HomeReportsBureau of Economic and Business Affairs2018 Investment Climate Statements...Slovenia

# 					2018 Investment Climate Statements: Slovenia			

 In this section										/

													Executive Summary											

                -  Executive Summary 
                -  1. Openness To, and Restrictions Upon, Foreign Investment   
                -  2. Bilateral Investment Agreements and Taxation Treaties   
                -  3. Legal Regime   
                -  4. Industrial Policies   
                -  5. Protection of Property Rights   
                -  6. Financial Sector   
                -  7. State-Owned Enterprises   
                -  8. Responsible Business Conduct   
                -  9. Corruption   
                -  10. Political and Security Environment   
                -  11. Labor Policies and Practices   
                -  12. OPIC and Other Investment Insurance Programs   
                -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                -  14. Contact for More Information   

## Executive Summary

Several factors make Slovenia an attractive location for foreign direct investment (FDI): modern infrastructure with access to important EU transportation corridors, a major port on the Adriatic Sea with access to the Mediterranean, a highly-educated and professional workforce, proximity to Central European and Balkan markets, and membership in the Schengen Area, EU and Eurozone.

The 2008 global economic crisis hit Slovenia hard and the country slumped into recession again in 2012. Slovenia’s Statistical Office reported economic growth topped 2.6 percent each year in 2014-16, however, and Slovenia is now one of the fastest growing economies in the EU, with growth estimated at over 5 percent in 2017 and projected at 4 percent in 2018. According to the Chamber of Commerce and Industry of Slovenia, at least 50 percent of Slovenia’s economy remains state-owned or state-controlled, and there is continued resistance to privatization and foreign direct investment (FDI), despite general awareness of FDI’s importance to economic growth, job creation, and developing new technologies. Potential investors in Slovenia still face significant challenges, including a lack of transparency in economic and commercial decision-making, time-consuming bureaucratic procedures, opaque public tender processes, and an often inconsistent taxation and regulatory structure.

As of 2016, the Bank of Slovenia reported inward FDI in Slovenia totaled EUR 12.9 billion (32 percent of GDP), an increase of 11.5 percent over the previous year. EU member states accounted for 84.7 percent of all inward FDI, primarily in manufacturing (32.5 percent), financial and insurance activities (22.5 percent), and wholesale and retail trade and repair of motor vehicles and motorcycles (19.2 percent). Slovenia’s most important sources for direct foreign investment were Austria (24.7 percent of all inward FDI), Luxembourg (11.1 percent), Switzerland (10.6 percent), Italy (8.8 percent), and Germany (8.6 percent).

Taking into account both direct and indirect investment, Bank of Slovenia data indicated U.S. companies accounted for 13.9 percent of foreign investment in 2016, with EUR 53.6 million invested directly and an additional EUR 1.741 billion invested indirectly through subsidiaries in Luxembourg, Sweden, Germany, and Switzerland. This investment totaled EUR 1.795 billion and was second only to Germany’s EUR 1.861 billion in direct and indirect investment.

According to the Bank of Slovenia, although foreign companies in Slovenia represented only a small share of total FDI (4.7 percent) in 2016, they accounted for nearly 23.7 percent of capital, over 24 percent of assets, and 24.2 percent of corporate sector employees. Their capital and workforce generated more than 31 percent of total net sales revenue and 28.8 percent of total operating profit. Foreign companies accounted for 39.9 percent of corporate sector exports and 44.9 percent of corporate sector imports. Wages in foreign firms were 12.7 percent higher than the average Slovenian salary and net profit per employee was 21.8 percent higher, while value-added was 12.2 percent higher on average than for domestically-owned companies. Returns on equity (ROE) for foreign companies in Slovenia were 10.4 percent higher in 2016, compared to 7.3 percent for all firms.

*Table 1*

							1. Openness To, and Restrictions Upon, Foreign Investment					

**Policies Toward Foreign Direct Investment**

The Slovenian Public Agency for the Promotion of Entrepreneurship, Innovation, Development, Investment and Tourism (SPIRIT) promotes FDI and advocates on behalf of foreign investors in Slovenia. Its mission is to enhance Slovenia’s economic competitiveness through technical and financial assistance to entrepreneurs, businesses, and investors.

Foreign companies conducting business in Slovenia have the same rights, obligations, and responsibilities as domestic companies. The principles of commercial enterprise, which include free operation and national treatment, apply to the operations of foreign companies as well. The Law on Commercial Companies and the Law on Foreign Transactions guarantee their basic rights.

According to SPIRIT’s annual survey on foreign perceptions of the Slovenian business environment, investors cite the high quality of Slovenia’s labor force as the primary factor in choosing Slovenia as an investment destination, followed by widespread knowledge of foreign languages, technical expertise of employees, innovation potential, and strategic geographic position providing access to EU and Balkan markets.

While generally welcoming Greenfield investments, Slovenia presents a number of informal barriers that challenge foreign investors. According to SPIRIT’s survey, the most significant FDI disincentives are high taxes, high labor costs, lack of payment discipline, an inefficient judicial system, difficulties in firing employees, and excessive bureaucracy.

Foreign companies doing business in Slovenia and the local American Chamber of Commerce have also cited additional factors that adversely affect the local investment climate, including the lack of a high-level FDI promotion strategy, a sizable judicial backlog, difficulties in obtaining building permits, labor market rigidity, and disproportionately high social contributions and personal income taxes coupled with excessive administrative tax burdens. Businesses have also reported a lack of transparency in public procurement, unnecessarily complex and time-consuming bureaucracy, frequent regulatory changes, relatively high real estate prices, and confusion among government agencies over responsibility and jurisdiction regarding foreign investment.

**Limits on Foreign Control and Right to Private Ownership and Establishment**

Both foreign and domestic private entities have the right to establish and own business enterprises, and engage in different forms of remunerative activity. Slovenia has relatively few formal limits on foreign ownership or control.

*Sector-specific restrictions*

Professional services: There are limits on banking and investment services, private pensions, insurance services, asset management services, and settlement, clearing, custodial, and depository services provided in Slovenia by companies headquartered in non-EU countries. Companies from non-EU countries can operate freely only through an affiliate with a license granted by an appropriate Slovenian or EU institution.

- Gaming: There is a 20 percent cap on private ownership of individual companies.
- Air transport: Aircraft registration is only possible for aircraft owned by Slovenian or EU nationals or companies controlled by such entities. Companies controlled by Slovenian nationals or carriers complying with EU regulations on ownership and control are the only entities eligible for Air Operator’s Certificates (AOC) for performing airline services.
- Maritime transport: The law forbids majority ownership by non-EU residents of a Slovenian-flagged maritime vessel unless the operator is a Slovenian or other EU national.

Slovenia has an open economy, and no screening or review process is necessary for FDI.

**Other Investment Policy Reviews**

Slovenia underwent an OECD Investment Policy Review and a World Trade Organization (WTO) Trade Policy Review in 2002. The Economist Intelligence Unit and World Bank’s “Doing Business 2017” provide current economic profiles of Slovenia.

**Business Facilitation**

Individuals or businesses may adopt a variety of different legal and organizational forms to perform economic activities. Businesses most commonly incorporate legally as limited liability companies (LLC or d.o.o.) and public limited companies (PLC or d.d.).

Non-residents of the Republic of Slovenia must obtain a Slovenian tax number  before beginning the process of establishing a business. Slovenia’s Companies Act, which is fully harmonized with EU legislation, regulates the establishment, management, and organization of companies.

