Slovakia Introduction

SLOVAKIA – the best deal in the EU (or “the West, but cheaper.’)

• Safe investment destination (stable politics & economy)
• In the EURO zone (no currency risks)
• Highest GDP growth, lowest inflation rate
• High quality, low cost, and available labor,
• Beautiful countryside and friendly People.

The best short descriptions of Slovakia are Stable, Cheapest in the Eurozone, and Ready to Roll. Prominent international publications equally describe Slovakia as a very attractive business destination.

On Feb 18, 2008, The Economist praised Slovakia for its outstanding economic performance in an article titled “Shining star - Slovakia's economy weakens but it remains a regional star.”

On May 5, 2008, Business Week, in an article “Slovakia: A Good Bet for Business” described how Kia Motors obtained a lucrative investment package compared to the alternatives in the Czech Republic, Hungary, or Poland – “a business-friendly tax regime, an inexpensive workforce. On top of that, Slovakia has met its early potential, becoming one of Europe's peppiest economies and leading reformers.”

Forbes (June 26, 2008) stated “Slovakia has mastered much of the difficult transition from a centrally planned economy to a modern market economy. The DZURINDA government made excellent progress during 2001-04 in macroeconomic stabilization and structural reform. Major privatizations are nearly complete, the banking sector is almost completely in foreign hands, and the government has helped facilitate a foreign investment boom with business friendly policies such as labor market liberalization and a 19% flat tax.” Forbes upgraded Slovakia in its “Best Countries for Business from #45 in 2007 to #36 in 2008.

The Financial Times (June 22, 2008) published an article headlined “A confident place at Europe’s top table” observing that “Slovakia’s fast growth and low wages have made it a magnet for foreign investors, with the government expecting about $2.7bn in foreign direct investment this year”.

Location, location, location – is so frequently stated by distinguished business leaders. Slovakia with its very central position in Europe makes it a natural bridge between the Western Europe and the future growth markets of the former Soviet Union countries such as Ukraine and Russia.

Slovakia’s joining the Eurozone on January 1, 2009, will increase the single currency population to 325 mil. people (EU27 is 494mil.). Slovakia will join the elite club that produced 15.8% of the global GDP in 2007. The country’s switch to Euros will remove any risks, costs, or complications related to currency exchange, making transactions smoother, easier, more predictable, and safer. More importantly, it will make investors’ assets more secure because the often faster appreciating local currency against Euros cuts off profits of large exporters with locally established sites.

Slovakia – Consistently a Strong Performer

Slovakia - once a part of a communist country - generates lots of “WOW” from visitors from the western world. Established in 1993, it experienced it all – first being rejected by all key organizations such as NATO, and the EU, and then reforming itself dramatically to join both organizations. Today, Slovakia is the second post-communist country to enter the Euro zone (Slovenia in 2007). Slovakia got closer to the U.S. in 2008 – based on Slovakia’s rapid progress on many social and economic metrics, the U.S. eliminated its travel visa requirement for all Slovak citizens.

Previously run by a highly recognized pro-reform government for two 4-year periods and currently led by a left wing leader, Slovakia can be considered politically the most stable country in the Visegrad region (Czech Republic, Hungary, Poland & Slovakia) and economically the best performer in the whole EU with its 10.4% GDP growth in 2007. And the 2007 success was not an exception – Slovakia is also # 1 in the EU for GDP growth per Capita and Growth of GDP per hour worked in the years of 2001-2006. If a longer period - 1995-2006– is taken into consideration, Slovakia seems to consistently outperform the other OECD (Organization for Economic Cooperation and Development) countries to an even larger extent.

Slovakia – joins the West and remains in the Spotlight

Slovakia’s economic performance will be very closely observed not only by other Eastern European countries such as the Czech Republic, Hungary, Poland, Latvia, Lithuania, Estonia, Romania, and Bulgaria, aiming to join the Eurozone in the near future. It will also be observed by the UK, Sweden, and Denmark, countries which intentionally have not adopted the Euro currency.

The future is secure - as a full member of the EU, Slovakia needs to follow the key rules and regulations observed by the Union. Therefore, it will be hard for any new Slovak government to make decisions which have the potential to take the country backwards. Because of this, businesses can reasonably expect to reap the benefits in the years to come.