Executive Summary

Slovakia is a small, open, export-oriented economy, with a population of 5.5 million.  Slovakia joined the European Union (EU) and NATO in 2004 and the Eurozone in 2009.  Slovakia is an attractive destination for foreign direct investment (FDI), with a favorable geographic location in the heart of Europe, and an investment-friendly regulatory environment.  The current ruling coalition took power in March 2020 and has implemented a range of measures to simplify business regulations.

The Slovak economy contracted 5.2 percent in 2020 due to the impact of COVID-19. The country began a prolonged lockdown in October 2020, which is expected to significantly slow the economic recovery. As of March 2021, much of the economy remains shuttered. The hospitality and restaurant sectors have been hit particularly hard by the restrictions.

Employers’ combined social and health contributions are equivalent to 35 percent of wages.  The corporate income tax rate is 21 percent for companies with revenues at or above 100,000 euro. The tax rate for companies with revenues below 100,000 euro was lowered to 15 percent in 2020.

Attracting higher value-added investment is a top priority of the current ruling coalition, as well as attracting investment in less-developed regions of Slovakia. Priorities for EU fund spending include reforms to the underperforming education and healthcare systems, and efforts to root out endemic corruption.  Inefficiencies in drawing available EU funds persist. In 2020, the Slovak police launched a major anti-corruption drive charging a number of high-ranking judges and prosecutors, two former police presidents, and several high-profile businessmen with corruption-related crimes. The judiciary is also currently undergoing a major reform aimed at improving the efficiency and predictability of the system.

Slovakia remains the largest per capita car producer in the world, with four major car producers and hundreds of suppliers.  Manufacturing industries, including automotive; machinery and transport equipment; metallurgy and metal processing; electronics; chemicals; and pharmaceuticals remain attractive and have the potential for further growth.

Positive aspects of the Slovak investment climate include:

  • Membership in the EU and the Eurozone
  • An open, export-oriented economy close to western European markets
  • Investment incentives, including for foreign investors
  • A firm government commitment to EU deficit and debt targets
  • A sound banking sector deeply integrated with Europe

Negative aspects of the Slovak investment climate include:

  • High sensitivity to regional economic developments
  • Weak public administration, allegations of corruption, and a weak judiciary
  • Significant regional disparities, suboptimal national transport network
  • Low rates of public and private R&D investment
  • Heavy reliance on EU structural funds, chronic deficiencies in allocation of funds
Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2020 60 of 180 http://www.transparency.org/research/cpi/overview 
World Bank’s Doing Business Report 2020 N/A http://www.doingbusiness.org/en/rankings 
Global Innovation Index 2020 39 of 129 https://www.globalinnovationindex.org/analysis-indicator 
U.S. FDI in partner country ($M USD, historical stock positions) 2020 N/A http://apps.bea.gov/international/factsheet/ 
World Bank GNI per capita 2020 N/A http://data.worldbank.org/indicator/NY.GNP.PCAP.CD 

Policies Towards Foreign Direct 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, financial services, 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 a central location in Europe have attracted a significant U.S. commercial and industrial presence, with investments from Accenture, Adient, Amazon, Amphenol, AT&T, Cisco, Dell, Garrett, GlobalLogic, Hewlett-Packard, IBM, Lear, Oracle, U.S. Steel, Whirlpool, and others.

The Ministry of Economy coordinates efforts to improve the business environment, innovation, and support for less-developed regions.  Within the Ministry of Economy, the Slovak Investment and Trade Development Agency (SARIO) is responsible for identifying and    advising potential investors, providing in-depth information on the Slovak business environment, investment incentives, the process for setting up a business, as well as advising on suitable locations and real estate leasing. The government encourages investment through tax incentives and grants to support employment, regional development, and training.  Section Four of the Regional Investment Aid Act (57/2018) specifies the eligibility criteria for receiving assistance.

According to the National Bank of Slovakia’s preliminary data, in 2019, inward FDI flows to Slovakia reached 2.2 billion EUR, and inward FDI stock was 54 billion EUR.  EU Member States, including the Netherlands, Austria, the Czech Republic, Luxembourg, and Germany, are the largest foreign investors in Slovakia.  South Korea remains by far the largest investor among non-EU countries.

The Act on Special Levy on Regulated Sectors (235/2012 Coll., and later amendments) imposes a special tax on regulated industries, including the energy and network industries, insurance companies, electronic communications companies, healthcare, air transport, and others.  The levy applies to profits generated from regulated activities above 3 million EUR.

The Slovak government requires ride-sharing and app-based hospitality platforms that are active on the local market to register a permanent office in Slovakia for tax collection purposes.   Platforms that have not yet registered an office must pay either a 19 or 35 percent withholding tax on the fees it pays to a foreign entity, based on the residence of the recipient of such fee and whether bilateral taxation treaties exist.

The government actively works with investors to keep them operating in the country. In late 2020, Volkswagen, already one of the largest private employers in the country, credited a decision to expand its investment, in part, to the government’s assistance in negotiations with local partners.

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.  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.  All new businesses registered from October 2020 onwards must provide the national registration numbers of their partners, authorized representatives, and members of the boards of directors and supervisory boards when registering the business. Foreigners must provide their passport or residence permit numbers when registering the business.

In February 2021, Slovak Parliament approved legislation, over the opposition of representatives of the business community, requiring government review of ownership transfers larger than 10 percent of companies considered “critical infrastructure” – which includes a number of companies with foreign ownership. The law was passed through a fast-track procedure in response to a reported demand from Russian Sberbank that Slovakia’s electricity generator Slovenske Elektrarne back its debt to the bank with equity. The Economy Ministry has said that it will release a more robust Investment Screening Mechanism in 2021, which will be based on the EU Investment Screening Regulation 2020/1298, and will replace the fast-tracked legislation.

Slovakia has no formal performance requirements for establishing, maintaining, or expanding foreign investments.  Large-scale privatizations are possible via direct sale or public auction.  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 government approval process.  The Act on Regional Investment Aid (57/2018) specifies that only three categories of projects may be subsidized: industrial production, technology, or business services.  An amendment to the Act in force from January 2021 slightly relaxed the conditions for receiving investment aid, increasing the maximum time to finish work on the investment project from three to five years.

The Slovak government treats foreign entities established in Slovakia in the same manner as domestic entities, and foreign entities face no impediments to participating in R&D programs financed and/or subsidized by the Slovak government.  Since January 2020, up to 200 percent of R&D spending is tax deductible.

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.  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.

Please consult the following websites for more information:

Other Investment Policy Reviews

In its Investment Policy Monitor, The United Nations Conference on Trade and Development (UNCTAD) highlights Slovakia’s 2018 adoption of the Act on Regional Investment Aid and notes that tourism was excluded. The report highlights that income tax exemptions are the primary form of state aid, but direct subsidies for land purchase are also available, and investors may apply for job creation contributions from the government or may be permitted to let or own property at lower than a market value.