Companies Act: http://www.mgrt.gov.si/fileadmin/mgrt.gov.si/pageuploads/zakonodaja/ZGD-1_PREVOD__13-12-12.pdf .

Generally, bureaucratic procedures and practices for foreign investors wishing to start a business in Slovenia are sufficiently streamlined and transparent. Start-up costs for businesses are among the lowest in the EU. In order to establish a business in Slovenia, a foreign investor must produce capital of at least EUR 7,500 (USD 8,771) for an LLC and EUR 25,000 (USD 29,237) for a stock company. The investor must also establish a business address and file appropriate documentation with the courts. The entire process usually takes three weeks to one month, but may take longer in Ljubljana due to court backlogs.

Individuals or legal entities may establish businesses through a notary, one of several VEM (*Vse na Enem Mestu*or “all in one place”) point offices designated by the Slovenian government, or online. A list of VEM points is available at http://www.podjetniski-portal.si/ustanavljam-podjetje/vem-tocke/seznam-vstopnih-tock-vem .

More information on how to invest and register a business in Slovenia is available at http://www.investslovenia.org/business-environment/establishing-a-company/  and http://www.eugo.gov.si/en/starting/business-registration/ .

**Outward Investment**

Slovenia does not restrict domestic investors from investing abroad, nor are there any incentives for outward investments. The majority of Slovenia’s outward investments are in the Western Balkans. The Bank of Slovenia reports Croatia is the most popular destination for Slovenian outward investment, constituting 28 percent of Slovenia’s investments abroad, followed by Serbia (18 percent), Bosnia and Herzegovina (9 percent), and Macedonia (7 percent).

							2. Bilateral Investment Agreements and Taxation Treaties					

Slovenia does not have a Bilateral Investment Treaty (BIT) with the United States.

Slovenia has signed BITs with Albania, Austria, the Belgium – Luxembourg Economic Union, Bosnia and Herzegovina, Bulgaria, China, Croatia, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Israel, Kuwait, Lithuania, Macedonia, Malta, Moldova, Montenegro, the Netherlands, Poland, Portugal, Romania, Singapore, Slovakia, Spain, Sweden, Switzerland, Thailand, Turkey, Ukraine, the United Kingdom, Uzbekistan, and Serbia.

Slovenia has a bilateral taxation treaty with the United States.

Slovenia has signed bilateral taxation treaties with Albania, Armenia, Austria, Azerbaijan, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Canada, China, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, India, Iran, Ireland, the Isle of Man, Israel, Italy, Japan, Kazakhstan, Kosovo, Kuwait, Latvia, Lithuania, Luxembourg, Macedonia, Malta, Moldova, Montenegro, the Netherlands, Norway, Poland, Portugal, Qatar, the Republic of Korea, Romania, the Russian Federation, Serbia, Singapore, Slovakia, Spain, Sweden, Switzerland, Thailand, Turkey, Ukraine, the United Arab Emirates, the United Kingdom, the United States, and Uzbekistan.

							3. Legal Regime					

**Transparency of the Regulatory System**

Accounting, legal, and regulatory procedures are transparent and consistent with international norms.

Financial statements should be prepared by the Slovenian Institute of Auditors in accordance with the Slovenian Accounting Standards and International Financial Reporting Standards (IFRS), as adopted by the EU. Annual reports of for-profit business entities are publicly available on the website of AJPES, the Slovenian Business Database (https://www.ajpes.si/?language=english ).

There are three levels of regulatory authority: supra-national (Slovenia is a member of the EU), national, and sub-national (municipalities have limited regulatory power over local affairs, and regulations must comply with state regulations). Laws may be proposed by the government, member(s) of parliament, or through signatures of at least 5,000 voters.

Slovenia adopted a comprehensive regulatory policy in 2013, focusing on measures aimed at raising the quality of the regulatory environment to improve the business environment and increase competitiveness.

Slovenia’s Ministry of Public Administration is required by several legal and policy documents to solicit and include public stakeholder engagement in decision-making processes. Public authorities must solicit stakeholder engagement and inform the public about their work to the greatest extent possible.

Government entities that propose regulations must invite experts and the general public to participate by publishing a general invitation, together with a draft regulation, on their websites. The experts and general public must respond by the deadline, ranging from 30 to 60 days from the day of its publication. In addition to the relevant ministry, the proposals are also published on the government websites and on the Ministry of Public Administration’s eDemocracy portal.

Through the eDemocracy web portal, citizens may actively cooperate in the decision-making process by expressing opinions and submitting proposals and comments on draft regulations. When possible, government entities take into consideration proposals and opinions on proposed regulations submitted by experts and the general public. If such opinions and proposals are not taken into consideration, those proposing the regulation must inform stakeholders in writing and explain the reasons.

The public, however, is not invited to comment on proposed regulations when the nature of the issue precludes such consideration, such as in emergency situations and in matters relating to the national budget, the annual financial statement, the rules of procedure of the government, ordinances, resolutions, development and planning documents, development policies, declarations, acts ratifying international treaties, and official decisions.

A regulatory impact assessment (RIA) is obligatory for all primary legislation; however, the quality of such assessments varies and analyses are often only qualitative or incomplete due to the lack of an external body to conduct quality control. The quality of such assessments has improved, however, since the Ministry of Public Administration introduced its small-to-medium enterprises (SME) test in 2012 to measure regulatory impacts on small and medium-sized businesses.

The General Secretariat of the Republic of Slovenia is responsible for administrative oversight to ensure the government follows administrative procedures. There are no informal regulatory processes managed by non-governmental organizations or private sector associations.

According to the Ministry of Public Administration, Slovenia’s executive branch initiates approximately 92 percent of primary laws, with regulations often developed rapidly. The government’s frequent use of urgent procedures (normally reserved for national emergencies) to pass legislation often limits the stakeholder engagement process.

After the adoption of new legislation, the text is published in the Official Gazette of the Republic of Slovenia and online at https://www.uradni-list.si/glasilo-uradni-list-rs . Slovenia lacks a systematic process to evaluate regulations after their implementation.

To measure regulatory burdens on businesses, Slovenia adopted the Standard Cost Model, which has led to a significant reduction of such burdens. The United Nations (UN) awarded its Public Service Award to Slovenia in 2009 for its system of one-stop shops (the so-called “VEM points”) to incorporate and establish businesses. The introduction of e-government processes has simplified administrative procedures.

**International Regulatory Considerations**

Slovenia joined the WTO in 1995, and to date Slovenia has not violated WTO rules. The law treats domestic and foreign investors equally. The government does not impose performance requirements or any condition for establishing, maintaining or expanding an investment. As a WTO member country, Slovenia is required by the Agreement on Technical Barriers to Trade (TBT Agreement) to report to WTO all proposed technical regulations that could affect trade with other member countries. Slovenia is a signatory to the Trade Facilitation Agreement (TFA) and has implemented all TFA requirements.

As an EU member state, Slovenia applies two principles in its regulatory system: the supremacy of EU laws and the principle of direct effect. In areas subject to EU responsibility, EU laws override any conflicting member state laws. Direct effect enables Slovenians and other EU citizens to use EU laws in national courts against the government or private parties.

