Business Friendly Slovakia

Slovak – Ukrainian Forum, Košice

April 20-23, 2015

CONTENT OF THE PRESENTATION

SARIO

INTRODUCTION TO SLOVAKIA

KEY SECTORS

INVESTMENT AID

SARIO BUSINESS EVENTS

SARIO INVESTMENT AND TRADE PROMOTION SERVICES

Governmental Agency under the

Ministry of Economy of the SR

Services Free of Charge

Source: SARIO

Investment Section I FDI attraction

I Assistance, consultancy for investment project implementation

I Database of available real estate

I Consultancy on state aid

I Starting business related materials, analyses

I Promoting Slovakia abroad via seminars

I Manages M&A database, open projects fro investments

SARIO SERVICES

Trade Section I Supports Slovak manufacturers in their

export activities

I Assists foreign companies to identify potential new products for export from Slovakia

I Identifies potential suppliers and subcontractors

I Monitors free production capacities

I Manages online databases

I Trade Fairs

I Organizing B2B meetings

SARIO BUSINESS EVENTS

I INTERNATIONAL ENGINEERING COOPERATION DAY

– International engineering fair May 2015- Nitra

I EXPORT FORUM 2015

– November 2015- Bratislava

INTRODUCTION TO SLOVAKIA

STRATEGIC POSITION WITH EXPORT POTENTIAL

Source: World Resources Institute

300 million

clients in radius of 1 000 km

600 million

clients in radius of 2 000 km

ROAD & AEROSPACE NETWORK

Vienna-AT

Prague

All major European cities

Brno (CZ) 120 km

Krakow (PL) 180 km

Source: National Motorway Company, Slovak Airports, 2015

Budapest-HU

Prague

WORLD

Vienna-AT London-UK Prague-CZ Bratislava-SK

WORLD

airport

EURO ZONE MEMBER - ONE OF A FEW IN CEE

Euro € since 1 January 2009

EURO IMPLEMENTATION IMPACT

Limitation of Foreign Exchange Risk

Lowering Transaction Costs

Growth in Foreign Trade

Increased Economic & Financial Stability

Favorable conditions

for long-term business decisions

FASTEST GROWTH IN EUROZONE, 2004-2014

Source: European Commission, Eurostat 2014

-2 -1 0 1 2 3 4

Greece

Italy

Portugal

EURO area (19)

Spain

Cyprus

Finland

France

Netherlands

Germany

Belgium

Austria

Slovenia

Ireland

Malta

Luxembourg*

Lithuania

Estonia

Latvia

Slovakia

-1,24

-0,28

0,02

0,87

0,9

0,99

1,02

1,05

1,12

1,29

1,35

1,45

1,57

1,72

2,3

2,51

2,67

3,05

3,33

3,97

Average Annual Growth Rate

*Data for 2014 missing

-5

0

5

10

15

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015f 2016f

European Union (EU 28)

Slovakia

2008 2009 2010 2011 2012 2013 2014

Real GDP Growth 5.8% -4.9% 4.4% 3% 1.8% 0.9% 2.4%

Labor Productivity Growth

2.3% -2.3% 4.4% 2.0% 2.2% 2.8% -

HICP Inflation 3.9% 0.9% 0.7% 4.1% 3.7% 1.5% -0.1%

Unemployment 9.6% 12.1% 14.4% 13.2% 14% 14.2% 13.2%

Average Gross Salary, € 723 744.5 769 786 805 824 858

Real GDP growth

GDP Prediction

by European Commission

SLOVAKIA: MACROECONOMIC OVERVIEW

2015f 2016f

Germany 1.5% 2.0%

Slovakia 2.5% 3.2%

Poland 3.2% 3.4%

Czech Rep. 2.5% 2.6%

Hungary 2.4% 1.9%

Romania 2.7% 2.9%

Bulgaria 0.8% 1.0%

Source: European Commission, Winter 2015 Forecast

Source: European Commission, Winter 2015 Forecast

Source: Eurostat, February 2015

Slovakia: 3rd Most Promising Pre-Emerging Market

Bloomberg

- ranked pre-emerging markets based on their overall investment potential through 2016

- awarded points based on the following indicators:

• Average projected GDP growth

• Projected inflation rate • Government debt • Total investments

• Current labor participation • Current account balance • Foreign reserves • Infrastructure

Economic indicators

• Price-to-book ratio of the primary equity

• Exchange rate volatility • Liquidity of the primary

equity

• Two-year sovereign debt • Credit-default-swap

spread

Financial indicators

• Corruption Perceptions Index

• Political risk score

• Ease-of-doing-business score

• Adult literacy rate

Political and social measurements

60,3

61,5

62,4

63,8

65

65,7

65,8

67,1

71,4

78,8

Romania

Kazachstan

Vietnam

Bulgaria

Slovenia

Bahrain

Lithuania

Slovakia

Estonia

Saudi Arabia

Source: Bloomberg, International Monetary Fund, World Bank, Economist Intellligence Unit, Transparency International, World Economic Forum, CIA , MSCI, FTSE, S&P, JP Morgan as of 2015

