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The Buzz in Slovenia: Interview with Mia Kalas of Selih & Partnerji

The Buzz in Slovenia: Interview with Mia Kalas of Selih & Partnerji

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“We had an interesting turn of events last week as our Prime Minister stepped down,” says Mia Kalas, Partner at Selih & Partnerji in Slovenia. “Previously, we had an ambitious government which began the tax reform and also had ambitious plans for a healthcare reform, but now this will very much slow down.”

“The government had previously worked on tax reforms, part of which involved introducing certain amendments to existing legislation, but it didn't lack controversy,” Kalas says. “There was some criticism in respect of easing the personal tax income ladder, and, as expected, much more of the increase of capital-based taxes. Also, the minimal gross salary changed, which is estimated to increase the cost of work by 1.8%.” In addition, she says, “proposed healthcare reform, which is always a major topic in Slovenia, hasn't progressed for quite some time.”

“Anyway,” she sighs, “the major opposing parties are now trying to form a government and as it looks new elections may well be coming up. We'll see how that goes.”

“The market is currently booming,” Kalas says, turning to a happier subject, “and the end of last year was incredibly active. The beginning of this one shows no change. M&A is the hottest field, as we have had a few large deals recently, including the sale of Abanka, which was – following the 2018 IPO of NLB bank – the largest state-owned bank in Slovenia. Also, 12 shopping centers have recently been sold in a single deal, and we still see a rising interest in hotels and logistic centers.” She adds that “the recent public procurement in the Slovenian largest infrastructure project for the second railway track from the port inland attracted several bidders from - not surprisingly - China.”

“The economy has recently been stable” Kalas says. “It is worth noting our growth hasn't been as high as it was the previous couple of years, but it's still solid - somewhere around 2.5%.” She reports speaking to a few manufacturing clients recently, who reported noticing “a bit of cooling,” but says that “in general, I think that the business climate is positive, and investors are happy.”

“It was interesting to find out that the main driver of economic growth is domestic demand,” Kalas concludes, “while at the same time the Bank of Slovenia recently implemented certain macro-prudential measures which – according to unofficial estimates of the banks – decreased consumer financing by almost 25%, and these two things don't work well together. NLB bank just filed for a constitutional review of such measures and it will be very interesting also for us lawyers to see the result. I just hope that the market will remain as good as it is now in the future, even though we will have to work hard to make that happen.”