**Legal System and Judicial Independence**

Slovenia has a well-developed, independent legal system based on a five-tier (district, regional, appeals, supreme, and administrative) court system. These courts handle a wide array of legal cases, including criminal, probate, domestic relations, land disputes, contracts, and other business-related issues. A separate social and labor court system, comprised of regional, appeals, and supreme courts, deals strictly with labor disputes, pensions, and other social welfare claims. As with most other European countries, Slovenia has a Constitutional Court, which receives complaints alleging violations of human rights and personal freedoms. The Constitutional Court also issues opinions on the constitutionality of international agreements and state statutes and deals with other high profile political issues. In 1997, Slovenia’s National Assembly established an administrative court to handle legal disputes among local authorities, between state and local authorities, and between local authorities and executors of public authority.

In 1999, the National Assembly passed legislation to streamline legal proceedings and speed up administrative judicial processes. The law established a stricter and more efficient procedure for serving court documents and providing evidence. In commercial cases, defendants are required to file their defense within 15 days of receiving a notice of a claim. At the end of 2017, the Ministry of Justice reported 72,109 cases remained open.

**Laws and Regulations on Foreign Direct Investment**

On March 27, 2018, the National Assembly passed Slovenia’s Investment Incentives Act, defining the types of incentives, criteria, and procedures to promote long-term investment in Slovenia. The act establishes that domestic and foreign investors are equal and mandates priority treatment of strategic investments, defined as investments totaling EUR 40 million or more and creating 400 new jobs in manufacturing and services, while R&D strategic investments are defined as totaling at least EUR 200 million and creating 200 new jobs. Under the law, a working group headed by the Ministry of Economic Development and Technology will assist strategic investors in obtaining necessary permits. The Invest Slovenia  website serves as a resource for investors to obtain relevant information on investment regulations and incentives.

**Competition and Anti-Trust Laws**

Slovenia’s Prevention of Restriction of Competition Act regulates restrictive practices, concentrations, unfair competition, regulatory restrictions of competition, and measures to prevent restrictive practices and concentrations that significantly impede effective competition. The law applies to corporate bodies and natural persons engaged in economic activities regardless of their legal form, organization, or ownership. The law also applies to the actions of public companies and complies with EU legislation.

Slovenia’s competition and anti-trust laws prohibit restrictive agreements; direct or indirect price fixing; sharing markets or supply sources; limiting or controlling production, sales, technical progress, or investment; applying dissimilar conditions to different trading parties; or subjecting the conclusion of contracts to acceptance of supplementary obligations that, by their nature or according to commercial usage, have no connection with the subject of their contracts.

Companies and entities whose domestic market share exceeds 40 percent for a single undertaking and 60 percent for two or more undertakings (joint dominance) are prohibited from abusing dominant market positions. Slovenian law defines a non-exhaustive list of dominant position abuses describing the most common practices.

However, the government may prescribe market restrictions by means of regulatory instruments and actions in cases of natural disasters, epidemics or states of emergency; significant market disturbances due to a shortage of goods or disturbances in other fields that represent a risk to the safety and health of the population; or when necessary to satisfy product requirements, raw materials, and semi-finished goods of special or strategic importance to the defense of the nation.

The fines for restrictive agreements and abuses of dominant positions may total as much as 10 percent of an undertaking’s annual turnover in the preceding business year. Those legally responsible for a legal entity or sole proprietorship may be subject to a fine of EUR 5,000-10,000 or EUR 15,000-30,000 for more serious violations.

Slovenia’s Competition Protection Agency (CPA) supervises the implementation of the Restriction of Competition Act. The agency monitors market conditions to ensure effective competition, conducts procedures and issues decisions, and submits opinions to the National Assembly and the government. The CPA is also responsible for the enforcement of Slovenia’s antitrust and merger control rules. An independent administrative authority, the CPA was established in 2013 by reorganization of the former Slovenian Competition Protection Office, which was part of the Ministry of the Economy. Some private sector representatives expressed concern about the CPA’s susceptibility to outside influence and ability to reach timely decisions on complex cases.

In 2017, the CPA reviewed 34 undertakings to assess their potential market implications. By the end of the year, the CPA had issued decisions in 30 cases, with four still pending, and found evidence of dominant market position abuse in two cases. In a high-profile case involving a U.S. firm’s bid to purchase a Slovenian media company, the CPA reviewed whether the acquisition would establish a dominant market position or limit access to television channels through unfair and discriminatory terms. The CPA had yet to issue a decision in the case by the end of the year.

**Expropriation and Compensation**

According to Article 69 of Slovenia’s Constitution, the government may take real property or limit rights to possess real property for public purposes in the public interest, in exchange for in-kind compensation or financial compensation under conditions determined by law. Article 7 of Slovenia’s Investment Incentives Act stipulates that, if the government deems an investment strategic, it may expropriate private property for construction in exchange for compensation, under conditions determined by law. In such cases, a special government task force monitors the investment and coordinates the acquisition of environmental and building permits.

The current government is not involved in any expropriation-related investment disputes. National law gives adequate protection to all investments. However, legal disputes continue over private property expropriated by the former Yugoslav government for state purposes. Following its secession from Yugoslavia, Slovenia’s 1991 Denationalization Act established a process to “denationalize” these properties, return them to their rightful owners or their heirs, or pay just compensation if returning the property was not feasible. In some of these cases, the rightful owners and heirs are U.S. citizens.

Since the 1993 deadline for filing claims, the Ministry of Justice reports over 99 percent of denationalization cases have been closed, although only 88 percent of cases involving American owners and heirs have been resolved. Cases involving U.S. citizens have taken longer in part because the claimants generally do not live in Slovenia. In such cases, the Ministry of Justice must determine the nationality of the property’s former owners at the time the property was seized – a generally simple question for Slovenians who never acquired another citizenship, but more complicated in cases involving naturalized American citizens. In addition, some claims may involve property currently controlled by prominent and influential Slovenians, thereby creating additional informal obstacles to restitution.

**Dispute Settlement**

*ICSID Convention and New York Convention*

Slovenia is a contracting state to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID) and a signatory to the New York Convention on Recognition of Foreign Arbitral Awards, which requires local courts to enforce international arbitration awards that meet certain criteria.

There have been no major investment disputes in Slovenia over the past five years. Authorities handle investment disputes in the same manner as all other business disputes.

*International Commercial Arbitration and Foreign Courts*

Slovenia is a signatory to the 1961 European Convention on International Commercial Arbitration. The Slovenian Arbitration Act is modeled after the UN Commission on International Trade Law’s model law.

Slovenia’s regional court specializing in economic issues has jurisdiction over business disputes. However, parties may agree in writing to settle disputes in another court or jurisdiction. Parties may also agree to court-annexed mediation. Local courts recognize and enforce foreign arbitral awards and foreign court judgments.

Parties may also exclude the court as the adjudicator of a dispute if they agree in writing to arbitration, whether ad hoc or institutional. In the former, applicable procedures and laws must be determined. In the case of institutional arbitration, Slovenian law requires a clear definition of the type of arbitration to be implemented.

The Slovenian Chamber of Commerce’s Ljubljana Arbitration Center is an independent institution that resolves domestic and international disputes arising out of business transactions among companies. Arbitration rulings are final, and decisions are binding.