Business Facilitation

According to the World Bank’s Doing Business 2020 report, Slovakia ranks 118 out of 190 countries surveyed on the ease of starting a business, up from 127 in 2019.  It takes, on average, 21.5 days to start a business versus 26.5 days in 2019, and involves seven procedures. There are business development companies that provide assistance with navigating the process of establishing a new business. The main agencies with which a company must register are the business registry, tax office, and social security agency.

In 2020, the Economy Ministry presented more than 500 measures that will decrease the administrative burden on businesses. More than 100 of these measures were approved by Parliament in July 2020. The Economy Ministry also announced plans for regular reviews of existing legislation to ensure it still serves its purpose, and stricter reviews during the transposition of EU legislation to ensure that the laws are not adding administrative burden beyond what is required.

The Central Government Portal “ slovensko.sk ” provides useful information on e-Government services for 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 the websites of the business registry, tax office and social security agency. The Economy Ministry is working on streamlining the information into one common platform.  The government has also announced plans for a major overhaul to the e-Government service portal to streamline access to public services.

Please consult the following websites for more information:

Outward Investment

Due to their limited size, Slovak companies have not made significant outward foreign direct investments.

Several state agencies share responsibility for facilitating outward investment and trade.  SARIO is officially responsible for export facilitation and attracting investment.  The Slovak Export-Import Bank (EXIM Bank) 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 financial assistance.  The Ministry for Foreign and European Affairs runs a Business Center that provides services for exporters and helps identify 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 Regional Development also play a role in facilitating external economic relations. Slovakia does not restrict domestic investors from investing abroad.

2. Bilateral Investment and Taxation Treaties  

Slovakia has signed 54 Bilateral Investment Treaties (53 remain in force) and another 72 Treaties with Investment Provisions (57 remain in force) both before and after accession to the EU.  Some of these are legacies of the former Czechoslovakia, while others have come into force following independence in 1993.  The 1992 U.S.-Slovakia Bilateral Investment Treaty governs the basic framework for investment protection and dispute resolution between the two countries.  An amended bilateral investment treaty entered into force on May 14, 2004, after Slovakia joined the EU.  Slovakia signed a Bilateral Income Tax Treaty with the United States in 1993.

The United States and Slovakia agreed to the Foreign Account Tax Compliance Act (FATCA) in July 2015, and Slovakia subsequently approved the Act on Automatic Exchange of Information on Financial Accounts (359/2015) in order to fully comply with FATCA.  Slovak financial institutions are now required to report tax information of American account holders to the Slovak Government, which then forwards that information to the U.S. Internal Revenue Service (IRS).

Please consult the following websites for more information:

3. Legal Regime 

Transparency of the Regulatory System

Companies in Slovakia frequently complain about the country’s complex and unpredictable legislative environment. The current ruling coalition is making significant efforts to address this issue. Starting January 1, 2021, the Economy Ministry has said that it will work on a “one-in-one-out” principle, meaning every new regulation that will increase administrative burden by 1 euro will have to be matched with a proposal to decrease the administrative burden by 1 euro. The Economy Ministry has announced it will follow a “one-in-two-out” principle starting January 2022.

Regulations are drafted on the local and national level, those on the national level typically have more direct consequences to foreign investors. The Legislative and Information Portal of the Ministry of Justice, Slov-Lex, is a publicly accessible centralized online portal for laws and regulations, including draft texts and information about the inter-agency and public review processes.  Draft bills, including investment laws proposed by ministries through a standard legislative procedure, are available for public comment through the portal. The public, however, is often granted little time to comment on draft legislation, and there is no obligation for a government reaction to comments prior to final submission to the cabinet.

While the process of adopting new laws and regulations follows clearly defined rules, MPs or parliamentary groups have the option of proposing fast-tracked draft bills.  This process has no rules guaranteeing opportunities for public comment, thus rendering the legislative process less predictable and transparent.  During the COVID-19 pandemic there has been a sharp increase in the number of laws adopted this way. While there were a total of 28 laws passed using fast-track procedures during the previous four years, there have already been 67 such laws adopted between March 2020 and February 2021.  Though the use of extraordinary procedure is conditioned on extraordinary circumstances, potential threats to the public safety, or imminent economic damage, the government has used the procedure to approve bills seemingly unconnected to these criteria.

Regulations are, in most cases, not reviewed on the basis of scientific data assessments. At their discretion, analytical institutes at some ministries may produce data-driven assessments of proposed policies or large investment projects. However, the selection of projects for assessment occurs internally within the institutes or ministries without the opportunity for public comment. Assessments are usually published once completed.

The Commercial Code ( 98/1991  Coll.) and the Act on Protection of Economic Competition (136/2001 Coll.) govern competition policy in Slovakia. As an EU Member State, Slovakia follows relevant EU legislation. The Anti-Monopoly Office, a part of the EU’s European Competition Network (ECN), is an independent state administrative body responsible for ensuring a competitive marketplace.

The Public Procurement Office (PPO) supervises and administers public procurement. Public procurement legislation is frequently amended, and challenges remain to ensure fair competition and eliminate corruption. The PPO has made efforts to improve transparency and communication with stakeholders, as well as to strengthen supervisory activities. All procurers, including ministries and municipalities, may now publish online tenders for low-value purchases, increasing transparency and increasing possibilities for businesses to participate in public tenders. In December 2020, the government proposed major reforms of the public procurement system aimed at streamlining the process by increasing the threshold for when public tenders are required, moving procurement complaint proceedings from the PPO to the courts, and removing the PPO’s authority to request information from the police or the financial administration, as well as other measures. The proposals were met with heavy criticism from anti-corruption campaigners as well as from the PPO itself claiming the reforms would undermine its independence, decrease oversight over public tenders, and increase corruption. As of March 2021, there was no agreement in the government on the final wording of the proposed reforms.

As an EU Member State, Slovakia conforms to the European System of National and Regional Accounts (ESA 2010), which is the EU’s most recent internationally compatible accounting framework, as well as the International Financial Reporting Standards (IFRS-EU). Slovakia meets the minimum criteria of the U.S. Fiscal Transparency Report. Budget proposals, enacted budgets, and closing statements are substantially complete and publicly available. Departures from budget goals are common. The current ruling coalition introduced a number of changes to the 2021 State Budget that have improved transparency and led to better projections compared to previous years. The Ministry of Finance publishes monthly reviews of budget execution, which provide an overview of public revenues and expenditures broken down by source and type. Annex 6 of the State budget describes the Debt Management Strategy including volume, total cost, debt service, structure, financing, forecast, and risk assessments.

