Foreign Direct Investment

Slovenia is completely open to foreign investment, in accordance with the principles of the European Union and the OECD, and does not discriminate between national and foreign investors. According to UNCTAD's World Investment Report 2023, FDI inflows to Slovenia totalled USD 1.62 billion, down by 8.5% year-on-year but still above the 2018-20 average (USD 1 billion). At the end of the same period, the total stock of FDI was estimated at USD 21.1 billion, around 33.9% of the country’s GDP. At the close of 2022, the distribution of foreign direct investment (FDI) inwardly in Slovenia by sector revealed manufacturing as the predominant sector, constituting 32.8% of the total, followed by financial and insurance activities (20.6%), and wholesale and retail trade including vehicle and motorcycle repairs (19.0%). Service activities remained dominant over the observed period, representing 64.3% of the total inward FDI in Slovenia for 2022, trailed by industry (33.2%) and real estate (2.4%). The leading five investor nations collectively held slightly over three-fifths of the entire stock of inward FDI in Slovenia by the conclusion of 2022. Inward FDI from EU Member States accounted for 78.8% of the total, with Germany and the US emerging as significant investors primarily as ultimate investing countries rather than initial counterparts. They ranked second and third respectively, trailing behind Austria, which controlled 15.5% of the total inward FDI stock. Germany had ultimate control over 14.3% of inward FDI (data Bank of Slovenia). According to the latest figures from the OECD, in the first semester of 2023, FDI inflows totalled USD 0.99 billion, down from USD 1.32 billion recorded in the same period one year earlier.

The country has a strategic location by the Adriatic Sea, along with developed infrastructures and a well-educated workforce. In recent years, Slovenia’s economy grew faster than most other EU member states, and the country has enjoyed rising incomes, growing domestic consumption, falling unemployment, low inflation, and burgeoning consumer confidence. However, around one-fourth of Slovenia’s economy remains state-owned or state-controlled, and foreign investors reported the lack of transparency in economic and commercial decision-making, time-consuming bureaucratic procedures, opaque public tender processes, regulatory red tape, and a heavy tax burden for high earners as the main factors hindering FDIs. As of June 9, 2023, the National Assembly of the Republic of Slovenia enacted legislation instituting a permanent FDI screening framework. Effective July 1, 2023, FDI notifications must be accompanied by evidence verifying the accuracy of the submitted information, which includes transaction documentation. According to the new FDI regulations, foreign investors are exclusively defined as non-EU entities. Slovenia ranks 33rd among the 132 economies on the Global Innovation Index 2023 and 44th out of 184 countries on the latest Index of Economic Freedom.