In the past 25 years Slovakia has undergone a major transformation, leaving behind the inefficiency of a planned economy while still trying to get the most from its post-communist heritage. The combination of a strong industrial background and reforms have facilitated our transition to the market economy and made Slovakia a production, service and commercial hub of Central Europe, and a preferred location for hundreds of major investors from the US, Asia and Europe, mainly in the automotive, electronics and IT/ICT sectors.
For the past 10 years Slovakia has been the fastest growing Eurozone member and, according to the World Bank, the best location for doing business in the CE region. Slovakia offers strategic location with great export potential, stable political and economic environment, and the common European currency. We are also proud of our educated, productive and multilingual workforce, which tops EU statistics in many ways. According to the European Commission, the Slovak labour force ranks third in the EU in having attained an upper secondary or tertiary education, and 80 per cent of our population speaks at least one foreign language. In terms of performance, the Slovak labour force ranks first in CE labour productivity charts and yet still maintains high cost efficiency. Slovakia is definitely one of the most attractive emerging markets in the world.
In Slovakia there have been many attempts to improve the overall business environment and enhance economic knowledge. For example, the new amendment to the Slovak Investment Act brings more flexible rules for new investments and expansions. Not only has the process of granting investment aid been accelerated, but the basic conditions to qualify for the aid have become more benevolent for all project types: industry, technological centres, strategic services centres and tourism.
Furthermore, this January a new scheme came into effect, by which companies performing R&D activities can claim a 2nd tax deduction. Additionally, innovation vouchers, covering costs of innovative projects performed by external companies, have been introduced. All these improved or brand new incentives create a solid ground to attract entities capable of improving the sectors of economic specialisation of the Slovak Republic.
As Slovakia is the world leader in per capita passenger car production, the newly incentivised environment aims to increase the inflow of companies involved in robotics, automation and digital technologies. These new incentive options will facilitate innovations, mainly in the product material base of Slovakia’s developed production of consumer electronics and ICT equipment. In Slovakia there is a strong background in steel production, so one can expect that this new R&D support will promote the use of intelligent technologies in the processing of raw materials and waste management. What is more, new investors are also invited to team up with existing scientific research centres, active mainly in the fields of nanotechnologies, ICT, biotechnology, and sustainable energy.
At the end of last year in Slovakia, a new financial structure using the European funds was established — the Slovak Investment Holding. The holding provides revolving credits, thereby attracting private capital into strategic economic segments, such as infrastructure and renewable energy, and opens up new opportunities for SMEs. The holding intends to decrease the risks linked to venture capital, thus improving the Slovak startup environment, which already facilitates new businesses in many different ways. Slovakia is home to venture capital funds, such as Neulogy Ventures and other entities and incubators with a proven track record. Last year’s 4th StartupAwards.sk and many interesting startup weekends undoubtedly marked an increasing interest in the Slovak innovative sector.