**Bankruptcy Regulations**

Competition is lively in Slovenia, and bankruptcies are an established and reliable means of working out firms’ financial difficulties. By law, there are three procedural methods for dealing with bankrupt debtors. The first procedure, compulsory settlement, allows the insolvent debtor to submit a plan to the court for financial reorganization. Creditors whose claims represent more than 60 percent of the total amount owed may vote on the proposed compulsory settlement plan. If the settlement is accepted, the debtor is not obligated to pay the creditor any amount exceeding the payment agreed to in the confirmed settlement. The procedure calls for new terms, extended in accordance with the conditions of forced liquidation settlement (see below). Confirmed compulsory settlement agreements affect creditors who have voted against the compulsory settlement as well as creditors who have not reported their claims in the settlement procedure.

Creditors or debtors may also initiate bankruptcy proceedings. In such instances, the court names a bankruptcy administrator who sells the debtor’s property according to a bankruptcy senate, the senate president’s instructions, and court-sponsored supervision. Generally, the debtor’s property is sold at public auction. Otherwise, the creditors’ committee may prescribe a different mode of sale such as collecting offers or placing conditions on potential buyers. The legal effect of the completed bankruptcy is the termination of the debtor’s legal status to conduct business, and distribution of funds from the sale of assets to creditors according to their share of total debt.

In accordance with the Law on Commercial Companies, the state can impose forced liquidation on a debtor subject to liquidation procedures and legal conditions for ending its existence as a business entity. This would occur, for example, in cases in which an entity’s management has ceased operations for more than 12 months, if the court finds the registration void, or by court order.

In 2013, the National Assembly adopted an amendment to the Financial Operations, Insolvency Procedures, and Compulsory Dissolution Act to simplify and speed up bankruptcy procedures and deleveraging.

Slovenia ranks as 9th out of 190 economies for ease of “resolving insolvency” in the World’s Bank Doing Business Report.

							4. Industrial Policies					

**Investment Incentives**

Slovenia offers special tax incentives for high-tech sector investments that create jobs and are linked to research and development activities. In some economically depressed and underdeveloped regions (such as the Prekmurje region near the Hungarian border), Slovenia offers special facilities, services, and financial incentives to foreign investors.

All companies registered in Slovenia can participate in government-financed or subsidized research and development programs, regardless of the origin of capital.

**Foreign Trade Zones/Free Ports/Trade Facilitation**

*Free Customs Zones (FCZ)*

The Port of Koper is Slovenia’s only FCZ. Under Slovenia’s Customs Act, subjects operating in FCZs are not liable for payment of customs duties, nor are they subject to other trade policy measures until goods are released into free circulation.

Duties and rights of users include the following:

- Separate books must be kept for activities undertaken in FCZs;
- Users may undertake business activities in a FCZ on the basis of contracts with the founders of FCZs;
- Users are free to import goods (customs goods, domestic goods for export) into FCZs;
- Goods imported into FCZs may remain for an indefinite period, except agricultural produce, for which the government sets a time limit;
- Entry to and exit from FCZs is to be controlled;
- Founders and users must allow customs, or other responsible authorities, to execute customs, or other, supervision; and
- For the purposes of customs control, users must keep records of all goods imported into, exported from, consumed or altered in FCZs.

The Customs Act also allows the establishment of open FCZs to allow for more flexible organization and supervision of customs authorities.

In such FCZs, users may undertake the following activities:

- Production and service activities, including handicrafts, defined in the founding act or contract, and banking and other financial business transactions, property and personal insurance and reinsurance connected with the activities undertaken;
- Wholesale transactions;
- Retail sales, but only for other users of the zone or for use within the FCZ.

Slovenia has set aside land for Greenfield investments. Most of the newly-developed industrial zones have direct access to well-developed infrastructure, including highways and rail service. Land prices vary greatly. Municipalities and the state often subsidize infrastructure and land costs as incentives to increase employment opportunities, reducing prices for fully-equipped land in industrial zones.

For example, in the town of Lendava in eastern Slovenia, local real estate advertisements indicate the price per square meter of land is roughly EUR 5 (USD 5.85), while prices in the vicinity of Ljubljana can run to EUR 50 (USD 58.50) or more. Potential investors may access a full range of free services and concessions provided by local development agencies for start-ups. Such assistance may also include assistance in completing all the necessary paperwork, securing permits, and in some cases organizing and financing construction in line with investor requirements. Interested investors may contact the U.S. Embassy in Ljubljana for further information.

**Performance and Data Localization Requirements**

Rigid procedures necessary to acquire work permits can be an impediment for foreign investors. It can take as long as two to three months to obtain a single work and residence permit, which is required for local employment. Applicants must submit their single permit application at an administrative unit or at the diplomatic or consular office in their home country. The Ministry of Labor has established a fast-track procedure for foreigners registered as authorized persons or representatives of companies, managers of branch offices, and foreigners who are temporarily sent to work in organizational units for foreign legal persons (corporate entities) registered in Slovenia. More information on single work and residence permits and employment services may be found at http://english.ess.gov.si/the_info_point_for_foreigners/working_in_slovenia .

The government does not oblige foreign investors to use domestic content in goods and technology, or to use local data storage.

							5. Protection of Property Rights					

**Real Property**

According to the World Bank’s Doing Business index, registering property in Slovenia requires an average of five procedures, takes 49.5 days, and costs 2 percent of the property’s value. Globally, Slovenia ranks 36 of 190 economies on the ease of registering property.

Administrative reforms implemented in 2011 and 2012 simplified property registration, while increased automation in Slovenia’s land registry reduced property registration delays by 75 percent. Slovenia has also made transferring property easier by introducing online procedures and reducing fees. Virtually all land has a clear title.

The land registry court (local court) initiates the registration process for the entry of a title in the land registry. Amendments to the Land Registry Act adopted in 2009 and implemented in 2011 require submission to the court of proposals with appendices in electronic form. Submissions are tendered via a notary public or attorneys and real estate agencies acting on the applicant’s behalf. In some cases, applicants may submit registrations directly. Other amendments to the Land Registry Act have transferred responsibility from the courts to the notary for depositing original documents (e.g. contracts) attached to submissions, whereby the notary’s confirmation of authenticity renders the evidence value of the electronic version equal to that of the original. The amendments also enable free access via a web-portal to the land registry records, including pending notations and land register extracts, neither of which were free prior to the reform.

Land registry proposals are automatically assigned to the least-burdened local court. Once the proposal is filed with the land registry court, the registration process is initiated ex officio and the priority of entry is ensured with a land registry seal. The priority order takes effect the day the proposal has been filed. The buyer may theoretically dispose of the property as soon as the purchase agreement is signed and the buyer obtains (direct or indirect) possession of the property. Buyers whose title is not yet entered into the land registry, but who have already taken possession of the property are recognized as proprietary possessor in good faith – the presumed owner. The presumed owner has the right to claim the return of a property in the event of its dispossession from a proprietary possessor in good faith who has the property with a weaker legal title. The buyer may claim the return of the purchase price, but has no claims under the law of property until the title is entered into the land registry. Since May 2011, the law requires submission of proposals in electronic format.

**Intellectual Property Rights**

Slovenia has enacted advanced and comprehensive legislation for the protection of intellectual property that fully reflects the most recent developments in the TRIPS (Trade Related Aspects of Intellectual Property) Agreement and various EU directives. Slovenia negotiated its TRIPS commitments as a developing country and implemented the policy as of January 1, 1996. Slovenia is a full member of the TRIPS Council of the World Trade Organization (WTO) and the World Intellectual Property Organization (WIPO). Slovenia has ratified the WIPO Copyright Treaty and the Cyber Crime Convention.