Please consult the following websites for more information:

International Regulatory Considerations

Slovakia is subject to European Court of Justice (ECJ) jurisdiction and must comply with all EU legislation and standards, including the Trade Facilitation Agreement (TFA). The national regulatory system is enforced in areas not governed by EU regulatory mechanisms.  Slovakia is a WTO member, and the government notifies the WTO Committee on Technical Barriers to Trade of technical regulations.

Please consult the following websites for more information:

Legal System and Judicial Independence

Slovakia is a civil law country.  The Slovak judicial system is comprised of the Constitutional Court and general courts, including the Specialized Criminal Court and the Supreme Court.  General courts decide civil, commercial, and criminal matters, and review the legality of decisions by administrative bodies.  The Specialized Criminal Court focuses on cases involving corruption, organized crime, serious crimes like premeditated murder, crimes committed by senior public officials, and crimes related to extremism, such as hate crimes.  Enforcement actions are appealable and are adjudicated in the national court system.  The right to appeal against regulations is limited to some state institutions and selected public officials.

The Slovak Constitution and the European Convention of Human Rights guarantee property rights.  Slovakia has a written Commercial Code including contract law in the civil and commercial sectors.  The basic framework for investment protection and dispute resolution between Slovakia and the U.S. is outlined in the 1992 U.S.-Slovakia Bilateral Investment Treaty.

Court judgments by EU Member States are recognized and enforced in compliance with existing EU Regulations.  Third country judgments are governed by bilateral treaties or by the Act on International Private Law.  Contracts are enforced through litigation or arbitration – a largely applied form of alternative dispute resolution.

Laws guarantee judicial independence, however, in practice, public perception of judicial independence is among the lowest in the EU.  A Focus Agency public survey from August 2019 commissioned by the Supreme Court Office showed 64 percent of Slovaks lack full trust in Slovak courts.  Accountability mechanisms ensuring judicial impartiality and independence exist and are increasingly utilized.   In 2019 and 2020 numerous investigations into judicial corruption were opened and almost 20 judges were arrested on suspicion of corruption.  Businesses and NGOs report that the justice system remains relatively slow and inefficient and suggest verdicts are unpredictable and are often poorly justified. Judges remain divided on the need for reform. Investors generally prefer international arbitration to resolution in the national court system.

Laws and Regulations on Foreign Direct Investment

Slovakia is a politically and economically safe destination for foreign investment.  Investment incentives are available to motivate investors to place new projects in regions with higher unemployment and to attract projects with higher added value.  In February 2021, the government approved a law that allows the Economy Ministry to review and potentially stop ownership transfers larger than 10 percent of companies classified as critical infrastructure.

The Slovak Investment and Trade Development Agency (SARIO) is a specialized government agency in charge of attracting foreign investments to Slovakia and serves as a one-stop shop for foreign investors. Their website offers easily accessible information on laws, rules, procedures and reporting requirements relevant to investors or those wanting to register a business.  The Slovak Business Agency (SBA) runs a National Business Center (NBC) in Bratislava and several other cities; it provides information and services for starting and establishing businesses. Startups can use a simplified procedure to register their company in order to facilitate the entry of potential investors. The Interior Ministry operates Client Centers around the country where many formal administrative procedures can be completed under one roof.

Slovakia ranked 45 out of 190 countries in the World Bank’s Doing Business 2020 ranking.

Please consult the following websites for more information:

Competition and Antitrust Laws

The Anti-Monopoly Office of the Slovak Republic is an independent body charged with the protection of economic competition.  The Office intervenes in cases of cartels, abuse of a dominant position, vertical agreements, and controls compliance of mergers with antitrust law. The Office always specifies if its intervention decision can be appealed based on the relevant laws.  The key antitrust legislation regarding fair competition is the Competition Law (136/2001 Coll.)  Slovakia complies with EU competition policy.

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Expropriation and Compensation

The Slovak Constitution guarantees the right to property.  There is an array of legal acts stipulating property rights.  The Act on Expropriation of Land and Buildings (282/2015 Coll.) mandates that expropriation must only occur to the extent necessary, be in the public interest, provide appropriate compensation, and shall only occur when the goal of expropriation cannot be achieved through agreement or other means.

The most recent case of expropriation is from 2016, when Slovak government began expropriating land needed for the construction of an automobile manufacturing plant and accompanying road infrastructure.  The state proceeded with expropriation only after it failed to directly purchase the land from the owners.

Dispute Settlement

ICSID Convention and New York Convention

Slovakia is a contracting state to the International Centre for Settling International Disputes (ICSID) and the World Bank’s Commercial Arbitration Tribunal (established under the 1966 Washington Convention).  Slovakia is a member of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitrage Awards, which obligates Slovakia to accept binding international arbitration.  The Finance Ministry leads on bilateral investment treaty matters and manages and represents Slovakia in international arbitration.  Investment contracts with foreign investors in Slovakia are covered by respective ministries depending on the sector, in most cases by the Ministry of Economy.

Investor-State Dispute Settlement

The basic framework for investment protection and dispute resolution between Slovakia and the United States is governed by the 1992 U.S.-Slovakia Bilateral Investment Treaty with an additional protocol that came into force in 2004.

To date, twelve known cases of international arbitration have concluded, all of which Slovakia won.  In one of the international arbitrations, a U.S. investor made claims under the U.S.-Slovakia Bilateral Investment Treaty, but respected the decision of ICSID, which ruled in Slovakia’s favor.

The legal system generally enforces property and contractual rights, but decisions may take years, thus limiting the relevance of the courts in dispute resolution.  According to the World Bank Doing Business 2020 report, Slovakia ranked 46 out of 190 countries in the “enforcing contracts” indicator, with a 775-day average for enforcing contracts.  The report notes that Slovakia made enforcing contracts easier by implementing electronic processing services.  Slovak courts recognize and enforce foreign judgments, subject to the same delays.  Although the commercial code generally appears to be applied consistently, the business community continues to cite a lack of legislation protecting creditor rights, corruption, political influence, lengthy procedures, and weak enforcement of court rulings as persistent problems.  U.S. and other investors privately described instances of multi-million-dollar losses that were settled out of court because of doubts about the court system’s ability to offer a credible legal remedy.

International Commercial Arbitration and Foreign Courts

There are two acts applicable to alternative dispute resolution in Slovakia – the Act on Mediation (420/2004 Coll.) and the Act on Arbitration (244/2002 Coll.).  The Slovak Act on Arbitration is largely modeled after UNCITRAL model law.  Local courts in Slovakia recognize and enforce foreign arbitral awards.

