Wednesday, 2 June 2010

Foreign investment regime - Slovenia

Residents and non-residents

Slovenian legislation does not distinguish between foreign and domestic investors, but
between residents and non-residents. The Foreign Exchange Act defines residents as:
− companies and other legal persons with their seats registered in Slovenia, with the
exception of their branches in other countries that perform profitable business;
− branches of foreign companies registered in Slovenia if they are engaged in profitable
− individual entrepreneurs and natural persons who run their own business and have
their seat or permanent residence in Slovenia;
− natural persons with a permanent residence in Slovenia;
− natural persons with a temporary residence in Slovenia based on a permit valid for a
minimum of 6 months, with the exception of foreign nationals employed in diplomatic
and consular missions in Slovenia and members of their families; and
− Slovenian diplomatic, consular and other representations abroad financed from the
national budget, Slovenian nationals employed in such representations, and members
of their families.
All other persons are considered to be non-residents.

The principle of national treatment

The treatment of foreign companies and entrepreneurs in Slovenia is regulated by the
Companies Act in a chapter on foreign undertakings.
A foreign undertaking is defined as a natural or legal person that performs a profitable activity
in Slovenia and has their residence or place of business abroad.
The Companies Act stipulates that, as a principle, with regard to its rights, obligations and
responsibilities, a foreign undertaking is equated with domestic undertakings or entrepreneurs
with registered office in Slovenia in respect of business conduct in Slovenia, unless otherwise
provided by applicable legislation.
Foreign undertakings must conduct their business activities through a branch registered in
Slovenia. There are no longer any legal restrictions on registering branches since the legal
requirement that undertakings from non-EEA countries may only establish a branch in
Slovenia after being registered in their own country for at least two years was abolished in
June 2009.

The protection of foreign investors

Slovenia accepts the principles of the OECD Draft Convention on the Protection of Foreign
Property of 1967. The repatriation of capital and transfer of profits are free after the payment
of tax duties and other obligations. Expropriation, nationalisation or any other measure with
an equivalent effect is prohibited except for public purposes, on a non-discriminatory basis,
under due process of law and in exchange for prompt, adequate and effective compensation.

Sectoral limitations

Slovenia has a liberal foreign investment regime. The movement of capital is fully liberalised
and in line with the EU rules. In the field of inward direct investment, all sectors are open to
investors from the European Economic Area, while restrictions on investments by non-EEA
residents apply to the operation of games of chance, maritime transport and air transport.
Further, non-EEA institutions may not establish branches for the purpose of providing
depositary services to resident collective investment funds.
In the field of cross-border trade in services there are restrictions on non-EEA service
providers in road transport services; insurance services (except reinsurance, retrocession and
the transfer of social security and social insurance payments); and most banking and other
financial services (except settlement, clearing and depositary services, and advisory and
agency services). Reciprocity is required for non-EEA residents in areas such as cross-border
transport and real-estate investments.
Branches of third-country credit institutions which are located within the EEA and want to
provide payment services are according to Payment Services Directive (2007/64/EC) obliged to
establish a company in the EEA and subsequently apply for an authorisation.

Financial incentives

Foreign companies making direct investments in Slovenia may apply for financial grants. Grants are
available for investments in industry, strategic services (Customer Contact Centres, Shared Services
Centres, Logistics and Distribution Centres, Regional Headquarters) and R&D.
Incentives are eligible for up to 30% (up to 40% for medium and up to 50% for small
companies) of the cost of infrastructure and utility connections, the cost of construction or
purchase of buildings as well as the purchase of new machinery and equipment. In 2009, EUR
5 million was allocated. (Source: JAPTI 2009)

Search for Slovenian Investment here:

by the Centre for International Cooperation and Development.

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