“There’s a lot going on at the moment in Slovakia,” according to Michaela Stessl, the Managing Partner of DLA Piper in Bratislava, who begins her summary by describing “a boom with regard to suppliers for the automotive sector who are coming with the Jaguar/Land Rover investors.” According to Stessl, “this has a huge impact on several levels and several fields of providing law,” not only to Jaguar/Land Rover itself, “but also to all the suppliers who are doing business with them.”
Indeed, Stessl reports that things are going extremely well in Slovakia at the moment, an uptick impossible to miss. “The skyline of Bratislava is really changing,” she smiles. “We’re getting skyscrapers! There’s a real boom. They’re going up almost every day.” Unsurprisingly, then, “Real Estate and Construction are really booming, as is everything else related to such projects.” Stessl reports that her own office is busy with transactions, noting that “we’re involved in several real estate transactions with portfolios about to change their owners, from logistics, to buildings, etc.” She says, “This is where the private equity funds are quite active — this is an interesting time for them.”
In addition, she says, “we’re doing a lot of litigation at the moment.” According to Stessl, Slovakia has “a totally new set of laws in place since July 2016 with regard to litigation that makes us quite busy, because some gaps in the law have already been identified. It’s quite difficult to litigate at the moment, so this is something we´ll have to deal with over the next few years. Because when even the courts don’t know how to proceed it’s an interesting question how things will go forward.”
Stessl reports that Compliance-related business is strong as well, as it is elsewhere in the region — “but even more in Slovakia, because we have not only these general requirements in preparation for the GDPR, for example, and the implementation for this regulation, but we’re one of the states that has created its own, even stricter regime, applicable to the so-called letterbox companies, which often use Slovakia because of its attractive tax structure.” Stessl notes that the country has introduced a new law for such “letterbox” companies, along with new transparency rules regarding ultimate beneficial owners (UBOs), all of which are creating substantial work for lawyers in the country. “Our new legislation is so creative — that’s the more positive word — so confusing, to a certain extent, that nobody knows exactly how to implement it, and we’re facing deadlines here.”
“For instance,” she says, “if you’re an energy company or a mining company, or a company which partners with a public sector company, you have to register, and if you fail to register by the deadline, it means potentially losing your license and other heavy penalties and fines, so we’re quite busy at the moment registering them.” She says, “this is all to bring transparency into state-regulated business, and also to identify the UBO. The deadline was on Monday, July 31st, so time was running out.” And Stessl says that “a lot of companies haven’t registered yet.” She describes it as “quite a mess, because you need so much documentation, and when companies start the process late it’s hard to do. There’s really a risk that many of these companies will lose their licenses, but nobody knows how the government regulator/legislator will apply the sanctions.”
There are potentially severe consequences to the lawyers too, Stessl says, noting that “there’s also a mechanism in place to punish lawyers who fail to register their clients in a timely manner as well.”
Another good example of new legislation in the compliance-related field, Stessl says, is Slovakia’s recently-introduced legislation on gambling, which tightens the rules for the provision and propagation of gambling games without a Slovak license, and which is expected to have particular impact on foreign gambling-game operators. According to Stessl, “Slovakia’s national lottery company, Tipos, remains the only licensed operator of online gambling games, numerical lotteries, or special bingo in the territory. Slovakian courts are empowered to issue orders to block the operators of unlicensed sites from promoting or operating gambling games in the territory of the Slovak Republic, and the supervising body — the Financial Directorate of the Slovak Republic — has new competences, including, among others, the publishing of a weekly list of prohibited websites.” Stessl says, “we are curious to see what the practical approach of the state authorities will be to enforce the new mechanisms.”
Otherwise, Stessl says, things are pretty calm. “The political climate is quite stable at the moment — everyone’s on vacation right not anyway — so it’s very quiet. And no elections are planned for the next two years.” She summarizes, with evident pleasure. “The trust in the judicial system could be higher, I suppose, and the changes I described also aim to improve this. Overall, compared to neighboring jurisdictions we seem to be doing well and the economy is doing fine.”
