SLOVAKIA Ideal Investment & Business Destination.
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Transcript of SLOVAKIA Ideal Investment & Business Destination.
SLOVAKIAIdeal Investment & Business Destination
Slovakia – Growing Heart of Europe
Source: SARIO, 2011
I Establishment: 1st January 1993I Official name: Slovak RepublicI Area (km2): 49,035I Population: 5,437,126I Capital: BratislavaI Member of: OECD, WTO, NATO,
EU, Schengen area I Official currency: EURO I Official Language: SlovakI Government: Parliamentary
democracyI Election term: 4 yearsI Neighbours: Austria, Czech
Republic, Hungary, Poland, Ukraine
I Time zone: GMT + 1hour
Macroeconomic Overview
-6
-4
-2
0
2
4
6
8
10
12
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
European Union Slovak Republic
GDP growth GDP Prediction for 2011
EC 3 %
OECD 3,6%
IMF 3,8 %
National Bank of SR 3,4 %
GDP Prediction for 2012
OECD 4,4 %
Source: International Monetary Fund, Eurostat,Slovak Statistics Office, Central office of Labour, social affairs and family
2008 2009 20102011 1Q
2011 2Q
Real GDP growth 6,4% -4,7% 4% 3,5% 3,3%
HICP Inflation 4,6% 1,6% 0,7% 3,4% 3,3%
Unemployment 7,7% 11,4% 14,4% 13,9% 12,9%
Average monthly gross salary (€)
723 744,5 769 746 781
COUNTRY RATINGS(Sovereign foreign currency ratings)
SLOVAKIACZECH
REPUBLICHUNGARY POLAND BULGARIA ROMANIA
A+ positive
AA- stable
BBB- negative
A- stable
BBB stable
BB+ stable
A1 stable
A1 stable
Baa3 negative
A2 Stable
Baa3 positive
Baa3 stable
A+ stable
A+ positive
BBB-stable
A- Stable
BBB- negative
BB+ stable
A+stable
A stable
BBB+ negative
A- Stable
BBBstable
BBB-stable
A stable
A stable
BBB stable
A- stable
OECDCountry risk 0 0 0 2 4 4
Source: www.standardandpoors. com,www.moodys.com, www.fitchratings.com, www.jcr.co.jp, www.r-i.co.jp, www.oecd.org
Ratings & Outlook
1
4851
5962 64
72
0
10
20
30
40
50
60
70
80
Singapore Slovakia Hungary Bulgaria Poland CzechRepublic
Romania
Source: World Bank Group – Doing Business Report 2012
Registering property
Paying taxes
Enforcing contracts
Protecting investors
Closing business
Construction permits
Methodology
The Doing Business projectprovides objective measures of business regulations and their enforcement across 183 economies and selected cities at the subnational and regional level.
Starting a business
Trading across borders
1st Rank in CEE in DOING BUSINESS 2012 !
Getting credit
Low Labour Cost & High Labour Productivity
769 €Slovakia
976 €23 951 CZK
Czech Republic
806 €3 224,98 PLN
Poland
760 €202 576 HUF
Hungary
Data for 2010Source: National Statistical offices of Czech republic, Hungary, Poland, Slovakia, Bulgaria, Romaniaexchange rate (as of 23 March 2011)
GDP (in PPS) per hour worked as compared to EU15 (100)Source: Eurostat 2011
Gross monthly salary
472 €1936 RON
Romania
328 €642 BGN
Bulgaria
0
10
20
30
40
50
60
70
80
90
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Slovakia Romania Poland
Hungary Czech Republic Bulgaria
Slovakia reaches the highest labor productivity
Member of the Eurozone
€1st January 2009Slovakia joined the EURO Zone
EURO IMPLEMENTATION IMPACT: Limitation of Foreign Exchange Risk
Lowering Transaction Costs
Growth in Foreign Trade
Increased Financial Stability
Source: SARIO, 2011
Corporate Income TaxPersonal Income Tax
Value Added Tax - VAT
Dividend tax Inheritance and Gift Tax Real Estate Transfer Tax
Repatriation of profits
19% Flat Tax Rate
Source: SARIO 2011
19%
0%
100%
20%
Simple and Fair Taxes
Regional Differences
4,63%
8,17%
9,51%
11,76%
18,86%
10,86%
17,75%
16,78%
Source: Central Office of Labour, Social Affairs and Family, 2011
991 €
705 €
657 €
636 €
635 €
686 €
594 €
716 €
in Unemployment Levels
NEW Labor Code since Sept. 1st, 2011!!! …more flexible, more motivating & business friendly!I 3/6 months/ upon agreement - probation period
I 1/2/3 months – notice period depends on length of employment <1 / 1-5 / 5+ yrs
I 40 hours - Weekly working time + 30 min unpaid break I longer working times for Managers up to 56 hrs./agreement
I Introducing “flexi account” of working time
I + 150 hours/year - Unpaid overtime can be ordered by the employer/ max. up to 400hrs.I + 250 hours/year – Agreed overtime with employees in managerial positions/ max. 550hrs.
