The Pomurje region of Slovenia can be found at the North Eastern point of the country, stretching from the Mura River at its most southern point, to the surrounding borders with Austria, Croatia and Hungary in the North. This location places the region, and the country as a whole, at the heart of central Europe, with closely forged economic, developmental and cultural ties with its neighbouring countries. In addition, the country possesses excellent road (the EU’s pan-European transport corridor runs through Pomurje), rail, and air infrastructure. These communication links point to an already established economic heritage, traditionally dominated by the textile, food and drink, edible refined oil, and chemical sectors.
The main regional town is Murska Sobota with a population of 20,000, and home to the College of Economics and the nearby university of Maribor, both of which have a strong history of providing an educated, multi-lingual and technologically minded labour force. Slovenia has a long tradition of generating a quality workforce with a lower wage expectancy which bodes particularly well for potential foreign investment.
Political stability, accession to the EU in 2004, and subsequent membership to the Eurozone in 2007, mean that Slovenia consistently receives the highest credit rating of all transition economies-receiving top regional honours in a recent Dunn & Bradstreet Survey. 2010 saw Slovenia exit recession, thanks to its excellent export relationships with Germany and its other EU neighbours. In order to continue this process of sustainable and on-going economic growth, the focus of attention for future exports is on the so-called BRIC countries (Brazil, Russia, India, and China). A readiness to develop economic ties with foreign businesses has encouraged new business start-ups amid a more fruitful and progressive business economy aided by the countries OECD membership.
Favourable financial and fiscal incentives for Foreign Direct Investment include a corporate income tax rate of 20%, which is set for gradual reduction to 15% by 2015
One such company taking advantage of the Slovenian Governments 2010-2015 plans designed to encourage economic growth and investment in the Pomurje region is Wolford AG. This international women’s wear and hosiery brand from Graz in nearby Austria sell to over 60 countries worldwide and collaborate with designers from the luxury goods market such as Vivienne Westwood and Giorgio Armani. They were looking to expand and were convinced by a corporate tax system supportive of foreign business investment and development, as well as other generous incentives provided by the Slovenian government.
Favourable financial and fiscal incentives for Foreign Direct Investment include a corporate income tax rate of 20%, which is set for gradual reduction to 15% by 2015, making it amongst the lowest in Europe. Labour market related incentives such as co-financing of projects are available from the Ministry of Economy, provided there is evidence of job creation across specific sectors. In addition, refunds of social and health insurance contributions paid by employers are also available. Increased relief from 30% to 40% of amount invested in equipment and other intangible assets is offered, whilst investment projects located in Pomurje receive priority treatment when bidding for financing from national development funds and the EU Cohesion fund.
Wolford AG’s investment in Murska Sobota in the Pomurje region in 2010 initially occupied a space of 4,000 sq. metres and employed 150. Wolford AG’s Pomurje operation is now worth in the region of EUR 4.6 million and shows no sign of slowing down. The company is expected to double its workforce in 2012. This achievement has just been rewarded at the Financial Times FDI awards in Slovenia where the company has been praised for its contribution to the development of the region’s economy, whilst the region as a whole has received numerous awards as a top European location for the future of FDI.
Agriculture is possibly the most distinguishing feature of this region and is intrinsically linked to the food industry and the foundation of economic turnover in many parts of Pomurje. Prime brown and green field sites containing mineral rich soil makes this region an ideal location for large-scale arable farming whilst enabling potential investors to gain a stronghold of both domestic and export production. The Government sponsored ‘Programme MURA’ was designed to rejuvenate the agricultural industry by promoting co-operative and resourceful attitudes to food production in this sector.
Pomurje’s advantageous location provides unique possibilities for FDI and business partnerships whilst it’s close proximity to Europe’s mountainous regions and nearby Adriatic coastline contribute to a fantastic quality of life for those looking to relocate. There is still work to be done in the Pomurje region, but no one can doubt the determination of the Government and its agencies to deliver favourable policies and incentives to ensure prospects for the future look bright and prosperous for foreign investment. If your company is looking to expand and benefit from the incentives that the Pomurje region offers, then join the success story of Wolford AG , and look to Pomurje as a prime location for FDI.