thoroughly all property title issues on land intended for investment projects.

During the country’s socialist years, owners of nationalized land became users of the land and acquired rights of use that, until 2003, could not be freely sold or transferred. In July 2015, the government adopted a law that allows for property usage rights to be converted into ownership rights with payment of a market-based fee.

In March 2015, the government implemented new amendments to the Law on Planning and Construction that separated the issuance of permits from conversion issues. These amendments cut the administrative deadline for issuing construction permits for a potential investor to 30 days and introduced a one-stop shop for electronic construction permits.

Serbia’s real property registration system is based on a municipal cadaster and land books. Serbia has the basis for an organized real estate cadaster and property title system. However, legalizing tens of thousands of structures built over the past twenty years without proper licenses remains an enormous challenge, as two million buildings in Serbia are not registered in the cadaster, of which almost half are residential properties. According to some estimates, every third building in Serbia was not built in accordance with legal requirements. In November 2015, the government adopted a new Law on Legalization, which simplified the registration process. Since then, however, only slightly more than 183,000 decisions on legalization have been issued. The deadline set by the law for legalization of all buildings constructed without proper permits is November 2023.

The World Bank’s 2019 Doing Business Report ranks Serbia 55 of 190 countries for time required to register real property (21 days).

Intellectual Property Rights

Serbia is a World Intellectual Property Organization (WIPO) member and a signatory to all key agreements administered by WIPO. The government has taken steps to implement and enforce the World Trade Organization (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement. Serbia’s intellectual property rights (IPR) laws include TRIPS-compliant provisions and are enforced by courts and administrative authorities.

For the most part, Serbia’s IPR legislation is modern and compliant with both the EU acquis communautaire and international standards. According to the EU’s 2017 Progress Report, Serbia has done a good job aligning its IP legislation with the acquis. Further alignment with the acquis is needed for the Law on Copyright and Related Rights, the Law on Topographies of Semiconductor Products, and the Laws on Patents and Trademarks; strengthening enforcement capacity and coordination among stakeholders is also needed. Serbia opened Chapter 7 pertaining to Intellectual Property in June 2017. Serbian laws extend legal protections to all major forms of IPR (including patents, trademarks, copyrights, industrial designs, geographic indicators, and semiconductor products). Serbia aims to adopt amendments to the Law on Trademarks (particularly to introduce a procedure for third-party objection), the Law on Patents, the Law on Semiconductor Circuits, and the Law on Copyright and Related Rights. An initial deadline for aligning IP legislation with the acquis by September 2018 has now been extended into 2019 due to changes in the relevant EU legislation, thus allowing Serbian legislators to incorporate new requirements. Amendments to the Law on Patents were adopted in 2018, which introduced changes to provisions on the protection of plant varieties and to the general patent prosecution proceedings before the IP Office and courts. In the first quarter of 2019, the Government adopted proposed amendments to the Law on Copyright and Related Rights and sent it to Parliament for adoption. Amendments to the Law on Special Competence for Efficient Protection of Intellectual Property Rights are also expected, with the goal of restructuring enforcement responsibilities among inspectorates.

The level of IPR protection in Serbia is improving. Enforcement remains haphazard but is roughly consistent with levels in neighboring countries. The government has a Permanent Coordination Body for IPR enforcement activities with participation from the tax administration, police, customs, and a number of state inspection services. The Public Procurement Law requires bidders to affirm that they have ownership rights to any IPR utilized in fulfilling a public procurement contract. Although still available, trade in counterfeit trademarked goods—particularly athletic footwear and clothing—are declining in volume as the government has stepped up its actions to combat illegal street sales and seize pirated goods at the border. Upon seizure, however, authorities cannot destroy the goods unless they receive formal instructions from the rights holders, who are billed for the storage and destruction of the counterfeit goods. The Customs Administration and Trade Inspection issues periodic reports on seizures, but these are segregated according to the type of good (e.g. cigarettes or apparel) rather than type of infringement (e.g. IPR or tax payments). Data on seizures is not publicly available. It is, however, possible to monitor the Customs Administration’s daily border seizures via their official Facebook page: https://www.facebook.com/upravacarina.rs/  