The alternative dispute resolution mechanisms in Slovakia are relatively fast compared to the court system.  The list of permanent arbitration courts authorized by the Slovak Ministry of Justice is published on the Ministry’s website.  Decisions should be reached within 90 days of the date when the lawsuit was filed.  It is possible to lodge an appeal to a civil court against an arbitration decision within three months of the date of its issuance or lodge a complaint about an arbitration decision to the chairman of the permanent arbitration court or to the Ministry of Justice.

Alternative dispute resolution proceedings can also be initiated by filing a motion with one of the alternative dispute resolution entities from a list maintained by the Ministry of Economy.  Dispute settlement takes place through written communication and has a 90-day timeframe for completion.  Unless the parties reach an agreement, the alternative dispute resolution entity will prepare a justified opinion. If any attempt to settle the dispute by mutual agreement fails, and the arbitration entity issues an opinion, there is no avenue for appeal.

The other option for extrajudicial dispute settlement is mediation.  Mediation can be used even after a court proceeding has started.  The agreement resulting from mediation is legally enforceable only if it has the form of a notarial record or court settlement.  The list of mediators is published on the website of the Association of Mediators.  In the case of an unsuccessful mediation, parties can still take the case to arbitration or to court.

Please consult the following websites for more information:

Bankruptcy Regulations

The Law on Bankruptcy and Restructuring (377/2016 Coll.) governs bankruptcy issues. Companies can undergo court-protected restructuring, and both individuals and companies can discharge their debts through bankruptcy. The International Monetary Fund praised the Act for speeding up the process, strengthening creditor rights, limiting the discretion bankruptcy judges may use in adjudicating cases, and randomizing the allocation of cases to judges to reduce potential corruption. The Act contains provisions to prevent preferential treatment for creditors over company shareholders, reduce arbitrariness in bankruptcy administrators’ conduct, and impose stricter liability rules for those initiating the bankruptcy proceedings. The Commercial Code also contains provisions on bankruptcy and restructuring preventing speculative mergers during ongoing bankruptcy proceedings.

Slovakia ranked 46 out of 190 in the World Bank’s Doing Business 2020 ranking of the ease of resolving insolvency (42 in 2019), with an average of four years for resolving insolvency.

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4. Industrial Policies 

Investment Incentives

The Economy Ministry manages and coordinates investment aid with other relevant agencies (see Policies Towards Foreign Direct Investment in Chapter 1). Eligibility for investment incentives is defined in the Act on Regional Investment Aid (57/2018 Coll.). Investors are encouraged to implement projects in less-developed regions, and to invest in high value-added activities.

Investment incentives are available to foreign and domestic investors for projects in sectors including industrial production, technology, and shared service centers.  The incentives are provided as tax relief, cash grants, contributions for newly created jobs, and transfers of state or municipal property at a discounted price.  Eligible costs include acquisition of land, acquisition and construction of buildings, acquisition of technology equipment and machinery, as well as intangible assets (e.g., licenses, patents, etc.) and wages of new employees for a period of two years.

Apart from investment aid, the Economy Ministry offers innovation vouchers and special loans through its Investment Fund.  Individual ministries run EU-supported projects in their respective areas of responsibility.

State aid granted by the Slovak government must comply with valid EU regulations.  The Anti-Monopoly Office of the Slovak Republic is the coordinating body for state aid granted by individual ministries, as per the Act on State Aid (358/2015 Coll.), and there is a dedicated state aid web portal.

Please consult the following websites for more information:

Foreign Trade Zones/Free Ports/Trade Facilitation

Slovakia eliminated all foreign trade zones and free ports in 2006.

Performance and Data Localization Requirements

There are no special requirements for foreign IT providers to turn over their source code or to provide access to encrypted documents.  However, according to the Act on Electronic Communications (351/2011 Coll.), entities providing public networks or public services that use coding, compression, encryption, or other form of concealing signal transfer must, at their own expense, provide information obtained through wiretapping and network traffic recording or monitoring to relevant authorities.  Slovakia follows the EU General Data Protection Regulation (GDPR) regulating data protection and privacy.   There are no automated or systemic mechanisms in place enforcing rules on local data storage. Slovakia follows the EU regulation on the free flow of non-personal data 2017/0228 (COD) that sets out the principle that non-personal data is allowed to be located and processed anywhere in the EU without unjustified restrictions, with some exceptions on the grounds of public security.  The relevant authority for data localization is the Deputy Prime Minister’s Office for Investments and Digitalization and the Office for Personal Data Protection.

Slovakia does not mandate local employment or that host country nationals should serve in roles of senior management or boards of directors, follow “forced localization,” or impose conditions on permissions to invest.

Foreign entities have equal access to investment incentives, as per the Act on Regional Investment Aid (57/2018 Coll.).  For more details on eligible projects, please see Chapter 1 on Investment Incentives.

The Alien Police Department issues temporary and long-term residence permits as specified in the Act on Residency of Foreign Nationals (404/2011 Coll.; 108/2018 Coll.).    Immigration regulations do not differ significantly from those of other EU countries, however the quality of customer service at the Alien Police Department is reportedly very low. Slovak authorities have made some concessions to improve this process for American citizens, including accepting FBI background checks that are up to 90 days expired and accepting applications at the Slovak Embassy in Washington, D.C.  prior to departure for Slovakia.  The U.S. Embassy’s Consular Section has reported a drop in the number of Americans looking for help with this issue since the implementation of these changes. Even with these changes, authorities are still inconsistent in their recommendations or enforcement of regulations.  Some Americans have also reported low level bribery solicitations at the registration center, although less since the introduction of the new online registration system.

Please consult the following websites for more information:

5. Protection of Property Rights 

Real Property

The mortgage market in Slovakia is growing rapidly, and a reliable system of record keeping exists. Secured interests in property and contractual rights are recognized and enforced.

Less than 10 percent of the land in Slovakia lacks a clear title, however, there are instances when a property’s owner is unknown.  In such cases, real estate titling can take a significant amount of time to determine.  Legal decisions may take years, limiting the utility of the court system for dispute resolution.

Parcels commonly have a very high number of co-owners.  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 a robust land ownership reform in 2019, projected to last 30 years, to gradually consolidate parcels and simplify ownership records in the cadaster database. In 2020, 141 land readjustments were initiated.  A dedicated web portal allows verification of information about land and property ownership.

Foreigners can acquire real property without restrictions.  In February 2019, the Slovak Constitutional Court ruled against a Law on Agricultural Land Ownership (140/2014 Coll.), which indirectly limited the sale of land to foreigners by requiring at least three years of previous agricultural business activity and having at least 10 years of residency in Slovakia.

The Agriculture Ministry announced plans to submit amendments to the respective laws including 140/2014 Coll. in 2021, addressing acreage limits; establishing preemption rights for local governments in order to prevent speculative leases and land sales; and ensuring transparent publication, registration, control, and regulation of the agricultural land market.

