Newsroom / News / Media / Info Magazine LGP NEWS 01/2022 / New Act on Major Investments in Slovakia

New Act on Major Investments in Slovakia

New Act on Major Investments in Slovakia

As from November 1st 2021, Slovakia has changed its approach towards investors coming to the country. The new law on large investments redefines the conditions, process and control in issuing certificates for large investments. 

One of the priority objectives of the new regulation is to support the construction of strategic parks especially in the least developed regions of the country. The new legislation thus introduces the legal definition of “strategic area” for an area designated for investment in industrial production, services, research and development, major environmental projects or public services, with a total area of at least 30 hectares. Transport infrastructure of national importance also falls under the qualifiers for “strategic area”. This change should help to speed up the approval of major transport projects still awaiting implementation substantially. 

The selection and preparation of strategic areas will be in the hands of the state, respectively a legal entity established by the Ministry of Economy. Thus, private investors will no longer be able to expropriate the land of the area concerned, as this activity will be carried out exclusively by organizations under the direct control of the state. 

At the same time, certain conditions for investors have been relaxed in comparison to the previous rules, such as the minimum size of the strategic area, the minimum investment amount or the minimum number of jobs created. The change in the basic conditions thus are very similar to the conditions for the provision of investment aid, as these instruments can often be connected. 

In addition to the government’s decision whether the investment is in the public interest, the investment costs of at least 30 million euros and the creation of at least 50 new jobs will be fundamental conditions for the issuance of an official certificate of major investment. The original investment cost requirement of at least 100 million euros is now only retained for public-private partnerships. In this way, the legislator is responding to the innovative trends in the smart industry, including the resulting productivity increases, and is also compensating for the long duration of the approval process by increasing the number of potential investments. 

With regard to the long-term goals of support for the least developed regions, the law provides specific conditions for those investment projects that are implemented in these districts. The required minimum investment amount, as well as the minimum number of jobs created, are halved in the case of the implementation of the investment plan in the least developed districts. 

The application for a major investment certificate itself is submitted to the responsible ministry, which evaluates this within 60 days of receiving complete and correct documentation. One of the main reasons for rejecting the application is an insufficient justification of the public interest of the investment project. If the application contains the prescribed requirements and is not rejected, the responsible ministry will prepare a proposal for the issuance of a certificate, which will then be submitted to the Government of the Slovak Republic for approval. 

With the approval of a major investment, a pre-emption right of a legal entity established by the state, self-governing region or municipality of land on which a major investment is to be made arises under the law. The pre-emption right shall lapse if the certificate holder becomes the owner of the land or building encumbered by the pre-emption right, or if, as a result of a change in the certificate, the pre-emptied land or building is excluded from the certificate. Likewise, the pre-emption right shall lapse if it is not exercised within two years from the date of approval or if the certificate holder does not submit a proposal to initiate expropriation proceedings within this period. 

The certificate shall cease if the certificate holder does not start to implement a major investment within twelve months of the date of issue of the certificate or if the certificate holder is sanctioned for an administrative offense. 

With regards to the transfer of ownership of land and buildings owned by the state, or natural persons or legal entities in which a major investment is to be made, the land and building shall be transferred at the price by agreement, at least in the amount determined by an expert opinion. If no agreement is reached, the law allows the expropriation institute to be used for compensation or to limit ownership of the land or building. 

In the event of a breach of obligations by the certificate holder, the relevant ministry will impose a fine of up to 100 percent of the value of the land for which the certificate holder acquired it. 

Finally, there is no legal entitlement to the issuance of a certificate. It follows from the above that even if the applicant meets the general conditions for the provision of a certificate, the responsible ministry or the government may also refuse issuing the certificate in the sense of other strategies and priorities.


AUTHOR:

JUDr. Mária Porubská Tökölyová, Legal Advisor at LGP

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