THE AMERICAN Chamber of Commerce (AmCham) in Slovakia voiced reservations over the draft amendment to the law on investment aid on February 5. AmCham particularly dislikes the requirement of growth in employment and production volume by 15 percent, the new demands for strategic service and technological centres and restrictions on repeatedly provided investment assistance.
“In the recent period, the expansion of firms is more frequent than the arrival of new investments and therefore it should become a priority,” AmCham wrote in the statement as quoted by the SITA newswire. “We consider several of the proposed legislative changes to be restricting for expanding companies.”
The amendment to the law on investment aid, which made it to the second reading in parliament earlier this month, prevents investors who want only to keep existing jobs from receiving state aid. The net increase in jobs cannot be lower than 15 percent of new jobs from the average of the last 12 months, but it cannot be fewer than 40 employees. Established investors demanding stimuli from the state will also have to expand their production by at least 15 percent compared with the average for the last three fiscal years.
“We believe that it is a considerable increase that can be difficult to realise mainly for bigger companies,” AmCham stated. “Slovakia loses not only expansions of firms but also technologically demanding investments that do not open [new] jobs due to this measure.”
The Economy Ministry also wants stricter terms for the provision of state assistance to technological centres and centres of strategic services. Such investors will have to improve the educational structure of their employees, demands the ministry. Under the new rules, at least 70 percent of staff in the above-mentioned fields will have to have a university education. AmCham argues that the proposed significant increase in the number of employees with university degrees from the current 30 percent to 70 percent will be a substantial obstacle. It expects that the stricter terms will definitely not rekindle investor interest, which AmCham considers to be low, in building new technological centres, but will have the opposite effect.
AmCham believes the draft amendment is tougher regarding terms for the provision of investment assistance. For example, the amendment states that expanding projects can only apply for tax relief, but it considerably toughens the terms for receiving it. According to the chamber, the amendment is tougher on companies that plan to expand in Slovakia while stricter terms for expanding firms will mean that Slovakia will encounter problems competing for large investments when investors are deciding where to land a project between several established plants of a specific company in various countries.
11. Feb 2013 at 0:00 | Compiled by Spectator staff