The tax administration checks software legality during its regular tax controls of businesses, but it intends to halt software inspection operations on the grounds that it is a non-core activity. In this case, responsibility would be transferred to the general market inspectorate. The estimated value of Serbia’s illegal software market is approximately USD 116 million. According to the most recent International Data Corporation (IDC) study, dated 2015, software piracy in Serbia is around 67 percent. Although this is down from 72 percent in 2011, it remains among the highest piracy rates in the Balkan region. However, the number of legal entities using illegal software continues to drop and was estimated at 55 percent in 2016.

Procedures for registration of industrial property rights and deposit of works of authorship with the Serbian Intellectual Property Office are straightforward and similar to procedures in most European countries. Relevant information is available at http://www.zis.gov.rs/home.59.html  .

Regarding copyright and related rights, Serbia has room to improve, particularly with regard to the digitalization of orphan works and broadcasting of audiovisual works, including cross-border, satellite, and cable broadcasting. Potential improvements include:

  • Amend the Criminal Procedure Code and related procedural laws, particularly in the area of cyber-crime
  • Adopt implementing regulations for various IPR laws that specify enforcement procedures and steps, currently subject to different interpretation by relevant authorities
  • Reverse Copyright Law amendments from December 2012, when the National Assembly exempted small businesses from paying royalties for copyrighted music, capped fees payable to collective rights managers, and allowed businesses to pay one collective bill for all music rights
  • Amend the Copyright Law regarding collective rights for video works
  • Align the Laws on Copyright, Topographies of Semiconductor Products, Patents and Trademarks with the EU acquis, including with the IPR Enforcement Directive
  • Amend the Law on Trademarks to enable third parties to oppose trademark registration if the submitted trademark resembles that party’s registered trademark

Enforcement actions by state authorities, such as inspectorates or customs authorities, can be relatively fast. However, enforcement of IPR in the court system often lasts up to two years. With the creation of semi-specialized IPR courts, which began operating in 2015, these proceedings have improved, according to the Foreign Investors’ Council. The Serbian Intellectual Property Office continues to organize IPR-focused training for judges, with the expectation that more specialized understanding of IPR will enable more timely court decisions.

Serbia is not listed in the Office of the United States Trade Representative (USTR) Special 301 Report or the USTR Out-of-Cycle Review of Notorious Markets. For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at www.wipo.int/directory/en/details.jsp?country_code=RS  

Slovak Republic

1. Openness To, and Restrictions Upon, Foreign Investment

Slovakia is one of the most open economies in the EU.  The government’s overall attitude toward foreign direct investment (FDI) is positive, and the government does not limit or discriminate against foreign investors.  FDI plays an important role in the country’s economy, with major foreign investments in manufacturing and industry, banking, information and communication technologies (ICT), and Business Service Centers, where U.S. companies have a significant presence.

Slovakia’s assets, including skilled labor, EU and Eurozone membership, and location at the crossroads of Europe, have attracted a significant U.S. commercial presence, including Hewlett-Packard, Cisco, IBM, Dell, AT&T, Oracle, Accenture, Whirlpool, Adient, Amazon, GlobalLogic, and U.S. Steel.

The government supports foreign investors and offers investment incentives based on specific criteria, usually delivered in the form of tax allowances, or grants to support employment, regional development, and training.  The Act on Regional Investment Aid (57/2018) specifies eligibility criteria. Section four of this report covers investment incentives in more detail.

According to the National Bank of Slovakia, in 2017, inward FDI flows to Slovakia reached EUR 2 billion, and inward FDI stock was EUR 46.5 billion.  EU member states are the largest foreign investors in Slovakia, including the Netherlands, Austria, the Czech Republic, Luxemburg, and Germany. South Korea remains an important investor among non-EU countries, given its importance in global automotive supply chains.

