Subchapters:
- Business Relationships
- Foreign direct investment
- FTAs and Treaties
- Development Cooperation
- Prospective fields of study (MOP)
Business relations
Trade relations with the EU
Slovakia has been a member of the EU since May 1, 2004. Slovakia’s exports to EU member countries in 2021 increased by 17.9% year-on-year and accounted for 79.7% of total Slovak exports. Imports from EU member states accounted for 64.3% of Slovakia’s total imports and increased by 14.9% year-on-year. Slovakia’s largest trading partners in the EU include Germany, the Czech Republic, Poland, Hungary, France, Austria, Italy, Romania, Spain and the Netherlands.
Trade exchange between Slovakia and the EU (million EUR)
| 2017 | 2018 | 2019 | 2020 | 2021 | |
| Exports from the EU (million EUR) | 59,528.1 | 64,072.4 | 63,932.4 | 59,730.6 | 68,630.4 |
| Imports into the EU (million EUR) | 56,773.10 | 61,813.90 | 63,445.40 | 59,207.20 | 69,805.3 |
| Balance with the EU (million EUR) | -2,755.0 | -2,258.5 | -487 | -523.3 | +1 174.9 |
Source: European Commission
Trade relations with the Czech Republic
In 2021, Slovakia was the 4th largest trading partner for the Czech Republic (after Germany, China and Poland), the 2nd largest export market (after Germany) and the 4th largest import market (after Germany, China and Poland). Slovakia accounted for 6.31% of the total foreign trade of the Czech Republic, 8.06% for Czech exports and 4.44% for Czech imports. For the year 2021, a pleasing year-on-year increase in turnover of 19.9% can be noted.
In the long term, the Czech Republic and Slovakia show a significantly positive trade balance. Czech exports to Slovakia increased by 17.3% year-on-year in 2021, and Czech imports from Slovakia increased by 25.4%. The Czech Republic mainly exports to Slovakia parts, components and accessories of motor vehicles, passenger cars, telephones for cellular and other networks, electricity, equipment for automated data processing, medicines, mineral oils. From Slovakia, we import parts, components and accessories for motor vehicles, mineral oils, passenger cars, piston diesel engines for motor vehicles. iron and steel products, medicines, electricity.
Trade exchange between Slovakia and the Czech Republic (billion CZK)
| 2017 | 2018 | 2019 | 2020 | 2021 | |
| Exports from the Czech Republic (billion CZK) | 184 | 332.9 | 346.8 | 338.2 | 396.8 |
| Imports to the Czech Republic (billion CZK) | 324 | 200.2 | 181.1 | 161.9 | 203.7 |
| Balance with the Czech Republic (billion CZK) | 140 | -132.8 | -165.7 | -176.3 | -193.1 |
Source: businesscarriers.com
Trade relations with countries outside the EU
In 2021, Slovakia’s largest trading partners outside the EU, based on mutual trade turnover, were China, the Russian Federation, the Republic of Korea, Great Britain, Vietnam, the United States of America, Switzerland and Ukraine. The negative trade balance with these countries is primarily due to significant imports from China, as well as the Russian Federation, the Republic of Korea and Vietnam. Most Slovak exports go to Great Britain, the United States of America, China and the Russian Federation. Turnover with non-EU countries accounts for 23% of the value of turnover with EU countries.
Slovakia’s trade exchange with non-EU countries (million EUR)
| 2017 | 2018 | 2019 | 2020 | 2021 | |
| Exports from countries outside the EU (million EUR) | 11,302.2 | 15,064.50 | 16,029.60 | 15,855.60 | 17,080.30 |
| Imports to countries outside the EU (million EUR) | 11,261.2 | 15,260.9 | 11,981.1 | 11,452.8 | ON |
| Balance with non-EU countries (million EUR) | -41 | 196.4 | -4,048.5 | -4,402.8 | ON |
Source: EIU, Eurostat
Foreign direct investment
Foreign direct investment in Slovakia
Industry structure
So far, only data for 2020 is available from the National Bank of Slovakia.
Foreign direct investment (FDI) in Slovakia reached a value of EUR 52.348 billion at the end of 2020. FDI is directed mainly to manufacturing (36%), finance and insurance (25%), wholesale and retail trade (9%), real estate (7%), administration and support services (7%), information and communication technologies (6%).
In the framework of production, FDI goes mainly to the following sectors:
– engineering and automotive industry (Volkwagen, PSA Peugeot Citroen, Kia Motors, Jaguar Land Rover)
– electrical industry (Samsung, Foxconn, Whirlpool)
– petrochemical and chemical industry (MOL Group, Continental, Agrofert Holding, BASF)
– metallurgy (US Steel, ArcelorMittal, Nemak)
– energy (Energy and Industry Holding, Enel, E.ON)
– food industry (Heineken, Nestlé, Meggle).
