We can help you get it. Let's look at the factors that influence this.

• The provision of investment assistance in Slovakia is regulated by Law No. 57/2018 Coll. on investment assistance.
• The Slovak government recently approved an amendment to the above Investment Assistance Law, which takes into account the difficulties that investors in Slovakia face due to the COVID-19 pandemic. The amendment, which entered into force on January 1, 2021, changes some conditions of investment assistance applicable at the initial stage. We explain exactly how.

Classification of regions of Slovakia by unemployment rate (December 2020):

Source: SARIO

The main conditions that must be met in order to receive state investment assistance:

• Instead of an automatic right to investment assistance, a rule is introduced: the assistance must be approved by the Slovak government.
• The minimum number of new jobs is no longer required. However, the creation of a large number of jobs will be an advantage.
• Conditions for investment projects from scratch depend on the location of the investment project and the actual business activity.

• In this regard, we advise you to refer to the map of Slovakia, on which the regions are divided by unemployment rate. The division is critical for the applicable conditions (amount of investment and share of new technologies).
• The company must be engaged in production activities (section C of the NACE code) or apply to a research and development center or a strategic service center.

Other aspects that affect the receipt of investment assistance:

• Only investments in land, new buildings, new equipment, or intangible assets acquired from third parties qualify as eligible investments, which serve as the basis for calculating investment assistance. Financial lease arrangements may be included.
• Before applying for assistance, no investment can be made. Otherwise, the decision may be reversed.
• New equipment may be acquired from related parties if the assets are new and the purchase price reflects fair market value (expert opinion).
• The investment project must be completed within five years of receiving the final decision (a seven-year period is allowed for investment projects over 50 million).
• Other terms and conditions apply, but they will be discussed with you when our company experts study your project in more detail.

• The project must be supported for five years after the completion of the investment project.
• All jobs (if applicable) must be created within three years of completion of the investment project.
• All new jobs must be retained for 5 years.
• At least 25% of investment costs must be financed by the company (share capital and/or loans).
• Changes in the investment project must be reported to the Slovak authorities. The main thing is that the investment project be implemented in accordance with the request for investment assistance. For example, the actual investment amount must be at least 70% of the estimated investment amount, and the actual number of jobs must be at least 80%, as stipulated in the request for assistance. In addition, the current investment assistance regime includes strict reporting obligations.

Calculation of the amount of investment assistance:

• The upper limit of investment assistance cannot exceed 25% of the investment amount (or eligible wage costs, if more advantageous) in Western Slovakia and 35% in Central and Eastern Slovakia.
• Assistance for investments exceeding 50 million euros is half the amount. Additional reductions are provided for investments exceeding 100 million euros: namely 34% of the above 25% and 35% of the investment amount.
• In general, investment assistance can be provided in the form of investment cash grants, new jobs and/or corporate tax incentives. However, the total amount of assistance cannot exceed 25%/35% of the investment amount.
• Before submitting a request, it is recommended to discuss the actual amount and categories of assistance with the Slovak authorities. Please note that the 25%/35% limit is the maximum aid amount. The Slovak authorities may require you to apply for a smaller amount of assistance.
• Cash subsidies (investments and new jobs) are subject to corporate tax at a rate of 21%. Tax benefits are not subject to corporate tax.

• Tax incentives can be used for 10 years. Annual tax credits cannot exceed 50% of the annual tax liability, but must be lower (during the investment period). Annual corporate tax credits are calculated by dividing the total actual investment made at the end of the year by the total estimated investment multiplied by 50%.
• There are many other issues to consider when applying for tax credits (eg transfer pricing arrangements, loss carry forward, timing of tax exemptions, etc.).
• The Slovak authorities prefer to provide assistance in the form of tax incentives for businesses.

Activities (sectors of the economy) corresponding to the following NACE codes are considered priority sectors for investment:

• C10 Food production
• C20 Manufacture of chemicals and chemical products
• C21 Manufacture of basic pharmaceutical products and pharmaceutical preparations
• C26 Manufacture of computers, electronic and optical products

• C27 Manufacture of electrical equipment
• C28 Manufacture of machinery and equipment, n.e.c.
• C29 Manufacture of motor vehicles, trailers and semi-trailers
• C30 Manufacture of other transport equipment

At least 75% of investments must be in the following technologies to be considered a priority sector:

• Autonomous and collaborative industrial robots and artificial intelligence
• In particular, autonomous and collaborative robots, integrated sensors, cameras, virtual reality systems.
• Industrial Internet of Things
  In particular, a network of machines and products, multidirectional communication between network objects.
• Modeling
  In particular, the use of real-time data and the mirroring of the physical world in a virtual model.

• Augmented reality with real-time information
  In particular, augmented reality for service and logistics, support for the efficient display of information.
• Additional, auxiliary production
  In particular, 3D printing of spare parts and prototypes.
• Big data and its analysis
  In particular, a comprehensive assessment of available data, real-time decision support and optimization.
• Cloud and cybersecurity
  In particular, security systems and management of large amounts of data in open systems.

Business activities carried out in accordance with the following NACE codes can be considered priority sectors:

• The EU supports investments aimed at regional development (disadvantaged regions), innovation, research and development (R&D - research and development, in particular the Horizon program) and people's education.
• Companies can apply for funds. The EU fund program is based on the same principles as state aid.
• However, it is only possible to apply for EU funds after the scheme has been published on the said website. In most cases, companies must submit applications within 3 months.
• Combining Slovak investment aid and EU funds appears to be allowed under EU state aid law, but is prohibited by Slovak law.

• A similar scheme exists for environmental and energy saving investment projects.
• It is advisable to discuss the above options after a detailed understanding of the investment project.
• You can also apply for a grant for wages and/or training. However, as noted above, actual application depends on the schemes available at the time of application.

Other

• In 2019, the Ministry of Economy introduced the reimbursement of the part of electricity costs related to renewable energy costs (renewable energy surcharge), which is part of the electricity price (approximately 15 euros per MWh).
• The compensation fee is 85% of the renewable energy surcharge. However, the offsetting fee will only be given to large companies (more than 1 GWh per year) and only in certain industries.

• Very large investment projects may qualify for significant investment status. This status may facilitate land acquisition and other arrangements. For example, investment projects can be submitted that will create more than 300 jobs.