The Dallas Regional Chamber co-hosted a seminar last week, May 4th, at the start of World Trade Month that focused on the investment environment and opportunities in Slovakia. One of the event attendees, Peter Petrik, a native of Slovakia and local business owner and professor at the University of Texas at Dallas, authored the following blog:
Invest in Slovakia Seminar
Written by Peter Petrik on May 4, 2010
This unique event took place on May 4, 2010 and was presented by the Dallas Regional Chamber and the Embassy of the Slovak Republic to the United States. The event sponsor was Chavez & Valko, LLP which is the law firm of the newest Honorary Consul of the Slovak Republic to Texas, Martin Valko.
Keynote introduction was delivered by H. E. Peter Burian, Ambassador of the Slovak Republic to the United States. His comments highlighted the dimplomatic career on behalf of the Slovak Republic with United Nations, NATO, and WEU. Since he took the post of Ambassador to the US he has promoted the many opportunities Slovakia offers to international companies.
Olga Algayerova, the State Secretary of the Ministry of Foreign Affairs of the Slovak Republic delivered a well received keynote. In her comments, she highlighted the shift in focus to attracting foreign investors into the fields of science, research and development, as well as the lucrative business environment composed of 19% flat tax and no tax on corporate dividends.
Jake Slegers, Executive Director of The American Chamber of Commerce in the Slovak Republic introduced and moderated a panel titled “Why invest in Slovakia?” Mr. Slegers provided a comprehensive overview of the Slovak marketplace based on his experience of 16 years.
The panelists included Thomas Flannery, Partner and Location Leader with Ernst & Young. The experience of his firm indicates that despite the global economic slowdown the opportunities in Slovakia are growing, as their employee ranks have increased by over 30%.
The experience of John Goodish, Executive Vice President and Chief Operating Officer of US Steel dates back to 1998 and the purchase of VSŽ, a large steel factory in Kosice. Mr. Goodish described the Slovak business partners “welcoming with suspicion”, and emphasized the educated and hard-working nature of the workforce. While the average worker was not worldly, by integrating the social and corporate culture many innovation projects ensued. Today, a full 1/3 of the international income for US Steel comes from their operations in Slovakia.
Kip Thompson, VP for Global Workplace Environment and Strategic Growth at Dell shared his “fantastic” experience. In 2001, Dell decided to look abroad for additional growth opportunities. The expansion team researched 8 potential countries. Beyond the stringent due diligence, Dell performed hands-on tests with workforce in each country, testing 200-500 prospective employees in assortment of skills that included technology, language, and critical thinking resulted in Dell focusing in on Slovakia. In 2002 the division started with 300 employees providing technical support for Germany. The positive experience led to a fast expansion that now includes their own corporate building with 1,500 employees providing complete services in 8 difference languages. Mr. Thompson emphasized that the people of Slovakia are the true strategic advantage of any investment in the country, delivering an innovative approach and can-do attitude.
The next panel discussion titled “Slovak Economic and Investment Environment” was introduced by Katarina Storfer, Euromoney Institutional Investor and SARIO Cooperation Partner. Ms. Storfer’s overview focused on comparison of Slovakia to the V4 (group of Vyšegrad 4 countries – Slovakia, Poland, Czech Republic, and Hungary). While Slovakia is the country of choice for 24 wholly-owned banks, it is also the best positioned amongst the Central- and Eastern-European countries for the economic rebound.
This panel also included Andrea Chovancova, Director for Foreign Direct Investments, SARIO. She presented a thourough overview of the favorable FDI conditions in Slovakia that include highly educated workforce (16% with college education) and average monthly salary of €750 (approximately $1,000). The addition of Slovakia into the Eurozone on January 1, 2009 eliminated exchange risk and highlighted the country as it is the only one utilizing the common currency in Central and Eastern Europe. Corporate and personal income tax as well as VAT (value added tax) are at 19%. There is no dividend, inheritance, or real estate transfer tax. While Netherlands is technically the largest source of FDI, it is due to the fact that many US firms choose to invest in Slovakia through their Dutch subsidiaries (i.e. US Steel, Coca-Cola). Slovakia’s top export countries are Germany (20%), Czech republic (13%) and France (9%). There are three key economic sectors that have put Slovakia firmly on the international map. The automotive industry is heavily represented by Peugeot/Citroen, Kia, and Volkswagen, recently claiming the world’s top output of cars per capita. The electronics industry is composed of Sony with the largest manufacturing plant in Europe, Samsung which recently opened their second production facility, and AU Optronics. Overall, Ms. Chovancova indicated a trend that is shifting from manufacturing and assembly to R&D and innovation projects, information and communication technologies, software, and clean energy.
Kristin Najdi, Senior Trade Specialist with the US Department of Commerce concluded this panel presentation by providing number of useful resources for doing business in Slovakia. She further corroborated the FDI statistics. While officially only $600 million has been invested in Slovakia by US companies, due to the investments handled through variety of foreign subsidiaries the actual amount is over $4 billion in 2008 alone.
The agenda concluded with Mr. Peter Petian delivering a photography slideshow along with commentary on the tourism opportunities in Slovakia.
The event was received with enthusiasm by the number of Honorary Consuls from across the US as well as the local business community. With Mr. Valko as the local point of contact, I am certain additional events to highlight the professional opportunities in Slovakia will follow.
To view Peter Petrik’s blog, visit http://peterpetrik.com/blog/invest-slovakia-seminar. To sign up for international business events, visit www.dallaschamber.org/events or www.dallaschamber.org/global.