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 was 8 out of 190 countries in the World Bank’s 2020 Doing Business “registering property” indicator, averaging 16.5 days to register a property compared to average of OECD high income countries of 23.6 days.

Please consult the following websites for more information:

Intellectual Property Rights

The Slovak legal system provides strong protection for intellectual property rights (IPR). The country is bound by robust EU regulations and adheres to major international IPR treaties, including the Berne Convention, the Paris Convention, and numerous others on design classification, registration of goods, appellations of origin, patents, etc.  The protection of IPR falls under the jurisdiction of two agencies. The Industrial Property Office of the Slovak Republic is the central government body that oversees industrial property protection, including patents, and the Culture Ministry is responsible for copyrights, including software. The Financial Administration, which is part of the Finance Ministry, plays an important role in enforcing IPR and deals with customs, which fights against counterfeit goods. In the case of IPR infringement, rights holders can bring a civil lawsuit in the district courts in Bratislava, Banska Bystrica, and Kosice and, if applicable, have the right to claim lost profits.  The courts can issue injunctions to prevent further infringement of IPR.  In certain cases, violation of IPR can be considered a criminal offense.

No major IPR-related laws were passed in 2020.  Recent EU Directives on copyright (2019/790 and 2019/789) are required to be transposed by June 2021.  Slovakia is not included in USTR’s Special 301 Report or the Notorious Markets List.

There were 2,781 suspected breaches of IPR in 2019 for goods imported from third countries (up from 1,901 cases in 2018, especially in the form of perfumes, cosmetics, jewelry and other accessories, sports shoes, and toys), and the value of seized counterfeit goods increased nine-fold from 2018 to 6.6 million EUR. The number of domestic IPR infringement cases grew from 996 in 2018 to 1,108 in 2019 but with a decrease in value in 2019 by 22 percent to 2.1 million EUR. In February 2021, the Financial Administration uncovered the largest illegal cigarette production site located in Slovakia to date worth 6 million EUR in VAT and excise duty.

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

Please consult the following websites for more information:

6. Financial Sector 

Capital Markets and Portfolio Investment

The Bratislava Stock Exchange (BSSE) is a member of the Federation of European Securities Exchanges (FESE).  An effective regulatory system exists that encourages and facilitates portfolio investment. BSSE is a joint-stock company whose activities are governed primarily by the Stock Exchange Act No 429/2002 (Coll.) on the Stock Exchange and Stock Exchange Rules. The stock market in Slovakia is among the smallest in Europe, and dominated by bonds, which constitute 95 percent of sales volume.  In 2020, the total volume of transactions at the BSSE was slightly more than $220 million (a 17 percent decline compared to 2019).  As of December 31, 2020, book-entry securities with the total nominal value Market capitalization of shares was roughly $3 billion and market capitalization of bonds $51 billion.

The European Single Market and existing European policies facilitate the free flow of financial resources.  Slovakia respects International Monetary Fund (IMF) Article VIII by refraining from restricting payments and transfers for current international transactions.  Credit is allocated on market terms in Slovakia and is available to foreign investors on the local market.

Please consult the following websites for more information:

Money and Banking System

Slovakia became part of the Euro system, which forms the central banking system of the euro area within the European System of Central Banks, upon its integration into the Eurozone on January 1, 2009.  The Central Bank of Slovakia (NBS) is the independent central bank of the Slovak Republic.

Most banks operating in Slovakia are subsidiaries of foreign-owned institutions.  Slovak branches operate conservatively and showed strong resilience during the 2009 financial crisis and subsequent EU-wide stress tests.  The combined total assets of the financial institutions active in the Slovak market were over 85 billion euro at the end of 2019.

While the COVID-19 pandemic will have significant negative impacts on the profitability of the banking sector, simulations of both baseline and adverse scenarios of the economic recovery in NBS’ Financial Stability Report suggest that the stability of the banking sector is not threatened. Despite the pandemic crisis, the non-performing loan ratio for the first eight months of 2020 fell from 2.9 percent to 2.6 percent. The report points to a risk of a sharp increase in non-performing loans in the adverse scenario, with up to 7.7 percent of loans to non-financial corporations and 3.2 percent of loans to households potentially becoming non-performing by end of 2021. The COVID-19 pandemic has resulted in a sharp increase in the risk of firm bankruptcies with approximately 11.7 to 13.7 percent of companies at risk of insolvency by the end of 2021. The banking sector’s aggregate total capital ratio increased from 18.2 percent to 19.5 percent.

Foreign nationals can open bank accounts by presenting their passport and/or residence permit, depending on the bank.

Please consult the following websites for more information:

Foreign Exchange and Remittances

Foreign Exchange

Slovakia joined the Eurozone on January 1, 2009.  The exchange rate is free floating.

The Foreign Exchange Act (312/2004) governs foreign exchange operations and allows for easy conversion or transfer of funds associated with an investment.  The Act liberalized operations with financial derivatives and abolished the limit on the export and import of banknotes and coins (domestic and foreign currency).  It also authorizes Slovak residents to open accounts abroad and eliminates the obligation to transfer financial assets acquired abroad to Slovakia.  Slovakia meets all international standards for conversion and transfer policy.  Non-residents may hold foreign exchange accounts.  No permission is needed to issue foreign securities in Slovakia, and Slovak citizens are free to trade, buy, and sell foreign securities.

Remittance Policies

The basic framework for investment transfers between Slovakia and the United States is set within the 1992 U.S. – Slovakia Bilateral Investment Treaty.

Following Slovakia’s approval of the Foreign Account Tax Compliance Act (FATCA) in July 2015, and per the Act on Automatic Exchange of Information on Financial Accounts (359/2015), Slovak financial institutions are obligated to report tax information of American account holders to the Slovak Government, which then forwards that information to the U.S. Internal Revenue Service (IRS).

Slovakia does not impose any limitations on remittances.  Dividends are taxed at 7 percent.  Transfer pricing for controlled transactions must be based on market prices.  An obligation to pay a 21 percent tax applies to companies that are moving their assets or activities abroad.

Please consult the following websites for more information:

Sovereign Wealth Funds

Slovakia does not maintain a Sovereign Wealth Fund (SWF).  Slovak Investment Holding (SIH) is a fund of funds fully owned by the Slovak Guarantee and Development Bank.  Resources are allocated as revolving financial instruments, through financial intermediaries or directly to final beneficiaries, and focus on strategic investment priorities in transport infrastructure, energy efficiency, waste management, SMEs, and social economy.

