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Slovakia, also known as the Slovak Republic, is a country located in the Central part of the European continent. Being in the center of the continent, Slovakia is a landlocked country, it is surrounded by other European nations on all sides. On the western side, Slovakia shares its border with Austria and Czech Republic, on the North it is bordered by Poland, on the east Slovakia is surrounded by Ukraine and to the south it shares its borders with Hungary. With more than 49,000 square kilometers area, Slovakia is one of the largest countries in the European Union.
Bratislava, the capital city of Slovakia, is also the largest city in the country. The country has more than 5 million inhabitants residing in the country. The country is one of the key members of the European Union. Besides it is also a member of the United Nation, WTO, OCED, NATO and other such prestigious International organizations.
• Foreign investors investing in Slovakia can greatly benefit from the Strategic geographic location of the country. Since the country is located at the center of the European continent, investors can have easy access to other important business centers in the European Union and expand their business operations.
• Slovakia has plenty of highly qualified and technically skilled laborers. Foreign investors investing in different sectors in the country can get the man power at very cheap rates.
• Slovakia has the unique distinction of being the country which has a very low cost of living as compared to other countries in the European Union.
• Slovakia has promise for tremendous growth in the prospective years.
• Since 1st January, 2009 when Slovakia joined the ranks of other member countries of the European Union to accept Euro as its currency, the risk of loss in business due to difference in the currency exchange rates is negligible. Euro is a strong and globally accepted currency. This is greatly beneficial for foreign investors investing in the country.
Slovakia is fast developing into a developed country. One of the vital factors contributing to the rapid development of the country’s economy is the sustain growth of GDP, which is the highest in the European Union. The graph of Foreign Direct Investment (FD) in Slovakia reflects a upward trend during the last few years. In the year 2006, the foreign investment in the country accounted for 30.3 billion dollars, it contributed to more than half of the countries GDP (55%). In 2007 the GPD increased by 10.4%. Market analysts suggest that the trend in GPD of Slovakia is all set to grow at a consistent pace over the next few years. Foreign investors investing in the country will continue to get valuable returns on their investments.
Tourism: Slovakia is an excellent destination for tourism. The availability of Slovakia’s numerous natural amenities provides an excellent backdrop for the development of the tourism industry. The country has huge forest meadows and water front and wealth of unique flora and fauna.
The tremendous tourism potential has opened up several avenues for foreign investment in the sector. To encourage investment in the sector the government has introduced fiscal investments; the government provides 100% tax relief on profits for the first 5 years, provided the foreign investors invest at least 1.5 million Euros in the tourism and other related sectors.
Forestry: Slovakia has a huge forest land, about 1,852,520 hectares of land is covered with trees and plantations and about 3 quarters of the land is dedicated for Industrial purposes. It is one of the major timber producing nations in the world. A large number of private foreign companies have invested in wood processing and manufacturing of wood products. The major advantage of investing in the Slovak forestry is that, foreign companies can have access to cheap labor and setting up a wood factory requires less investment.
Besides Tourism and Forestry there are plenty of other key investment area, foreign investors can consider investing. Some of the best industries that promise valuable returns are listed below:
• Textile and Footwear Industry
• Agriculture and allied industries
• Real Estate
• Heavy Industry
• Information Technology (IT)
The Federal government of Slovakia encourages foreign investment, since it is one of the vital elements that drive the economy of Slovakia further. Slovakia has established rules that grant financial incentives to foreign investors investing the country. The financial grants are in terms of tax credits and subsidiary incentives.
These financial grants are provided to foreign investors depending on the geographical location the investors are investing in the country and what kind of sector they are investing in. The low tax rate structure existing in the country is another key factor that attracts FDI in Slovakia. Also Slovakia, being a part of the European Union, it gets financial aid from the European Union and the foreign investors can greatly benefit of the modernization and the large renovation projects undertaken in the country.
The Slovak Federal government, with a view to encourage maximum foreign investment in the country has laid out a very investor friendly tax structure. The government of Slovakia has levied a flat tax rate of 19% for foreign companies. The government doesn’t discriminate between local and foreign investors.
The foreign investors can benefit from the financial aids provided by the Slovak government to foreign investors. The government provides about 20% to 50% finance of the total investment venture depending on the project.
The Federal government of Slovakia provides complete freedom to foreign investors to establish Industrial premises in the country and undertake commercial activities. Besides, the government also allows the foreign companies investing in the country to legally hold majority percentage of stocks in a local company.
The Slovak Investment and Trade development agency provides comprehensive assistance to investors who are interested in investing in Slovakia. The assistance offered includes complete consultancy services and detailed information about investment climate in Slovakia. It offers consultancy services in legislation, customs, and tax and business conditions. Besides the consultancy services it provides regional and sector analyses that helps in setting up new business.
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