Slovakia’s attractiveness in the eyes of foreign investors is decreasing mainly due to recent changes of the tax and labour legislation. According to a survey carried out by the Slovak-German Chamber of Commerce and Industry in February most of the 187 foreign firms addressed expect that the economic situation in the country will even worsen this year. For the first time Slovakia was not assessed as the most attractive CEE destination when it placed second behind the Czech Republic.
However, compared with results of surveys from the same period among foreign investors in 20 countries of the region Slovakia placed fourth when Poland, the Czech Republic and Estonia overran it. Investors are discontent particularly with the development in the area of fighting corruption and crime, worsened transparency in public procurement and extremely weak law enforceability. They are critical as well of the cancellation of the 19% flat tax rate and the introduction of a 23% corporate income tax.
What currently attract investors to Slovakia are the country’s EU membership and availability and quality of local suppliers. Companies evaluate positively the relatively cheap and efficient workforce but are unhappy about negative changes to the Labour Code and the tax-levy reform. “Under the previous Government laws improving flexibility of the labour market were approved. Now this satisfaction sank somewhere to the very bottom,” said Markus Halt of the Slovak-German chamber. Almost 80 percent of firms would like to keep or even extend their workforce despite the difficult situation.
Anca Dragu
