2023 Investment Climate Statements: Slovenia

Policies Towards Foreign Direct Investment

The Slovenian Public Agency for the Promotion of Entrepreneurship, Internationalization, Foreign Investment and Technology (SPIRIT) promotes FDI and advocates for foreign investors in Slovenia, often in collaboration with diplomatic missions and business associations based in Slovenia.  Its mission is to enhance Slovenia’s economic competitiveness through technical and financial assistance to entrepreneurs, businesses, and investors.

Foreign companies conducting business in Slovenia have the same rights, obligations, and responsibilities as domestic companies. The principles of commercial enterprise, including national treatment, apply to the operations of foreign companies as well. The Law on Commercial Companies and the Law on Foreign Transactions guarantee their basic rights.

According to SPIRIT’s annual survey on foreign investors’ perceptions of Slovenia’s business environment, investors cite the high quality of Slovenia’s labor force as the deciding factor in choosing the country as an investment destination, followed by widespread knowledge of foreign languages, employees’ technical expertise, innovation potential, and strategic geographic position offering easy access to EU and Balkan markets.

While generally welcoming greenfield investments, Slovenia presents a number of informal barriers that may prove challenging to foreign investors.  According to SPIRIT’s survey, the most significant disincentives to FDI are high taxes, high labor costs, lack of payment discipline, an inefficient judicial system, difficulties in firing employees, and excessive bureaucracy.  There are no formal limits on foreign investors’ ability to establish an investment or operate in the market.

Foreign companies doing business in Slovenia and the local American Chamber of Commerce have also cited additional factors that adversely affect the local investment climate, including the lack of a high-level FDI promotion strategy, a sizable judicial backlog, difficulties in obtaining building permits, labor market rigidity, and disproportionately high social contributions and personal income taxes coupled with excessive administrative tax burdens.  Businesses have also reported a lack of transparency in public procurement, unnecessarily complex and time-consuming bureaucracy, frequent changes in regulation, relatively high real estate prices in some parts of the country, and confusion over lead responsibility or jurisdiction regarding foreign investment among government agencies. Slovenia is currently experiencing a severe labor shortage, with the unemployment rate at an all-time low. In response, in 2023, the government passed amendments to two laws affecting foreign workers, allowing foreign workers to switch employers more easily and removing red tape for employers to hire workers in health and social care. However, the government kept a controversial language requirement that requires workers and family members to pass a Slovenian language test to renew their residence permits – a requirement widely opposed by the business sector and NGO groups.

Rigid procedures necessary to acquire work permits can be an impediment for foreign investors. It may take as long as two to three months to obtain a single work and residence permit, which is required for local employment. Applicants must submit their single permit application at an administrative unit or at the diplomatic or consular office in their home country.  The Ministry of Labor has established a fast-track procedure for foreigners registered as authorized persons or representatives of companies, managers of branch offices, and foreigners who are temporarily sent to work in organizational units for foreign legal persons (corporate entities) registered in Slovenia. More information on single work and residence permits and employment services is available here .

Limits on Foreign Control and Right to Private Ownership and Establishment

Both foreign and domestic private entities have the right to establish and own business enterprises and engage in different forms of remunerative activity. Slovenia has relatively few formal limits on foreign ownership or control. In May 2020, Slovenia enacted a screening mechanism for foreign investments that will remain in force until June 2023.

The investment screening mechanism stipulates that foreign investments acquiring at least 10 percent of share capital or voting rights in Slovenian companies with activities involving critical infrastructure, critical technologies and dual use items, supply of critical inputs, access to sensitive information, the freedom and pluralism of the media, and certain projects and programs in the interest of the EU must seek approval from the Ministry of Economy, Tourism, and Sport. The ministry was also authorized to retroactively screen foreign direct investment transactions within the past five years. The application for such approval must be submitted to the ministry within 15 days from the date of the execution of the agreement. The Slovenian government envisages that the review process can take up to two months. Failure to comply to this new legislation may result in a fine ranging between EUR 50,000 and EUR 500,000 for companies based on their size and a fine of EUR 10,000 for individuals.

In 2023, the Ministry of Economy, Tourism, and Sport initiated the process to update and permanently establish the investment screening mechanism within the Investment Promotion Act

Sector-specific Restrictions:

Professional services: There are limits on banking and investment services, private pensions, insurance services, asset management services, and settlement, clearing, custodial, and depository services provided in Slovenia by companies headquartered in non-EU countries. Companies from non-EU countries can operate freely only through an affiliate with a license granted by an appropriate Slovenian or EU institution.

Gaming: There is a 20 percent cap on private ownership of individual companies.

Air transport: Aircraft registration is only possible for aircraft owned by Slovenian or EU nationals or companies controlled by such entities. Companies controlled by Slovenian nationals or carriers complying with EU regulations on ownership and control are the only entities eligible for Air Operator’s Certificates (AOC) for performing airline services.

Maritime transport: The law forbids majority ownership by non-EU residents of a Slovenian-flagged maritime vessel unless the operator is a Slovenian or other EU national.

Other Investment Policy Reviews

Slovenia underwent an OECD Investment Policy Review  and a WTO Trade Policy Review  in 2002. The Economist Intelligence Unit and World Bank’s “Doing Business 2020” provide current economic profiles of Slovenia.

Business Facilitation

Individuals or businesses may adopt a variety of different legal and organizational forms to conduct economic activities. Businesses most commonly incorporate legally as limited liability companies (LLC or d.o.o.) and public limited companies (PLC or d.d.). Non-residents of the Republic of Slovenia must obtain a Slovenian tax number  before beginning the process of establishing a business. Slovenia’s Companies Act , which is fully harmonized with EU legislation, regulates the establishment, management, and organization of companies.