Territorial structure
The largest foreign direct investor in Slovakia is the Netherlands with a total investment value of EUR 11.63 billion, which represents almost 22.2% of all FDI. However, these are mostly companies whose parent company is not based in the Netherlands. As a rule, these are American companies that invest in Slovakia through their European headquarters located in the Netherlands. Significant purely Dutch investors in Slovakia are Heineken, ING Bank and Nationale-Nederlanden. Heineken bought the Hurbanovo brewery in 1995 and has already invested more than 200 million euros in its development and modernization. Heineken is currently the largest seller of beer in Slovakia, the main brand is Zlatý Bažant beer. The third largest investor in Slovakia is the Czech Republic.
Foreign investors from the following countries also made significant investments in Slovakia:
Austria (EUR 7.73 billion, 14.8% of all FDI) – e.g. companies Erste Group, Glock, MIBA, Michatek, OMV, ZKW
CR (EUR 7.43 billion, 14.2% of all FDI) – Energy and industrial holding (EPH), Agrofert, PPF, Plzeňský Prazdroj, Hamé, Česká zbrojovka, Czechoslovak Group, Charvát Group, TTS Třebíč, ČEZ Esco
Germany (3.84 billion euros) – Volkswagen, Continental, Hella, Osram, Siemens, Deutsche Telecom, T-Systems, Vaillant South Korea (€3.28 billion) – Kia Motors, Hyundai Dymos, Mobis, Samsung Electronics, Yura, Hanon Systems Luxembourg (€3.11 billion) – ArcelorMittal Gonvarri SSC Italy (3.10 billion euro) – Enel, Magneti Marelli, Mevis, Lombardini
Belgium (2.78 billion euro) – Aspel, Bekaert, Carmeuse, Deltrian, Fremach, Plastiflex
Hungary (2.18 billion euro) – MOL Group
United Kingdom (€1.65 billion) – Jaguar Land Rover, Tesco, GlaxoSmithKline, KMF Cyprus (€1.18 billion)
France (€1.02 billion) – PSA Peugeot Citroen, Alcatel Lucent, Orange, Treves
Switzerland (€864 million) – ABB, Enics, Lafarge Holcim, Nestlé, Nexis, Novartis, Schindler, Swiss Re
Sweden (€798 million) – Ericsson, IKEA, Lindab, Dometic
Spain (€726 million) – Nemak, Grupo Antolin, Cikautxo, Cortizo, Fagor
Czech FDI in Slovakia according to the CNB
Current CNB data on the state of Czech investments in Slovakia as of 31 December 2020 are as follows:
Czech investments in Slovakia: CZK
116,13million Slovak investments in the Czech Republic: CZK 127,62million.
It can be assumed that the mentioned higher state of Slovak investments in the Czech Republic is related to the banking operations of ČSOB as and other financial groups. Between 2004 and 2018, the CzechInvest agency brokered a total of 6 investment projects originating in Slovakia with a total value of CZK 2,34million, of which 1 project received investment incentives.
Regarding direct foreign investments, the Czech National Bank lists Slovakia as the third country in which our companies invested the most by 2019 and Slovakia as the eighth most important investor country in the Czech Republic. The Národní banka Slovenska reports the Czech Republic as the third most important investor in Slovakia for the year 2020 and at the same time the Czech Republic as the country where Slovak companies invest the most.
Czechs own almost 10.5 thousand Slovak companies. The value of subscribed Czech capital in the share capital of Slovak companies, which are more than 50% Czech-owned, amounts to almost EUR 1.15 billion. These are mainly Poštovní banka (EUR 366 million), mobile operator O2 Slovakia (EUR 103 million) and Duslo Šaľa (EUR 102 million).
FTAs and treaties
Treaties with the EU
The Slovak Republic (SR) and 9 other states, including the Czech Republic, signed the Treaty on Accession to the EU with the EU member states on 16 April 2003 in Athens. The National Council of the Slovak Republic approved the contract on 1 July 2003. The President of the Slovak Republic ratified the contract on 26 August 2003. The contract entered into force on 1 May 2003. 2004. Mutual trade between Slovakia and EU member states takes place without customs duties, quantitative quotas, surcharges, certificates, licenses, various forms and border controls. With the accession to the EU, mutual trade intensified.
