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Slovakia Country Profile
The market strong points consist of the following:
• 19% Corporate and Income tax
• Strategic geographical location – As an essential Central European hub
• Stable political and economic environment
• No withholding on dividend taxes
• 350 Million potential customers within a 1000 km radius
• Low Labor costs
• Infrastructure grows steadily
• Member of the Schengen region
• Great communication technology infrastructure
• Flexible as well as Highly skilled labor force
• Liberal workforce code
• EU member state
• January 1 , 2009 implemented the Euro
• Excellent rail services for freight and passengers
• Direct international air services between a number of European cities, Bratislava, together with Vienna International Airport which is 40 minutes from Bratislava
• Trans-European river transportation by the Danube River
There are numerous diverse opportunities which are found in the sectors listed below:
• Skills and Training – Corporate and management training, English Language, Lifelong learning, Vocational education, Rural Development training, and ICT in Education.
• Sportswear and Equipment – Adidas is the number one sportswear brand in the market. The market pricing is sensitive and on the same level to Poland.
• Automotive Industry – Tier 1, 2, 3 suppliers, Fasteners/Fixings, Testing Services, Pressings and Stampings, Design Engineering Services, Plastic Moldings
• Fashion and Clothing –is typically respected and there are opportunities for popular international brands which will offer great quality at reasonable prices.
• Water – You can find projects which are planned for waste water treatment, drinking water supplies, and sewage
• Drink and Food – Ethnic foods, confectionery, tea, sauces, spirits, and cereals
• Environment – Soil decontamination projects Air Pollution , waste management , and there is even a demand for environmental services such as Audits, Carbon efficiency, and CO2 emissions
• Security and Defense
• ICT- Government procurement, EU funded projects
• Legal and Financial Services – Legal services in acquisition transactions, PPP
• Development and Construction – Improvement of railway networks, motorways (PPP)
Although the economic crisis in 2009 that caused a reduction of 4.7% of GDP, the average growth rate every year since has been at 2.7%. Slovakia, in accordance with estimates, is recognized to be listed as amongst a number of countries with the strongest level of economic growth in the Central European area. The estimations for 2015 point out that the GDP will probably be around 2.4%, although the Slovak commercial banks as well as The Ministry of Finance states it to be at 2.8% in that year.
Regrettably, the unemployment rate is one of the most important challenges. Slovakia's unemployment rate is presently at 13.4%, rendering it the 5th highest in the Eurozone in addition to seventh largest in the European Union. The industrial production has observed a small increase after a 13 month reduction, but foreign trade is continuing to generate a surplus, although import and export has slowed.
Slovakia has a population of 5.4 million people and 85.8% of these are Slovaks. The minority groups within the country consist of 0.8% Czechs, 9.7% Hungarians, and 1.7% Romans. The religious influence continues to be robust, being that 68% or maybe more Slovaks are Roman Catholic. The typical lifespan, when compared with other Western European areas, is lower with the average being 78.2 years for women and 70.5 years for men. The academic standard of the country is quite high with a mandatory primary schooling for all the people.
The National Council or the Slovak Parliament is the sole legislative and constitutional body of the whole country. There are 150 members of parliament, which are elected to serve a 4 year term. The elections are held with proportional representation that states political parties should have at least 5% of the ballot of votes to to qualify. The President is selected in a presidential election, is recognized as the Head of State and so serves a sizable representational function. The Slovakian government manages the executive powers, which are selected by the president with the recommendation of the Prime Minister. The president additionally chooses a prime minister as well, who tends to be the leader of the party who won the general election.
The recent elections led to a shift in government. Four center to the right parties that, led by the Slovak Democratic and Christian Union (SDKU) created the coalition of the government. The former Prime Minister's party Smer, although winning the highest number of general votes, could not find a coalition partner. The president then elected Ms. Iveta Radicova to be the first female Prime Minister in Slovakia's history. The new elected government is a great choice relating to the conditions of combating corruption as well as improving the overall business environment. The key ministers include the Minister of Foreign Affairs Mikulas Dzurinda, Minister of Finance Ivan Miklos, and Minister of Economy Juraj Miskov. It is a good thing to keep in mind that the Ministerial structure differs in Slovakia.
In the 2009 presidential election, Ivan Gasparovic, the present President defeated the SDKU party candidate Iveta Radicova. He is actually the very first president to protect his very own decree and was then reelected for a second presidential term until 2013.
Slovakia and Preparing Exports
In May of 2004, Slovakia joined the European Union. The standards and business procedures of the EU typically apply. Slovakia has signed up to the Schengen agreement in December of 2007.
The most difficult aspect for international companies doing business is usually selling direct to the Slovakian market. It is usually more effective to approach the marketplace via a local business partners that has the capability to offer technical support as well as being a distribution channel in Slovakia. Franchising and Licensing are just as popular. It is also easy to establish a subsidiary that is fully owned in Slovakia.
