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SARIO Good Idea Slovakia

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SARIO Good Idea Slovakia ENGLISH EDITION SARIO GooD JUNE 2017 SLOVAK INVESTMENT AND IDEA TraDE DEVELOPMENT AGENCY SLOVAKia Why SLOVAKIA KEY FACTS WHY SLOVAKIA SHOULD BE YOUR NEXT INVESTMENT DESTINATION Why Slovakia This publication is designed to provide information regarding business environment, sector strengths, vision and strategy for economic development to illustrate why Slovakia is an ideal location for business. total area 49,035 km2 population 5.4 million capital city Bratislava member of European Union, Eurozone, Schengen Area, OECD, WTO, NATO time zone GMT +1 hour 300 million Helsinki clients in radius Oslo of 1,000 km Stockholm Tallinn Moscow Edinburgh Riga 600 million clients in radius Copenhagen of 2,000 km Dublin Vilnius Minsk Amsterdam London Berlin Warsaw Brussels Kiev Luxembourg Prague Paris Bratislava Chisinau Zurich Vienna Budapest Ljubljana Bucharest Zagreb Belgrade Sarajevo Sofia Madrid Podgorica Lisbon Rome Skopje Tirana Athens 1 www.sario.sk Macroeconomic Overview Slovakia is experiencing an ongoing economic expansion, driven by continually increasing domestic demand, as well as booming investment — both local and foreign. Real GDP growth has more than doubled since 2013 and reached 3.3% in 2016. The Slovak economy is projected to keep this pace and expand even further. The unemployment rate continues to decline and labour market conditions are expected to continuously improve. Source: European Commission, European Economic Forecast, spring 2017 REAL GDP GROWTH (%) 3.8 3.6 3.3 Top 10 Reasons 3.0 2.6 to Invest in Slovakia 1.5 1 STRATEGIC LOCATION IN EUROPE 2013 2014 2015 2016 2017 F 2018 F WITH GREAT EXPORT POTENTIAL 2 HIGHLY OPEN HICP INFLATION (%) POLITICAL & ECONOMIC STABILITY EcoNOMY 3 EURO CURRENCY AS ONE 93.8% OF A FEW IN CEE Export of Goods 4 1.6 & Services to 1.5 1.4 CEE LEADER IN LABOUR GDP Index -0.1 -0.3 -0.5 PRODUCTIVITY (2016) 2013 2014 2015 2016 2017 F 2018 F 5 COST–EFFECTIVE, SKILLED AND EDUCATED LABOUR FORCE UNEMPLOYMENT RATE (%) 6 14.2 EXCELLENT MULTILINGUAL SKILLS 13.2 11.5 9.7 8.6 7 7.6 ONE OF THE MOST OPEN ECONOMIES IN THE WORLD 2013 2014 2015 2016 2017 F 2018 F 8 SLOVAKIA COUNTRY CREDIT RATINGS GREAT POTENTIAL FOR R&D AND INNOVATION A+ A2 A+ 0 9 DEVELOPED & STEADILY GROWING Standard Fitch OECD INFRASTRUCTURE NETWORK Moody's & Poor's Ratings Country Risk 10 Source: Standard & Poors, Moody's, Fitch Ratings (information as of January 2017), European Commission — Eurostat, European Economic Forecast, spring 2017 ATTRACTIVE INVESTMENT INCENTIVES 2 www.sario.sk Slovakia is a regional leader in labor productivity, Qualified while still remaining cost–competitive on Labour Force the regional as well as the European level. Availability of skilled workforce is a key factor for successful site selection. In Slovakia, investors can find workforce which excels in three major areas — productivity, qualification & labour costs. +20% The Slovak labour force is also often praised increase in labour for its loyalty and high adaptability to productivity culturally different management styles. over the last 10 years LABOUR PRODUCTIVITY IN CEE 80.0 Slovakia Czech Rep. Tax 70.0 System Hungary 60.0 Poland Romania 20% 50.0 Bulgaria Value Added Tax 40.0 30.0 20.0 21% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: Eurostat, 2015, GDP (in PPS) per hour worked as compared to EU 28 (100) Corporate Income Tax AVERAGE GROSS MONTHLY SALARIES IN CEE 1,020 EUR 100% 27,220 CZK 928 EUR 4,047 PLN 912 EUR Repatriation of Profits 844 EUR 263,171 HUF 642 EUR 2,886 RON 482 EUR 944 BGN 0% Czech Republic Poland Slovakia Hungary Romania Bulgaria Inheritance & Gift Tax Source: National Statistical Offices of Slovakia, Czech Republic, Hungary, Poland, Bulgaria & Romania, Real Estate Transfer Tax National Bank of Slovakia, 2016 3 www.sario.sk Education & Language MULTILINGUAL COMPETENCIES Competencies 85% Slovakia has a well–established system of Slovak population speaks of secondary schools and universities 340 at least one foreign language preparing students to gain the skills and vocational schools knowledge demanded by the employers. with more than 79,000 students SEcoNDARY EDUCATION in technical 98% Slovakia has one of the highest proportions fields of secondary educated people in the EU — 72% of the total population attained of all secondary school students upper–secondary education. study at least one foreign language Dual Education The Slovak Government fully implemented THE MOST commoN FOREIGN Almost a new dual education framework facilitating LANGUAGES TAUGHT AT SLOVAK 140 companies and shared theoretical education in schools and SEcoNDARY SCHOOLS 1,400 students joined practical training in companies. Companies the dual education joining the new scheme have the advantage in academic year of not only benefiting from a prepared 92% English 2016/2017 and qualified labor force, but also of the possibility to utilize a related tax relief. 