Generally, bureaucratic procedures and practices for foreign investors wishing to start a business in Slovenia are sufficiently streamlined and transparent. Start-up costs for businesses are among the lowest in the EU. To establish a business in Slovenia, a foreign investor must produce capital of at least EUR 7,500 (USD 8,235) for a limited liability company and EUR 25,000 (USD 27,450) for a stock company. The investor must also establish a business address and file appropriate documentation with the courts. The entire process usually takes three weeks to one month, but may take longer in Ljubljana due to court backlogs.

Individuals or legal entities may establish businesses through a notary, one of several VEM (Vse na Enem Mestu or “all in one place”) point offices designated by the Slovenian government, or online. A list of VEM points is available at http://www.podjetniski-portal.si/ustanavljam-podjetje/vem-tocke/seznam-vstopnih-tock-vem .

More information on how to invest and register a business in Slovenia is available at https://www.sloveniabusiness.eu/business-environment/establishing-a-company  and http://www.eugo.gov.si/en/starting/business-registration/ .

Outward Investment

Slovenia does not restrict domestic investors from investing abroad, nor are there any incentives for outward investments. The majority of Slovenia’s outward investments are in the Western Balkans. Croatia is the most popular destination for Slovenian outward investment, constituting 35 percent of Slovenia’s investments abroad, followed by Serbia (19 percent), Bosnia and Herzegovina (6.8 percent), Russia (6 percent), and North Macedonia (6 percent).

Transparency of the Regulatory System

Accounting, legal, and regulatory procedures in Slovenia are transparent and consistent with international norms.

Financial statements should be prepared by the Slovenian Institute of Auditors in accordance with the Slovenian Accounting Standards and International Financial Reporting Standards (IFRS), as adopted by the EU. Annual reports of for-profit business entities are publicly available on the website of AJPES , the Slovenian Business Database.

There are three levels of regulatory authority: supra-national (Slovenia is a member of the EU), national, and sub-national (municipalities have limited regulatory power over local affairs, and regulations must comply with state regulations). Laws may be proposed by the government, member(s) of parliament, or through signatures of at least 5,000 voters.

Slovenia adopted a comprehensive regulatory policy in 2013, focusing on measures aimed at raising the quality of the regulatory environment to improve the business environment and increase competitiveness.

Slovenia’s Ministry of Public Administration is required by several legal and policy documents to solicit and include public stakeholder engagement in decision-making processes. Public authorities must solicit stakeholder engagement and inform the public about their work to the greatest extent possible.

Government entities that propose regulations must invite experts and the general public to participate by publishing a general invitation, together with a draft regulation, on their websites. The experts and general public must respond by the deadline, ranging from 30 to 60 days from the day of its publication. In addition to the relevant ministry, the proposals are also published on government websites and on the Ministry of Public Administration’s eDemocracy  portal.

Through the eDemocracy web portal, citizens may actively cooperate in the decision-making process by expressing opinions and submitting proposals and comments on draft regulations. When possible, government entities take into consideration proposals and opinions on proposed regulations submitted by experts and the general public. If such opinions and proposals are not taken into consideration, those proposing the regulation must inform stakeholders in writing and explain the reasons.

The public, however, is not invited to comment on proposed regulations when the nature of the issue precludes such consideration, such as in emergency situations and in matters relating to the national budget, the annual financial statement, the rules of procedure of the government, ordinances, resolutions, development and planning documents, development policies, declarations, acts ratifying international treaties, and official decisions.

A regulatory impact assessment (RIA) is obligatory for all primary legislation; however, the quality of such assessments varies, and analyses are often only qualitative or incomplete due to the lack of an external body to conduct quality control. The quality of such assessments has improved, however, since the Ministry of Public Administration introduced its Small and Medium Enterprise (SME) test in 2012 to measure regulatory impacts on small and medium-sized businesses.

The General Secretariat of the Republic of Slovenia is responsible for administrative oversight to ensure the government follows administrative procedures. There are no informal regulatory processes managed by non-governmental organizations or private sector associations.

Slovenia’s executive branch initiates approximately 92 percent of primary laws, with regulations often developed rapidly. The government’s frequent use of urgent procedures (normally reserved for national emergencies) to pass legislation often limits the stakeholder engagement process.

After the adoption of new legislation, the text is published in the Official Gazette of the Republic of Slovenia and online at https://www.uradni-list.si/glasilo-uradni-list-rs . Slovenia lacks a systematic process to evaluate regulations after their implementation.

To measure regulatory burdens on businesses, Slovenia adopted the Standard Cost Model, which has led to a significant reduction of such burdens. The United Nations awarded its Public Service Award to Slovenia in 2009 for its system of one-stop shops (the so-called “VEM points”) to incorporate and establish businesses. The introduction of e-government processes has simplified administrative procedures. The World Bank assigned Slovenia a score of 4.75 out of 5 on its Global Indicators of Regulatory Governance  measure in 2018, while the International Budget Partnership gave Slovenia 66 points out of 100 on its Open Budget Survey 2021 , assessing Slovenia’s budget transparency as sufficient with substantial information available.

Slovenia meets the Department of State’s minimum requirements for fiscal transparency. In 2022, Slovenia’s budget and information on debt obligations were widely and easily accessible to the general public, including online. The budget was substantially complete and considered generally reliable. Slovenia’s supreme audit institution reviewed the government’s accounts and made its reports publicly available. The criteria and procedures by which the national government awards contracts or licenses for natural resource extraction were outlined in law and appeared to be followed in practice. Basic information on natural resource extraction awards was public.

International Regulatory Considerations

Slovenia joined the World Trade Organization (WTO) in 1995, and to date there have been no cases of Slovenia violating WTO rules. The law treats domestic and foreign investors equally. The government does not impose performance requirements or any condition for establishing, maintaining, or expanding an investment. As a WTO member country, Slovenia is required by the Agreement on Technical Barriers to Trade (TBT Agreement) to report to the WTO all proposed technical regulations that could affect trade with other member countries. Slovenia is a signatory to the Trade Facilitation Agreement (TFA) and has implemented all TFA requirements.

