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 business;
- 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. Foreign undertakings must conduct their business activities through an entity registered in Slovenia.
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 a registered office in Slovenia in respect of business conduct in Slovenia, unless otherwise provided by the applicable legislation.
Protection of foreign investors
Slovenia follows the OECD principles regarding the protection of foreign property. The repatriation of capital and transfer of profits are free after tax liabilities and other obligations have been paid. 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.
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, almost all sectors are open to investors from the European Economic Area (e.g. the operation of games of chance is also limited for EEA investors), while certain restrictions on investments by non-EEA residents apply in a limited number of sectors such as 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 area of cross-border trade in services, there are restrictions on non-EEA service providers in sectors like insurance services (except for direct insurance services and direct insurance intermediation for the insurance of risks relating to transport; reinsurance and retrocession); and most banking and other financial services (except for lending of all types; giving guarantees and commitments to domestic legal entities and sole proprietors; providing and transferring financial information and financial data processing and related software by suppliers of other financial services; and certain advisory and other auxiliary financial 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 located within the EEA and wishing to provide payment services are, according to the Payment Services Directive (2015/2366/EU), obliged to establish a company within the EEA and subsequently apply for an authorisation.
Slovenian citizens and legal entities may buy and own real estate in Slovenia without limitation. Companies established or purchased by foreign nationals in Slovenia are Slovenian legal entities and hold the same property rights as companies established by domestic persons.
For non-citizens and legal entities established outside the Republic of Slovenia, the following rules apply:
- Citizens and legal entities from EU, EEA (Iceland, Liechtenstein, Norway) and non-EU OECD countries (Australia, Canada, Chile, Iceland, Israel, Japan, Mexico, Norway, New Zealand, Switzerland, Turkey, South Korea and the USA), as well as persons with the status of a Slovenian without Slovenian citizenship, may freely and unconditionally invest in and acquire real estate in the territory of Slovenia.
- The citizens and legal entities of EU candidate states which are not OECD members (Albania, Montenegro, North Macedonia, Serbia) may acquire real estate in Slovenia according to the principle of reciprocity.
- Citizens and legal entities from all other countries may only own real estate if they have both inherited it and if the reciprocity principle is observed under the conditions set out in the Inheritance Act.
There are no restrictions on the leasing of real estate by foreign nationals.
Slovenia has a civil law system based on the Continental European law tradition. Regular court proceedings are the most commonly used method of resolving disputes.
Courts of general jurisdiction have three levels. Courts of first instance are divided into local courts with jurisdiction over civil cases concerning claims for damages or property rights up to a certain value, the disturbance of possession, tenancy relations etc. and district courts dealing with civil cases which exceed the jurisdiction of local courts, commercial disputes, copyright and IP cases, the confirmation of rulings of a foreign court etc. Courts of second instance decide on appeals lodged against decisions by courts of first instance. The court of third instance is the Supreme Court of the Republic of Slovenia and is the highest court in Slovenia.
Specialised courts comprise the Administrative Court providing the judicial review of administrative acts; labour courts with jurisdiction in individual and collective labour disputes; and a social court which holds jurisdiction in social insurance disputes.
Court decisions are binding and enforceable. Foreign judgments are enforced under the provisions of the relevant EU law, bilateral or multilateral treaties and domestic procedural rules.
Mediation and, less commonly, arbitration are used as types of alternative dispute resolution.
Courts of first and second instance carry out alternative dispute resolution via ADR offices organised within the courts. A mediation board operates within the Slovenian Insurance Association and in some other non-governmental organisations and private institutions. Mediation may also be carried out by individual mediators.
Permanent arbitration institutions operate at the Chamber of Commerce and Industry of Slovenia and at the Triglav Insurance Company d.d., while a special board conducting settlement proceedings operates within the Ljubljana Stock Exchange and the Bank Association of Slovenia.
Bilateral agreements on mutual promotion and protection are in force with the following countries: Albania, Austria, the Belgo-Luxembourg Economic Union, Bosnia and Herzegovina, Bulgaria, China, Croatia, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Israel, Kuwait, Lithuania, Malta, Moldova, the Netherlands, North Macedonia, Poland, Portugal, Romania, Serbia, Singapore, the Slovak Republic, Spain, Sweden, Switzerland, Thailand, Turkey, Ukraine, the United Kingdom, and Uzbekistan.
Bilateral agreements with Belarus, India and the Russian Federation have also been signed, but have not yet entered into force.
SPIRIT Slovenia – Information point for foreign investors
The public agency SPIRIT Slovenia regularly updates the overview of all current calls for tenders in Slovenia, for which any company registered in Slovenia may apply irrespective of its ownership structure. The list of calls for tenders with basic information in the English language is available at the website http://www.investslovenia.org/business-environment/incentives/.
Financial incentives for investment are regulated by the Investment Promotion Act (ZSinv) of 2018.Incentives may be granted in the form of grants, in the form of loans, guarantees and subsidised interest rates, or as the purchase of property of the local community at a below-market price.