Contracts with the Czech Republic
The contractual basis in the economic and trade area between the Czech Republic (CR) and the Slovak Republic (SR) is formed by the following agreements:
– Agreement between the Czech Republic and the Slovak Republic on mutual employment of citizens, in force from 3 May 1993, communication 227/1993 Coll.ms
– Agreement between the Czech Republic and the Slovak Republic on social security, in force from 3 May 1993, communication 228/1993 Coll.ms
– Agreement between the Czech Republic and the Slovak Republic on cooperation and mutual assistance in the field of customs, in force from 6.6.1996, communication 200/1996 Coll.ms
– Agreement between the Czech Republic and the Slovak Republic on the joint procedure for the division of the property of the Czech and Slovak Federal Republic between the Czech Republic and the Slovak Republic and its transfer to the Czech Republic and the Slovak Republic, in force from 22.5.2000, communication 63/2000 Coll.ms
– Agreement between the Czech Republic and the Slovak Republic on facilitating border clearance in road, rail and water transport, in force since 12 March 2001, communication 24/2001 Coll.ms
– Agreement between the Czech Republic and the Slovak Republic on the provision and payment of health care, in force from 1 April 2001, communication 48/2001 Coll.ms
– Treaty between the Czech Republic and the Slovak Republic on the prevention of double taxation and the prevention of tax evasion in the field of income and property taxes, in force from 14.7.2003, communication 100/2003 Coll.ms
Developmental cooperation
The Slovak Republic (SR) is not a recipient of development aid, but a provider of it.
Development cooperation of the Slovak Republic is governed by Act No. 392/2015 Coll. The coordinator of the provision of development assistance is the Ministry of Foreign Affairs and European Affairs of the Slovak Republic. Development cooperation is implemented by several state institutions, e.g. the Slovak Agency for International Development Cooperation (SAMRS), the Ministry of Finance of the Slovak Republic, the Ministry of the Interior of the Slovak Republic and the Ministry of the Environment of the Slovak Republic. Under the SlovakAid logo, development projects are implemented in countries in Africa, Asia and Europe.
In 2019, the Ministry of Foreign Affairs and European Affairs (MZVaEZ) prepared the fourth key strategic document “Medium-term strategy of official development assistance of the Slovak Republic for the years 2019-23”. The strategy is in line with the 2030 Agenda for Sustainable Development and defines two cross-cutting themes – environment and climate change and equal opportunities. Among the program countries of development cooperation of the Slovak Republic in 2019-2023 are Georgia, Moldova and Kenya.
Slovakia contributed USD 151 million to development aid in 2021. It thus surpassed the historical maximum of 2020, when it contributed USD 10million to development aid. The share in gross national income (GNI) reached 0.13%. Bilateral development aid amounted to USD 35.53 million and multilateral USD 115.18 million. Bilateral aid was mainly aimed at development projects in the least developed countries in their transformation process, such as Kenya, Georgia or Moldova, and also at post-humanitarian development projects in regions and countries such as the Western Balkans. Within the framework of multilateral development aid, these are contributions from the Slovak Republic to the UN, EU, WTO and other multilateral organizations.
Czech companies can participate in the development cooperation of the Slovak Republic through SAMRS calls, which are published on the website: https://slovakaid.sk/zaradenie/aktualne-vyhlasene-vyzvy/.
Prospective fields of study (MOP)
Slovakia is the second largest export market for the Czech Republic and offers a number of opportunities not only in the promising fields we have mentioned.
Transport industry and infrastructure
Public transport and transport infrastructure are burdened with a large investment debt. The outdated vehicle fleet requires renewal and the pressure to green it is growing. For this reason, there will continue to be interest in trolleybuses, electric buses and hydrogen buses, while every public order for a new vehicle fleet must include a share of ecological vehicles. By 2026, 48% of buses and trolleybuses should be ecological. The Bratislava transport company plans to purchase hybrid trolleybuses with batteries, electric buses and buses using biofuels. Currently, 766 km of highways and expressways are open in Slovakia. The construction of highway and road infrastructure in Slovakia is largely financed by European funds. The main long-term government priority is the completion of the remaining sections of the D1 highway from Bratislava to Košice.
Rail and rail transport
Due to the very low number of electrified lines in Slovakia, the local priority is the gradual expansion of these lines and the related necessary modernization of the vehicle fleet. Czech manufacturers of rolling stock are already significantly involved in its restoration. Slovakia also declares its intention to further liberalize transport, in addition to renewing the vehicle fleet in road and rail transport, whether there will be opportunities for the entry of private carriers. Rail transport has long been an underfunded sector. The infrastructure manager of the Railways of the Slovak Republic (ŽSR) estimates the investment debt on railway infrastructure at EUR 15 billion (CZK 367.5 billion). The total length of railway lines in Slovakia reaches 3,623 km, while up to 35% of the lines are problematic and 56% of the lines are not electrified. Rail transport has long been an underfunded sector. The infrastructure manager of the Railways of the Slovak Republic (ŽSR) estimates the investment debt on railway infrastructure at EUR 15 billion (CZK 367.5 billion). ŽSR is preparing a large-scale modernization of the railway infrastructure, and wants to modernize the tracks, safety equipment and switches.