As an EU member state, Slovenia applies two principles in its regulatory system: the supremacy of EU laws and the principle of direct effect. In areas subject to EU responsibility, EU laws override any conflicting member state laws. Direct effect enables Slovenians and other EU citizens to use EU laws in national courts against the government or private parties.

Legal System and Judicial Independence

Slovenia is a civil law jurisdiction with a codified system of law. It has a well-developed, independent legal system based on a five-tier (district, regional, appeals, supreme, and administrative) court system. These courts deal with a wide array of legal cases, including criminal, probate, domestic relations, land disputes, contracts, and other business-related issues. A separate social and labor court system, comprised of regional, appeals, and supreme courts, deals strictly with labor disputes, pensions, and other social welfare claims. As with most other European countries, Slovenia has a Constitutional Court which hears complaints alleging violations of human rights and personal freedoms. The Constitutional Court also issues opinions on the constitutionality of international agreements and state statutes and deals with other high-profile political issues. In 1997, Slovenia’s National Assembly established an administrative court to handle legal disputes among local authorities, between state and local authorities, and between local authorities and executors of public authority.

In 1999, the National Assembly passed legislation to streamline legal proceedings and speed up administrative judicial processes. The law established a stricter and more efficient procedure for serving court documents and providing evidence. In commercial cases, defendants are required to file their defense within 15 days of receiving a notice of a claim.

Laws and Regulations on Foreign Direct Investment

In 2018, the National Assembly passed Slovenia’s Investment Promotion Act, defining the types of incentives, criteria, and procedures to promote long-term investment in Slovenia. The act establishes that domestic and foreign investors are equal and mandates priority treatment of strategic investments, defined as investments totaling EUR 40 million or more and creating 400 new jobs in manufacturing and services, while R&D strategic investments are defined as totaling at least EUR 200 million and creating 200 new jobs. Under the law, a working group headed by the Ministry of Economy, Tourism, and Sport will assist strategic investors in obtaining necessary permits. The Slovenia Business  website serves as a resource for investors to obtain relevant information on investment regulations and incentives.

Competition and Antitrust Laws

Slovenia’s Prevention of Restriction of Competition Act regulates restrictive practices, concentrations, unfair competition, regulatory restrictions of competition, and measures to prevent restrictive practices and concentrations that significantly impede effective competition. The law applies to corporate bodies and natural persons engaged in economic activities regardless of their legal form, organization, or ownership. The law also applies to the actions of public companies and complies with EU legislation. Slovenia’s competition and anti-trust laws prohibit restrictive agreements; direct or indirect price fixing; sharing markets or supply sources; limiting or controlling production, sales, technical progress, or investment; applying dissimilar conditions to different trading parties; or subjecting the conclusion of contracts to acceptance of supplementary obligations that, by their nature or according to commercial usage, have no connection with the subject of their contracts. Companies and entities whose domestic market share exceeds 40 percent for a single undertaking and 60 percent for two or more undertakings (joint dominance) are prohibited from abusing dominant market positions. Slovenian law defines a non-exhaustive list of dominant position abuses describing the most common practices. The government may, however, prescribe market restrictions by means of regulatory instruments and actions in cases of natural disasters, epidemics, or states of emergency; significant market disturbances due to a shortage of goods or disturbances in other fields that represent a risk to the safety and health of the population; or when necessary to satisfy product requirements, raw materials, and semi-finished goods of special or strategic importance to the defense of the nation.

The fines for restrictive agreements and abuses of dominant positions may total as much as 10 percent of an undertaking’s annual turnover in the preceding business year. Those legally responsible for a legal entity or sole proprietorship may be subject to a fine of EUR 5,000-10,000, or EUR 15,000-30,000 for more serious violations.

Slovenia’s Competition Protection Agency (CPA) supervises the implementation of the Restriction of Competition Act. The agency monitors market conditions to ensure effective competition, conducts procedures and issues decisions, and submits opinions to the National Assembly and the government. The CPA is also responsible for the enforcement of Slovenia’s antitrust and merger control rules. A judicial protection procedure may be initiated against decisions of the agency. Decisions on a judicial protection case will be made by the Supreme Court of the Republic of Slovenia with three judges sitting on a panel.

An independent administrative authority, the CPA was established in 2013 through a reorganization of the former Slovenian Competition Protection Office, which was part of the Ministry of the Economy. Some private sector representatives expressed concern about the CPA’s susceptibility to outside influence and ability to reach timely decisions on complex cases, which added an element of unpredictability for some investors and their legal counsel.

Expropriation and Compensation

According to Article 69 of Slovenia’s Constitution, the government may take real property or limit rights to possess real property for public purposes in the public interest, in exchange for in-kind compensation or financial compensation under conditions determined by law. Article 7 of Slovenia’s Investment Promotion Act stipulates that, if the government deems an investment strategic, it may expropriate private property for construction in exchange for compensation, under conditions determined by law. In such cases, a special government task force monitors the investment and coordinates the acquisition of environmental and building permits.

The current government is not involved in any expropriation-related investment disputes. National law offers adequate protection to all investments. However, legal disputes continue over private property expropriated by the former Yugoslav government for state purposes. Following its secession from Yugoslavia, Slovenia’s 1991 Denationalization Act established a process to “denationalize” these properties, return them to their rightful owners or their heirs, or pay just compensation if returning the property was not feasible. In some of these cases, the rightful owners and heirs are U.S. citizens.

Since the 1993 deadline for filing claims, over 99 percent of denationalization cases have been closed, although only 88 percent of cases involving American owners and heirs have been resolved. Cases involving U.S. citizens have taken longer in part because the claimants generally do not live in Slovenia. In such cases, the Ministry of Justice must determine the nationality of the property’s former owners at the time the property was seized – a generally simple question for Slovenians who never acquired another citizenship, but more complicated in cases involving naturalized American citizens. In addition, some claims may involve property currently controlled by prominent and influential Slovenians, thereby creating additional informal obstacles to restitution.

Dispute Settlement

ICSID Convention and New York Convention

Slovenia is a contracting state to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID) and a signatory to the New York Convention on Recognition of Foreign Arbitral Awards, which requires local courts to enforce international arbitration awards that meet certain criteria.

