In the first 6 months of 2025, Slovakia – with a new government since late 2023 – has implemented a number of notable economic, financial and legal policies, thereby affecting the bilateral trade and investment environment with Vietnam. On the foreign affairs front, Slovakia affirmed that it considers Vietnam an important partner in the Asia-Pacific region.

At the meeting with the Vietnamese Ambassador (February 2025), Slovakian Deputy Foreign Minister Marek Estok emphasized Vietnam's international position and said that Slovakia will increase the number of economic counselors at the Embassy in Vietnam to promote trade and investment cooperation. 2025 marks the 75th anniversary of the establishment of diplomatic relations, the two countries plan to organize many trade promotion activities, fairs and business delegation exchanges to exploit cooperation potential

In fact, Vietnam-Slovakia trade is growing strongly thanks to the leverage of EVFTA. After 4 years of implementing the EVFTA, two-way trade has continuously increased at double digits. In the first 10 months of 2024 alone, Vietnam's exports to Slovakia increased by 57.4% compared to the same period last year, bringing the total trade turnover for the whole year of 2024 to an estimated ~730 million USD (far exceeding the half-billion USD mark of previous years)

Slovakia currently considers Vietnam as one of the leading trade partners in Asia-Pacific, as evidenced by the country's early ratification of the EVIPA in February 2023 and its active promotion of the implementation of the EVFTA. EVIPA, when fully effective, will strengthen the confidence of businesses on both sides, supporting cooperation projects in Slovakia's strong sectors (automobiles, mechanics, energy) and Vietnam's priority sectors (infrastructure, supporting industries).

Regarding domestic investment and financial policies, the Slovak government has just issued a series of tax reforms from January 1, 2025 to support small businesses and people, while ensuring budget revenue.

Specifically, corporate income tax applies a new progressive tax schedule: the preferential tax rate is reduced from 15% to 10% for income up to 100,000 EUR (ie expanding the threshold for low-tax revenue from 60,000 to 100,000 EUR). Enterprises or small business households with profits below this threshold will only be taxed at 10%, significantly reducing the tax burden.

In contrast, large enterprises with profits over EUR 5 million will be subject to a tax rate of 24% (up from 21%)

The dividend withholding tax has also been reduced from 10% to 7% to encourage investment and profit sharing. These adjustments reflect the policy of supporting small and medium-sized enterprises, promoting start-ups and business investment in Slovakia. In parallel, from April 1, 2025, Slovakia will apply a new financial transaction tax (also known as the “bank tax”).

This tax is levied on transfers and withdrawals: the rate is 0.4% on the amount debited to the account (up to EUR 40 per transaction), 0.8% on cash withdrawals, and 0.4% on the financial service fee transferred back to the customer. The tax is paid by banks and financial institutions, but businesses and business households are also subject to the tax if they use accounts at banks that are not based in Slovakia (i.e. using foreign banks).

Some transactions are exempt from the tax (money into accounts, card payments, internal transfers within the same bank, tax payments, social insurance payments).

This transaction tax was adopted to increase budget revenues and encourage businesses to use the domestic banking system. However, this is a controversial measure because it can increase operating costs for businesses (although the retail tax is capped at 40 EUR/transaction).

In terms of the legal environment, a notable development is the adoption by the Slovak Parliament of the Law on Non-Governmental Organizations (NGOs) on 16 April 2025. New law requires all NGOs to disclose their funding sources and the identities of major donors, with penalties for non-compliance

Prime Minister Robert Fico’s government has touted the law as a move toward transparency, but critics say it is a blow to Slovakia’s civil society, similar to a “Russian NGO law” that aims to clamp down on independent voices

After a wave of protests, some harsh provisions (such as labeling NGOs as “lobbyists” or “foreign agents”) were withdrawn before it was passed

However, the NGO law, which is expected to come into effect on 1 June 2025, is still seen as a step backward for democracy, raising concerns in the EU about Slovakia’s commitment to the rule of law. In addition, Slovakia has been actively promoting economic cooperation outside the EU.

