FDI inflows in Slovenia, in EUR million, 1999-2008

The low levels of FDI flows in the past indicate that Slovenia was not widely recognised as an attractive location for mobile investment. The main reasons are generally associated with the following:

• Slovenia was a young country starting the transition to a market economy; it had a small domestic market and bordered on an unstable region.
• The privatisation model (decentralised, voucher-based) in the first half of the 1990s left less room for foreign investors than in other countries in the region.
• The domestic services sector (financial services, trade, tourism, infrastructure) was ahead of other countries in the region. The fact that there were some competitive domestic enterprises with a firm foothold in the small domestic market was a clear signal that foreign companies had to make greater efforts than in other countries in the region to win the same market share.

Rise in FDI inflows in the future

It is expected that more foreign investors will look to Slovenia either to make their debut in the region or to strengthen their presence, resulting in FDI inflows from the following sources:

• Post-privatisation acquisitions of already privatised companies. These companies will continue to work on the concentration of ownership. By tying the knot with a strategic partner such companies will have the advantage necessary to maintain their share of the domestic market and to expand into cross-border markets.
• The authorised privatisation funds and other state-run funds will continue to consolidate their portfolios with the aim of increasing the liquidity of their property.
• New entries. Based on the increased demand for information about Slovenia as an inward investment location a rise in the number of greenfield investments is expected.
• Expansion of existing foreign-owned companies. This has been the largest source of new jobs in the manufacturing sector.

FDI stock in Slovenia, in EUR million , 2000-2010