An increasing number of Italian companies are moving at least a part of their operations to Slovenia. Reasons? Much lower taxes, excellent conditions, skilled work force, port of Koper as a key logistics hub between Asia and Central Europe, proximity to Italy, good access to Balkan markets and – last but not least – less bureaucracy than in Italy.
The relations between the two neighbors, Italy and Slovenia, in the 20th Century was marked with tension and mistrust. The neighbors fought ferociously against each other in two world wars. The atrocities committed by the two totalitarian regimes on both sides against the one another are far from being forgotten. Yet since Slovenia’s entry into the European Union in 2004 the situation has been changing rapidly; the positive change was further accelerated after Slovenia entered the Schengen Zone. The two ex-foes are model neighbors today.
The business cooperation is clear proof of a good partnership. Italy is the third largest investor in Slovenia with a number of large investments in industry (for example Bonazzi Group) and banking (Unicredit and Intesa San Paolo). Around 2.000 companies with Italian capital have been registered in Slovenia since the end of 2014.
But this year the interest to start business operations in Slovenia has reached new levels. Only in the bordering Slovenian regions (The Coast and Northern Primorska) 180 companies have started operating with Italian capital. Why do Italian entrepreneurs choose Slovenia? The main reason they quote are the general business conditions. Mathitec is an important global player in the growing niche of healthcare automation. In other words, the company develops and produces robotic and other automatized solutions for use in medicine. In 2010 Mathitech moved from Trieste to Sežana. The Company’s CEO Enrico Merlani stated that in Slovenia they have much less trouble with bureaucracy and pay less tax. The move has also put the company closer its Slovenian suppliers. Mathitech was recently followed by their global distributor Health Robotics. The US company expanded their Trieste based operation to the Slovenian border town of Sežana.
The Italian Ministry of Foreign Affairs (The Farnesina) state a number of strengths as the main reason to choose Slovenia as an investment opportunity: closeness to Italy, high-skilled workers, good level of infrastructure, favorable taxation and access to the Balkan markets. The difference in taxation can be quite dramatic. “In Slovenia we pay 17 percent tax on profits and we can reinvest the rest. In Italy we used to pay 26 percent of the state tax and then also the regional taxes – in effect we had to give away up to 50 percent of the profit,” explains Mathitec’s CEO Merlani.
Interestingly enough, the document created by the Farnesina names excessive red tape as one of the few weak points of Slovenia. The Italian entrepreneurs strongly disagree and state that you can get most permissions in a couple of months in Slovenia; for the same document in Italy you could wait for years. In a country as little as Slovenia even a small entrepreneur can get in touch with the minister; to do that in larger countries is practically impossible.
“We started to work a month after the relocation to Sežana. In one month only,” stressed Merlani in impeccable Slovenian. The young manager felt necessary to learn the language of the neighboring country. Italian is widely spoken in the Slovenian regions of the Coast and Northern Primorska, yet more and more Italian families from the bordering parts put their children into Slovenian language courses, or even Slovenian language schools in the eastern Friuli Venezia Giulia region. The reasons are purely pragmatic - it is easier to make business and to live with the neighbors if you understand their language. And it could pay-off well: if you need proof of what good neighbors can achieve when they join forces, you need not look further than Tina Maze. The trainer and partner to one of the all time best woman skiers is Italian Andrea Massi. Massi is widely perceived as a key element behind Maze’s success. Of course, he speaks perfect Slovenian.