“The Slovak economy is, surprisingly, experiencing good times,” says Tomas Rybar, Partner at Cechova & Partners in Bratislava, despite political turbulence due to lasting issues relating to corruption and some of the xenophobic and anti-immigrant attitudes that have arisen in the country in recent years – as they have across Europe – and the rise of the far-right.
Rybar reports that the economic scene in Slovakia is relatively stable compared to some neighboring countries. He explains that a certain legislative balance appears to have taken hold following the marriage of convenience between Left and Right elements in the current government, replacing the turmoil of the past few years, in which control of the government alternated between parties on the Right and Left, with each seeking to undo the legislative achievements of its predecessor – and, as a result, little lasting getting done. "Be it in spite of or thanks to the politics," Rybar says, the Slovak economy has been thriving, most visibly in the automotive sector, exemplified most famously by the building of the Jaguar/Land Rover plant that is scheduled to begin operation in 2018, as well in the shared service center sector, which is particularly strong in Bratislava but now also popping up in other regions due to shortage of workforce.
The downside of the boom is that previously unknown shortage, Rybar reports, "in spite of still relatively high nominal unemployment." According to Rybar, "this creates a situation where the need of business to soften the rules for immigrant workers hits the bureaucratic restrictions as well as the anti-immigrant sentiment in the society." While the employment law did not undergo changes after the last elections, Rybar points to some changes on the horizon, including the "not-too-thought-over idea of inclusion of an obligatory 13th salary in the Labor Code."
Rybar claims that, for Cechova & Partners, at least, the recent changes in pharma regulation have also brought significant amounts of work. These regulations include, in particular, the introduction of new rules on medicine distribution, "affecting parallel trade and requiring introduction of so-called emergency channels ensuring swift delivery of medicines not available on the regular market."
Rybar also refers to the country’s Anti-Letterbox Act, designed to ensure more transparency from individuals and legal entities doing business with state-owned or controlled enterprises in Slovakia. While it is driven by noble intentions, Rybar notes, the Act – which came into force in February 2017 – creates a lot of administrative work for companies, which then "need law firms to assist and guide the clients through the obligatory certification process." Rybar reports that no clear standards have been set yet, which adds to the sensitivity of the process.
In summary, “the Slovak economy is steaming ahead,” says Rybar, who notes that it is expected to increase by 5% annually in the next two years, and who is optimistic both "for the firm and the legal business."