The Impact of Legislation on Foreign Direct Investments in Slovak Republic

Abstract

The condition of ensuring a permanent economic growth and development is an investment activity which includes the foreign direct investment (“FDI”). The issue of examination of FDI in the business environment, under existing conditions created by dynamically changing regulatory environment, in connection with the performance and efficiency of businesses, has an impact on the overall economic level of the country at last. A crucial component of the rise of transnational capital is the growth of FDI, shifting of investors' capital as a productive investment into one or more foreign countries. FDI inflow is determined by the entire legal system of a particular state. An inevitable factor influencing the decision to invest in a particular country is the quality and stability of legal regulation of the business environment and equally important factor is the enforcement of legal claims. The key role is played by procedural rules in this respect. Regarding the above mentioned, it should be emphasized that national legal regulation significantly determines the decision to invest in a particular country. Poor enforcement of law is considered as a significant competitive disadvantage in case of Slovak Republic. In the area of public law, the regulation of taxation plays a major concerning the impact on the business environment. As standard methods of scientific research for the given topic, methods of analysis, synthesis, deduction, and comparison will be used together with historic method.