Typically, Prime Minister Fico officially visited China in late 2024 and by June 2025 issued regulations on granting special work visas to Chinese citizens: according to which each year, up to 1,000 skilled workers from China are allowed to work in Slovakia in large investment projects, provided that the Chinese employer meets the criteria of compliance with the law and has been approved by the Slovakian Ministry of Economy for the strategic investment project

This regulation (effective from July 1, 2025) shows the Slovak government's efforts to attract foreign investment and technology, while solving the problem of shortage of skilled workers for new industries (e.g. battery production, electronics). On the other hand, 

Slovakia also recognizes the contributions of the Vietnamese community in the country: about 7,000 people of Vietnamese origin live and work in Slovakia (this community has just been recognized by the Slovakian government as the 14th ethnic minority since June 2023).

The Deputy Minister of Foreign Affairs of Slovakia highly appreciated the Vietnamese community, considering them a socio-economic bridge, and said that more than 10,000 residence permits were granted to Vietnamese citizens in 2024 - making Vietnamese the third largest foreign group in Slovakia (after Ukrainians and Serbians).

The Slovakian side also pledged to closely coordinate with Vietnam on consular procedures, facilitating Vietnamese workers to renew work permits as well as apply for new visas to Slovakia.

Impact on Vietnamese businesses: Slovakia's new policies generally create many favorable conditions for business cooperation with Vietnam, but also pose some potential challenges that need to be noted. On the positive side, the most obvious is the opportunity to boost exports to Slovakia thanks to the EVFTA. The extensive tariff reduction (many Vietnamese products currently enjoy 0% tax in the EU) helps Vietnamese goods become more competitive in Slovakia.

Slovakia's consumer demand is complementary to Vietnam's supply: Vietnam mainly exports to Slovakia consumer goods and tropical agricultural products that Slovakia cannot produce (for example: textiles, footwear, phones, coffee, pepper, frozen seafood, etc.). These are all traditional export sectors of Vietnam and are growing well. The export growth rate of over 50% in 2024 is proof of the great potential.

Vietnamese enterprises can take advantage of the Slovakian market as an additional gateway besides the Czech Republic to penetrate the EU, especially when purchasing power in Slovakia is recovering after the pandemic and the Slovakian government advocates diversifying import sources. In addition, Slovakia's policy environment towards Vietnam is quite friendly.

Slovakia prioritizes promoting trade and investment with Vietnam (demonstrated through increasing trade counselors and continuously exchanging delegations at all levels), so Vietnamese enterprises will receive more active support when seeking business opportunities here. In 2025, many trade fairs and networking events in Slovakia are expected to have the participation of Vietnam, which is a good opportunity for enterprises to promote products and connect with partners. Regarding investment, Slovakia's early ratification of EVIPA shows its goodwill to protect investors, creating confidence for Vietnamese enterprises when investing or entering into joint ventures in Slovakia. 

Cooperation projects can focus on Slovakia's strengths such as the automotive industry, mechanical engineering, and energy - areas in which Slovakia welcomes foreign capital. For example, Vietnamese enterprises can participate in the supply chain in the Slovakian automotive industry (one of Europe's automotive manufacturing centers) or cooperate in the clean energy sector. Slovakia's new tax policy is also beneficial for Vietnamese small and medium-sized enterprises: the income tax reduction to 10% for profits under 100,000 EUR will help Vietnamese startups or small shops in Slovakia reduce costs and increase their ability to accumulate. Reducing the dividend tax to 7% also creates incentives for Vietnamese investors to invest, because repatriated profits will incur less tax.

