Slovenia is launching Individual Investment Accounts (INRs), a new savings vehicle aimed at boosting long-term investing and deepening the domestic capital market. In this blog, we break down what the INR offers and why it could be a game-changer for Slovenia’s capital markets and a model for the region.
The Policy Leap: What INR Brings to the Table
On 27 May 2025, the Slovenian National Assembly adopted the Act on Individual Investment Accounts (Zakon o individualnim investicijskim računima), a reform that introduces a new type of personal savings account specifically designed for long-term investment in financial instruments. The Individual Investment Account (INR) is a dedicated account opened through licensed banks or brokers, where individuals can invest in a wide range of capital market instruments, such as stocks, bonds, ETFs, and mutual funds, while enjoying favorable tax treatment on returns. Investors can invest in instruments from global markets, but contributions directed into Slovenian-issued securities receive additional annual allowances, making domestic investing particularly attractive. The INR is not simply a savings tool; it is part of Slovenia’s Capital Market Development Strategy 2023–2030, intended to broaden retail participation in capital markets. Through this mechanism, the government seeks to make investing more accessible to everyday citizens, simplify the tax treatment of investments, and encourage longer investment horizons for retail investors. In doing so, the reform aims to support the growth and diversification of Slovenia’s capital market while aligning private saving behavior with broader economic objectives. The INR complements other national initiatives under the strategy, including financial literacy programs and earlier tax adjustments targeted at investment income. First INR accounts will be opened in March 2026. Until then, brokers and banks are in an implementation period, preparing the necessary legal frameworks and operational infrastructure. Now, we provide key insights into the Individual Investment Account:
Eligibility: Every Slovenian tax resident can open one INR in their lifetime. Parents may also open an INR for a child, which the child can fully manage at age 18. If the account holder moves abroad and loses Slovenian tax residency, the account can be placed “on hold” for up to 10 years, preserving savings and tax treatment.
Contribution limits: Savers can contribute up to EUR 20,000 in the first year, and EUR 5,000 in each following year. Importantly, an extra EUR 5,000 per year (from year two) can be contributed if allocated to Slovenian-issued securities. In this way, proactive investors can contribute up to EUR 10,000 annually. While the INR allows investments in global financial instruments, there is a potential policy trade-off: without sustained investor education or product availability, savers may direct funds abroad, reducing the immediate impact on Slovenia’s own capital market. The EUR 5,000 annual incentive for Slovenian securities aims to counterbalance this risk by anchoring a portion of investments domestically. Beyond incentivizing local investment, this mechanism is also intended to stimulate demand for Slovenian corporate bonds and equities, encouraging more companies to consider public listings and bond issuances by providing a stronger domestic investor base. Over the life of the account, total contributions are capped at EUR 150,000, though this limit may evolve over time. The structure is intentionally designed to encourage broad participation by small and first-time investors, not to serve as a tax shelter for high-net-worth individuals, fully aligned with the policy’s inclusive intent.
Investment options: Funds can be invested in a wide range of instruments traded on organized markets: stocks, bonds, ETFs, treasury bills, and mutual funds. Slovenia also included mutual fund units not listed on exchanges, which are popular among local investors. The account is opened via a licensed broker or bank, listed in the official ATVP registry. Investors can buy and sell eligible instruments freely within the account. One restriction applies – only cash contributions and withdrawals are permitted; existing securities cannot be transferred in.
Tax incentives for patience: The INR introduces a new level of tax benefits, not offered before in Slovenia’s investment landscape, to reward long-term investing. While funds remain inside the account, investors pay no tax on dividends, interest, or capital gains, enabling tax-free compounding. Withdrawals trigger a flat 15% tax on returns, lower than Slovenia’s standard capital gains tax. Early withdrawals are allowed at any time, but are taxed at 15%. If the first withdrawal occurs after 15 years, it is fully tax-exempt. Dividends, interest, and capital gains earned on investments are retained within the account and reinvested; they cannot be withdrawn separately without triggering a taxable event. Slovenia does not impose any additional tax on foreign income earned within the INR. However, if a foreign jurisdiction (such as the US) applies withholding tax on dividends or interest at the source, Slovenia has no authority to exempt that; such foreign taxes may still apply and reduce net returns.
Investor safety and tax simplicity: The INR is designed to be simple and safe for retail investors. Tax reporting is automated, and investors do not file annual tax returns for income within the account. This simplicity is a deliberate feature of the INR, designed not only for experienced investors but also to attract first-time savers who may have previously been discouraged by complex tax filing requirements in investing. The broker or bank handles tax withholding when withdrawals occur. Oversight is provided by the Securities Market Agency (ATVP), which supervises providers and publishes cost comparisons for transparency. The Financial Administration (FURS) maintains the registry of account holders. As with any investment account, market risk remains fully with the investor. However, investors enjoy legal protections: financial instruments are held separately from the provider’s assets, and cash is protected up to EUR 22,000 under Slovenia’s investor compensation scheme. While the state sets the framework, pricing for INR accounts will remain market-driven. Each bank or broker can determine their own fees, including maintenance, trading, and withdrawal costs, with no regulatory cap. To promote transparency and competition, the Securities Market Agency (ATVP) will regularly publish a comparative table of provider fees. This setup aims to keep pricing fair while giving investors flexibility to choose the provider that best suits their needs.
Why It Matters: Slovenia’s Capital Market at a Turning Point
Slovenia, an independent nation since 1991, has proven itself to be a stable and economically successful country. It integrated rapidly with Western Europe, joining the European Union in 2004 and the eurozone in 2007, and today enjoys one of the highest GDP per capita levels in Central and Eastern Europe, with GDP per capita in PPP terms now approaching USD 54t (Croatia at USD 38t). It is a state that has navigated its post-socialist transition more effectively than many of its former Yugoslav peers, building a modern institutional framework, strong rule of law, and sound macro fundamentals. Yet despite all this progress, its capital market remains shallow, and it is still classified as a frontier market by MSCI, similar to Croatia.
