Successfully investing in Slovenia

published on May 16, 2018

  

​​How do you assess the current economic situation in Slovenia?

Slovenia's economy is picking up steam. According to forecasts, the country's GDP will increase by 5.1 % in 2018 and by 3.8 % in 2019. The growth will be fuelled by strong domestic and foreign demand as well as by an increase in investment.

 
The investment activity will be driven especially by the greater inflow of EU funds. In this process, investments in machinery and equipment will significantly grow again by 10.6% and 10.5% in 2018 and 2019, respectively. Indications for a positive development can be also observed in the construction sector.

 
Slovenia continues to be export-oriented. On a year-on-year basis, exports grew by 9.2% and imports by 10.4%. The majority of exports and imports are shipped to or from the EU countries, representing 73.8% of the total exports and 77.9% of the total imports. Germany is Slovenia's largest export partner with a share of 20.4% in the total exports of goods from the Republic of Slovenia. Germany is also Slovenia's largest import partner, with imports from Germany representing 19.1% of the country's total imports.

  

How would you describe the investment climate in Slovenia? Which sectors offer the largest potential?

The investment climate and the general situation continue to be optimistic.  The investment activity is being driven by the greater inflow of EU funds. An example of the good investment climate are the investments by Magna Steyr and Yaskawa.

 
The privatisation of state-owned enterprises is successfully progressing. DUTB (the Bank Assets Management Company (BAMC) of the Republic of Slovenia) regularly publishes on its website an up-to-date list of claims and equity shares subject to sale.  This can be a good opportunity for foreign companies to invest in Slovenia.

 
Investors may choose from over 140 planned projects with a project volume of about EUR 20 billion. The focus is specifically on the core branches of industry such as structural and civil engineering, environmental technologies, and energy. 

  

What challenges do German companies face during their business ventures into Slovenia?

Aspects specific to Slovenia which a German company should observe include mainly aspects related to the municipal and urban structure.

 
When acquiring state shares, it is particularly important to observe the procedural rules.  It is also essential to gain an insight into the financial situation of the potential investee (excerpts from the land register or company register etc.). It should be also taken into account that administrative procedures in Slovenia are often longer than originally assumed (e.g. in the case of building permits etc.). These special aspects should be considered in the planning and taken heed of in advance.

 
Other reasons for investor discontent may include poor payment behaviour, lack of transparency of public tenders, and low efficiency of public administration.

 

What importance does Germany have for the Slovenian economy?

Germany has been Slovenia's most important trading partner since 2000. The volume of exports and imports between the countries is EUR 11.4 billion. Slovenia's imports from Germany mainly include other machinery and vehicles and car parts, but also electric machines and their parts.  

 
The most important federal state partners are: Baden-Württemberg, Bavaria, North Rhine-Westphalia, Lower Saxony, and Hesse.

  

In your opinion, how will Slovenia develop?

In our opinion, Slovenia has enormous potential arising from its favourable and central location in Europe but also from the government's efforts to introduce modern reforms. Also the economic forecasts of the European Commission are promising: in 2017, Slovenia reported a 5.0% growth in the GDP. In 2018, the GDP is expected to grow by 5.1%.   

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