Investor-State Dispute Settlement

The government accepts binding international arbitration of disputes between foreign investors and the state. There have been no investment disputes involving a U.S. person within the past 10 years. Local courts are expected to enforce foreign arbitral awards issued against the government. To date, there has been no evidence of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

Slovenia is a signatory to the 1961 European Convention on International Commercial Arbitration. The Slovenian Arbitration Act is modeled after the United Nations Commission on International Trade Law’s model law.

Slovenia’s regional court specializing in economic issues has jurisdiction over business disputes. However, parties may agree in writing to settle disputes in another court or jurisdiction. Parties may also agree to court-annexed mediation. Local courts recognize and enforce foreign arbitral awards and foreign court judgments.

Parties may also exclude the court as the adjudicator of a dispute if they agree in writing to arbitration, whether ad hoc or institutional. In the former, applicable procedures and laws must be determined. In the case of institutional arbitration, Slovenian law requires a clear definition of the type of arbitration to be implemented.

The Slovenian Chamber of Commerce’s Ljubljana Arbitration Center is an independent institution that resolves domestic and international disputes arising out of business transactions among companies. Arbitration rulings are final, and decisions are binding.

Bankruptcy Regulations

Competition is lively in Slovenia, and bankruptcies are an established and reliable means of working out firms’ financial difficulties. By law, there are three procedural methods for dealing with bankrupt debtors. The first procedure, compulsory settlement, allows the insolvent debtor to submit a plan to the court for financial reorganization. Creditors whose claims represent more than 60 percent of the total amount owed may vote on the proposed compulsory settlement plan. If the settlement is accepted, the debtor is not obligated to pay the creditor any amount exceeding the payment agreed to in the confirmed settlement. The procedure calls for new terms, extended in accordance with the conditions of forced liquidation settlement (see below). Confirmed compulsory settlement agreements affect creditors who have voted against the compulsory settlement as well as creditors who have not reported their claims in the settlement procedure.

Creditors or debtors may also initiate bankruptcy proceedings. In such instances, the court names a bankruptcy administrator who sells the debtor’s property according to a bankruptcy senate, the senate president’s instructions, and court-sponsored supervision. Generally, the debtor’s property is sold at public auction. Otherwise, the creditors’ committee may prescribe a different mode of sale such as collecting offers or placing conditions on potential buyers. The legal effect of the completed bankruptcy is the termination of the debtor’s legal status to conduct business, and distribution of funds from the sale of assets to creditors according to their share of total debt.

In accordance with the Law on Commercial Companies, the state can impose forced liquidation on a debtor subject to liquidation procedures and legal conditions for ending its existence as a business entity. This would occur, for example, in cases in which an entity’s management has ceased operations for more than 12 months, if the court finds the registration void, or by court order.

In 2013, the National Assembly adopted an amendment to the Financial Operations, Insolvency Procedures, and Compulsory Dissolution Act to simplify and speed up bankruptcy procedures and deleveraging.

Investment Incentives

Slovenia offers special tax incentives for high-tech sector investments that create jobs and are linked to research and development activities. In some economically depressed and underdeveloped regions (such as the Prekmurje region near the Hungarian border), Slovenia offers special facilities, services, and financial incentives to investors.

As defined in Slovenia’s Investment Promotion Act, the government offers the following investment incentives: subsidies, loans, guarantees, subsidized interest rates, and purchase of land owned by municipalities at below-market prices.

All companies registered in Slovenia can participate in government-financed or subsidized research and development programs, regardless of the origin of capital.

Foreign Trade Zones/Free Ports/Trade Facilitation

The Port of Koper is Slovenia’s only free trade zone (FTZ). Under Slovenia’s Customs Act, subjects operating in FTZs are not liable for payment of customs duties, nor are they subject to other trade policy measures until goods are released into free circulation.

Slovenia has set aside land for greenfield investments. Most of the newly-developed industrial zones have direct access to well-developed infrastructure, including highways and rail service. Land prices vary greatly. For example, in the eastern Slovenia community of Lendava, one square meter of land costs roughly EUR 5, while prices in the vicinity of Ljubljana can run up to EUR 50 or more. Municipalities and the state often subsidize infrastructure and land costs as incentives to increase employment opportunities, reducing prices for fully-equipped land in industrial zones.

Potential investors may access a full range of free services and concessions provided by local development agencies for start-ups. Such assistance may also include assistance in completing all necessary paperwork, securing permits, and in some cases organizing and financing construction in line with investor requirements. Interested investors may contact the U.S. Embassy in Ljubljana for further information.

Performance and Data Localization Requirements

Slovenia does not enforce any forced localization policies. The government does not oblige foreign investors to use domestic content in goods and technology, or to use local data storage.

Real Property

Administrative reforms implemented in 2011 and 2012 simplified property registration, while increased automation in Slovenia’s land registry reduced property registration delays by 75 percent. Slovenia has also made transferring property easier by introducing online procedures and reducing fees. Virtually all land has a clear title.

The land registry court (local court) initiates the registration process for the entry of a title in the land registry. Amendments to the Land Registry Act adopted in 2009 and implemented in 2011 require submission to the court of proposals with appendices in electronic form. Submissions are tendered via a notary public or attorneys and real estate agencies acting on the applicant’s behalf. In some cases, applicants may submit registrations directly. Other amendments to the Land Registry Act have transferred responsibility from the courts to the notary for depositing original documents (e.g. contracts) attached to submissions, whereby the notary’s confirmation of authenticity renders the evidence value of the electronic version equal to that of the original. The amendments also enable free access via a web portal to the land registry records, including pending notations and land register extracts, neither of which were free prior to the reform.