In addition, the Vietnamese workforce in Slovakia is quite large and is facilitated by the local government (simplified residence procedures, recognition as a minority community)

This is not only meaningful in terms of culture and society but also has economic benefits: Vietnamese enterprises can consider sending more workers to Slovakia (under the labor cooperation program) to meet the human resource needs here, or take advantage of the Vietnamese community that understands the locality to act as a business bridge (for example, hiring Vietnamese people in Slovakia as sales representatives, market development).

Slovakia's move to open a special visa to attract highly skilled workers from China also shows that the country is ready to seek human resources outside the EU for large projects.

In the long term, if Vietnamese enterprises invest on a large scale in Slovakia, it is entirely possible to propose similar favorable mechanisms in personnel recruitment and technical cooperation.

Challenges to note: Despite the opportunities, Vietnamese enterprises also need to prepare for some challenges when operating in the Slovakian market. First, the Slovakian market is small (population ~5.5 million), and purchasing power is more limited than that of Western European countries. Therefore, the ability to expand sales has a certain ceiling; enterprises should not rely entirely on a small market but should consider Slovakia as a link in a broader EU penetration strategy.

Second, the change in Slovakian government policy under Prime Minister Fico is somewhat unpredictable, requiring enterprises to closely monitor and respond. For example, the new NGO law signals a policy environment that tends to tighten control over civil society organizations, which may indirectly affect associations, business associations, or foreign-funded cooperation projects.

The government’s tightening of NGO management may cause technical assistance and trade promotion projects funded by international organizations to be 

Financial support is more difficult in terms of procedures, so Vietnamese businesses may lose a useful information or connection support channel. Third, the application of financial transaction tax from April 2025 will certainly increase operating costs for businesses. Each payment transfer to suppliers, salary payment or cash withdrawal in Slovakia is subject to a tax of 0.4–0.8%

This cost is not large for small transactions, but for import-export businesses that regularly transfer large amounts of money, the cumulative cost will be significant. Vietnamese businesses need to recalculate payment methods to optimize (for example, prioritize card payments or combine transactions to reduce the number of taxable times, take advantage of tax exemptions for certain items). Fourth, similar to the Czech Republic, technical barriers and EU standards in Slovakia are also very high. Goods entering Slovakia must meet European quality standards, from product safety regulations, food hygiene to environmental and labor requirements. 

Vietnamese enterprises exporting to Slovakia need to pay attention to complying with regulations such as animal and plant quarantine, CE certification for industrial goods, packaging standards, local language labeling, etc. Any violation can lead to shipments being stuck at EU ports or being returned, causing damage. In addition, competition in the Slovakian market is increasing as the country opens up more to non-EU sources (especially from Asia). The increasing presence of Chinese, Turkish, Indian goods in Slovakia requires Vietnamese goods to make efforts to maintain their advantages in quality and price. Notably, Slovakia's prioritization of attracting investment and labor from China shows that Chinese companies can gain an advantage in some projects in Slovakia thanks to the direct support of the local government.

Vietnamese businesses need to monitor this move to find suitable ways to compete or choose niche areas with less direct confrontation. Finally, in the medium term, if the Slovakian government conflicts with the EU due to its political views (for example, the issue of sanctions against Russia or budget deficit due to strong tax cuts), Slovakia is at risk of being monitored by the EU or having its financial support cut.

This could affect the business environment (such as inflation, interest rates) and people's purchasing power. Although this scenario is not yet clear, Vietnamese businesses should be cautious and diversify risks, and should not rely entirely on incentives in one market.

In short, Slovakia is still a potential destination for Vietnamese businesses thanks to its traditional friendship, commitment to EU integration and current preferential policies. However, success in this market requires businesses to clearly understand and adapt to changes in domestic policies, while constantly improving quality, making the most of EVFTA incentives to build a solid position.

References: Policies and data in the article are compiled from the Vietnam Trade Office Portal in the Czech Republic - Slovakia and international news sources, including updates from VietnamPlus, Reuters, DW, etc. . The analysis and assessment are based on information up to June 2025.