Energy industry
In recent years, Slovakia has consumed approximately 10% more electricity than it produces. In the electric power industry, opportunities include increasing the capacity of the cross-border transmission system due to the planned start-up of new reactors at the nuclear power plant in Mochovce with a capacity of 2 x 471 MWe. The potential is represented by the construction of battery storage of electricity or the installation of equipment using renewable energy sources (wind farms, solar power plants) and the production of hydrogen with the help of excess electricity from nuclear power plants. Opportunities are offered by building charging and fast charging stations for electric cars, electricity storage, building intelligent solutions (automation, big data, smart networks). The transformation of the Horní Nitra region after the end of coal mining in 2023 offers opportunities in projects connected with the use of geothermal energy. After scheduled launch 4.
Defense industry
In 2021, a new defense strategy was adopted in Slovakia, modernization of technology and infrastructure will be developed simultaneously, as they are interconnected. The concept of long-term purchases by the Ministry of Defense until 2035 was presented in the summer of 2021. In the field of technology modernization, mainly larger and smaller armored personnel carriers, artillery systems, small arms and trucks will be purchased. During the next 10 years, Slovakia intends to invest almost EUR 9 billion (CZK 228 billion) in the modernization of the army. Both the Czech and Slovak Republics are interested in closer cooperation between their armies and the unification of armaments to increase mutual cooperation and combat capabilities. The current situation in the army is characterized by the obsolescence of equipment, technology, material and communication and information systems. On the basis of its commitments to NATO, Slovakia must complete the construction of a heavy mechanized brigade. Massive investments in defense await Slovakia, the Slovak Ministry of Defense plans to invest almost EUR 9 billion (CZK 228 billion) in the modernization of the army over the next 10 years. Defense spending is to reach the required 2% of GDP in 2024.
Agricultural and food industry
Food production in Slovakia is low, the share of Slovak food in domestic retail reaches only 40%, and the number of employees in agriculture and the food industry is decreasing every year. Roughly 60% of food is imported, 800 food trucks arrive in Slovakia every working day. Slovakia offers great opportunities in the construction of slaughterhouses, freezers, canneries, irrigation facilities and processing capacities for vegetables and fruits. In Slovakia, there is a lack of processing capacity for meat, vegetables and fruit, and the existing ones need to be modernized. The canning industry has almost disappeared. Currently, approximately 50% of Slovakia’s area is used for agriculture. The total area of arable land in Slovakia reaches 1.73 million hectares, but only 52 thousand hectares are irrigated. More than 80% of the land is in the hands of private owners and churches. Roughly 20% of the land is managed by the state through the Slovak Land Fund. Organic farms account for roughly 3% of arable land. The number of employees in agriculture and the food industry decreases every year and reaches 32 thousand people, which represents 4% of all employees.
ICT – digitization
In its Recovery and Resilience Plan, the Slovak government set the digital transformation of individual sectors of the economy as one of its reform priorities and allocated a total of EUR 615 million (CZK 1 billion) for it. It will primarily be about the transformation of the existing industry into Industry 4.0, which is supposed to represent, in particular, the automation of production and the exchange of data in production processes. Industry 4.0. is to become the engine of Slovak economic growth. Both private and public investments in new technologies have contributed to this. Slovakia is also preparing for the creation of a new dynamic data economy, which should create sufficient space for the emergence of new innovative solutions. Digitization is a great challenge for Slovakia and at the same time an opportunity not only for local companies, but also for Czech companies, especially in the case of cross-border projects. A total of EUR 615 million (CZK 1 billion) was earmarked for the digitalization of Slovakia from the Recovery and Resilience Plan. Of this amount, EUR 183 million (CZK billion) is earmarked for the development of the digital economy, of which EUR 104 million (CZK billion) is earmarked for cross-border European projects aimed at building the digital economy. Cross-border projects are an opportunity for Czech business entities. Digital transformation and the shift towards an industry oriented towards innovation and technology represent a significant potential to become a real engine of Slovakia’s economic growth. The implementation of the Recovery and Resilience Plan assumes that Slovakia will reorient itself from classic industrial production to the digital level of the economy.
More information can be found in the Map of industry opportunities for the Slovak Republic.