SLOVAKIA: HIGHEST LABOR PRODUCTIVITY IN CEE

933 € 25 686 CZK

Czech Republic

951 € 3 980 PLN

Poland

770 € 237 736 HUF

Hungary

Source: National Statistical Offices of Slovakia, Czech republic, Hungary, Poland and Bulgaria, National Bank of Slovakia, 2015

GDP (in PPS) per hour worked as compared to EU 27 (100) Source: Eurostat 2014

Gross monthly salary 2014

542 € 2 412 RON

Romania 429 € 840 BGN

Bulgaria

Slovakia reaches the highest labour productivity

858 € Slovakia

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

2005 2006 2007 2008 2009 2010 2011 2012 2013

Slovakia Hungary Czech Republic Poland Romania Bulgaria

KEY SECTORS

LEADING SECTORS OF THE SLOVAK ECONOMY

Automotive Electronics ICT/SSC

INNOVATION & INFORMATION TECHNOLOGIES IN-LINE WITH TRADITIONAL INDUSTRIES

R&D

Car Production in Slovakia

Source: Business Monitor International, Slovak Automotive Industry Association ZAP, VW, KIA, PSA-Peugeot, International Organization of Motor Vehicle Manufacturers 2015

KEY SECTOR No 1: AUTOMOTIVE

+4,8 % growth/annum forecast

SLOVAKIA, 2014 Leader in World Car Production

per 1000 inhabitants

183 vehicles /1000 inhabitants

World Average 10 vehicles / 1000 inhabitants

MADE IN SLOVAKIA: AUTOMOTIVE PAST

TAZ 1500 / Škoda 1203

Tatra T815 Jawa Babetta

MADE IN SLOVAKIA: AUTOMOTIVE PAST

Audi Q7 VW Touareg

Peugeot 208 Kia Cee'd

I 35 established SSCs

I Personnel over 24 800

Key Sector No 2: ICT/SSC

Defence industry

Chemistry Electrical equipment

Machinery equipment

Automotive industry, supplier

sector

Medium-High Technology: Manufacturing

Other transport

equipment

Medical and dental

instruments

GREAT BRANDS GATHER IN SLOVAKIA, MEDIUM HIGH- TECH

High-Tech Services: Knowledge Intensive

Creative, movie, TV industry and ICT

Scientific research and development (biotech, medical, engineering

etc.)

High-Technology: Manufacturing

Computer, electronic and

optical products

Pharmacy Air and spacecraft industry

GREAT BRANDS GATHER IN SLOVAKIA, HIGH-TECH

CORPORATE R&D CENTRES IN SLOVAKIA

dernières

INVESTMENT INCENTIVES

ELIGIBLE PROJECTS

Industry

Shared Service Centers

Technology Centers

Tourism

BASIC FEATURES

I Targeted at regions with high unemployment rate

I Final decision: Slovak government

I Administrative body: Ministry of Economy of SR

I Investment intensity up to 35% from eligible costs

I ELIGIBLE COSTS : LAND

BUILDINGS

NEW MACHINERY & TECHNOLOGY EQUIPMENT

LICENSES & PATENT RIGHTS OR WAGE COSTS OF NEW EMPLOYEES DURING 2 YEARS

I FORMS: INCOME TAX RELIEF up to 10 tax periods

CASH GRANT (paid ex-post, based on annual costs report) CONTRIBUTIONS ON NEW JOBS (paid ex-post, based on annual costs report)

PROPERTY TRANSFER

Legal framework: Act no. 561/2007 Coll. on Investment Aid

MAX REGIONAL INTENSITIES OF INVESTMENT AID

35%

35%

25%

for SMEs plus 10 to 20%

ELIGIBLE INVESTMENTS & REQIUREMENTS

ELIGIBLE

INVESTMENTS

INDUSTRY

TECHNOLOGY CENTER

SHARED SERVICES

CENTER

TOURISM

NEW FACILITY or EXPANSION

MIN. AMOUNT 10/5/3 M € 0.5 M € 0.4 M € 10/5/3 M €

MIN. NEW JOBS 40

30

(70% university

education)

40

(60% university

education)

40

Slovak Success Stories

Source: SARIO, 2015

Significant global leaders in IT, automotive and machinery sectors with unique innovation potential

SLOVAKIA Country where history meets future

5th TOP best travel destination by Lonely Planet

Thank you for your attention

SARIO

Slovak Investment and Trade Development Agency

Address Trnavska cesta 100

821 01 Bratislava

Slovakia

Web www.sario.sk

Email invest@sario.sk