Please consult the following websites for more information:

7. State-Owned Enterprises 

There are 95 fully or partially State-Owned Enterprises (SOEs) in Slovakia that employ approximately 85,000 employees. SOEs are mostly active in strategic sectors, including health and social insurance, aerospace, ground transportation, and energy.  Gas industry SOEs are the most profitable with SPP Infrastructure (gas infrastructure) at the top of the list with a profit of 584 million euro in 2020. Slovak Rails, a rail infrastructure company with a net loss of 2 million euro in 2019 and assets worth 3.7 billion euro, and Slovak Post, with a net income of 1.4 million euro in 2019 and assets worth 500 million euro, are the two biggest employers in Slovakia, each with around 13,000 employees. In an effort to improve competitiveness, Slovak Post announced layoffs of 6 percent of its employees in January 2021.

Among fully state-owned SOEs Narodna Dialnicna Spolocnost (National Highway Company) has the most assets, totaling 10 billion euro.  The second biggest SOE in terms of assets is SPP Infrastructure with 6 billion euro.  The 30 biggest fully state-owned enterprises have assets of roughly 25 billion euro.  In 2019, the Slovak budget received roughly 430 million euro in revenue from SOEs with 300 million euro coming from SPP and another 110 million euro from key electricity distribution companies ZSE, SSE, and VSE.  Slovenske Elektrarne, a major utility company with 34 percent state ownership, has assets worth 10.5 billion euro.  According to the government’s Value for Money unit, 37 percent of SOEs have a good financial health and the same percentage have serious financial problems.

In 2019, Transparency International Slovakia (TIS) published a ranking of 100 Slovak companies with state, municipal, and regional ownership, assessing how open these companies are when it comes to publishing economic results and access to information. Transparency International has deemed the SOEs to be generally non-transparent and with limited openness to public control. In February 2021, the Supreme Court responded to a TIS complaint regarding SPP’s concealment of the salaries paid to its board members, ruling that SOEs manage public funds and citizens have a right to know how they manage them.  Wider concerns over transparency of public tenders persist, including those involving the SOEs.

Most SOEs are structured as joint-stock companies governed by boards that include government representatives and government appointees, and the government plays a key role in SOE decision making.  Significant SOEs are required to publish their audited financial statements in accordance with the Accounting Act.  They submit their audited financial statements to the Finance Ministry’s dedicated portal.

Most ministries publish a list of companies they own on their web portals.  The list includes SOE equities and profits broken down by enterprise and is publicly available.

Slovak SOE ownership is exercised in accordance with the Act on State-Owned Enterprises (111/1990) and is consistent with the OECD Guidelines on Corporate Governance for SOEs.

Please consult the following website for more information:

Economic data about Slovak companies including SOEs:  https://www.finstat.sk/ 

Privatization Program

Foreign investors are free to participate in privatization programs for SOEs, however, no privatization efforts are currently under way.  Privatization programs are usually executed through direct sale, although Slovakia tends to complete major privatization projects through public tenders, especially in the energy sector.

According to Act on Transfer of State Assets to Other Entities (92/1991 Coll.), the appropriate ministry plays a central role in the SOE privatization process.  Previous privatization programs commonly resulted in foreign investors bidding and winning the tenders.

8. Responsible Business Conduct 

Responsible Business Conduct (RBC) has not yet been officially defined nor standardized by the Slovak government. The current ruling coalition pledged in its 2020 to 2024 Program Statement to become more responsible towards business and the environment. The Ministry of Labor, Social Affairs and Family continues to refer to Howard R. Bowen’s 1953 text on Social Responsibilities of the Businessman for its definition of social responsibility. The Ministry has not updated the generic webpage on social responsibility nor boosted the awareness of RBC during recent years.

Slovakia is a party to the Aarhus Protocol. Consumer protection is guaranteed and enforced through the Civil Rights Act, Consumer Protection Act, and the Act on E-Commerce.  Slovakia has ratified the Extractive Industry Transparency Initiative (EITI).  As an EU member state, Slovakia adheres to the 2017/821 regulation based on the Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.  Also, as an OECD member, Slovakia adheres to the OECD Guidelines for Multinational Enterprises.  A National Contact Point (NCP) was established to promote these guidelines among the wider public (business community, government, trade unions, etc.) and to help resolve RBC disputes. The latest NCP annual report available on their website was issued in 2016.

The Acts on Environmental Impact Assessment (24/2006), Air (137/2010), and Waste (313/2016) govern the environmental protections affecting businesses.  The mandatory Environmental Impact Assessment (EIA) process applies to a number of industries, including mining, energy, steel, chemical, pharmaceutical, wood, food, and agriculture, as well as infrastructure projects.  The Act on Air defines legal obligations for businesses causing emissions, including emissions limits, monitoring, and reporting in line with valid national and EU legislation.  The Act on Waste establishes the obligations for companies producing packaging, as well as rules on waste recycling and recovery, and other waste management issues.

The Ministry of Environment intends to revise the Low Carbon Strategy and the National Integrated Energy and Climate Plan, with the goal to transition to a carbon neutral economy by 2050, including stopping coal power production at the Novaky Power Plant by 2023. The Ministry also aims to introduce a Forest Stewardship Council for state-owned forests.

There have not been any specific human or labor rights violations reported, though Amnesty International reports Roma face widespread discrimination and social exclusion in Slovakia.

Many companies and NGOs adhere to the principles of RBC and actively promote and advocate for this concept.  The most significant program is the Via Bona Awards, developed by the Pontis Foundation, which annually recognizes Slovakia’s best RBC programs.  The American Chamber of Commerce in Slovakia also plays an important and active role in promoting and advocating for RBC.

Slovakia is not a signatory of The Montreux Document on Private Military and Security Companies nor a participant in the International Code of Conduct for Private Security Service Providers’ Association (ICoCA).

The NCP can be contacted here:
Ministry of Economy of the Slovak Republic
The Strategy Unit
Department of Bilateral Trade Cooperation
Mierova 19
827 15 Bratislava 212
Slovak Republic
Tel.: +421 2 4854 2309
E-mail: nkm@mhsr.sk 

9. Corruption 

Slovakia is a party to international treaties on corruption.  Among them are the OECD Convention on Combating Bribery of Foreign Public Officials, the UN Anti-Organized Crime Convention, the UN Anti-Corruption Convention, and the Criminal Law Convention on Corruption and Civil Law Convention on Corruption.  Slovakia is a member of the Group of States against Corruption (GRECO).

