Businessman's best friend

MOVE over, Rover. Man's best friend is not his dog but his Chamber of Commerce. At least, it is when it comes to the business world.

FOREIGN chambers of commerce meet at an annual Garden Party.
photo: TASR

MOVE over, Rover. Man's best friend is not his dog but his Chamber of Commerce. At least, it is when it comes to the business world.

A Chamber of Commerce serves as an important meeting ground, a place to share and exchange the latest local business information - as well as acquire new contacts and expand trade. It is also where investors go to suss out potential business opportunities.

Foreign investors are particularly reliant on their national Chambers of Commerce, many of which have active chapters on foreign soil. These home-away-from-homes allow business people to connect with their compatriots and get friendly with the local business community.

The Slovak Spectator met with several foreign Chambers of Commerce in Slovakia to take the pulse of the Slovak business environment and how foreigners perceive it. While most chambers say that their members are content with business in Slovakia overall, they point out areas where improvement is necessary.

Below are detailed opinions of various representatives of foreign Chambers of Commerce in Slovakia, including:

- Jake Slegers, executive director of the American Chamber of Commerce in Slovakia

- Emma Louise Grant, executive assistant with the British Chamber of Commerce in Slovakia

- John T Novak, president of the Slovak-Canadian Chamber

- Christina Lykke Christensen, executive director of the Danish Chamber of Commerce

- Jean-Michel Giovannetti, president of the French-Slovak Chamber of Commerce

- Michele Bologna, general secretary of the Italian-Slovak Chamber of Commerce

- Sergey Shuklin, president of the Russian Chamber of Commerce in EU

- Eva Krajmerová, general secretary of the Israeli Chamber of Commerce in Slovakia

The Slovak Spectator (TSS): What do your members appreciate the most about the business environment in Slovakia?

Jake Slegers (JS) from the American Chamber of Commerce: AmCham Slovakia and its membership appreciate the reforms that the current Slovak government has undertaken and is still undertaking. We especially find the flat tax reform and pension reform extremely beneficial and progressive. We believe that the healthcare and educational reforms are also crucial in establishing a healthy and transparent environment in these areas.

AmCham Slovakia also appreciates the Slovak government's strong interest in supporting and attracting foreign investors. Foreign direct investments (FDI) are definitely one of the areas where AmCham is very proactive and supportive.

ENTERTAINING events also belong to the chambers' agendas.
photo: TASR

Emma Louise Grant (ELG) from the British Chamber of Commerce: Firstly, the legal framework for doing business in Slovakia is being rapidly developed to encourage economic activities within the region. The economy is steadily growing, thanks to increasing confidence and a positive attitude towards business personnel, and the support of FDI from the government.

Furthermore, the Slovak government has been focussing on implementing reforms in several areas, most notably the tax system and labour legislation.

John T Novak (JTN) from the Slovak-Canadian Chamber:In my opinion, the main interest in Slovakia is the manufacturing sector. The highly skilled labour force that exists here, together with an ideal geographical location, is an important reason for this interest.

I believe that EU accession has also had a profound and positive impact on the Canadian business community for investing in Slovakia. EU membership means that there are distinct advantages for Canadians, including a favourable tax structure and a safe legal structure that both protects and encourages more investments into Slovakia. The government here has created an extremely comfortable business environment.

Christina Lykke Christensen (CLC) from the Danish Chamber of Commerce: I can answer this question very fast: Danish companies choose Slovakia because of three main reasons: low salaries, the flat tax rate and geographic position in the centre of Europe.

Most of the Danish companies here are production units. They do not sell their products in Slovakia but they produce here at low cost to sell either in their home country or in other parts of the world. This is also one of the reasons why you do not see a lot of commercials for Danish companies here. There is no need for it, because their products are not significant for the Slovak market. Therefore brand and image are not that important on a national basis. On the other hand, a lot of Danish companies give back to their Slovak communities by sponsoring events in the region or city where they have their plant.

The main objective for Danish companies in Slovakia is to get more for less. We are not talking about sourcing of core competencies or IT [information technology] and call centres, but the simpler task of production.

Jean-Michel Giovannetti (JMG) from the French-Slovak Chamber of Commerce: The business environment in Slovakia has become quite friendly. However two areas for improvement can be pinpointed: the real estate acquisition process and the functioning of the judiciary system.