I 20 days/ 25 days after 15 years of work - Annual leaveI 5 weeks in case employee reaches 33 yrs. (January, 2012)
I Reduction of Labor Unions Influence
I Shorter period for recruitment ban; easier process of collective redundancies; work in night shift in 2 weeks in a row,…
I Bonuses for: above the law overtime: 25% of hour wage and bank holidays: 50% of hour wage
Source: SARIO, 2011
Road Network
Source: National Motorway Company, 2011
Aerospace Network
Vienna (AT)
Prague
ViennaBratislavaPrague
All major European cities
All major European & World cities
Brno (CZ) 120 km
Krakow (PL) 180 km
Source: www.slovak-airports.net
Budapest (HU)
All major European & World cities
Prague
SliačAll major European cities
ViennaBratislavaPrague
Prague
Prague
Brno (CZ) 120 km
Krakow (PL) 180 km
Railway Infrastructure
Source: Ministry of Transport, Post and Telecommunications of the Slovak Republic, SARIO, 2011
TOP SECTORS OF THE SLOVAK ECONOMY
Automotive1st in world car
production in 2010
ElectronicsLeading Slovak Exporter –
driver of economic and technological growth
SSC/ICTSR is becoming a
hive of SSC and ICTs
Key Sector: Automotive
Car Production in Slovakia
Full Capacity of 3 automobile companies1,000,000 cars/year
Source: SARIO 2011, Slovak Automotive Industry Association ZAP,VW, KIA, PSA-Peugeot
1st Place in 2010103/1000 inhabitantsin World Car Production/1000 inhabitants
Three World Car Producers in Slovakia
I established 1991I 7.000 employees I VW plants: Bratislava, Martin and Košice
I established 2003I 3.000 employeesI PSA plant in Trnava
I established 2004I 1st production plant in EUI 3.000 employees I KIA plant in Žilina, and 2nd KIA engine plant is under construction
Source: www.volkswagen.sk; www.kia.sk; http://psa-slovakia.sk/
Key Sector: Electronics
Source: SARIO, 2011
I Assembly of Bravia models for the European market doubled in 2008 to 4mil.
I 3D TV from April 2010
I Production of LCD 10 mil pcs.I Assembly of LCDI Logistic centerI Europe service centerI 3D TV from February 2010
I Production of LCD moduls I Only 1 in EuropeI Headquarter for EuropeI 3000 new jobsI Investment 191,3 mil Eur
Map of SSCs & CCs Success StoriesTop Destinations
Over 48 SSCs & CCs
…employing > 25 800+ professionals
Insight into Investment Incentives
Investment Incentives: ELIGIBLE PROJECTS
Industry
Shared Service Centers
R&D Centers
Tourism
ELIGIBLE ARE COSTS OF:
LAND
BUILDINGS
NEW MACHINERY & TECHNOLOGY EQUIPMENT
LICENSES & PATENT RIGHTS
OR
WAGE COSTS OF NEW EMPLOYEES DURING 2 YEARS
Investment Incentives: Aid is calculated from...
Investment Incentives: Forms & Intensity
INCOME TAX RELIEF up to 10 tax periods
- IN ALL DISTRICTS
CASH GRANT (paid ex post, based on annual costs report)
CONTRIBUTIONS ON NEW JOBS (paid ex post, based on annual costs report)
- IN THE CASE OF INDUSTRY APPLICABLE ONLY IN DISTRICTS WITH HIGHER UNEMPLOYMENT
- THE TOTAL AMOUNT IN ALL REQUESTED FORMS CANNOT EXCEED THE MAX. INTENSITY IN DISTRICT 20% - 50% OF THE ELIGIBLE COSTS.
