Challenges in Attracting Inward FDI to Slovenia are Rising

A study conducted among foreign-owned firms in Slovenia for 2024 prepared by prof. dr. Andreja Jaklič in assist. dr. Iris Koleša from CIR (FDV UL) for the Public Agency SPIRIT Slovenia shows worsening in foreign investors' evaluations of the Slovenian business environment. Foreign investors’ expansion plans in Slovenia for 2025 decreased by more than 11 % compared to their 2022 predictions for 2023. The role of Slovenian entities in multinational networks has moreover diminished, but a vast majority maintain a developmental role.

In line with this, foreign investors highlight the highly qualified, professional and knowledgeable staff as the main advantage of Slovenian business environment. Geographic position and access to additional markets are also frequently mentioned advantages of Slovenia. However, foreign investors note that Slovenia’s location advantages are diminishing, whereas the barriers to doing business in Slovenia remain the same throughout the years. Among them, long and complex bureaucratic procedures and administrative barriers, unfavourable tax system and policy (especially the high taxation of labour), as well as complex and continuously changing legislation (especially labour and tax legislation) are stressed. Businesses are also critical of the negative attitudes towards capital in the society at large. They additionally expect more professionalism and greater responsiveness from support institutions as well as professional and responsible behaviour from politicians.

While the surveyed firms are planning moderate growth and expansion in Slovenia and other markets for 2025, the survey records a large decline in expansion plans in Slovenia (mostly due to a larger share of foreign-owned firms planning to maintain the same extent of business activity in the market). The share of surveyed foreign-owned firms with expansion plans in Slovenia decreased under 20 % - for the first time following 2010.

A summary report is available in Slovenian here.

You can also contact the authors for more information.

About the study: The 'Foreign investors about Slovenian business environment' study has been one of the regular annual (or biannual) activities for monitoring foreign-owned firms’ experience with the Slovenian business environment. The study focuses on motives, challenges and plans of foreign investors doing business in Slovenia as well as their (dis)satisfaction with existing support services. It also includes questions about international expansion plans of the surveyed firms. Since 2016, a thematic set of questions related to developments in the international business environment and international business trends, has been added to the survey. In 2024, this set of questions was focused on the challenges, opportunities and actions related to artificial intelligence, cyber security and sustainable development.