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Slovenia, officially known as the Republic of Slovenia, is a small country with a population of approximately 2 million in the Central part of Europe. It is surrounded by countries such as Italy, Austria, Croatia and Hungary. Slovenia is a developed country and has a GDP which is highest among the newly joined states of the European Union.
Its strategic location has really worked wonders for the country as it has got good reserves of natural resources. Slovenia contains good reserves of zinc, mercury, lead, lignite coal, hydropower and silver. Apart from the abundant natural resources, it also has a state of the art transport and ICT infrastructure. It has good rail, road and water networks that handle all the freight and passenger transport and also provides traders and manufacturers reliable and faster trade routes. This perfect blending of natural resources and excellent infrastructure has really proved beneficial for the country in many ways. Not only the infrastructure and natural resources, but also the highly skilled yet cheap labor of Slovenia plays an important in its economic growth.
Slovenia’s macroeconomic stability and easy access to EU has enabled it to receive the highest transition economy rating in Dunn and Bradsheet survey.
Slovenia is the front runner in the economic development among the countries which have become the members of European Union in 2004. Slovenia is highly depended on foreign trade. Trade amounts to as much as 120% of its economy. Central Slovenian and Slovenian Littoral are the most economically prosperous regions in the country. Slovenian economy has registered a healthy growth in the past 8 years, where the growth was 4.0% annual GDP growth each year.
Slovenia is fast recovering from the economic shocks experienced in the past year due to the global economic crisis. Its economy is now expected to grow at a rate of 1 per cent in the year 2010 and 2.5 per cent in the year 2011. Thus, Slovenia is experiencing a positive growth trend in the coming years which will really prove beneficial for investors who want to invest in Slovenia. International organizations have predicted that the FDI level will consistently increase in Slovenia with privatization of state assets, which include parts in financial, telecommunications and energy sectors.
With a population of more than 2 million people, the market of Slovenia is increasing. Its strategic location of being situated in the center of the European continent really makes it easy for businesses to tap the market of the surrounding countries.
Slovenia is an open economy with a Gross Domestic Product (GDP) per capita of EUR 18,464 in the year 2008. As predicted by the Vienna Institute for International Economic Studies (WIIW), the GDP of Slovenia is expected to exceed as much as 90 per cent of the EU GDP by the year 2015. As far as Foreign Direct Investment (FDI) is concerned, there has been huge growth in the inward inflow of FDI in Slovenia in recent years. It has now touched to more than one thousand million Euros and is increasing. Foreign investors are, in fact, looking at Slovenia to make their international debut and to have a control in the region.
The key sectors which stand the expectations of the investors and provide huge opportunities to them include automotive industry, electrical engineering, electronics, life science, pharmaceuticals and chemical industry. Apart from these, some of the other sectors that provide huge opportunities to investors include business service sector and the financial sector. The tourism sector still needs to be explored and there are also lots of opportunities waiting for investors in natural and man-made facilities.
FDI encouragement has formed the core part of Slovenia’s current foreign investment policy. The Slovenian government is assisting investors to increase their productivity in Slovenia and have designed several strategies that will support entrepreneurship in the country and will also add a distinct force to the internationalization of the business and would also encourage innovation in the SME’s and will boost youth entrepreneurship. It has devised its foreign investment policy as such so that it provides investors to gain an easy access or have a large share in the Slovenian market.
The government of Slovenia provides financial as well as fiscal incentives to investors. The Slovenian government provides a deduction of 20% from the overall tax base of the investment made in Research & development. This deduction can be further increased to as much as 30-40% depending on the region. The Slovenian government also provides depreciation allowance on equipment and buildings. Apart from these, the corporate tax rate of Slovenia is also less as compared to other countries. As of 2010, the general corporate tax is set at 20% of the entire taxable base.
To promote foreign investment in the country, the government of Slovenia has established an agency known as invest Slovenia. The main objective of the agency is to assist all the investors who want to invest in the country by providing them all the necessary information about the benefits investors will gain for investing in Slovenia.
A positive growth trend, a strategic location, investment encouraging policies and an investor friendly government- all these features really make Slovenia one of the best destinations to invest. Foreign investors who want to establish a base in Europe.
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