A business who would like to develop their business in the Slovakian Market are encouraged to perform as much research about the market and plan as much as they can. CeSports team can help by providing a large variety of services to companies that wish to increase their business through the Slovakian market. The services that they provide include validated lists of distributors/agents, potential customers in the market, as well as key market players and provisions of market information. When you establish connections with potential customers and other contacts in working with you, then you can arrange appointments to meet. Not only can we actively market companies through our impressive sports site, we can also add the companies into the publications that are handed to many different key decision makers in the Bicycle and sports industry in the Slovakian market.
How to conduct business in Slovakia
What should companies take into account while carrying out business in Slovakia?
Out of 182 global markets, Slovakia ranks number 41 in the World Bank Doing Business report, the report indicates some issues that need to be considered which include the lack of clarity, slowness of the Slovakian judicial system, bureaucracy, as well as transparency in the tax administration. The main goal of the new government would be to develop the transparency of public procurement together with fighting corruption. Slovakia has been developing its railway infrastructures into a more modern railway in addition to constructing new motorways. These types of developments are funded by the European Union together with PPP projects. Slovakia has been approved to have 11.4 Billion EUR from the European Union structural funds together with the Cohesion Fund in the 2007-2013 program period. Slovakia, with the help of European Union funds, is predicted to enhance performance and competitiveness of the local regions, employment along with the economy with a respect to sustain growth. The biggest part should be applied to Slovakian infrastructure, its knowledge based economy, as well as human resources.
The funds are then distributed to 11 operating programs listed below:
1 . Environment
2 . Regional Operational Program
3 . Transport
4 . Research and Development as well as science
5 . Informatisation of Society
6 . Education
7 . Economy and Competitiveness Growth
8 . Social and Employment Inclusion
9 . Technical Assistance
10 . Healthcare and Fitness (the promotion of well-being and health through various sports activities)
11 . Development of the Sector of SME business
The Bratislava County
The vast majority of the funding goes to the transport sector with an agreement of investing 3.2 Billion EUR. The co-financing from the state budget was modified to an 80:20 model with 5% being financed by the municipalities together with 15% of the state budget. The private sector of the ratios of co-financing vary. Generally, Brussels is inclined to contribute anywhere from 35% to 50% of the structural funds and the outstanding amount needed is balanced by the beneficiary.
Locations and Gateways
Bratislava is not just the largest city in Slovakia it is also the capital and contains 0.5 million people. Additionally, it is the center for economic and business services.
The primary locations for any new development and investments incorporate the following outskirts and cities:
• Zilina (Kia Motors)
• Nitra (Foxconn and Samsung)
• Kosice (Getrag Ford and US Steel)
• Trnava (PSA Peugeot Citroen)
Startup and Market Entry considerations
Any company that would like to enter the Slovakian market would be advised to be particularly well-prepared in addition to briefed. To be able to enter the market, the company will have to set up a contact such as a local representative, agent, distributor, or setting up a local office in Slovakia.
Regulations and Customs
Since Slovakia is a member of the WTO or World Trade Organization as well as the European Union, the EU market principles and procedures and European Community Customs Codes are applicable directly.
Local Regulations and Legislation
The Slovakian legislation, despite the fact that it is integrated with all of the European Union requirements, it is rather complex. Amendments, revisions, as well as regular modifications are taking place. With regards to considering new projects within Slovakia, it is essential that you consult with one of the consulting or international law firms in Slovakia.
Any products which are in free circulation with the European Union, for example, those that are not needed to pay customs fees in the EU because either the fee has been paid or even they originated there, can be imported and exported without any subsequent kind of documentation. This does not affect any controlled or excise products that will still need the correct documentation.
Technical Regulation and Standards
The Slovakian Technical/Standard regulatory authority is essentially the Metrology, Testing, and Standards Authority. Its primary goal is to generate and maintain the trustworthy tools of quality infrastructures for a competitive business environment. The quality infrastructure tools in a European sense are the metrology, accreditation, standardization, conformity assessment and recently market surveillance.
On January 1, 2004 a single tax rate of 19% was announced for corporate tax, VAT and personal income tax. January 2011 the VAT was set at a rate of 20% and the VAT on pharmaceuticals and books is only 10%.
According to the European Union's Cohesion Policy, the major challenges that Slovakia needs to overcome in order to keep up with the European Unions development and action play for 2007-2013 include the following:
• Education and Human Resources: The support of human resource development is going to be targeted in the direction of employment growth, along with the development of the quality of the human capital and workforce for the demands of the knowledge based economy and increase the social inclusion of the disadvantaged groups.
• Regional Accessibility and Infrastructure: Modernizing as well as the building of public infrastructures to develop the availability of certain infrastructures in the area and increase the efficiency of the related public services. The main focus is on education, transportation, social, and environmental infrastructure as well as urban renewal.
• Knowledge Economy: The support of the development of a knowledge based economy by investments in electronic content and services, development, research, and support of the competitive natures of services and companies through modern innovations.
Full name: Slovak Republic
Population: 5.5 million (UN, 2012)
Area: 49,033 sq km (18,932 sq miles)
Major language: Slovak
Major religion: Christianity
Life expectancy: 72 years (men), 80 years (women) (UN)
Monetary unit: 1 euro = 100 cents
Main exports: Manufactured goods, machinery and transport equipment
GNI per capita: US $16,190 (World Bank, 2011)
Internet domain: .sk
International dialling code: +421