Slovenia’s Intellectual Protection Office actively participates in the Council of Europe’s Intellectual Property Working Group, the Trademark Committee, and other EU bodies engaged in the formulation of new EU intellectual property legislation. The Copyright and Related Rights Act, as amended in 2015 and 2016, deals with all aspects of modern copyright and related laws, including traditional works and their authors, computer programs, audiovisual works, and rental and lending rights. The act also takes into account new technologies such as storage and electronic memory, original databases, satellite broadcasting, and cable re-transmission. Slovenia’s 2004 harmonization with EU legislation introduced a new system of collective management of intellectual property rights compliant with the latest directives.

The 1994 Law on Courts gives the District Court of Ljubljana exclusive subject matter jurisdiction over intellectual property disputes. The aim of the law is to ensure specialization of judges and efficiency of relevant proceedings. For enforcement of TRIPS provisions, the law provides a number of civil legal sanctions, including injunctive relief and the removal of the infringement, seizure and destruction of illegal copies and devices, publication of the judgment in the media, compensatory and punitive damages, border and customs measures, and the securing of evidence and other provisional measures without the prior notification and hearing of the other party. These infringements also constitute a misdemeanor charge, with fines ranging from EUR 400 (USD 468) to EUR 45,000 (USD 52,628) for legal persons and from EUR 40 (USD 47) to EUR 2,000 (USD 2,440) for supervisors of individual offenders provided that the reported offenses are not criminal in nature. In criminal cases, Slovenia’s Criminal Code applies, which may result in fines or imprisonment. While laws regarding intellectual property are clearly defined, foreign investors have complained that the court system is too slow.

Since the enactment of the Law on Copyright and Related Rights Act, there have been relatively few reported prosecutions regarding copyright infringements and violations. The most notable cases usually involve computer software piracy. In 2004, a long-running software piracy court case ended with a prison sentence and monetary fine. Slovenia has dedicated resources to training prosecutors and public authorities. Slovenia also continues to address the preservation of evidence in infringement procedures and border measures through amendments to existing legislation. The Ministry of Culture has established the Intellectual Property Fund, the Slovenian Copyright Agency, and the Anti-Piracy Association of Software Dealers to combat the problem of piracy in a collective manner.

The Law on Industrial Property grants and protects patents, model and design rights, trademark and service marks, and appellations of origin. The holder of a patent, model, or design right is entitled to exclusively profit from the protected invention, shape, picture, or drawing; exclusively market any products manufactured in accordance with the protected invention, shape, picture, or drawing; dispose of the patent, model, or design right; and prohibit the use of a protected invention, model, or design by any person without consent.

The holder of a trademark has the exclusive right to use the trademark to designate products or services in the course of trade. The authorized user of a protected appellation of origin has the right to use the appellation in the course of trade for labeling products to which the appellation refers.

The patent and trademark rights granted by the Law on Industrial Property take effect from the date of filing the appropriate applications. Patents are granted for 20 years from the date of filing, and model and design rights are granted for 10 years. Trademarks are granted for 10 years, but may be renewed an unlimited number of times. The term of an appellation of origin is unlimited. All patents and trademarks are registered through the Intellectual Property Office, and all registers are open to the public. Patent and trademark applications filed in member countries of the International Union for the Protection of Industrial Property are afforded priority rights in Slovenia. The priority period is 12 months for patents and six months for model and design rights.

Any person who infringes upon a patent or trademark right may be held liable for damages and prohibited from carrying on the infringing acts.

The Ministry of Finance, through the Customs Authority, tracks and reports on seizures of counterfeit goods in accordance with the European Parliament decree 608/2013. All data on seized goods are stored on a central database at the European Commission. The Commission publishes an annual report on seized goods from all countries, available at https://ec.europa.eu/taxation_customs/business/customs-controls/counterfeit-piracy-other-ipr-violations/ipr-infringements-facts-figures_en .

The Law on Industrial Property also provides for the contractual licensing of patents, model and design rights, and marks. All license agreements must be in writing and specify the duration of the license, the scope of the license, whether the license is exclusive or non-exclusive, and the amount of remuneration for use of the patent, model and design rights, and marks.

Compulsory licenses may be granted to another person when the invention is in the public interest or the patentee misuses rights granted under the patent. A misuse of a patent occurs when the patentee does not use or insufficiently uses a patented invention and refuses to license other persons to develop or make use of the protected invention, or imposes unjustified conditions on the licensee. If a compulsory license is granted, the patentee is entitled to compensation. Slovenian industrial property legislation fully complies with EU standards.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

							6. Financial Sector					

**Capital Markets and Portfolio Investment**

Capital markets remain relatively underdeveloped for Slovenia’s level of prosperity and the country continues to feel the effects of the global financial crisis. Enterprises rarely raise capital through the stock market and tend to rely on the traditional banking system and private lenders to meet their capital needs.

Established in 1990, the Ljubljana Stock Exchange (LSE) is a member of the International Association of Stock Exchanges (FIBV). In 2015, the Zagreb Stock Exchange acquired the LSE. However, the number of companies listed on the exchange is limited, and trading volume is very light, with annual turnover similar to a single day’s trading on the NYSE. Low liquidity is an issue when entering or exiting sizeable positions.

In 1995, the Central Securities Clearing Corporation (KDD) was established to provide central securities custody services, clear and settle securities transactions, and maintain the central securities registry on the LSE electronic trading system. Slovenia’s Securities Market Agency (SMA), established in 1994, has powers similar to the U.S. Securities and Exchange Commission. The SMA supervises investment firms, the LSE, the KDD, investment funds, and management companies. It shares responsibility with the Bank of Slovenia for supervision of banking and investment services.

Slovenia adheres to Article VIII of the International Monetary Fund’s Article of Agreement and is committed to full current account convertibility and full repatriation of dividends.

The LSE uses different dissemination systems, including real-time online trading information via Reuters and the Business Data Solutions System. The LSE also publishes information on the Internet at http://www.ljse.si/ .

Foreign investors in Slovenia have the same rights as domestic investors, including the ability to obtain credit on the local market.

**Money and Banking System**

There is a relatively high degree of concentration in Slovenia’s banking sector. The country’s largest bank, NLB (Nova Ljubljanska Banka), remains state-owned, despite the government’s commitment to the European Commission to sell 50 percent of the bank by the end of 2017 and conclude the privatization process by the end of 2019. The second largest bank, NKBM (Nova Kreditna Banka Maribor), was sold to an American fund in 2016. NLB accounts for approximately 26 percent of market share, while NKBM and other foreign-owned banks account for more than 40 percent. There are 12 commercial banks, three savings banks, and three foreign bank branches in Slovenia, serving two million people. According to European Banking Federation data, the total assets of Slovenia’s banking sector were EUR 37.1 billion (USD 43.4 billion) as of the end of 2016, accounting for approximately 93 percent of GDP. In 2008, the combined effects of the financial crisis, the collapse of the construction sector, and diminished demand for exports (nearly 70 percent of GDP is derived from exports) led to significant capital shortfalls. Bank assets declined steadily after 2009, but rebounded in 2016 and have remained steady since then. Most banks have tried to refocus their business activities towards the small and medium-sized enterprises segment and individuals/households, prompting larger companies to search for alternative financing sources.

