Business in Slovakia

Doing business in Slovakia

Facts and figurs about Slovakia

The Slovak Republic is undoubtedly one of the most attractive investment destinations in Europe. Once nicknamed the Tatra Tiger, Slovakia reaps the benefits of strong underlying fundamentals, such as its highly skilled and educated workforce, well-developed infrastructure and political stability.

Business in Slovakia facts

DID YOU KNOW?

In the Slovak Republic foreign and domestic investors may receive four different types of investment incentives, such as cash grant, corporate tax relief, transfer of property at lower than market prices and contributions with new jobs.

GENERAL

Official name: Slovak Republic
Area: 49,036 km2
Time zone: GMT + 1
Currency: EUR
Official language: Slovak

PEOPLE

Population: 5,443 million
Active workforce: 2,754 million
Birth rate: 1.07 per 1,000 people per year
Average gross monthly salary: 984 EUR
Retirement age: 62,5 years

INTERNATIONAL ORGANIZATIONS MEMBERSHIP

European Union
Euro Area
Schengen Area
V4
OECD
WTO
NATO, and others.

POLITICAL SITUATION

Type of government: Parliamentary democracy

Electoral system: Proportional representation

Geografy

The Slovak Republic is situated in Central Europe, bordered by five countries – Hungary, Ukraine, Poland, Austria and the Czech Republic. Slovak cities are in close proximity to other internationally recognised hubs, such as Vienna, Budapest, Prague or Krakow, which only further underlines the favourability of the central location, offering access to 350 million customers within a 1,000 km radius. It is easily accessible by air, having two main international airports in Bratislava and Košice and another three global hubs in Vienna and Budapest accessible within two hours and Prague within four hours of the capital city.

SAEI map

DID YOU KNOW?

There are extreme requirements on candidates‘ profiles nowadays. The expectation is: super-qualified candidate with excellent CV and experience too and also with a minimum salary requirement. Unfortunately, this is not a reflection of today’s reality.

Macroeconomic overview

  • Comprehensive structural reforms of the tax, labour, pensions and healthcare systems and an overall decentralization of powers in past years.
  • Membership in the Eurozone since 2009.
  • One of the strongest recoveries in terms of GDP growth in the regions after the 2008 crisis.
  • Higher levels of unemployment as compared to the situation in the Eurozone which indicates a potential for growth without the upward pressure on wages.

Ease of doing business

Based on the World Bank report on the ease of business, in 2018, Slovakia ranked number 39 in the world. In terms of comparable countries in the region, this year it was only surpassed by Poland. Slovakia was the regional leader in the ranking in years 2008 to 2013. The factors considered by the World Bank as measures of the index include:

  • the political and institutional environment,
  • macroeconomic stability, market potential,
  • private entrepreneurship support,
  • taxation system,
  • access to financing, contract enforcement,
  • the starting and closing of a business,
  • labour market characteristics, and
  • infrastructure quality.

DID YOU KNOW?

Slovakia and the CEE region offer foreign companies a number of advantages. Development of business relationships within the European Union are easy due the close geographical proximity, with good access through a number of budget airlines, meaning business here is especially ideal for SMEs on tight budgets. The European Union funded infrastructure, energy, and innovation projects have also created opportunities, and it currently has a far lower market penetration in comparison with West European markets. The Slovak workforce is highly skilled. The main foreign languages spoken are English and German. Hourly labour costs in Slovakia are more than 3 times lower than in Germany.

Industries

  • Tradition of electrical and chemical engineering, wood-processing and food industry.
  • Industry is currently undergoing a phase of rapid growth, which is attributable to the favourable business environment and a supply of foreign investors.
  • Slovakia is one of the world leaders in the automotive industry with four well-known car manufacturers. PSA Peugeot Citroën (in Trnava), KIA Motors & Hyundai Mobis (in Žilina), Volkswagen (in Bratislava) and Jaguar Land Rover (in Nitra) produce their cars in our country.

-In 2015, the Slovak automotive industry reached production levels of more than a million cars per year.

-Slovakia maintains the position of a world leader in the indicator of car production per capita.

  • Electrical engineering is now the second largest industry as well as the second largest employer.

Recent attractive sectors

  • Strong interest of international companies in relocating and centralising their business services to the region of Central and Eastern Europe (CEE) with shared services sector becoming one of the key sectors in Slovakia, employing more than 30,000 people.
  • Bratislava stands as an important IT cluster in the CEE region, being home to internationally recognised IT companies such as ESET and Sygic.

DID YOU KNOW?

In the Slovak Republic money payed as registered capital can be immediately used for the company’s needs and does not have to be kept in the company.

Factors adding up to the attractiveness of Slovakia

  • geographic and cultural proximity to Western Europe
  • well-developed infrastructure
  • broad knowledge of languages
  • available and skilled labour force
  • lower wage costs in comparison with Western Europe or North America

HUMAN CAPITAL

  • A qualified and relatively inexpensive labour force is Slovakia’s greatest asset.
  • The gross minimum wage is stipulated by the law, and translates to €2.99 per hour worked.
  • The social security contributions by the employer amount to 35.2% with a cap for social contributions at a maximum base of €6,678.
  • Slovakia is the regional leader (among V4 countries) in terms of labour productivity per hour worked.

Education

  • In order to receive a high school diploma (so-called Maturita), there is a mandatory foreign language exam on the internationally recognised level B2.