Michele Bologna (MB) from the Italian-Slovak Chamber of Commerce: First of all, a qualified and skilled workforce, the geographic position, the legal environment, the fiscal system - together with investment friendly policies - and the cost of labour make Slovakia's business environment advantageous.

Sergey Shuklin (SS) from the Russian Chamber of Commerce:The Slovak business environment may be considered one of the favourites in the European Union, especially for foreign investors. It offers sound investment legislative support, a low cost and educated workforce and a central geographical location.

Most chamber members appreciate the fact that Slovakia still has a lot of opportunities for business development in many business sectors, from hospitality and manufacturing to banking and information technologies.

TSS: What do you consider the biggest barriers to business in Slovakia?

JS from the American Chamber of Commerce: Feedback from our members indicates that the most urgent problems include the insufficient legal framework of the economic system and inadequate law enforceability, which we consider to be an essential aspect for any entrepreneur, especially for foreign investments.

Institutionalized corruption and an evident lack of transparency seem to be present mainly in public procurement. What also concerns us very much is the area of intellectual property rights protection. Then, of course, bureaucracy is often an obstacle, but we must admit that this situation is gradually improving, as is usual in transition economies. To be fair, we are seeing slow but sure positive movement in all of these areas.

ELG from the British Chamber of Commerce:The level of corruption is still relatively high in Slovakia and the government needs to work towards making the environment more transparent. In addition, there is a lack of information and promotion for business-related activities.

Furthermore, there is some discrepancy with the incorporation and acceptance of the legal environment as represented by EU law. The direct effect of EU directives acknowledged by the community courts allows individuals to rely directly on EU law laid down in a directive rather than on the transposition of EU law into national law.

In addition, the registration of companies, although it has improved, still has room for increased efficiency.

JTN from the Slovak-Canadian Chamber: Following Slovakia's entry into the EU the barriers are no different than anywhere else in the Union, but because of the business-friendly atmosphere here in Slovakia, there is actually an advantage for the entrepreneur to choose Slovakia over other EU countries.

CLC from the Danish Chamber of Commerce: Bureaucracy, corruption and sometimes underdeveloped infrastructure.

JMG from the French-Slovak Chamber of Commerce: As mentioned before, there is no major obstacle to doing business in Slovakia.

MB from the Italian-Slovak Chamber of Commerce: For small and medium enterprises especially, access to loans is still limited even if developing positively. Sometimes the slowness of public administration and the language is a barrier for many entrepreneurs.

SS from the Russian Chamber of Commerce:Transparency and equal opportunity. This is what business owners want most and what is still a problem in Slovakia. Corporate legislation and tax procedures need to be more flexible and understandable, so every small business owner can properly utilize them.

The professional performance of government employees is still far from what businesses need. Other barriers are: a lack of sufficient transport (highways, roads), logistic services and access to information.

TSS: One of Slovakia's most important goals is to build a knowledge economy. Do you think Slovakia has the right conditions for creating a knowledge-based economy? What changes are necessary to achieve this goal?

JS from the American Chamber of Commerce: I'm convinced that Slovakia definitely has the right conditions, but building a knowledge-based economy is a long-term goal requiring strong determination of the government, strong support of all elements of society and, most of all, the will of the private sector to effectively contribute as well.

This goal will require extensive resources and our chamber will do its best to assist in bringing the support of the private sector, as I'm convinced it will be to their benefit in the future as well. In addition, since the Slovak government has completed its role by formulating the National Lisbon strategy, and introduced a related project, it is up to us all to push it forward.

ELG from the British Chamber of Commerce: Slovakia is on track to becoming a more knowledge-based economy. However, it is the duty of the government to access more resources in order to fulfil the Lisbon Strategy. We can expect some tensions between political parties representing an agriculture approach and knowledge-based approach, although under the UK presidency of the EU, this knowledge-based approach will be strongly supported.

Slovakia needs to concentrate on the cooperation between the educational system and commercial sector and implement an inter-knowledge-based structure of the system. Hence it is the responsibility of the Slovak government to start these initiatives and build these foundations by increasing the funding to universities and also by financially supporting projects in the area of knowledge, including the small- and medium enterprise segment.