Several foreign banks have announced takeovers or mergers with Slovenian banks. In 2001, the French bank Societe Generale acquired Slovenia’s largest private bank, SKB Banka. That same year, the Italian banking group San Paolo IMI purchased 82 percent of the Bank of Koper, the fifth largest bank in Slovenia. In 2002, the government sold 34 percent of NLB to Belgium’s KBC Group and another five percent to the European Bank for Reconstruction and Development (EBRD). In December 2012, KBC sold its share of NLB, and the government stepped in again to recapitalize the bank. In early 2018, the government continued to negotiate with the European Commission on NLB’s privatization.

Slovenia’s banking sector was hit hard by the 2009 economic crisis. NLB and NKBM faced successive downgrades by credit rating agencies due to the large number of non-performing loans in their portfolios. According to World Bank statistics, an estimated 5.1 percent of Slovenian banking assets were non-performing as of end of 2016, while approximately 12 percent of NLB’s total assets were nonperforming at the end of 2017. According to European Bank Authority statistics from mid-2017, based on a broader definition of “non-performing loans,” 14 percent of all loans in Slovenia were past due. The Slovenian Bank Association report estimates 5.3 percent of Slovenian bank loans are nonperforming.

In 2013, the government established a Bank Asset Management Company (BAMC) with a management board comprised of financial experts to promote stability and restore trust in the financial system. BAMC agreed to manage the non-performing assets of three major state banks in exchange for bonds. Three such operations were conducted from December 2013 through March 2014. The government also injected EUR 3.5 billion (USD 4.1 billion) into three of the biggest banks (NLB, NKBM, and Abanka). These measures helped recapitalize and revitalize the country’s largest commercial banks.

Banking legislation authorizes commercial banks, savings banks, and stock brokerage firms to purchase securities abroad. Investment funds may also purchase securities abroad, provided they meet specified diversification requirements.

Slovenian entrepreneurs are very active in developing blockchain technology, with several important global blockchain technology players headquartered in Slovenia. Despite this vibrant community, however, Slovenian banks have not adopted blockchain technologies to process banking transactions.

Slovenia’s takeover legislation is fully harmonized with EU regulations. In 2006, Slovenia implemented EU Directive 2004/25/ES by adopting a new takeover law. The law was amended in 2008 to reflect Slovenia’s adoption of the euro as its currency. The law defines a takeover as a party’s acquisition of 25 percent of a company’s voting rights and requires the public announcement of a potential takeover offer for all current shareholders. The acquiring party must publicly issue a takeover offer for each additional acquisition of 10 percent of voting rights until it has acquired 75 percent of voting rights. The law also stipulates that the acquiring party must inform the share issuer whenever its stake in the target company reaches, surpasses, or drops below 5, 10, 20, 25, 33, 50, or 75 percent. The law applies to all potential takeovers.

It is common for acquisitions to be blocked or delayed, and drawn out negotiations and stalled takeovers have hurt Slovenia’s reputation in global financial markets. In 2015, the privatization of Slovenia’s state-owned telecommunications company, Telekom Slovenije, failed in large part due to political attempts to discourage the sale of a state-owned company. The government has struggled to meet its commitment to open Slovenia’s economy to the international capital market. Slovenia’s biggest retailer, Mercator, faced similar challenges in 2014 when a lengthy and arduous process and strong domestic opposition preceded its eventual sale to a Croatian buyer.

A handful of large companies dominate Slovenia’s insurance sector. The largest such company, state-owned Triglav d.d., holds 36 percent of the total market. The four largest insurance companies in Slovenia account for 84 percent of the market, while foreign insurance companies constitute less than 10 percent. In 2016, two Slovenian and two Croatian insurance companies merged into a new insurance company, SAVA. 14 insurance companies, two re-insurance companies, three retirement companies, and seven branches of foreign firms operate in Slovenia. Insurance companies primarily invest their assets in non-financial companies, state bonds, and bank-issued bonds.

Since 2000, there have been significant changes in legislation regulating the insurance sector. The Ownership Transformation of Insurance Companies Act, which seeks to privatize insurance companies, has stalled on several occasions due to ambiguity over the estimated share of state-controlled capital. Although plans for insurance sector privatization have been under discussion since 2005, there has been no implementation.

Slovenia currently has three registered health insurance companies and a variety of companies offering other kinds of insurance. Under EU regulations, any insurance company registered in the EU can market its services in Slovenia, provided the insurance supervision agency of the country where the company is headquartered has notified the Slovenian Supervision Agency of the company’s intentions.

**Foreign Exchange and Remittances**

*Foreign Exchange Policies*

Slovenia adheres to Article VIII of the IMF Article of Agreement and is committed to full current account convertibility and full repatriation of dividends. To repatriate profits, joint stock companies must provide evidence of the settlement of tax liabilities, notarized evidence of distribution of profits to shareholders, and proof of joint stock company membership (Article of Association). All other companies must provide evidence of the settlement of tax liabilities and the company’s act of establishment.

For the repatriation of shares in a domestic company, the party must submit its act of establishment, a contract on share withdrawal, and evidence of the settlement of tax liabilities to the authorized bank.

Slovenia replaced its previous currency, the Slovenian tolar, with the euro in January 2007. The Eurozone has a freely floating exchange rate.

*Remittance Policies*

Not applicable/information not available.

**Sovereign Wealth Funds**

Slovenia does not have a sovereign wealth fund.

							7. State-Owned Enterprises					

Private enterprises compete on the same terms and conditions as public enterprises with respect to access to markets, credit, and other business operations.

State-owned and partially state-owned enterprises (SOE) are present across most industries in Slovenia. The state has never undergone a wholesale privatization program, having retained significant ownership shares in many large companies since its independence. SOEs are particularly predominant in sectors of strategic national interest, such as energy, transport, public utilities, banking, telecommunications, and insurance. Other economic sectors, including retail, entertainment, construction, tourism, and manufacturing, include important firms that are either wholly state-owned or in which the state maintains a controlling interest by virtue of holding the largest single block of shares.

In general, SOEs do not receive a greater share of contracts or business than private sector competitors in sectors that are open to private and foreign competition. SOEs obtain goods and services from private and foreign firms. SOEs have to follow a strict government procurement agreement which requires transparent procedures available to all firms. Private firms can compete under the same terms and conditions with respect to market share, products, and incentives. All firms have the same access to financing.

SOEs are subject to the same laws as private companies. They must submit their books for independent audits and publish annual reports if required (for example, if the SOE is listed on the stock exchange or the size of the company meets a certain threshold). The reporting standards are comparable to international financial reporting standards. SOEs must fully comply with all legal obligations.

Slovenia is an active participant in the OECD Working Party on State Ownership and Privatization Practices and adheres to the OECD Guidelines on Corporate Governance for SOEs.

Following OECD recommendations, the government established the Capital Asset Management Agency (AUKN) in 2010 to increase transparency and promote more efficient management of SOEs. In 2013, authorities transformed the AUKN into the Slovenian Sovereign Holding (SSH). The SSH is charged with simplifying and shortening the administrative process of privatizing state assets. SSH took over all AUKN portfolios as well as the portfolios of two other smaller state-owned funds. More than 95 percent of SSH funds are invested domestically. SSH is an independent state authority that reports to the National Assembly. It provides the National Assembly with annual reports regarding the previous year’s implementation of the Annual Plan of the Corporate Governance of Capital Investments. The government then adopts the Annual Plan of the Corporate Governance of Capital Investments based on SSH’s proposal.