46% German 35 UNIVERSITY Universities EDUCATION 13% Russian Slovak universities offer large variety 151,316 of study fields Students enabling 5% French multidisciplinary skill-set for future graduates. 53,495 Graduates Over 1,000 companies already 15% 4% cooperate with 19 universities across Economics & Business Natural Sciences Slovakia UNIVERSITY COOPERATION WITH COMPANIES DIVERSE STUDY 32% Various forms of systematic FIELDS AT SLOVAK cooperation between universities UNIVERSITIES Social Sciences and companies enable transfer of knowledge from theory to practice. 22% Other Source: The Institute for Information & Prognosis (medicine, 27% in Education for Academic Year 2015/16, State Vocational Training Institute, Center of Scientific & Technical agriculture, Information, Automotive Industry Association arts, etc.) Technical Sciences of the Slovak Republic 4 www.sario.sk 1st PLACE IN 2016 in world car production Key Sectors per 1,000 inhabitants 191 cars/ Slovakia prides itself on its 1,000 inhabitants industrial heritage which has provided a stable base for the development of certain sectors such as automotive or electronics. Over the last decade, global corporations Over representing various sectors have selected 1 million vehicles produced in Slovakia as the top location for their Kia Motors 2016 expansion in the CEE region. Slovakia in Žilina PSA Peugeot MECHANICAL ENGINEERING Citroën Slovakia & AUTOMOTIVE in Trnava Slovakia has a long tradition in mechanical engineering. Although many activities transformed over the years and merged into the automotive industry, the traditional engineering products created a strong skill driven environment and still maintain an important share on the entire Slovak manufacturing sector. The position of Slovakia as one of the key players in the automotive industry will be further strengthened by the world class manufacturing facility of Jaguar Land Rover which is already being built in Nitra. Jaguar Land Rover in Nitra The investment project of Jaguar Land (start of production in 2018) Rover in Slovakia. Volkswagen Slovakia in Bratislava Of industry workers employed 33% by the mechanical engineering sector Other 12% 1% transport vehicles Machinery Share of mechanical & equipment engineering on the 42% country's industrial production Subsectors in Mechanical Engineering Share of mechanical 13% 74% 50% engineering on the total industrial export Basic metals & Automotive fabricated metal products OEMs & Source: Statistical Office of the Slovak Republic, Trend (metalworking) suppliers 5 www.sario.sk ELECTRONICS INDUSTRY Slovakia has very strong tradition in People employed the electronics industry. It has become 43,000 in the electronics the second largest pillar of Slovak industry industry after automotive sector the second strongest employer and exporter. Share of electronics 11% industry on total industrial production SSCs & ICT Stories in Slovakia Added value 1.18 BN € in the electronics industry SSC & ICT Most Shared Service Centers and Information & Communication Technology Centers (SSC & ICT) in Slovakia are concentrated in the capital city of Bratislava or the second largest city of Košice. Nevertheless, new hubs, such as Banská Bystrica, Nitra, Prešov, Trenčín, Trnava or Žilina, are gradually developing and offering great combination of conditions for doing business in SSC & ICT sector. Top Reasons Why to Place People employed SSC & ICT in the Slovak Republic 70,000+ by the Slovak SSC • adaptable, educated and cost– & ICT centres effective workforce • excellent multilingual skills • 35 universities providing qualified pool of labour force • candidates willing to relocate or commute daily in the radius of SSCs already 60–80 km 60+ established in • dynamically growing real estate Slovakia market with modern and affordable offices • high quality data & voice networks • attractive investment incentives for SSC & ICT sector SSCs include also • strategic time zonation and 75% higher value added geographic location processes • well–developed ICT institutional network 6 www.sario.sk Research & Development R&D expenditures tripled in last As a top priority, the Government of the Slovak Republic 7 years 30% is determined to attract and support investments with of all outputs high added value and innovation potential. in international scientific journals on PUBLIC R&D INFRAstructurE material research originates from Slovakia Žilina Prešov Trenčín Košice BANSKÁ BYSTRICA Key Facts Why Consider TRNAVA NITRA material research, nanotechnology Slovakia for BRATISLAVA industrial technology research (transport, mechanical & electrical engineering) food quality, environmental
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