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In The Corner Office we ask Managing Partners across CEE about their unique roles and responsibilities. The question this time around: How do you do performance reviews, and how important are they to the planning and management of the firm?”

After a few troublesome years during the global financial crisis, it seems like Slovenia is on a positive economic route again. On December 14, 2018, S&P Global Ratings affirmed an “A+/A-1” credit rating for Slovenia with a positive outlook. Slovenian GDP has grown in the last two years between three and four percent annually, with a growth forecast for 2019 of 3.4 percent.

If you are a company conducting business in the automotive industry with intentions of expanding on the European market, where do you look? The answer may be the Central European country of Slovenia.

Needless to say, business in the European Union is going through some turbulent times. How this is affecting the CEE region and how business in the region will adapt to this never-ending uncertainty is the million-dollar question that everyone is asking at the beginning of 2019.

As in almost all other jurisdictions, in Slovenia there are no cryptocurrency-specific tax laws. In order to shed light on the tax treatment of the cryptocurrency in Slovenia, in June 2018 the Financial Administration of the Republic of Slovenia (FURS) issued the extended and updated Guidelines on Tax Treatment of Cryptocurrencies in Slovenia (the “Guidelines”).

The well-formed regulation of competition is a precondition for a healthy and effective market. Thus, countries have to not only adopt appropriate legislation, but also ensure that the relevant authorities will enforce that legislation in a way that allows all participants in the market to carry out their activities in a fair environment.

A “qualifying shareholder” is any person intending to acquire or increase his or her bank shares in order to achieve or exceed a qualifying holding. The qualifying shareholder must be authorized by the European banking supervisor, the European Central Bank. Such authorization is first needed upon the acquisition of ten percent or more of the shares and/or voting rights in a bank. Subsequent authorizations are required when acquisitions of twenty, thirty, and/or fifty percent of the shares and/or voting rights in the bank are made. Importantly, the authorization procedure is activated not only upon the crossing of the relevant thresholds but also when the acquirer obtains the right to appoint the majority of the management board or any other means of exerting a significant influence on the bank’s management.

The continued rise in the number of sales in 2017 confirmed the revival of the Slovenian real estate market that began in 2014 (after the end of the economic crisis). While the prices of residential real estate in Slovenia hit bottom in 2015, last year they increased more than ten percent over the previous year. Real estate prices have continued to rise in the first few months of this year as well.

With the tremendous increase in the price of cryptocurrencies in 2017 the world has witnessed an explosion of cryptocurrency-related enterprises, with initial coin offerings at the forefront. Several European countries have aligned their legislation to become appealing for such enterprises and Slovenia has been mentioned on several occasions as one of the most “crypto-friendly” countries. However, as Slovenian legislation offers a very high level of protection to personal data regarding identity documents, crypto business ventures within the Slovenian jurisdiction may be at a disadvantage against foreign competitors.

The European Union’s General Data Protection Regulation is, according to the EU-hosted GDPR website, “the most important change in data privacy regulation in the past 20 years.” The Act, which was approved by the EU Parliament on April 14, 2016 and will become fully effective on May 25, 2018, was designed “to harmonize data privacy laws across Europe, to protect and empower all EU citizens’ data privacy, and to reshape the way organizations across the region approach data privacy.”

The winners of the 2017 CEE Deal of the Year Awards were announced at the first ever CEE Legal Matters Deal of the Year Awards Banquet last night in Prague. The biggest smiles in the joyous and music-filled celebration of CEE lawyering, perhaps, were on the faces of Partners from Avellum and Sayenko Kharenko, which, along with White & Case and Latham & Watkins, won the award both for Ukrainian Deal of the Year and CEE Deal of the Year for their work on the 2017 Ukraine Eurobond Issue (a story initially reported by CEE Legal Matters on October 2, 2017).

In The Corner Office we ask Managing Partners at law firms across the region important questions about their unique roles and responsibilities. The question this time around: What was your favorite course in law school, and why?

Slovenia: Fine-Tuning of the Tax System

In the beginning of 2018, Slovenia introduced several minor and mainly administrative changes to its tax legislation, mostly addressing and resolving inconsistencies in the legislation that had been detected in practice. 

The first recorded energy performance contracting project in Slovenia was carried out in 2002, and was soon followed by a number of other similar projects, notably in the public sector. Thus, energy performance contracts are not a new concept in the Slovenian business sphere, although it was not until 2014 that the country’s newly adopted Energy Act transposed Directive 2012/27/EC on energy efficiency and introduced a comprehensive definition of an energy performance contract. 

For the past five years the financial market in Slovenia has been characterized by a process involving the selling of non-performing loan and leasing receivables (“Receivables”), mostly to foreign investors. According to information published by the Bank of Slovenia, Slovenian banks still have approximately EUR 1.5 billion of non-performing loans on their balance sheets, and we expect to see more of these loans being sold in the next two years. 

Of the former Yugoslavian countries, Slovenia was the least penetrated by Russian businesses – a result of mutual caution on both sides. 

The EU has always acknowledged the positive effects of foreign investments into member states and thus has one of the most open regimes in this regard. But in light of recent security issues in Western countries, the EU’s view on foreign investments has slightly changed, and out of concerns for both security and public order direct foreign investments could soon become subject to a so-called “screening mechanism,” in which they would be reviewed by the member state where the investment is planned, by the European Commission, and by other member states.

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