**Privatization Program**

In 2013, the National Assembly approved a list of 15 state-owned companies it planned to sell. To date, the state has sold 11 of these companies, and one is in the final phase of privatization. The government planned to sell NLB by the end of 2017, but stopped the process and re-opened negotiations on the terms for the sale with the European Commission in 2017. Foreign investors may participate in the public-bidding processes on an equal basis. However, interested parties often describe the bidding process as opaque, with unclear or unenforced deadlines.

In 2015, the government prepared an asset management strategy that classified state-owned assets into *strategic*, *important,* and*portfolio* assets. In companies classified as *strategic*, the state will maintain or obtain at least a 50 percent plus one share. In companies classified as *important,* the state will maintain a controlling share (25 percent plus one share). In companies classified as *portfolio,*it is not mandatory for the state to maintain a controlling share. The government reclassified the list of companies in 2017.

SSH publishes online the latest list of state stakes for sale. It is available in Slovenian at https://www.sdh.si/sl-si/prodaje-nalozb/kapitalske-nalozbe-v-postopku-prodaje .

							8. Responsible Business Conduct					

The concept of Responsible Business Conduct (RBC) has become increasingly popular among Slovenia’s business community, but the due-diligence approach is not yet commonly recognized. However, to raise their public profiles and improve their images with the public, larger international companies have increasingly undertaken activities such as sponsoring sports teams and community events in the name of corporate social responsibility. Larger companies in Slovenia have also focused on developing environmentally-friendly images by implementing green technologies and adhering to high environmental standards.

As an OECD member, Slovenia adheres to the OECD Guidelines for Multinational Enterprises and encourages foreign and local enterprises to follow generally accepted RBC principles, including the UN Guiding Principles on Business and Human Rights. Slovenia’s National Contact Point for the OECD Guidelines is located in the Ministry of Economic Development and Technology: http://mneguidelines.oecd.org/ncps/slovenia.htm .

							9. Corruption					

Slovenia has no bribery statute comparable to the U.S. Foreign Corrupt Practices Act. However, Chapter 24 of the Slovenian Criminal Code (SCC) provides statutory provisions for criminal offenses in the economic sector. Corruption in the economy may take many forms, including collusion among private firms or public officials using influence to appoint patrons to the boards of SOEs.

The SCC calls for criminal sanctions against officials of private firms for forgery or destruction of business documents, unauthorized use or disclosure of business secrets, insider trading, embezzlement, acceptance of gifts under certain circumstances, money laundering, and tax evasion.

Articles 241 and 242 of the SCC make it illegal for a person performing a commercial activity to demand or accept undue rewards, gifts, or other material benefits that will ultimately result in harm or neglect to a business organization.

Under Article 261 of the SCC, public officials cannot request or accept a gift to perform or omit an official act within the scope of their official duties. The acceptance of a bribe by a public official may result in a fine or imprisonment of no less than one year, with a maximum sentence of five years. The law also stipulates the seizure of the accepted gift or bribe.

Article 262 holds the gift’s donor accountable, making it illegal for natural persons or legal entities to bribe public officials with gifts. Violation of this article carries a sentence of up to three years. In cases in which the gift giver discloses the attempted bribery before it is detected or discovered, punishment may be reduced.

The State Prosecutor’s Office is responsible for the enforcement of anti-bribery laws. The number of cases of actual bribery is small and generally limited to instances involving inspection and tax collection. The Prosecutor’s Office has reported that obtaining evidence is difficult in bribery cases, making it equally difficult to prosecute. In 2010, the government established the Commission for the Prevention of Corruption (CPC), an independent state body with a broad mandate to investigate corruption, prevent breaches of ethics, and ensure the integrity of public officials. The CPC is not part of Slovenia’s law enforcement or prosecution system, and its employees do not have traditional police powers. However, the CPC has broad legal powers to access and subpoena financial and other documents, question public servants and officials, conduct administrative investigations, and direct law enforcement bodies to gather additional information and evidence within the limits of their authority. The CPC may also issue fines for violations.

In 2011, to combat Slovenia’s ongoing problems with corruption and non-transparent procedures in public procurement, authorities established a new government-wide Public Procurement Agency under the Ministry of Justice to carry out all public procurements over established EU thresholds, such as goods and services above EUR 40,000 (USD 46,780) and projects above EUR 80,000 (USD 93,560). By law, the National Review Commission provides non-judicial review of all public procurements.

Corruption is an ongoing problem, although its prevalence remains relatively limited. In 2001, Slovenia convicted its first senior public official for accepting a bribe. A second case was prosecuted in 2010, resulting in the imprisonment of a member of parliament. The small size of Slovenia’s political and economic elite contributes to a lack of transparency in government procurement and widespread cronyism in the business sector. Several prominent national and local political figures have been charged or tried for corruption in public procurements. In 2008, investigators accused several public officials, including the prime minister, of accepting bribes from the Finnish defense contractor Patria related to an armored personnel carrier procurement. Although three defendants, including the former prime minister, were convicted in 2013, the convictions were overturned on appeal. The CPC has instituted a new system for tracking corruption in public procurement at the municipal level and has discovered numerous violations since implementation.

The CPC also operates with a broad mandate to prevent and investigate breaches of ethics and integrity involving holders of public office. The president of Slovenia appoints the leadership of CPC, which reports to the National Assembly.

Slovenia ratified the UN Anticorruption Convention in 2008.

Slovenia is a party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

**Resources to Report Corruption**

Contact at government agency or agencies are responsible for combating corruption:

Boris StefanecPresidentCommission for the Prevention of Corruption56 Dunajska cesta1000 LjubljanaTel: +386 1 400 5710Fax: +386 1 400 8472Email: info@kpk-rs.siWeb: www.kpk-rs.si/en 

Contact at “watchdog” organization:

Alma Sedlar, PhDActing PresidentTransparency International SloveniaVozarski pot 12, 1000 LjubljanaTel +386 1 3207325info@transparency.si

Assistance for U.S. Businesses: The U.S. Department of Commerce offers several services to U.S. businesses seeking to address business-related corruption issues. For example, it may assist U.S. companies in conducting due diligence as part of the company’s overarching compliance program when choosing business partners or agents overseas. The U.S. Foreign Commercial Service may be reached through its offices in major U.S. and foreign cities, or through its website at http://www.trade.gov/cs .

The Departments of Commerce and State provide worldwide support for qualified U.S. companies bidding on foreign government contracts through the Commerce Department’s Advocacy Center and State’s Office of Commercial and Business Affairs. U.S. companies may report problems encountered in seeking such foreign business opportunities, including alleged corruption by foreign governments or competitors, to appropriate U.S. officials at the U.S. Embassy and the Department of Commerce Trade Compliance Center’s “Report a Trade Barrier” website at http://tcc.export.gov/Report_a_Barrier/index.asp .

Guidance on the U.S. FCPA: The Department of Justice’s (DOJ) FCPA Opinion Procedure enables U.S. firms and individuals to request a statement on the Justice Department’s present enforcement intentions under the FCPA’s anti-bribery provisions regarding any proposed business conduct. The details of the opinion procedure are available on DOJ’s Fraud Section Website at http://www.justice.gov/criminal/fraud/fcpa . Although the Department of Commerce has no enforcement role with respect to the FCPA, it supplies general guidance to U.S. exporters who have questions about the FCPA and international developments concerning the FCPA. For further information, see the website of the Office of the Chief Counsel for International Counsel, U.S. Department of Commerce, at https://ogc.commerce.gov/ .