JTN from the Slovak-Canadian Chamber: Speaking from my personal experience in the IT business here in Slovakia, I can tell you that this [a knowledge-based economy] is a very good and, as far as I am concerned, successful approach. Slovakia is known for its highly trained and skilled people who are some of the best software designers available today. I know many foreign companies who rely on the expertise of Slovak Web and software designers, so I think that Slovakia is definitely on the right track.

CLC from the Danish Chamber of Commerce: I think it is still a bit early for Slovakia, but you will get there. It is a natural development.

JMG from the French-Slovak Chamber of Commerce: This goal is shared by all the European economies and has not been achieved by any of them except may be the UK and some Scandinavian countries, which are on the right track. The open issues in Slovakia are: a less academic teaching system; a clear definition of the areas that should be the main "poles of development" in the future; a bigger share of state investment dedicated to education and a lifetime knowledge-upgrading process.

MB from the Italian-Slovak Chamber of Commerce: Yes, with no doubt, the environment and background are very good for supporting a knowledge-based economy.

SS from the Russian Chamber of Commerce: The basis for a knowledge economy is experience and research. So far Slovakia does not have its own sufficient experience and productive research.

In my opinion this is the right way to go. When a country has a goal, the government has to create an environment to accomplish that goal, cooperate with all business subjects and utilize world economy experience without any political preferences. I do believe that Slovakia has great potential, but it also means that we all have to make it happen.

TSS: What do you consider the biggest success of your chamber?

JS from the American Chamber of Commerce: There are several indicators of AmCham Slovakia's success. Most importantly, over the past few years, AmCham Slovakia has contributed significantly to various legislative changes and reform processes.

For example, we contributed to changes in the Slovak Labour Code, Penal Code, Commercial Register Act, Pension Reform, Public Procurement, Residency Permit, Telecom Electronic Communication Act and the Act on Lobbying. These positive changes serve not only AmCham members, but also a whole range of local and expatriate communities in Slovakia, bringing positive change for everyone.

When dealing with such issues, we always take our members' interests into consideration. AmCham Slovakia serves its members through the support of its three main pillars: contacts, information and advocacy.

Together with TA3 Television, AmCham Slovakia organized a live televised debate preceding the 2002 Parliamentary Elections.

We also succeeded in having Róbert Šimončič, the current AmCham Slovakia President, elected as the chair of the European Council of the American Chamber of Commerce, giving Slovakia even greater representation on the European stage.

And the last, but not least, we have established a permanent presence in Eastern Slovakia with the opening of a new office in Košice, thereby giving our eastern members greater representation and services as we continue in our efforts to help our members meet their business objectives.

ELG from the British Chamber of Commerce: Since the chamber was established it has continued to grow and become an extremely prestigious organization. The role of the chamber supports Slovak/British business and it is well known not only amongst governmental bodies in Bratislava but all across Slovakia and in the UK. Furthermore, we are proud that the British Chamber is the second most active chamber in Slovakia, with a popular array of networking and business events.

JTN from the Slovak-Canadian Chamber: The creation of awareness of Slovakia as a great choice for Canadian investors is one of our biggest successes.

CLC from the Danish Chamber of Commerce: To create business contacts between Danish and Slovak companies, to promote Danish export and investment, to help Danes that moved to Slovakia, to connect Danes in Slovakia and give them the opportunities to use each others' knowledge and experiences, are some of our important successes.

JMG from the French-Slovak Chamber of Commerce: An effective biculturalism is our greatest success.

MB from the Italian-Slovak Chamber of Commerce: We have become a real point of reference for Italian companies coming to Slovakia as well as for Slovak companies - we have more than 30 Slovak members - who are interested in cooperating with Italian companies. This is done by a wide range of consultancy and support services, from partner research to company establishment, legal assistance, workshops and social events. The good relationship with public institutions, both in Italy and Slovakia, is an important aspect, ensuring that we remain an effective lobbying group for our members.

SS from the Russian Chamber of Commerce:The biggest success for any chamber is to be needed by the business environment. We feel that need every single day. But the biggest success for the chamber is when our members are finding success and benefiting from our business.

Eva Krajmerová from the Israeli Chamber of Commerce: Our biggest success has been the participation in the official visit of Israeli President Moshe Katsav in Slovakia in September 2003.

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