The giving or accepting of a bribe constitutes a criminal act according to Slovak law.  Slovak criminal law incorporates criminal liability for legal persons, including corporations. Nevertheless, corruption continues to be among the most serious issues for the business community.  According to the Special Eurobarometer survey of December 2019, 79 percent of respondents believed that corruption is part of Slovakia’s business culture.  In the 2020 Transparency International global corruption perception ranking Slovakia ranked 60th place, down from 59 in 2019. There is no data available on whether U.S. firms identify corruption as an obstacle to foreign direct investment.  In a March 2018 survey by five foreign chambers of commerce (Slovak-German Chamber of Commerce, Slovak-Austrian Chamber of Commerce, Dutch Chamber of Commerce, Swedish Chamber of Commerce, and Advantage Austria), respondents highlighted the fight against criminality and corruption as the largest problem among evaluated investment criteria.

NGO analysts and GRECO point out that conflict of interest and asset declaration regulations lack the necessary level of detail to be implemented and enforced in practice.  There is a high threshold for reporting gifts accepted by judges and prosecutors.  Government authorities do not require private companies to establish internal codes of conduct that would prohibit bribery of public officials, although some companies have adopted such measures voluntarily. The law requires that public entities and private companies having at least 50 employees set up an internal channel to report corruption or unlawful conduct.   While law enforcement has effectively investigated some cases of petty bribes and mid-level corruption, anti-corruption NGOs assess that high-level corruption was rarely investigated or prosecuted effectively until 2019. Prior to that, only two ministerial-level officials had been convicted of corruption-related crimes since Slovak independence in 1993.  According to a survey published by Transparency International Slovakia, between October 2016 and 2019 only 10 percent of corruption cases decided by the Specialized Criminal Court involved amounts greater than 5,000 EUR. NGOs investigating corruption do not enjoy any special protection.

Following the murder of investigative journalist Jan Kuciak and his fiancée Martina Kusnirova in February 2018 and the resulting changes in the government and police leadership, one individual involved in high-level tax fraud was convicted in March 2019. In the course of 2019 and 2020 a number of judges, the former Special Prosecutor, high-level police officers, internal revenue officers and several businessmen and lawyers were charged with corruption, interference in the independence of courts and organized crime. In December 2020, the former Environment and Economy Minister was charged with bribery. In January 2021, Pavol Rusko, a former director of TV Markiza, and Marian Kočner, a businessman who was accused of plotting the murder of Jan Kuciak and his fiancée, were sentenced to 19 years in jail for obstruction of justice and promissory notes fraud. The fraudulent promissory notes allowed Kočner to receive 69 million EUR from TV Markiza. TV Markiza is part of NASDAQ-traded Central European Media Enterprise (CME), and was majority owned by AT&T. CME was sold to Czech firm PPF in 2019, pending approval from EU and national regulatory authorities.

The new government’s agenda has been heavily focused on strengthening anti-corruption measures. In February 2021, Parliament selected the head of the new Whistleblower Protection Office responsible for enhancing the country’s system of whistleblower protections. The new Office will become active in August 2021. In June 2019, Parliament streamlined the anti-shell company law that requires private companies to reveal their ownership structure before entering into business contracts with public entities. In January 2020, a conflict of interest in civil service regulation was adopted by Cabinet decree, introducing a Code of Conduct for Civil Servants (400/2019 Coll.).

Disclosure of contracts in the Central Registry of Contracts by public administrators and state-owned enterprises is compulsory.

Private businesses, especially those with foreign ownership, often have internal codes of ethics, in many cases also extending to contractors.

Resources to Report Corruption

Contact details of government agencies responsible for combating corruption:
Daniel Lipsic
Head of the Special Prosecutor’s Office
Office of the Special Prosecution under the General Prosecutor’s Office
Suvorovova 4343
902 01 Pezinok
Telephone: +421 33 690 3171
Daniel.Lipsic@genpro.gov.sk

Branislav Zurian
Director of the National Criminal Agency
Ministry of Interior, National Police Headquarters
Račianska 45
812 72 Bratislava
Telephone: +421 964052102
Branislav.Zurian@minv.sk

Contact details of “watchdog” organizations:
Michal Pisko
Executive Director
Transparency International Slovakia
Bajkalska 25
82718 Bratislava
Telephone: +421 2 5341 7207
sipos@transparency.sk

Zuzana Petkova
Executive Director
Stop Corruption Foundation
Stare Grunty 18
841 04 Bratislava
petkova@zastavmekorupciu.sk

Peter Kunder
Executive Director
Fair Play Alliance
Smrecianska 21
811 05 Bratislava
Telephone: +421 2 207 39 919
kunder@fair-play.sk

10. Political and Security Environment 

Politically motivated violence and civil disturbances are rare in Slovakia.  There have been no recent reports of politically motivated damage to property, projects, and installations nor violence directed toward foreign-owned companies.  Slovak citizens have responded well to stringent government measures introduced during March and April 2020 to contain the spread of the COVID-19 pandemic, with polls showing that nine out of ten Slovaks considered the restrictions appropriate. As the pandemic continued and the country returned to a prolonged lockdown in October 2020, the willingness of the general public to abide by the restrictions, however, decreased. Enforcement of the measures was low across the country. In October and December 2020, protests against COVID restrictions attracted several thousand participants including several high-ranking opposition politicians. The protests resulted in minor damage of government property, a police response with tear gas and water cannon, several arrests and minor injuries to three policemen and two participants. In February 2020, Slovakia elected a new four-party government coalition, which ran on a campaign of anti-corruption, good governance, and accountability.  The transfer of power from the previous government was smooth and effective.

11. Labor Policies and Practices 

Slovakia is one of the most industrialized economies in the EU with almost 32 percent of the workforce employed in industry, 65 percent in services (including construction), and the rest in agriculture.  Due to COVID-19, the unemployment rate increased to 7.8 percent by the end of 2020 from 4.92 percent in December 2019.   Long-term unemployment remains prevalent in poorer regions, especially in the marginalized Romani communities.

Foreign companies frequently praise workers’ motivation and productivity, and especially commend younger workers for their proficiency with foreign languages.  However, businesses complain about the growing gap between their labor market needs and popular areas of study, with shortages in technical education at both the high school and higher education levels, and a lack of support for critical thinking and managerial skills.  Slovak PISA scores are persistently below average with skill shortages particularly prevalent in knowledge and technology-intensive sectors.  The health and IT sectors are among those facing the most severe long-term labor shortages, but most regions also report shortages in workers for lower-skill construction and machinery operation jobs.

The minimum wage law indexes the minimum wage to overall wage growth in the economy.  The minimum wage increased to 623 EUR per month in 2021.  Nominal wages grew by 7.8 percent in 2019.  The average nominal wage in 2020 remained almost identical to the previous year at 1,096 EUR per month.  In 2019, the average hourly labor cost was 12.50 EUR, significantly lower than the EU average of 27.70 EUR.  According to Eurostat, the gender pay gap stood at 19.4 percent and the gender employment gap at 13 percent in 2018.  A lack of childcare facilities for children below three years of age combined with three years of paid maternity leave discourages mothers from returning to work and aggravates the gender pay gap.  According to the European Commission Country Report on Slovakia, formal childcare of children under 3 years remains among the lowest in the EU.  In November 2020, the Education Ministry has presented an education reform plan, which will include increasing funding for pre-school infrastructure.

