Business environment & FDI opportunities in Slovenia Goran Križ Embassy of the Republic of Slovenia 4Qs4U Four Qs For You

SLOVENIA: dynamic EU member SloveniaNon-EU countries Area: 20,273 sq. km Capital: Ljubljana Population of 2 million EU member state - May 2004 Euro area - January 2007 Schengen Space - December 2007 EU presidency - first half of 2008 Invited to Join the OECD GDP per capita (2009) = 17,602 EUR 86% EU-27 Average GDP annual growth (2010) +0,9 % EU countries

SLOVENIA – macroeconomic indicators 2010 GDP – current prices EUR 35.9 billion GDP – real growth rate + 0,9 % GDP per capitaEUR 17,602 GDP per capita, PPS* EUR 23,100 *Purchasing Power Standard … 86 % EU-27 EXPORTS of goods and services real growth rate % IMPORTS of goods and services real growth rate % INFLATION, annual average 1. 4 % Unemployment rate (by ILO) 5.7% (registered: 10.6%) Source: Institute of macroeconomic analysis and development, 2010

Export driven economy Source: Institute of macroeconomic analysis and development, 2010 High value-added products and services exported 70% of exports destined for EU EUR 18.2 bn exports of goods and services in 2010; 60% of GDP Sectors, _____________ Geographic distribution, 2010 ______________________

SLOVENIA – The right mix of Qualities 4Qs4U (Four Qs For You)

Quality of life High standard of living Cultural and geographical diversity At the intersection of Roman, German and Slavic culture Nestled between Alps and Adriatic Sea Mixture of Alpine, continental and Mediterranean climates Huge continuous forest ecosystem – 3rd in Europe after Finland and Sweden

Quality of workforce Technologically-minded (long industrial tradition), innovative spirit Highly educated: 16% university degree, 62% secondary school Excellent IT & foreign language skills (English, German, Italian, Serbo-Croatian …) Not cheap but cost-effective Minimum gross wage € Est. monthly gross labour costs: low skilled € 700 skilled € 1,000 engineer € 1,700 computer engineer: € 2,200 Source: IMD World Competitiveness Yearbook 2010 Full-time working hours may not exceed 40 hours a week

Quality link to regional markets Strong export orientation Well established links with neighbouring countries and countries of former Yugoslavia Hub for foreign companies to serve the EU and Central European markets Advantages: Economic and political stability Knowledge of circumstances, language, culture, people Geographical location with a strategic edge Slovenia is an important investor in the SE Europe

Quality infrastructure Port of Koper –ideal as a logistics and distribution centre –the fastest developing port in the Adriatic basin –the shortest sea connection between Central Europe and Asia Well-developed general infrastructure at the intersection of 5th and 10th European transportation corridor Well- developed ICT infrastructure

Taxes Corporate income tax 20%20% Tax relief % of the amount invested in R&D - tax relief on employment of certain workers - up to 30% of the amount invested in equipment and intangible long-term assets Profit repatriation tax 15% on dividends paid abroad Capital gains tax 0 – 20% (depending on a holding period) VAT (Value added tax) 20% - standard rate; 8.5% - reduced rate Property tax 0% Immovable Property Transfer Tax 2% Social security contributions 16.1% paid by employer; 22.1% paid by employee Personal income taxes progressive tax rates: 16%, 27% and 41%

FDI in Slovenia Source: Bank of Slovenia, 2010 FDI stock in Slovenia (from Hungary) 50.8 mio € - FDI in Hungary (from Slovenia) 25.4 mio € Inward inflow in mio € Inward inflow in mio €

Bilateral relations Slovenia - Hungary Slovenian export and import from Hungary (in EUR million) Source: Statistical Office of the Republic of Slovenia, 2009

Bilateral relations Slovenia - Hungary Source: Statistical Office of the Republic of Slovenia, 2010 EXPORT electric equipments, machines (26%) chemical goods (17%) vehicles (14%) food, drinks, tobacco (11%) base metals, metal goods (8%) mineral goods (4%) IMPORT electric equipments, machines (23%) mineral goods (15%) chemical goods (13%) vehicles (10%) food, drinks, tobacco (8%) base metals, metal goods (7%)

Investment opportunities Energy and renewable energy Construction and engineering Telecommunications & ICT Chemical & Pharmaceutical Shared service centers Regional Headquarter (HQ) Research & Development Logistics & Distribution New materials and Nanotechnology Textile industry Automotive & Components Machining & Metalworking Industry Electronics & Electrical ICT Finance Environmental technologies Tourism

Business and industrial parks in Slovenia Resolution projects PHOENIX OKO OREH JV SLOVENIJA PERSPEKTIVA IN PRIME GREGOR NOORDUNG TEHNOPOLIS approx. 30 business and industrial zones across Slovenia (Komenda business zone, Brnik business and logistics zone, Vrbina business zone, Drnovo, Komenda, šenčur etc.)

Financial incentives ACTIVITY VALUE OF INVESTMENT NUMBER OF NEW JOBS Manufacturing projects€ 1 million25 Strategic services€ 0.5 million10 R & D€ 0.5 million5 Foreign direct investment (FDI) grant scheme for 2010: Amount of incentives up to 30% of the total eligible investment costs amount of the incentive may be increased by 10 percentage points for medium-sized companies, and 20 percentage points for small companies Government action plan for Mura region

Thank you for your attention! Embassy of the Republic of Slovenia