The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses.  The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption.  The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption.

Executive Summary

Several factors make Slovenia an attractive location for foreign direct investment (FDI): modern infrastructure with access to important EU transportation corridors, a major port on the Adriatic Sea with access to the Mediterranean, a highly educated and professional workforce, proximity to Central European and Balkan markets, and membership in the Schengen Area, EU, and Eurozone.  With a small domestic market of just over two million people, Slovenia’s economy is heavily dependent on foreign trade and susceptible to international price and currency fluctuations as well as economic conditions among its major trading partners.

In recent years, Slovenia’s economic growth rate has outpaced those of most other EU member states, and the country has enjoyed rising incomes, growing domestic consumption, falling unemployment, low inflation, and burgeoning consumer confidence.  Slovenia’s economy rebounded after the COVID-19 pandemic with a GDP growth rate of 8.1 percent in 2021, exceeding the eurozone average. However, due to rising inflation and energy prices – both exacerbated by the Russian invasion of Ukraine – Slovenia had a slower growth of 5.4 percent in 2022 and is expecting more modest growth of 1.8 – 2.6 percent until 2025.

Despite a number of privatizations in the banking sector in 2019 and 2020, approximately 25 percent of Slovenia’s economy remains state-owned or state-controlled.. While estimates of the percentage of state involvement in the economy vary, most experts agree that it is among the highest among EU member states. There is widespread skepticism in some quarters toward privatization and foreign direct investment, despite general awareness of FDI’s importance to economic growth, job creation, and developing new technologies.  Potential investors in Slovenia may face significant challenges, including a 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.

According to Bank of Slovenia figures, FDI in Slovenia totaled EUR 18.4 billion (35.2 percent of GDP) in 2021, a 10.4 percent increase over the previous year.  This relatively large growth in investment flows is largely attributed to the resumption of  investment activity that was pent-up during the COVID-19 pandemic. The most important sources for direct foreign investment were Austria (24.9 percent), Luxembourg (11.9 percent), Switzerland (11.2 percent), Croatia (9.7 percent) and Germany (8.1 percent).  However, Bank of Slovenia data indicated U.S. companies accounted for 8.9 percent of total inward foreign direct investment (FDI) in 2021, EUR 96.1 million (USD 105.5 million) invested directly and an additional EUR 1.53 billion (USD 1.68 billion) invested indirectly through U.S. subsidiaries in other European countries.  This combined investment of EUR 1.63 billion (USD 1.79 billion) placed the United States as Slovenia’s third largest source of direct and indirect foreign investment, behind Austria (EUR 2.82 billion) and Germany (EUR 2.65 billion).  The most important sectors for FDI were manufacturing (31.8 percent), financial and insurance activities (21.3 percent), wholesale and retail trade and repair of motor vehicles and motorcycles (19.4 percent).

Slovenia, in line with the European Union (EU), committed to reducing greenhouse gas emissions by at least 55 percent by 2030 (compared to 1990 levels) and achieving climate neutrality by 2050. Slovenia’s long-term climate strategy, approved in July 2021, includes a provision specifying that the country will use nuclear energy in the long term, clarifying the country’s energy future and committing to produce a large percentage of its energy supply domestically. In July 2021, the EU approved Slovenia’s national recovery and resilience plan, allowing funds up to EUR 2.5 billion (EUR 1.8 billion in grants and 700 million in loans) to be drawn from the EU Recovery and Resilience Facility.  42.5 percent of the funds are earmarked for green transition projects. 

To access the ICS, visit the U.S. Department of State Investment Climate Statements website.