Land registry proposals are automatically assigned to the least-burdened local court. Once the proposal is filed with the land registry court, the registration process is initiated ex officio and the priority of entry is ensured with a land registry seal. The priority order takes effect the day the proposal has been filed. The buyer may theoretically dispose of the property as soon as the purchase agreement is signed and the buyer obtains (direct or indirect) possession of the property. Buyers whose title is not yet entered into the land registry but who have already taken possession of the property are recognized as proprietary possessor in good faith – the presumed owner. The presumed owner has the right to claim the return of a property in the event of its dispossession from a proprietary possessor in good faith who has the property with a weaker legal title. The buyer may claim the return of the purchase price, but has no claims under the law of property until the title is entered into the land registry. Since May 2011, the law requires submission of proposals in electronic format.

Intellectual Property Rights

Slovenia is not included in USTR’s Special 301 Report or Notorious Markets List.

Slovenia has enacted advanced and comprehensive legislation for the protection of intellectual property rights (IPR) that fully aligns with EU directives. Slovenia negotiated its commitments under the World Trade Organization’s (WTO’s) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) as a developing country and implemented the policy as of January 1996. Slovenia is a full member of the TRIPS Council and the World Intellectual Property Organization (WIPO). Slovenia has ratified the WIPO Copyright Treaty and the Cyber Crime Convention.

Slovenia’s Intellectual Protection Office actively participates in the Council of Europe’s Intellectual Property Working Group, the Trademark Committee, and other EU bodies engaged in the formulation of new EU IPR legislation. The Copyright and Related Rights Act, as amended in 2015, 2016, and 2019, deals with all aspects of modern copyright and related laws, including traditional works and their authors, computer programs, audiovisual works, and rental and lending rights. The act also takes into account new technologies such as storage and electronic memory, original databases, satellite broadcasting, and cable re-transmission. Slovenia’s 2004 harmonization with EU legislation introduced a new system of collective management of IPR compliant with the latest directives.

The 1994 Law on Courts gives the District Court of Ljubljana exclusive subject matter jurisdiction over IPR disputes. The aim of the law is to ensure specialization of judges and efficiency of relevant proceedings. For enforcement of TRIPS provisions, the law provides a number of civil legal sanctions, including injunctive relief and the removal of the infringement, seizure, and destruction of illegal copies and devices, publication of the judgment in the media, compensatory and punitive damages, border and customs measures, and the securing of evidence and other provisional measures without the prior notification and hearing of the other party. These infringements also constitute a misdemeanor charge, with fines ranging from EUR 400 to EUR 45,000 for legal persons and from EUR 40 to EUR 2,000 for supervisors of individual offenders, provided that the reported offenses are not criminal in nature. In criminal cases, Slovenia’s Criminal Code applies, which may result in fines or imprisonment. While laws regarding IPR are clearly defined, foreign investors have complained that the court system is too slow.

Since the enactment of the Law on Copyright and Related Rights Act, there have been relatively few reported prosecutions regarding copyright infringements and violations. Slovenia has dedicated resources to training prosecutors and public authorities. Slovenia also continues to address the preservation of evidence in infringement procedures and border measures through amendments to existing legislation. The Ministry of Culture established the Intellectual Property Fund, the Slovenian Copyright Agency, and the Anti-Piracy Association of Software Dealers to combat the problem of piracy in a collective manner.

The Law on Industrial Property grants and protects patents, model and design rights, trademark and service marks, and appellations of origin. The holder of a patent, model, or design right is entitled to exclusively profit from the protected invention, shape, picture, or drawing; exclusively market any products manufactured in accordance with the protected invention, shape, picture, or drawing; dispose of the patent, model, or design right; and prohibit the use of a protected invention, model, or design by any person without consent.

The patent and trademark rights granted by the Law on Industrial Property take effect from the date of filing the appropriate applications. Patents are granted for 20 years from the date of filing, and model and design rights are granted for 10 years. Trademarks are granted for 10 years but may be renewed an unlimited number of times. The term of an appellation of origin is unlimited. All patents and trademarks are registered through the Intellectual Property Office, and all registers are open to the public. Patent and trademark applications filed in member countries of the International Union for the Protection of Industrial Property are afforded priority rights in Slovenia. The priority period is 12 months for patents and six months for model and design rights.

Any person who infringes upon a patent or trademark right may be held liable for damages and prohibited from carrying on the infringing acts.

The Ministry of Finance, through the Customs Authority, tracks and reports on seizures of counterfeit goods in accordance with the European Parliament decree 608/2013. All data on seized goods are stored on a central database at the European Commission. The Commission publishes an annual report on seized goods from all countries, available at https://ec.europa.eu/taxation_customs/business/customs-controls/counterfeit-piracy-other-ipr-violations/ipr-infringements-facts-figures_en .

The Law on Industrial Property also provides for the contractual licensing of patents, model and design rights, and marks. All license agreements must be in writing and specify the duration of the license, the scope of the license, whether the license is exclusive or non-exclusive, and the amount of remuneration for use of the patent, model and design rights, and marks.

Compulsory licenses may be granted to another person when the invention is in the public interest or the patentee misuses rights granted under the patent. A misuse of a patent occurs when the patentee does not use or insufficiently uses a patented invention and refuses to license other persons to develop or make use of the protected invention, or imposes unjustified conditions on the licensee. If a compulsory license is granted, the patentee is entitled to compensation. Slovenian industrial property legislation fully complies with EU standards.

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/ .

Capital Markets and Portfolio Investment

Capital markets remain relatively underdeveloped given Slovenia’s level of prosperity. Enterprises rarely raise capital through the stock market and tend to rely on the traditional banking system and private lenders to meet their capital needs.

Established in 1990, the Ljubljana Stock Exchange (LSE) is a member of the International Association of Stock Exchanges (FIBV). In 2015, the Zagreb Stock Exchange acquired the LSE. However, the number of companies listed on the exchange is limited and trading volume is very light, with annual turnover similar to a single day’s trading on the NYSE. Low liquidity remains an issue when entering or exiting sizeable positions.

