In this chapter, CMS and Sorainen have provided a country-by-country guide to understanding and comparing what incentives are potentially available to Industrial & Logistics investors seeking to start operations in one or more the CEE countries covered in the report. Investment incentives are a key element of the decision-making process when investors are selecting countries and locations. Therefore, we look at some of the more frequently asked questions and provide an overview of the general conditions that were applicable at the time of preparation.
Legal incentives for investments specifically in the Industrial & Logistics sector in CEE-17
There are currently no incentives specifically targeted at the Industrial & Logistics sector.
General incentives, from which investors in the I&L sector in CEE-17 can benefit, if no specific ones are available
Subject to certain conditions (minimum value of investment, minimum jobs created, etc.), general incentives are available to Slovenian and foreign investors in the form of subsidies, credit, guarantees, subsidised interest rates and loans provided by the SID Bank d.d. Furthermore, a self-governing local community may sell real estate owned by it to an investor for a purchase price that is below market value. The difference between the market price and the agreed purchase price represents the amount of regional state aid. The investor may profit from the last-mentioned incentive on the same conditions under which the incentives are provided by the SNB. In addition, the planned investment must also have a positive economic, environmental, spatial and social impact on the region in which it will be implemented.
A special regime is provided for strategically important investments (“SII”). SIIs are investments: (i) in manufacturing or a service industry with a value over EUR 40 million and over 400 jobs created; or (ii) in R&D with a value over EUR 20 million and over 200 jobs created. For example, large companies may receive an incentive of up to EUR 12.5 million for a strategically important investment with a value of EUR 50 million.
Potential investors can also benefit from developing facilities in industrial parks. Construction there is easier, quicker, and less costly, as companies avoid lengthy procedures of accepting detailed municipal spatial plans, as the latter are usually already approved and accepted there.
Available tax exemptions or preferences for investors specifically in the I&L sector in CEE-17
No Industrial & Logistics sector specific tax exemptions or preferences are currently available in Slovenia.
Investors may utilise general tax benefits available to all businesses in Slovenia (see below).
General tax exemptions or preferences for investors in CEE-17 that would apply to the I&L sector
Slovenia offers the following tax incentives: While nominal Corporate tax rate is 19%, minimum effective Corporate tax rate is 7.03%; tax losses may be carried forward indefinitely and can offset 50% of each year’s taxable profit. 100% tax allowance (on top of costs) for R&D activities. 40% tax allowance (on top of costs) for investments in equipment and intangibles and reduced VAT rates of 9.5%, while the standard rate is 22%.
There is no real-estate tax, although currently a “land-use” tax is imposed by municipalities, which considers the size of the building and available communal infrastructure. Implementation of a new real-estate tax is planned in the near future.