Conditions for granting incentives
Investment incentives may be granted to a domestic or foreign legal person that invests in a company in Slovenia. Investments may be made in tangible and intangible fixed assets and should relate to the setting up of a new company, expansion of a company’s capacities, diversification of production into new products, or significant changes to a company’s entire production process.
|Conditions for granting incentives|
|Manufacturing||Service activities||R&D activities|
|New jobs within 3 years||25||10||5|
|Investments that significantly contribute to developing the Slovenian economy|
|New jobs within 3 years||502||402||202|
|New jobs within 10 years||4004||4004||2004|
|1 at least 50% of the investment value in machinery and equipment2 of which at least 10 highly qualified jobs3 maintenance of the investment in Slovenia for at least 10 years4 in a ten-year period|
Subsidies under general conditions are granted on the basis of a call for tenders carried out by SPIRIT Slovenia. Calls for tender are published in the Official Gazette and on SPIRIT’s website.
SPIRIT Slovenia issues a decision approving or rejecting an application for a grant within 60 days of the date of opening the applications.
If a grant is approved, SPIRIT Slovenia, the investor and the incentive recipient enter into a grant contract. On signing the contract, the investor or the incentive recipient must provide a first-call performance bond or other appropriate security.
Grants for investments that significantly contribute to developing the Slovenian economy may be awarded without a call for tenders. Investors should send their applications for a grant to the Ministry of Economic Development and Technology (hereinafter: MGRT) on the prescribed form. At its own discretion, the MGRT issues a decision to award or refuse a grant. If a grant is approved, the MGRT, the investor and the incentive recipient enter into a grant contract. On signing the contract, the investor or the incentive recipient must provide a first-call performance bond or other appropriate security.
Loans, guarantees and subsidised interest rates
Loans, guarantees and subsidised interest rates are granted to incentive recipients by SID Bank d.d Ljubljana. Incentive recipients must secure the loan, guarantee or subsidised interest rate by a lien on movable or immovable property or using other appropriate security.
Purchase of property owned by a local community at a below-market price
A local community may sell property to a company at a below-market price on the basis of a property purchase contract. The decision to sell the property at a lower than market price is adopted by the local community council.
Special rules apply to strategic investments. Investors send their applications to determine compliance with conditions for a strategic investment to the MGRT on a prescribed form. If the investment meets the conditions, the MGRT, the investor and the incentive recipient sign a contract to implement the strategic investment. On signing the contract, the investor or the incentive recipient must provide a first-call performance bond or other appropriate security.
The general corporate tax rate is 19%. Various tax allowances and tax reliefs are available (see Taxation).
To encourage employment, the Employment Service of Slovenia (ESS) applies several measures through which it advises and finally supports employers that employ new workers.
Slovene Enterprise Fund incentives
Various incentives in the form of bank loan guarantees, grants for enterprise start-ups and equity financing instruments are available to micro-, small- and medium-sized companies registered in Slovenia (including companies fully owned by foreigners) via public tenders of the Slovene Enterprise Fund. Tenders include co-financing B2B events, acquiring of certificates, market research analyses of foreign markets etc.
The SID Bank performs various activities intended to stimulate Slovenian exports (see Insurance and financing of Slovenian exports).
Through public calls, the SPIRIT Slovenia public agency co-finances companies’ individual and group presentations at trade fairs abroad, brand strengthening in foreign markets through showrooms, establishing or upgrading e-commerce in SMEs, and promoting partnerships for a more effective presence in foreign markets.
Municipalities may offer different forms of incentives, which are negotiated on a case-by-case basis. These incentives can include easy access to industrial sites, utility connections and local tax holidays.
Local incentives in practice: example of the Municipality of Ajdovščina
The Municipality of Ajdovščina is the economic, educational and cultural centre of the Vipava Valley, situated in Western Slovenia on the border with Italy, 80 km from Ljubljana and 150 km from Venice. Apart from the state-level incentives described above, the Municipality of Ajdovščina offers investors several incentives of its own, such as:
- subsidies on purchases of land intended for the construction of premises for their industrial or business activities of up to 100% of the purchase price;
- operation grants for up to 100% of the assessed public utilities charge for investments made in the construction of commercial and production facilities located within commercial zones (either existing or new ones);
- interest-rate subsidies for investments in: production and service capacities; new construction or renovation of production and service capacities; and investments in business activity equipment and/or the purchase of intangible rights (patents, licences, and technological know-how);
- a subsidy covering up to 75% of the employer’s share of social security contributions for as many as 10 new employees in the first 2 years of their employment, where the sole condition is that their employment contracts are for a minimum of 3 years;
- co-financing the protection of intellectual property rights, the costs of creating an initial prototype or the costs of documented innovation-oriented technical solutions, ideas or research assignments by up to 50%;
- co-financing consultation services for entrepreneurs in the process of putting together tender documentation for national and international tenders in order to receive grants by up to 50%;
- a subsidy of up to 100% of the market rental of commercial premises owned or managed by the Municipality of Ajdovščina to encourage specific commercial activities of the public interest but for which there is no economic interest; and
- lease co-financing for exhibition spaces at fairs in Slovenia or abroad by up to 50%.
The Municipality of Ajdovščina provides investors with a liaison officer to assist them with their acquisition of land and obtaining of building permits and other licences.
In addition, tenders are open in various other areas (co-financing the purchase of new technological equipment in an SME, direct co-financing for joint development and investment projects) subject to the condition that they have operated in Slovenia for at least 1 year.
A special regime applies to high-value added companies and to innovative start-up companies. The register of high-value added companies and the register of innovative start-up companies is maintained by the Slovene Enterprise Fund (SEF).