In 1995, the Central Securities Clearing Corporation (KDD) was established to provide central securities custody services, clear and settle securities transactions, and maintain the central securities registry on the LSE electronic trading system. In 2017, KDD successfully aligned its procedures to that of the uniform European securities settlement platform TARGET2-Securities (T2S).  In 2019, Slovenia’s Securities Market Agency (ATVP) licensed KDD to operate under the EU’s Central Securities Depository Regulation (CSDR) and provide services as a Central Securities Depository (CSD), pursuant to Article 17 of the Regulation (EU) 909/2014 on improving securities settlement in the European Union and on central securities depositories.

Established in 1994, the ATVP has powers similar to those of the U.S. Securities and Exchange Commission and supervises investment firms, the Ljubljana Stock Exchange (LSE), the KDD, investment funds, and management companies. It also shares responsibility with the Bank of Slovenia for supervision of banking and investment services.

Slovenia adheres to Article VIII of the International Monetary Fund’s Article of Agreement and is committed to full current account convertibility and full repatriation of dividends.

The LSE uses different dissemination systems, including real-time online trading information via Reuters and the Business Data Solutions System. The LSE also publishes information on the Internet at  http://www.ljse.si/ .

Foreign investors in Slovenia have the same rights as domestic investors, including the ability to obtain credit on the local market.

Money and Banking System

There is a relatively high degree of concentration in Slovenia’s banking sector, with 11 commercial banks, three savings banks, and two foreign bank branches in Slovenia serving two million people. All commercial banks are private as of January 2021, and most have foreign owners and shareholders. SID Bank (Slovenian Export and Development Bank), which supports Slovenian companies’ export activities and provides financing for economic development, remains state-owned. In 2008, the combined effects of the global financial crisis, the collapse of the construction sector, and diminished demand for exports led to significant capital shortfalls. Bank assets declined steadily after 2009 but rebounded in 2016 and have remained steady since then. Since the crisis, most banks have refocused their business activities towards SMEs and individuals/households, prompting larger companies to search for alternative financing sources. According to European Banking Federation data, Slovenia’s banking sector assets totaled EUR 48.3 billion (USD 53 billion) at the end of 2021, equaling approximately 92.8 percent of GDP. However, the figure still lags the total banking assets volume at the end of 2009, when banking sector assets equaled 146 percent of GDP.

Slovenia’s banking sector was devastated by the 2009 economic crisis. Nova Ljubljanska Banka (NLB) and Nova Kreditna Banka Maribor (NKBM) faced successive downgrades by credit rating agencies due to the large numbers of nonperforming loans in their portfolios. In 2013, the government established a Bank Asset Management Company (BAMC) with a management board comprised of financial experts to promote stability and restore trust in the financial system. In exchange for bonds, BAMC agreed to manage the nonperforming assets of three major state banks, conducting three such operations from December 2013 through March 2014. The government also injected EUR 3.5 billion (USD 4.2 billion) into Slovenia’s three largest banks, NLB, NKBM, and Abanka. These measures helped recapitalize and revitalize the country’s largest commercial banks. In December 2022, the government closed BAMC, as originally planned, and its approximately EUR 500 million in remaining assets were transferred to the Slovenian Sovereign Holding.

According to World Bank data, an estimated 2.1 percent of all Slovenian banking assets were non-performing as of the end of 2021. According to the Bank of Slovenia, the Slovenian banking sector’s exposure to non-performing loans was 0.98 percent, as of February 2023.

NLB, the country’s largest bank, was privatized in 2019, although the government remains a major shareholder with a 25 percent plus one share stake. Of the remaining shares, more than fifty percent are spread among several international investors on fiduciary account at the Bank of New York, while a number of Slovenian institutional and private investors purchased the remainder. The country’s second largest bank, Nova Kreditna Banka Maribor (NKBM), was sold to an American fund (80 percent) and the European Bank of Reconstruction and Development (EBRD) (20 percent) in 2016. In 2020, NKBM acquired the country’s third largest state-owned bank, Abanka. As of January 2021, the banks have been fully merged. With a total asset of EUR 9.2 billion (USD 10.1 billion) and approximately 22 percent market share, NKBM is on par with the country’s largest commercial bank, NLB. In May 2021, Hungary’s OTP Bank signed a contract to acquire NKBM, with the deal receiving final approval from Slovenia’s Competition Protection Office in February 2023. OTP plans to fully integrate NKBM with its previously acquired SKB Bank by 2024.

Following sanctions imposed as a result of Russia’s invasion of Ukraine, the European Central Bank (ECB) assessed in February 2022 that Sberbank Europe and its two subsidiaries in Croatia and Slovenia were failing or likely to fail due to a deterioration in their liquidity situation. In March 2022, the Bank of Slovenia announced that the country’s largest bank, NLB, acquired Sberbank Slovenia, including its assets, liabilities, and clients. The Bank of Slovenia noted that the swift sale of Sberbank Slovenia helped preserve the banking sector stability in the country.

Banking legislation authorizes commercial banks, savings banks, and stock brokerage firms to purchase securities abroad. Investment funds may also purchase securities abroad, provided they meet specified diversification requirements. The Slovenian government adopted in March 2021 a draft banking legislation, which transposed provisions of an EU directive on exempted entities, financial holding companies, mixed financial holding companies, remuneration, supervisory measures and powers, and capital conservation measures. The new legislation also addresses the 2019 Constitutional Court decision that invalidated a provision that exempted banks from worker representation requirements in corporate governance. Under the proposed legislation, workers will be entitled to at least one seat of a bank’s supervisory board, but these workers’ representatives must meet professional qualifications of the supervisory board. The banking legislation was passed by the National Assembly in June 2021.

