Slovenia: Main Takeaways of the FDI Regime in Force
The Slovenian FDI regime closely follows the EU FDI Screening Regulation 2019/452 and after being temporarily part of one of the so called COVID laws, it now forms part of the Investment Promotion Act, which inter alia also regulates available investment incentives, conditions, criteria and granting procedure, as well as related activities.
A notification to the ministry responsible for economy (the “Ministry”) is required, when the following conditions are met:
(i) the transaction involves a foreign investor,
(ii) the transaction constitutes a foreign direct investment by which the investor acquires at least 10 percent of the capital or voting rights in a Slovenian company,
(iii) the activity of the target company relates to one of the risk factors.
Who is a foreign investor?
The inclusion of the FDI regime in the Investment Promotion Act has led to an important change: only a third-country national or a legal person established in a third country is considered a foreign investor, and no longer an EU national or a legal person established in the EU.
The Law also explicitly addresses the issue of indirect investors and provides that a third-country national or a legal person established in a third country, that holds, directly or indirectly, at least 10% of the capital or voting rights in a legal person established in an EU Member State and intends to make a direct foreign investment in the Republic of Slovenia, or has already made such an investment, shall also be considered a foreign investor.
Which investments are subject to notification and/or potential supervision?
All investments carried out by foreign investors aimed at establishing or maintaining permanent and direct or indirect links between the foreign investor and a company established in the Republic of Slovenia fall under the scrutiny of the Slovenian FDI regime. This includes acquisitions of a 10% participation in the capital or voting rights based on a legal transaction, as well as investments in tangible or intangible assets of a company established in the Republic of Slovenia.
The law also specifies that both the first acquisition as well as any subsequent acquisition of at least 10% of the capital or voting rights must be notified.
Risk factors
The investment may interfere with the public security and order of the Republic of Slovenia and hence requires a notification, when it concerns:
(a) critical infrastructure, whether physical or virtual, including energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral or financial infrastructure, and sensitive facilities, as well as land and real estate crucial for the use of such infrastructure;
(b) critical technologies and dual use items as defined in Point 1 of Article 2 of Council Regulation (EC) No 428/2009 (15), including artificial intelligence, robotics, semiconductors, cybersecurity, aerospace, defence, energy storage, quantum and nuclear technologies as well as nanotechnologies and biotechnologies;
(c) supply of critical inputs, including energy or raw materials, as well as food security;
(d) access to sensitive information, including personal data, or the ability to control such information;
(e) the freedom and pluralism of the media;
(f) projects and programmes in the interest of the EU as listed in Annex 1 of Regulation 2019/452/EU.
Standstill and fines
There is no stand-still requirement, but for practical purposes foreign investors are advised to obtain the clearance/opinion of the Ministry of Economic Development and Technology before closing. In the event that the transaction is prohibited by the Ministry, the underlying contract is deemed to be null and void by law.
A fine of up to EUR 500,000 may be imposed on corporate entities that were obliged to notify, if inter alia the notification is not submitted in the envisaged 15-day deadline or when not all of the required data and information is submitted to the Ministry.