MILESTONES
SUBMISSIONTO MoE
EVALUATION SARIO
DRAFT OF AID OFFER MoE
ACCEPTANCE INVESTOR
APPROVAL GOVERNMENT
EVALUATION MINISTRIES
WORKS ON PROJECT CAN START
20 days30 days
STATEMENT MoE
10 days 30 days
AID OFFER MoE
30 days
Investment Incentives: Industrial Projects
Minimum investment
14 mil. / 7 mil. / 3.5 mil. EUR out of that at least 7/3.5 /1.75 mil EUR to be covered by own equity
Eligible costsland, buildings, machinery & other manufacturing equipment, licenses or patents
Machinery, technology
- at least 40%, 50% or 60% (depending on the unemployment rate) of the eligible costs - new, not depreciated, not used before
Min. new jobs created
no limitation
Maximum incentives
up to 20%-50%
Investment Incentives: INDUSTRYMin. Investment & Share of New Machinery
TV
VT
KSRA
RS
PT
LC
VK
SO
KK SB
PO
GL
LE
BJSK
SPML
HESVPP
SN
BR
LM
TS
NOCA
DK
RKMT
ZA
KMBY
PB
PU
IL
TN
TRBB
ZVDT
ZC
BS
KA
LV
NR
ZM
TOPE
BNNM
PN
TT
GA
DS
MA
SE
SA
PK
SCBA
HC
SL
KE
SAMY
KN
NZ
PD
ZHRV
MI
14 mil EUR & 60%
7 mil EUR & 50%
3.5 mil EUR & 40%
* Region Bratislava is excluded
Investment Incentives: INDUSTRY - Max. Aid
Investment Incentives: Shared Service Centers
Center
providing services with a high added valueemploys qualified experts in
• Software development center• Expert solution center• High-tech repair center• Customer support center• HQs of multinational corporations
Minimum investment
400 000 EUR out of that at least 200 000 EUR to be covered by own equity
Eligible costsland, buildings, technological equipment, software, licenses or patents
Min. new jobs created
no limitation
Other conditions at least 30% employees with university education
Maximum incentives
up to 30% - 50% (depends on further examination)
Investment Incentives: SSCs- Max. Aid
Investment Incentives: Technology Centers
Minimum investment
500 000 EUR
at least 250 000 EUR to be covered by own equity
Eligible costsland, buildings, machinery & other equipment, know-how, licenses or patents
Minimum newly created jobs
- no limitation- at least 60% of newly created jobs for employees with university education
Maximum incentivesup to 30%-50% depending on the level of unemployment
Investment Incentives: Technology Center - Max. Aid
Investment Incentives: Tourism
Minimum investment
10 MIL. / 5 MIL. / 3 MIL. EURout of that at least 5 / 2.5 / 1.5 mil EUR to be covered by own equity
Eligible costsland, buildings, machinery & other equipment, know-how, licenses or patents
Machinery, technology
- at least 20% or 40% (depending on the unemployment rate) of the eligible costs - new, not depreciated, not used before
Maximum incentivesup to 30%-50% depending on the level of unemployment
Other conditionsTourism Center Complex with Combination of more Services
Responsible institution
Minister of Transport,Construction and Regional Development of the Slovak Republic
Investment Incentives: TourismMin. Investment & Share of New Machinery
TV
VT
KSRA
RS
PT
LC
VK
SO
KK SB
PO
GL
LE
BJSK
SPML
HESVPP
SN
BR
LM
TS
NOCA
DK
RKMT
ZA
KMBY
PB
PU
IL
TN
TRBB
ZVDT
ZC
BS
KA
LV
NR
ZM
TOPE
BNNM
PN
TT
GA
DS
MA
SE
SA
PK
SCBA
HC
SL
KE
SAMY
KN
NZ
PD
ZHRV
MI
10 mil EUR/40%
5 mil EUR/20%
3 mil EUR/20%
* Region Bratislava is excluded
State Aid Effectivity
In the period 2002 – 2011:
I 109 approved investment project
I 41,057 number of newly created jobs
I 25% - average intensity of state aid
I 29,000 EUR – average intensity of state aid per 1 newly created job
Important facts
I Investment must be implemented within max. 36 months
I Submission of investment plan before start of the work on project
I Work on the project can start after the Ministry of Economy issues a preliminary statement (takes approx. 40 days)
I The investor must meet his investment plan in all material aspects (especially amount and no. of newly created jobs)
I The beneficiary of the aid is obliged to keep investment at least 5 years after completion of investment plan
I Also newly created position must be maintained at least 5 years after their creation
Slovakia´s Success Stories
Source: SARIO, 2010
Golf opportunities
Beautiful mountains
Aqua parks
Wellness
Small Country of Great Opportunities
Source: SARIO, 2010
Spa resorts
A place where history meets future
Delicious Slovak Food
Rafting
Skiing opportunities
Visit the mysterious caves
Charming Castles
SARIO – Closer to You Strategy Key Focus New Services
18 October 2011, Košice
SARIO Who We Are
Government Funded
Organization under the direction
of the Slovak Ministry of Economy
MISSION EXECUTED THROUGH 3 CORE SECTIONS
Foreign Direct Investment
Foreign Trade
Structural Funds of the EU
SARIO Services
From providing General services & information to all subjects
interested in FDI in Slovakia Tailor-made solutions for potential investors exploring Slovakia such as
Best Location for Your Investment Best Location for Your Expansions
Through Assistence in STATE AID application process for
investments into: INDUSTRY SHARED SERVICE CENTERS R&D CENTERS TOURISM
Support foreign trade via match-making & subcontracting
To AFTERCARE services - for established foreign
companies
GovernmentalAgency:Services
Free of Charge
Business Development Department
I Broad network of cooperation partnersI Promotion of Slovakia home & abroadI Latest developments in business environment:
I Comprehensive investment package (tax, legal, HR, costs, …)I Investment incentives information I Sector & regional analyses
I Assistance to incoming commercial & official delegations
Gateway for Investors
Corporate Development Department
I Extensive experience in supporting business & investment activities I Local presence in each region of Slovakia I Individual client approach I Updated database of existing investors I Contacts to sub-suppliers and other business entities
Dedicated to Investor’s Needs
Thank you for your attention!
Foreign Direct Investment Section
For more information, you can contact us at:
Address: Slovak Investment and Trade Development Agency
Martincekova 17 821 01 BratislavaSlovak republic
Tel.: +421 2 58260 100Email: [email protected]
Source: SARIO, 2011