In February 2022, Slovenia’s National Assembly passed a bill that retroactively forced Slovenian banks to share the burden of exchange rate fluctuations beyond 10 percent on Swiss Franc loans issued between June 28, 2004, and December 31, 2010, imposing an estimated cost of more than EUR 300 million on banks. The bill also required banks to amend loan contracts within 60 days to include this foreign exchange rate cap or face penalties, including up to revocation of banking licenses. Banks and business associations broadly opposed the bill, expressing concern about the bill’s inconsistencies with existing EU and Slovenian laws and regulations, disproportionately high penalties for incompliance, and the retroactively nature of the bill that calls into question the sanctity of legal contracts in Slovenia. These groups worried that this precedent created unpredictability in the economy and negatively impacted the business climate in Slovenia. Soon after the bill was passed, nine banks with operations in Slovenia requested a constitutionality review.  In March 2022, the Constitutional Court stayed the enactment of the bill and, in December, annulled the legislation citing inconsistencies with existing EU and Slovenian laws. The Slovenian Bank Association claimed that the ruling was an affirmation of the rule of law in Slovenia.

Despite Slovenia’s vibrant blockchain technology ecosystem and several global blockchain companies headquartered in the country, Slovenian banks have been slow to adopt blockchain technologies to process banking transactions.

The Bank of Slovenia, established on June 25, 1991, is Slovenia’s central bank. The Bank of Slovenia has been a member of the European System of Central Banks (ESCB) since Slovenia joined the European Union in 2004. The Bank of Slovenia gave up responsibility for monetary policy to the Eurosystem when Slovenia adopted the euro as its currency in 2007. As a member of the Eurosystem, the Bank of Slovenia coordinates with other EU central banks to implement the common monetary policy, manage foreign exchange reserves, ensure the smooth functioning of payment systems, and issue euro banknotes.

Slovenian law allows non-residents to open bank accounts in Slovenia on presentation of a passport, a Slovenian tax number, and a foreign tax number. Company owners must be present to open a business bank account.

Slovenia’s takeover legislation is fully harmonized with EU regulations. In 2006, Slovenia implemented EU Directive 2004/25/ES by adopting a new takeover law. The law was amended in 2008 to reflect Slovenia’s adoption of the euro as its currency. The law defines a takeover as a party’s acquisition of 25 percent of a company’s voting rights and requires the public announcement of a potential takeover offer for all current shareholders. The acquiring party must publicly issue a takeover offer for each additional acquisition of 10 percent of voting rights until it has acquired 75 percent of voting rights. The law also stipulates that the acquiring party must inform the share issuer whenever its stake in the target company reaches, surpasses, or drops below five, 10, 20, 25, 33, 50, or 75 percent. The law applies to all potential takeovers.

It is common for acquisitions to be blocked or delayed, and drawn out negotiations and stalled takeovers have hurt Slovenia’s reputation in global financial markets. In 2015, the privatization of Slovenia’s state-owned telecommunications company, Telekom Slovenije, failed in large part due to political attempts to discourage the sale of a state-owned company. Slovenia’s biggest retailer, Mercator, faced similar challenges in 2014 when a lengthy and arduous process and strong domestic opposition preceded its eventual sale to a Croatian buyer. The U.S.-owned Central European Media Enterprises dropped its politically controversial sale of Slovenian media house Pro Plus to then-U.S. owned United Group in January 2019 after the Competition Protection Agency failed to issue a ruling on the proposed acquisition despite reviewing the case for more than 18 months. The government has also struggled to meet its commitment to open Slovenia’s economy to international capital markets.

Twelve insurance companies, two re-insurance companies, three retirement companies, and five branches of foreign firms operate in Slovenia. The three largest insurance companies in Slovenia account for over 60 percent of the market, with the largest, state-owned Triglav d.d., controlling 35 percent of the market. Foreign insurance companies together accounted for 22 percent of the market. Insurance companies primarily invest their assets in non-financial companies, state bonds, and bank-issued bonds.

Since 2000, there have been significant changes in legislation regulating the insurance sector. The Ownership Transformation of Insurance Companies Act, which seeks to privatize insurance companies, has stalled on several occasions due to ambiguity over the estimated share of state-controlled capital. Although plans for insurance sector privatization have been under discussion since 2005, there has been no implementation.

Slovenia currently has three registered health insurance companies and a variety of companies offering other kinds of insurance. Under EU regulations, any insurance company registered in the EU can market its services in Slovenia, provided the insurance supervision agency of the country where the company is headquartered has notified the Slovenian Supervision Agency of the company’s intentions.

Foreign Exchange and Remittances

Foreign Exchange

Slovenia adheres to Article VIII of the IMF Article of Agreement and is committed to full current account convertibility and full repatriation of dividends. To repatriate profits, joint stock companies must provide evidence of the settlement of tax liabilities, notarized evidence of distribution of profits to shareholders, and proof of joint stock company membership (Article of Association). All other companies must provide evidence of the settlement of tax liabilities and the company’s act of establishment.

For the repatriation of shares in a domestic company, the party must submit its act of establishment, a contract on share withdrawal, and evidence of the settlement of tax liabilities to the authorized bank.

Slovenia replaced its previous currency, the Slovenian tolar, with the euro in January 2007. The Eurozone has a freely floating exchange rate.

Remittance Policies

There are no restrictions on inward or outward remittance transactions. The Bank of Slovenia is responsible for monitoring and regulating remittances.

Sovereign Wealth Funds

Slovenia does not have a sovereign wealth fund.

7. State-Owned Enterprises

Private enterprises compete on the same terms and conditions as public enterprises with respect to access to markets, credit, and other business operations.

State-owned and partially state-owned enterprises (SOE) are present across most industries in Slovenia.  The state has never undergone a wholesale privatization program and has retained significant ownership shares in many large companies since independence.  According to a 2017 OECD report on SOEs, 37 companies with a total value of USD 12.5 billion and employing 47,000 people were majority state owned. In 2020, an OECD report assessed that privatization has progressed slowly, with the Slovenian Sovereign Holdings (SSH) maintaining controlling shares in most SOEs. Most state-owned companies are in the energy, transportation, public utilities, telecommunications, insurance, and financial sectors, although the government successfully completed the privatization of the three largest state-owned banks by 2020.  Other economic sectors, including retail, entertainment, tourism, and manufacturing, include important firms that are either wholly state-owned or in which the state maintains a controlling interest by virtue of holding the largest single block of shares.