Average daily trading volume of SBITOP constituents (YTD, in EUR ‘000)
Source: Bloomberg, InterCapital Research
While Slovenia’s capital market infrastructure is relatively solid, trading liquidity remains modest, with relatively few large-cap listings and limited turnover outside a handful of blue-chip names. This, in turn, can discourage broader investor participation and make it harder for new issuers to access the market. However, with the INR set to expand the long-term domestic investor base, the added demand could gradually improve secondary market liquidity and provide more incentives for Slovenian companies, especially mid-sized or family-owned firms, to consider public offerings, knowing there is a more stable local pool of capital.
Until now, the development of Slovenia’s capital market has largely been organic, tracking broader GDP growth and corporate profitability. But there comes a point where organic growth alone is no longer sufficient: targeted incentives and structural reforms like this are needed to deepen the market and ensure that capital formation actively drives economic growth. In this context, household investors are especially important. With high levels of savings still parked in bank deposits, Slovenian families have ample potential to become long-term investors, especially if supported by accessible tools and protections.
Cross-Border Relevance: What Croatia Can Learn
This dynamic is also relevant beyond Slovenia’s borders. Croatian institutional investors have long played an active role in the Slovenian capital market, and Croatian retail interest has been rising as well. The InterCapital 7SLO ETF, tracking a diversified portfolio of Slovenian equities, has returned 41% in 2024 and 34.5% YTD, reflecting growing confidence and engagement.
InterCapital 7SLO ETF YTD return (2025 YTD, points)
Source: Bloomberg, InterCapital Research
For Croatian policymakers, this trend provides not only a valuable benchmark for future reforms but also evidence that Croatian capital is already embedded in Slovenia’s investment ecosystem. While the INR reform is primarily a Slovenian effort, its success could indirectly benefit Croatian investors by enhancing liquidity and performance in a market where Croatian capital is already present. Strengthening the Slovenian investor base ultimately supports a healthier regional investment environment and offers Croatia a glimpse of what targeted policy can unlock.
Recognizing this, many governments have introduced tax-advantaged investment accounts to incentivize long-term investing and channel private savings back into the economy. A more advanced capital market not only helps companies scale and innovate but also allows the increasingly affluent population to put their savings to work productively at home.
Regional Context: Where Slovenia Leads and Others Lag
Across the CEE region, tax-advantaged investment accounts are still thin, fragmented, and unevenly developed. Hungary has led the way with its well-established Long-Term Investment Account (TBSZ), encouraging households to invest and hold for the long term. Poland and the Czech Republic primarily rely on third-pillar pension savings schemes, valuable but tightly linked to retirement and less flexible. In both countries, there is currently no equivalent to Slovenia’s INR, a general-purpose, tax-incentivized investment account for various life goals.
In Croatia, such an account does not yet exist, though the government and the Zagreb Stock Exchange have stated that a tax-free investment account is under consideration. For now, Croatian investors benefit from zero capital gains tax on stocks held for more than two years, which is not bad, it is also encouraging, but it does not impose a really long-term investment horizon. We do at least have something for the start, including pension-focused third-pillar products. The absence of a flexible investment account clearly limits the flow of long-term household savings into Croatian equities and bonds.
In this broader context, Slovenia is now taking a leadership role. The INR is precisely the kind of modern savings tool missing in many neighboring markets. It is designed to be accessible to small investors, promote a culture of patient capital, and channel more domestic savings into Slovenian financial instruments, something both Croatia and other CEE countries would benefit from replicating. The INR stands out as a forward-looking measure at a time when many CEE markets remain dominated by institutional flows, bank lending, and limited retail participation.
Average daily trading volume on regional stock exchanges (YTD, in EUR million)
Source: Bloomberg, InterCapital Research
All in all, Slovenia’s move to introduce Individual Investment Accounts is more than a tax tweak – it is a strategic effort to strengthen its capital market and mobilize domestic savings for long-term growth. By empowering citizens to invest in the country’s future, Slovenia stands to benefit through deeper market liquidity, greater financing for businesses, and broader personal wealth accumulation.
Croatia, with a similarly sized economy and comparable challenges, high household savings in banks, and a shallow equity market, could gain significantly from adopting a similar model. Policymakers are already considering such accounts, and Slovenia’s example offers a clear template. Crucially, any Croatian model should follow Slovenia’s core principle: making the account attractive and accessible to everyday citizens, ensuring that long-term investing is not perceived as the domain of only a narrow elite. If implemented, Croatia could see a boost in retail investor activity, increased demand for domestic securities, and greater diversification of household assets.
More broadly, Croatia is entering a transition phase where retail investment is slowly being normalized. For decades after the war and privatization scandals, stocks remained a taboo topic across much of the population. But today, with a growing economy, rising financial awareness, and early signs of improving participation, the groundwork is being laid. Talks around IPOs, higher trading volumes, and stronger investor interest signal that Croatia could be ready for a new chapter. A flexible, long-term investment account could be the catalyst that nudges retail investors off the sidelines – and helps turn savings into growth capital.
Ultimately, for small economies like Slovenia and Croatia, enabling more citizens to participate in capital markets is critical. It turns savings into productive investment, drives business growth, and fosters financial resilience. As Slovenia’s Individual Investment Accounts launch in 2026, the region will be watching. For Croatia, the opportunity is clear: now is the time to move.