Exporters and investors should be aware that virtually all countries prohibit the bribery of public officials and prohibit officials from soliciting bribes under domestic laws. As party to various international conventions, most countries are required to criminalize such bribery and other acts of corruption.

							10. Political and Security Environment					

Except for its brief, 10-day war of independence from Yugoslavia in 1991, there have been no significant incidents of political violence in Slovenia since independence.

							11. Labor Policies and Practices					

According to the Statistical Office of Slovenia, Slovenia’s unemployment rate has fallen steadily since 2014 and reached an eight-year low of 6.6 percent in 2017.

Following the 2008 economic crisis, many Slovenian companies declared bankruptcy or laid off significant portions of their workforce. While prevalent in all sectors, financial difficulties hit the construction, automotive, textile, and other producers particularly hard. Various government-sponsored economic reforms addressed this problem through a combination of retraining and investment in new technologies, often targeting areas with the highest unemployment.

Although significantly lower than its 2013 high of 25 percent, the Statistical Office reported Slovenia’s youth unemployment rate remains relatively high at 15 percent. To address this problem, authorities implemented “Youth Guarantee 2014-2015,” whereby every young person aged 15 to 29 years is eligible for an employment offer (including apprenticeship), on-the-job training, formal education, or a short form of institutional or work-based training, within four months of registering with a government-sponsored employment service. Based on its initial success, the government budgeted EUR 300 million for the 2016-2020 Youth Guarantee program.

Slovenia fully harmonized its labor legislation with the EU in 2004. In line with this legislation, Slovenia maintains strict rules on issuing work permits to non-EU applicants. The 2001 Employment of Aliens Act introduced a quota system for work permits and simplified the procedure for obtaining such permits for foreigners who have worked and lived in Slovenia for an extended period.

Slovenia’s wage-setting practice follows the “social partners” model, designed to contain upward pressure by centralizing wage decisions. In practice, however, high wage expectations have pushed Slovenia’s wage levels above those of its neighbors in the Western Balkans. Despite these pressures, Slovenia’s well-educated labor force and position as a productive transition economy allows it to remain competitive in niche markets.

In 2003, Slovenia adopted an Employment Relationship Act that defines a full-time workweek as 36 to 40 hours (made up of six to eight-hour days, including a 30-minute lunch break). The act increases protections for critical working groups (including women and children) and eases the conditions under which an employer may terminate employees. Amendments to the act adopted in 2013 further ease the conditions for termination of employment. Slovenia’s labor force performs well in the higher value-added activities that utilize its skilled technicians and engineers at a competitive cost. Despite the introduction of policies offering greater labor market flexibility, however, the market for workers remains quite rigid, and investors find that laying off workers is more difficult than in the United States.

As of April 2018, the Institute for Macroeconomic Analysis and Development reported Slovenia’s minimum wage is EUR 842.79 (USD 985.66) per month, among the highest in Europe. In addition, growing public sector labor unrest has placed pressure on regulators to push wages higher. In November 2015, the National Assembly endorsed a motion sponsored by trade unions to exempt bonuses for night, weekend, and holiday work from the minimum wage and force employers to pay these wages separately. Given such rapid increases in the minimum wage, Slovenia has lost its cost competitiveness in many sectors.

In the aftermath of the global financial crisis, Slovenia encountered protracted labor unrest related to public sector salaries. The current government, formed in 2014, negotiated a reform of the public sector pay system with the unions that lowered salaries by 0.5 percent to 4.86 percent, depending on the pay scale. The agreement went into force in July 2014 and remained valid through 2015. In November 2015, the government and unions reached an agreement that the public sector wage bill would rise by around EUR 148 million (USD 173 million) in 2016 compared to 2015. The deal stipulated that wages would return to 2013 levels (a 3.47 percent increase), while the annual holiday allowance would increase. Public sector promotions, more or less frozen for years, have been partially relaxed.

							12. OPIC and Other Investment Insurance Programs					

Slovenia signed a bilateral agreement with the U.S. Overseas Private Investment Corporation (OPIC) in 1994. OPIC currently offers several investment finance and insurance programs in Slovenia, including loan guarantees, direct loans, and political violence and expropriation insurance.

The U.S. Export-Import Bank offers short-, medium-, and long-term private sector, as well as short-term public sector, programs in Slovenia. In 1999, the Slovenian Export Corporation (SEC) and the U.S. Export-Import Bank signed a memorandum on cooperation in financing, insuring, and reinsuring exports to Southeast European countries. In 2007, the SEC restructured to become the Slovenian Export and Development Bank. More information is available on its website http://www.sid.si/ .

							13. Foreign Direct Investment and Foreign Portfolio Investment Statistics					

*Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy*

*Statistical Office of the Republic of Slovenia(D) indicates that investment levels are so small that the U.S. BEA has suppressed the data to avoid disclosure of data of individual companies.N.B.: The Bank of Slovenia (BoS), in its official data, lists U.S. FDI at approximately USD 61 million or 0.5 percent of total inward FDI. However, this amount does not take into account significant investments by U.S. firms not listed as U.S. in origin by the BoS, as U.S. funds are often routed through third-country subsidiaries. In 2017, the BoS began reporting FDI according to the ultimate investing country or originating country of capital. It estimated that USD 2.19 billion (EUR 1.795 billion euros) or 13.9 percent of Slovenia’s total FDI originated in the United States, making the United States second only to Germany as a source of foreign investment in Slovenia.*Table 3: Sources and Destination of FDI*

Source: IMF’s Coordinated Direct Investment Surveyhttp://data.imf.org/CDIS .*Table 4: Sources of Portfolio Investment*

Source: IMF’s Coordinated Direct Investment Surveyhttp://data.imf.org/regular.aspx?key=60587804 .

							14. Contact for More Information					

William D. BakerEconomic & Commercial Officer31 Presernova Street, Ljubljana, Slovenia+386 1 200 5668Email: BakerWD@state.gov OR DoingBusinessinSlovenia@state.gov

## View report by:

### On This Page

                    -  Executive Summary 
                    -  1. Openness To, and Restrictions Upon, Foreign Investment   
                    -  2. Bilateral Investment Agreements and Taxation Treaties   
                    -  3. Legal Regime   
                    -  4. Industrial Policies   
                    -  5. Protection of Property Rights   
                    -  6. Financial Sector   
                    -  7. State-Owned Enterprises   
                    -  8. Responsible Business Conduct   
                    -  9. Corruption   
                    -  10. Political and Security Environment   
                    -  11. Labor Policies and Practices   
                    -  12. OPIC and Other Investment Insurance Programs   
                    -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                    -  14. Contact for More Information   

Tags

Bureau of Economic and Business AffairsBureau of European and Eurasian AffairsSlovenia

Back to Top

01 / Select a Year

02 / Select Sections	

                  -  Select All Sections 

03 / Select Countries You can add more than one country or area.

                - White House
                - USA.gov
                - Office of the Inspector General
                - Archives
                - Contact Us

follow us
FacebookXInstagramYouTubeFlickrGovDelivery

              - Privacy Policy
              - Accessibility Statement
              - Copyright Information
              - FOIA
              - No FEAR Act

## U.S. Department *of* State

#### The Lessons of 1989: Freedom and Our Future