For the past 15 years, governments throughout Central Europe have dramatically reformed their economies by moving commercial enterprises from state control to private ownership. This has resulted in foreign direct investment of over $100bn throughout the region. A myriad of opportunities and pitfalls have arisen for local entrepreneurs and foreign multinationals, thus maneuvering through this new landscape can be challenging.

Foreign investors must realize that besides the benefits that investing in Slovakia brings, there are also challenges that investors may face. Although we cannot completely resolve these problems, we can help to alleviate them.

Key issues of investing in Slovakia

• Land issues
  When investing in Slovakia a particular attention needs to be placed on land issues. Especially in greenfield investment, there are repeated cases that a suitable site for an investment project may require a prolonged acquisition procedure. This situation has been caused by numerous unsolved heritage disputes in the past, restitutions claims and poor recording system during the period of planned economy prior to 1989.
• Shortage of labour
  In western part of Slovakia, where the majority of FDI projects ended in the previous years, the investor may face a shortage of qualified labour especially in manufacturing sector. The most critical is the automotive industry that is gradually reaching a high level of saturation and direct competition in labour availability.
• Qualifying for incentives
  When it comes to investment incentives, the Slovak state aid rules and regulations are in compliance with the EU legislation. In order to qualify for incentives a foreign investor must meet certain criteria. These criteria vary from the part of the country where an investor wants to place the project. A major setback for an investor is that a submitted application for state aid may face a prolonged approval process as each investment project is evaluated on an individual basis. The state aid is guaranteed only after being approved by the European Commission.
• Bureaucracy and corruption
  There are still issues with the countries of Central Europe with excessive administration, bureaucracy and corruption in spite of EU membership. Slovakia similarly like other neighboring counties is fighting this problem.