As a member of the European Union Slovakia boasts industrial heritage, favourable location as well as some of the lowest costs in Central Europe. The cities in Slovakia also promote the living standards of Western Europe at a fraction of the cost. In recent years the government of Slovakia has promoted a series of pro-investment economic reforms creating an inviting investor situation as well as investor confidence.

Key benefits of investing in Slovakia

There are several key benefits in investing in Slovakia including:

• Leaders in Economic Reform
  The World Bank has recognized Slovakia as the country with the most significant economic reforms. The most significant advantage to Slovakia is the tax rate. The 19% flat tax rate for companies and individuals makes Slovakia favorable even after initial tax incentives have finished. The flat tax that was introduced in January 2004 as well as having no tax dividends have given Slovakia a competitive edge with foreign direct investments.
• Low Labour Costs
  With an average gross income of € 448 per month in 2005, Slovakia has the lowest annual salaries in Central Europe. While Slovakia’s neighbors experienced large amounts of foreign direct investments in the 90’s Slovakia was left largely untouched. This has driven up the salary cost in other Central European countries while Slovakia lagged behind. In support of foreign investors the government has issued a flexible labour code and has put a cap on social costs.
• Strategic Location
  Geographically, Slovakia bridges Western and Eastern Europe, facilitating a combined market of over 455 million people. Within Central Europe, Slovakia allows easy access to neighboring countries such as Poland, the Czech Republic and Hungary. Combined these four countries form a market of 64 million people and due to accelerated economic growth, it has experienced a steady inflow of foreign investment and a gradual increase of purchasing power of their population.
• Leading Sectors
  The automotive sector is currently one of the fastest growing sectors in Slovakia, primarily due to the significant amount of brown and greenfield investment already operative or currently planned. The expected car production of 900 000 units in 2007 will make Slovakia the top per-capita car producer in the world. Other sectors active with respect to foreign investment are engineering, electronics, business process outsourcing and ICT. Investors from these sectors have already discovered Slovakia as a suitable location for their business operations. Still unutilized potential is in a pharmaceutical sector, biotechnology and in tourism.
• Investment incentives
  The inexpensive, skilled and disciplined labour force is one of the most valuable incentives to invest in Slovakia. The most competitive labour is found in the East of the country with unemployment reaching around 17% in some areas. In connection to this the Slovak government tends to offer economic incentives to invest in specific regions throughout Slovakia.
  Forms of state aid
  • Indirect forms
    • Tax relief – a relief of corporate tax "tax relief" up to the period of 10 years.
    • Transfer of a real estate title from the state or municipality at a price lower than the market value.
  • Direct forms
    • Financial grants to cover investment costs for Reseach & Development centers and Technology centers.
    • Grants for Newly Created Jobs:
      • Slovak government provides assistance to investors by providing grants for newly created jobs. The grants could be up a maximum of 30% of labour costs per annum.
      • Training Grants: Slovak government provides subsidies for general education as well as for special training of the employees.