In general, SOEs do not receive a greater share of contracts or business than private sector competitors in sectors that are open to private and foreign competition.  SOEs acquire goods and services from private and foreign firms.  SOEs must follow strict government procurement agreements which require transparent procedures available to all firms.  Private firms compete under the same terms and conditions with respect to market share, products, and incentives.  All firms have the same access to financing. Slovenian SOEs are active both in domestic and international markets, including in the United States. However, the United States, generally is not a major export market nor a large investment destination for SOEs.

SOEs are subject to the same laws as private companies and must fully comply with all legal obligations.  They must submit to independent audits and publish annual reports if required (for example, if the SOE is listed on the stock exchange or the size of the company meets a certain threshold).  Reporting standards are comparable to international financial reporting standards.

Slovenia is an active participant in the Organization for Economic Cooperation and Development (OECD) Working Party on State Ownership and Privatization Practices and adheres to the OECD Guidelines on Corporate Governance for SOEs.

Following OECD recommendations, the government established the Capital Asset Management Agency (AUKN) in 2010 to increase transparency and promote more efficient management of SOEs.  In 2013, authorities transformed the AUKN into the Slovenian Sovereign Holding (SSH), which is charged with simplifying and shortening the administrative process of privatizing state assets.  SSH took over all AUKN portfolios as well as the portfolios of two other smaller state-owned funds.  More than 95 percent of SSH funds are invested domestically.  SSH is an independent state authority that reports to the National Assembly.  It provides the National Assembly with annual reports regarding the previous year’s implementation of the Annual Plan of the Corporate Governance of Capital Investments.  The government then adopts the Annual Plan of the Corporate Governance of Capital Investments based on SSH’s proposal.

A list of SSH’s SOEs is available at https://www.sdh.si/en-gb/asset-management/list-of-assets .

Privatization Program

Foreign investors may participate in the public-bidding processes on an equal basis.  However, interested parties often describe the bidding process as opaque, with unclear or unenforced deadlines.

In 2015, the government prepared an asset management strategy that classified state-owned assets as strategic, important, or portfolio assets.  In companies classified as strategic, the state will maintain or obtain at least a 50 percent plus one share.  In companies classified as important, the state will maintain a controlling share (25 percent plus one share).  In companies classified as portfolio, it is not mandatory for the state to maintain a controlling share.  The government reclassified the list of companies in 2017.

SSH publishes online the latest list of state stakes for sale. It is available in Slovenian at https://www.sdh.si/sl-si/prodaje-nalozb  .

Additional Resources

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain.

Climate Issues

Slovenia, in line with the European Union (EU), committed to reducing greenhouse gas emissions by at least 55 percent by 2030 (compared to 1990 levels) and achieving climate neutrality by 2050.

Slovenia’s long-term climate strategy, approved in July 2021, includes a provision specifying that the country will use nuclear energy in the long term, clarifying the country’s energy future and committing to produce a large percentage of its energy supply domestically. In July 2021, the EU approved Slovenia’s national recovery and resilience plan, allowing funds up to EUR 2.5 billion (EUR 1.8 billion in grants and 700 million in loans) to be drawn from the EU Recovery and Resilience Facility.  42.5 percent of the funds are earmarked for green transition projects.

Slovenia is currently updating its National Energy and Climate Plan (NECP), last adopted in 2020. The new NECP is expected to be announced in mid-2023. The Slovenian government recently committed to increase renewable energy capacity in Slovenia, especially solar energy. In February 2022, the Slovenian government adopted a bill requiring government identification of priority locations for solar and wind farms installation. The bill cites rooftops, parking lots, and vacant spaces in industrial and agricultural zones as possible locations. The bill also canceled restrictive zoning obligations that hampered future renewable energy projects.

Resources to Report Corruption

Contact at the government agency or agencies that are responsible for combating corruption:

Robert Šumi
President
Commission for the Prevention of Corruption
56 Dunajska cesta1000 Ljubljana, Slovenia
Tel: +386 1 400 5710
Fax: +386 1 400 8472
E-mail: anti.korupcija@kpk-rs.si
Web:  www.kpk-rs.si/en 

Contact at “watchdog” organization:

Neža Grasselli
President
Transparency International Slovenia
Vožarski pot 12, 1000 Ljubljana
Tel +386 1 3207325
info@transparency.si 

Assistance for U.S. Businesses: The U.S. Department of Commerce offers several services to U.S. businesses seeking to address business-related corruption issues. For example, it may assist U.S. companies in conducting due diligence as part of the company’s overarching compliance program when choosing business partners or agents overseas. The U.S. Foreign Commercial Service may be reached through its offices in major U.S. and foreign cities, or through its website at  http://www.trade.gov/cs .

The Departments of Commerce and State provide worldwide support for qualified U.S. companies bidding on foreign government contracts through the Commerce Department’s Advocacy Center and State’s Office of Commercial and Business Affairs. U.S. companies may report problems encountered in seeking such foreign business opportunities, including alleged corruption by foreign governments or competitors, to appropriate U.S. officials at the U.S. Embassy and the Department of Commerce Trade Compliance Center’s “Report a Trade Barrier” website at http://tcc.export.gov/Report_a_Barrier/index.asp .

Guidance on the U.S. FCPA: The Department of Justice’s (DOJ) FCPA Opinion Procedure enables U.S. firms and individuals to request a statement on the Justice Department’s present enforcement intentions under the FCPA’s anti-bribery provisions regarding any proposed business conduct. The details of the opinion procedure are available on DOJ’s Fraud Section Website at  http://www.justice.gov/criminal/fraud/fcpa . Although the Department of Commerce has no enforcement role with respect to the FCPA, it supplies general guidance to U.S. exporters who have questions about the FCPA and international developments concerning the FCPA. For further information, see the website of the Office of the Chief Counsel for International Counsel, U.S. Department of Commerce, at https://ogc.commerce.gov/.