On April 7, 1999, the latest strategical project of the Slovak Government in support of FDI entry into the Slovak economy was published for the first time in the Italian Capital and in the seat of the Cofindustria industrial union representing 250 Italian associations and about 130,000 private firms of various sizes.

The new strategy was brought home to a group of about 60 Italian businessmen who ignored the period of Easter holidays by Slovak Prime Minister Mikuláš Dzurinda in person. His lecture was part of a two-day official visit to Italy during which he held courtesy-informative negotiations with Italian Prime Minister Massimo D'Alemo, President Oscar Luigi Scalfaro and Pope John Paul II.

During his 20-minute address, the Slovak Prime Minister stressed that the Slovak Government expects a combination of FDI inflows with the entry of new technologies and equipment, boosting competitiveness, providing employment and infrastructure development of Slovakia's regions.

Under the strategical project approved by the Slovak Government April 1, 1999, the Cabinet puts the main stress on its financial area. It suggests to provide new investors with several lucrative advantages, namely under precisely defined conditions. These include especially, but not limited to, tax reduction up to 100 % and tax holidays for a period of up to five years. This is conditional on companies investing at least EUR 5 million in production or at least EUR 1 million in select tourism services and holding at least a 60 % export share of production. For persons and entities investing in high-unemployment regions, the minimum investment limit will be lowered to EUR 2.5 million.

"Among another advantages I can cite an accelerated depreciation of investment, a zero rate for import duty on machinery and equipment, an exemption VAT and real estate tax, providing a prepared territory for a token price allowed through granting free municipal loans of up to 50 % of cost associated with building up an industrial infrastructure. Furthermore, this will be a contribution in support of creating jobs, lowering or remission of the unemployment insurance payment and in the long run lowering the common income tax rate," Prime Minister Mikuláš Dzurinda told the inquisitive Italian businessmen who represented a mere 20 % of the total number of businessmen invited.

The Slovak Government further anticipates that among the most alluring incentives for investors will be a deduction of 20 % of cost from the tax base for R&D, granting contributions in support of creating new jobs, the maintenance of existing jobs and retraining in high-unemployment regions. Tax entities may also take advantage of the institute of tax credit based on the value of investment spending and the consequent possibility of lowering the tax amount.

In their responses to Dzurinda's lecture, the Italian businessmen requested to improve Slovak legislation on certification, obtaining a foreigner's permit for stay on Slovak territory, the ratification of the bilateral Investment Protection Agreement, the signature of a new double taxation relief agreement and a social security agreement. One of the businessmen stated that the Slovak Government should not seek only tax holidays but also legislative changes in the Taxation and Customs Acts. "We are suffering from the customs house that is becoming almighty and the Customs Act concerning import duty with which we have to wage a very bitter fight. This costs us a lot of vigour and efforts. "A freer and less bureaucratic customs regime would be helpful to us," one of the businessmen told Prime Minister Dzurinda just before his departure for a meeting with the Italian President. Finance Minister Brigita Schmögnerová represented the Prime Minister in a more extensive standpoint on these problems saying that Slovakia was preparing an amendment to the Customs Act and the Customs Administration. "We are concerned with an increased order in the Customs Administration. We are developing a new regulation to simplify the release of goods to individual customs regimes. Also a new Double Taxation Relief Agreement is in hand. I think that even an agreement between the Customs Administrations of Italy and the Slovak Republic is necessary," the Finance Minister accented. Economy Minister Ľudovít Černák, who could stay with the Italian businessmen the longest, had to field critical comments regarding missing industrial parks and duty-free zones in Slovakia. The instable Slovak banking sector and a sluggish business disputes settlement did not escaped criticism, either, leading one Italian businessman to conclude that it is more advantageous to invest in Bulgaria than in Slovakia.

"We are hard working on duty-free zones and industrial parks. The Ministry of Economy of the Slovak Republic is prepared to promote any good project. The government's strategical objective is to support small entrepreneurs and trade licence businessmen. We are offering investors at least what is also in the other states of the Visegrad Four. I want to assure you as well that the legal order of the Slovak Republic is approximating to Union laws. We have five to six standards contravening standards of the European Union. Rather, investors rebuke us for frequent taxation changes. We are offering one more and already last tax reform in 2000. Under our Constitution, the state may act solely in conformity with law, while the businessman may act in a way not forbidden by the Constitution and laws," Minister Černák briefly responded.

A paradox of the Rome premiere of the new strategy for foreign investors is the knowledge that the Slovak Government has not thus far developed and introduced a similar strategy for domestic investors in Slovakia. This fact is not only arousing an indignation and disagreement among the Slovak businessmen but it is even seriously threatening the negotiations on Slovakia's admission to the Organisation for Economic Cooperation and Development. One of its important clauses says that in order to maintain the home market competition environment, national governments are under obligation to create equal legislative conditions for domestic and foreign investors.