COVID-19 Slovenia Update

New Rules on Foreign Direct Investments in Slovenia

The New Act on the intervention measures to mitigate and eliminate the consequences of the COVID-19 epidemic[1] (“Act”) entered into force on 31 May 2020. Among others, it also introduces a new set of rules applicable to foreign direct investments into the Republic of Slovenia, which will have important implications for several fields, including M&A transactions, greenfield, and real estate.

Screening of foreign direct investment is a known topic within the EU, considering its basic framework was already determined under Regulation (EU) 2019/452[2]. However, the new set of rules introduce some important deviations from the EU-framework as well as more detailed rules governing the screening process.

The provisions on screening of foreign direct investment under the Act are applicable from 1 June 2020 until 30 June 2023.

Subject matter and scope

The purpose of a new set of rules is to eliminate foreign investors and foreign direct investments which could negatively affect the security and/or public order of the Republic of Slovenia. In this regard, the Act sets forth an obligation to notify and provisions on the screening process to identify potentially harmful investments.

The definition of a foreign investor under the Act includes citizens of and legal entities with its registered seat in the member states of the European Union, states of the European Economic Area, the Swiss Confederation or third countries.

Foreign direct investment is an investment made by a foreign investor with the purpose to establish or maintain permanent and direct links between the foreign investor and a business entity with its registered seat in the Republic of Slovenia, by acquiring at least 10 % participation in the capital or voting rights.

However, not all foreign investments that fall within the above definitions are under obligation of notification and screening. Such obligations only apply if the investment is placed in one of the fields of activities directly provided in the Act (e.g. critical infrastructure, transport, water, aviation, media, data processing, artificial intelligence, medical and pharmaceutical technology, the supply of critical inputs and similar).

The obligation to conduct notification of a foreign direct investment applies in the following cases:

  • conclusion of merger agreement or publication of the takeover bit,
  • incorporation of a company in the Republic of Slovenia with which the foreign investor intends to invest in tangible and intangible assets, related to the establishment of a new business unit, expansion of the capacity of an existing business unit, diversification of a business unit’s products into new products that were not previously produced in the business unit, or significant changes in the entire production process of an existing business unit; and
  • agreement under which the foreign investor or its subsidiary in the Republic of Slovenia is granted the right to dispose of land and real estate that are essential for critical infrastructure or land and real estate that are located near such infrastructure.

Notification process

If a foreign direct investment fulfills all above conditions, it must be dully notified to the Ministry of Economic Development and Technology (“Ministry”). Notification shall be submitted in the prescribed form within the statutory deadlines (generally within 15 days following the conclusion of a relevant agreement).

Due to ambiguous provisions, it is unclear, whether the obligation to notify apply also in cases where the signing of the merger agreement was concluded more than 15 days before the Act entered into force but the closing has not been completed yet.

Screening process, decision of the Ministry and legal remedies

The final decision of the Ministry is limited to whether the foreign direct investment poses a threat to the security and/or public order of the Republic of Slovenia.

Screening process is to be performed by a special commission appointed by the Ministry. The Ministry shall issue its decision based on the opinion by the commission no later than 2 months after the notification was made. By issuing the decision, the Ministry can either (i) approve, (ii) determine conditions for its implementation, (iii) prohibit or (iv) unwind the foreign direct investment. An appeal against the decision by the Ministry may be filed with the Government of the Republic of Slovenia.

Importantly, the Ministry may retroactively screen foreign direct investments in the relevant fields within five years from the publication of the takeover bid, signing of the merger agreement or agreement under which the foreign investor or its subsidiary in the Republic of Slovenia is granted the right to dispose of with land and real estate or incorporation of the company in the Republic of Slovenia.


A fine ranging from EUR 100,000 to 250,000 may be imposed upon the company if it fails to notify the Ministry on relevant foreign direct investment in due time. A fine ranging from EUR 200,000 to 500,000 may be imposed on medium and large undertakings and a fine ranging from EUR 50,000 to 150,000 may be imposed on private entrepreneurs. Responsible person at legal entity may be fined up to 10,000 and natural persons may be fined up to EUR 5,000.

[1] Official Gazette of the Republic of Slovenia, No. 80/20.

[2] Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union (Official Journal of the European Union, LI 79/1), effective from 11 October 2020 onwards.


A version of this article in Slovenian language is available here.



*The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.