Improving the business climate is an inter-agency effort involving a number of state institutions and other actors.  The Ministry of Economy coordinates efforts to improve the business environment, innovation intensity, and support for least-developed regions.  Within the Ministry of Economy, the Slovak Investment and Trade Development Agency (SARIO) is responsible for identifying and advising potential investors on the Slovak political, business, and investment climate.  The National Investment Plan 2018-2030, drafted by the Deputy Prime Minister’s Office for Investments and Digitalization, focuses on investment programs in the areas of green economy, including transport, ICT, energy, green infrastructure, waste management, climate change mitigation, R&D and innovation, healthcare, and education.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign and domestic private entities have the right to establish and own business enterprises and engage in all forms of remunerative activity in Slovakia (Commercial Code, 98/1991   Coll.).  Businesses can contract directly with foreign entities.  Private enterprises are free to establish, acquire, and dispose of business interests, but must pay all Slovak obligations of liquidated companies before transferring any remaining funds out of Slovakia.  Non-residents from the EU and OECD member countries can acquire real estate for commercial purposes.

Slovakia has no formal performance requirements for establishing, maintaining, or expanding foreign investments.  Large-scale privatizations are possible via direct sale or public auction.

The Slovak government treats foreign entities established in Slovakia in the same manner as domestic entities, and foreign entities face no impediments in participating in R&D programs financed and/or subsidized by the Slovak government.  R&D spending is 100 percent tax deductible, set to increase to 150 percent in 2019, and 200 percent in 2020. According to the OECD, total R&D investment in 2016 represented just 0.8 percent of GDP (compared to the OECD average of 2.3 percent).  A large percentage of R&D spending is financed though EU funds, and private R&D intensity remains low at 0.4 percent of GDP. The European Commission continues to criticize the persistent lack of transparency in allocating EU funds.

The Slovak government holds stakes in a number of energy companies.  It has historically been less open to private investment in energy assets that it considers to be in the national security interest, and has even expressed interest in increasing state ownership of some key energy assets.  There are no domestic ownership requirements for telecommunications and broadcast licenses. The Act on Civil Air Transport (143/1998 Coll.) sets out rules for foreign operators seeking to operate in Slovakia.

There are no formal requirements to approve FDI, though the Government ultimately approves investment incentives.  If investment incentives apply, the Economy Ministry manages the associated legislative process. The Act on Regional Investment Aid (57/2018) specifies eligibility requirements.

Please consult the following websites for more information:

Office of Deputy Prime Minister:  https://www.vicepremier.gov.sk/index.html  

R&D Tax-Deductible:  https://superodpocet.sk/  

Other Investment Policy Reviews

The OECD produced a 2019 Economic Forecast Summary for Slovakia: http://www.oecd.org/economy/surveys/Slovak-Republic-2019-OECD-economic-survey-overview.pdf 

The European Commission published its regular Country Report – Slovakia 2019, addressing various aspects of the Slovak economy:  https://ec.europa.eu/info/sites/info/files/file_import/2019-european-semester-country-report-slovakia_en_0.pdf 

The World Trade Organization’s data on Slovakia is available here: https://www.wto.org/english/thewto_e/countries_e/slovak_republic_e.htm  

Business Facilitation

According to the World Bank’s Doing Business 2019 report, Slovakia ranks 127th out of 190 countries surveyed on the ease of starting a business (down from 83rd in the 2018 edition).  It takes around 26.5 days to start a business in Slovakia (versus 12.5 days in 2018), and involves eight procedures.  Slovak officials commented that the drop in ranking was due to a lack of consideration of all relevant country specific indicators and did not indicate a deterioration in the business climate.

The Central Government Portal “slovensko.sk” provides useful information on e-Government services in the area of starting and running a business, citizenship, justice, registering vehicles, social security, etc.  Checklists of procedures necessary for registrations, applications for permits, etc., are currently available on websites of individual institutions, and the Economy Ministry is working on streamlining the information into one common platform.