The Slovak Labor Code (311/2001 Coll. and later amendments) governs the national labor market, including for foreigners.  Businesses cite burdensome labor regulations, frequent and arbitrary changes to the labor code, and a lack of stakeholder input as some of the obstacles to doing business in Slovakia.  A number of labor related measures came into force in March 2021, including an increase in the minimum wage; a requirement for employers to pay for any additional costs arising from telework and clarifying that employees do not have to read e-mails or accept phone calls outside of working hours; and simplifying employer options for providing meal vouchers to employees.

In February 2021, the government approved a permanent “kurzarbeit” social insurance program, in which employers may reduce their employees’ work hours instead of laying them off. Pending approval by Parliament, the act will require the state to subsidize 60 percent of a worker’s salary, with the employer providing another 20 percent.

On January 1, 2020, the Amendment to the Act on Employment Services (5/2004 Coll.) simplified the process for hiring non-EU nationals by decreasing wait times for temporary residence permits from 90 to 30 days and limiting the wait time for work permits to 20 days.

The number of foreign nationals from non-EU countries in the Slovak labor market was steadily increasing, but, likely due to COVID-19, dropped from just over 28,500 in December 2019 to 24,000 in December 2020.  According to statistics from the Slovak Labor Office, Ukrainian and Serbian nationals account for 80 percent of all non-EU foreign laborers.  There are roughly 69,000 foreign workers in Slovakia in total, including EU and non-EU nationals not requiring work permits.

The Anti-discrimination Act (365/2004 Coll.) and the Labor Code ban discrimination in the workplace based on gender, race, nationality, sexual orientation, health impairment, age, language, religion, and political affiliation. It does not, however, specifically prohibit discrimination based on HIV status. Activists frequently allege that employers refused to hire Roma, and an estimated 70 percent of Roma are unemployed.

Slovakia has a standard workweek of 40 hours and the law mandates a maximum workweek of 48 hours, including overtime, except for employees in the health-care sector, whose maximum work week is 56 hours.  The Labor Code caps overtime at 400 hours annually and sets minimum remuneration for overtime and work during public holidays or on weekends.  There are no serious concerns regarding compliance with international labor standards.

The Labor Code differentiates between layoffs and firing.  The cost to lay off employees stipulated by the Labor Code is generally less expensive than in Western Europe and depends mostly on the employee’s time in service.

Social insurance contributions are compulsory and include healthcare, unemployment, and pension insurance.  Both employers and employees must pay social contributions – employers’ combined social and health contributions amount to 35 percent of wages.

Collective bargaining is voluntary and takes place without interference from the state.  No national-level collective bargaining exists in Slovakia.  Provisions agreed in multiemployer as well as single-employer collective agreements are legally binding for the contracting parties.   EU Agency Eurofound reports up to 35 percent of employees in the national economy are covered by a collective agreement.  At the sectoral or regional level, the coverage is about 10 percent.  No official national data exist on collective bargaining coverage.  The standard mechanism for dealing with collective labor disputes is conciliation, which is used in vast majority of cases, and arbitration.

Union membership has declined in recent years.  A “tripartite arrangement” is used as a discussion platform including state representatives, labor unions, and employers’ associations.  Slovakia is a member of the International Labor Organization and has ratified all eight core conventions.  Strikes are infrequent in Slovakia.  In January 2020, truck drivers organized a series of strikes, which affected production at two car making factories.

Please consult the following websites for more information:

12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs 

As a high-income economy, Slovakia does not qualify for DFC support outside of energy infrastructure projects. Before OPIC transformed into DFC, it offered U.S. investors in Slovakia insurance against political risk and expropriation of assets or damages due to political violence. Slovakia is a member of the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA) which also provides political risk insurance.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics  

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy 
Host Country Statistical source* USG or international statistical source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2019 $115,18 2019 $105,08 www.worldbank.org/en/country 
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2019 $708 2019 $925 BEA data available at  https://apps.bea.gov/
international/factsheet/ 
Host country’s FDI in the United States ($M USD, stock positions) 2019 $26 2019 $-10 BEA data available at  https://www.bea.gov/
international/direct-
investment-and-multinational-
enterprises-comprehensive-data 
Total inbound stock of FDI as % host GDP 2019 57.9% 2019 56.9% UNCTAD data available at
https://stats.unctad.org/
handbook/Economic
Trends/Fdi.html
    

* Source for Host Country Data:

(Note: Final end-of-year data are usually published in Q2 of the next year. Values from host country sources are converted from their original euro denomination with the conversion rate valid at the end of the respective year.  Data on FDI is inconsistent since much of U.S. FDI is channeled through subsidiaries located inside the EU.)     

Table 3: Sources and Destination of FDI 
Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 60,954 100% Total Outward 4,727 100%
The Netherlands 14,894 24% Czech Republic 2,167 46
Czech Republic 8,449 14% Poland 496 10%
Austria 7,960 13% Austria 201 4%
Germany 5,306 9% The Netherlands 185 4%
Luxembourg 3,530 6% Cyprus 156 3%
“0” reflects amounts rounded to +/- USD 500,000.

Data is fully consistent with host country data provided by the Central Bank of Slovakia ( http://www.nbs.sk/sk/statisticke-udaje/statistika-platobnej-bilancie/priame-zahranicne-investicie ).  

Table 4: Sources of Portfolio Investment  
Portfolio Investment Assets 
Top Five Partners (Millions, current US Dollars) 
Total  Equity Securities  Total Debt Securities 
All Countries  42,748  100%  All Countries  10,305  100%  All Countries  32,443  100% 
International
Organizations 
 12,520  29%  Luxembourg    3,187  31%  International Organizations  12,520  39% 
Ireland     3,741    9%  Ireland    3,064  13%  Spain  2,064  6% 
Luxembourg     3,592    8%  United States    1,291  13%  United Kingdom  1,477  5% 
United States     2,724    6%  Austria    1,234  12%  France  1,475  5% 
Austria     2,532    6%  Czechia      455    4%  United States  1,452  4% 

Source: – IMF: https://data.imf.org/?sk=B981B4E3-4E58-467E-9B90-9DE0C3367363&sId=1481577785817  (Note: Data is from December 2019)

14. Contact for More Information 

Isaac Hansen-Joseph
Economic Officer
U.S. Embassy Bratislava
Hviezdoslavovo námestie
+421 (2) 5443 3412 
hansen-josephis@state.gov 

2021 Investment Climate Statements: Slovakia
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