The Banking Environment

 

Economy

Slovakia joined the Euro zone from January 2009.

The overall structure of economic growth was balanced, and influenced both by foreign and domestic demand. The ongoing strong economic growth supported by the labour productivity growth was reflected in wage and employment growth, in a drop of the number of unemployed and in an improvement of the financial performance of corporations.

The public deficit has been brought within Maastricht guidelines and Slovakia is a Euro member from 2009. Slovakia has been able to attract significant inward investment, not least in the automobile sector.

Slovakia has a flat rate of tax – 19% for corporation tax, income tax and VAT.

Key economic indicators for 2007 estimates (Source: Central Intelligence Agency Country Profiles)

63.9% of the economy is in the services sector, 33.5% industrial and 2.6% agriculture.

Population: 5,455,407

GDP: USD110,2 billion

Per capita GDP: USD 20,200

Real GDP growth: 10.4%

Unemployment: 7.5%

Public debt/GDP: 35.9%

Export partners are Germany 21.4%, Czech Republic 12.6%, France 6.7%, Italy 6.4%, Poland 6.2%, Hungary 6%, Austria 5.8%, UK 4.8% (2006)

Import partners are Germany 22.1%, Czech Republic 17.3%, Russia 9.2%, Hungary 6.7%, Austria 5.1%, Poland 4.9%, South Korea 4.7% (2006)

Central Bank

The National Bank of Slovakia (“NBS”).

Banking System

There are 31 banks operating in the Slovak Republic. Most of the domestic banks are foreign-owned.

Both residents and non-residents can have EUR and foreign currency accounts, and they can attract interest or go into overdraft. Residents require an NBS permit to hold an account outside Slovakia.

Currency

Euro (EUR)

Taxation

See Tax and Legal template for Slovakia.

Exchange Control

Export proceeds (goods, services, invisibles) must be brought back into Slovakia within 30 days of occurring. Residents may not hold accounts abroad without an NBS permit.

An NBS permit is also needed for foreign investment in countries outside the OECD and EEA.

Lifting fees can apply to cross-border payments unless negotiated. This is a nebulous area and should without doubt be addressed with the bank.

Central Bank Reporting

The following must be reported:

• All payments between residents and non-residents over SKK1 million
• Accounts of residents that are held outside Slovakia and their balances (assuming that an NBS permit was obtained to hold the account at all)
• Reporting is monthly