Please consult the following websites for more information:

Outward Investment

Several state agencies share responsibilities for supporting investment (inward and outward) and trade.  SARIO is officially responsible for export facilitation and attracting investment. The Slovak Export-Import Bank (EXIM BANKA) supports exports and outward investments with financial instruments to reduce risks related to insurance, credit, guarantee, and financial activities; it assists both large companies and small- and medium-sized enterprises (SMEs), and is the only institution in Slovakia authorized to provide export and outward investment-related government assistance.  The Ministry for Foreign and European Affairs runs a Business Center that provides services in the area of export and investment opportunities. Slovakia’s diplomatic missions, the Ministry of Finance’s Slovak Guarantee and Development Bank, and the Deputy Prime Minister’s Office for Investments and Digitalization also play a role in facilitating external economic relations.

The majority of Slovak exports go to fellow EU countries.  Slovak companies have made limited outward foreign direct investments.

5. Protection of Property Rights

Real Property

The mortgage market in Slovakia is growing rapidly, and a reliable system of record keeping exists.  In 2018, the National Bank of Slovakia introduced measures to cool down the mortgage market by introducing strict assessments and limiting the size of the mortgage.  Secured interests in property and contractual rights are recognized and enforced.

Even though the Cadastral office records that less than 10 percent of the land in Slovakia lacks a clear title, there are rare instances when the property owner is unknown.  This is a result of unclear record keeping dating back to the 20th century and the communist era.  In such cases, real estate titles can take significant amounts of time to determine.  Legal decisions may take years, thus limiting the utility of the court system for dispute resolution.

There are currently 8.4 million parcels, 4.4 million recorded owners of land, and 100 million co-owning relations.  On average, one parcel has 11.93 co-owners, and one owner has an average of 22.74 parcels. To address this issue, the Agriculture Ministry started land ownership reform in early 2019 to consolidate parcels and simplify ownership records in the cadaster database.  A dedicated web portal makes it possible to verify information about land and property ownership.

The complex and obsolete Construction Act is currently under review, with the aim to better respond to the current environment.

In November 2018, the Slovak Constitutional Court ruled against a Law on Agricultural Land Ownership (140/2014 Coll.) which limited the sale of land to foreigners by requiring at least three years of previous agricultural business activity and 10 years of residency in Slovakia.  Since 2018, the maximum lease period decreased from 25 to 15 years.

Squatting is illegal in Slovakia, and ownership of unoccupied property will not revert to squatters or other parties unless they are entitled to own the land.

Slovakia fell two places to ninth out of 190 countries in the World Bank’s 2019 Doing Business “registering property” indicator, averaging 16.5 days to register a property.

Please consult the following websites for more information:

Intellectual Property Rights

Slovak law protects patents, copyrights, trademarks and service marks, trade secrets, and semiconductor chip design.  The protection of intellectual property rights (IPR) falls under the jurisdiction of two agencies. The Industrial Property Office is responsible for most areas, including patents, while the Culture Ministry is responsible for copyrights, including software.

Slovakia adheres to major intellectual property agreements including the Bern Convention for Protection of Literary and Artistic Works, the Paris Convention for Protection of Industrial Property, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and numerous other international agreements on design classification, registration of goods, appellations of origin, patents, etc.  The Industrial Property Office of the Slovak Republic is the central government body overseeing industrial property protection. The Financial Administration (under the Finance Ministry) deals with customs and adjacent IPR, including the fight against counterfeit goods.

No major IP related laws were passed in 2018.  Slovakia is not listed in the United States Trade Representative (USTR) Notorious Markets List.  Slovakia was taken off the USTR Special 301 Watch List in 2006 in large part due to significant progress that the government had made in addressing concerns related to the protection of pharmaceutical patents in Slovakia.

There were 1,363 suspected breaches of IPR in 2017 (for goods imported from third countries, especially textiles and shoes), with the value of seized counterfeit goods down 42 percent from 2016, to around EUR 1.5 million.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/  .

Please consult the following websites for more information:

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