Manuel Costescu – State Secretary, InvestRomania Romania – A Strategic Choice

The Government of Romania Swiss Investment in Romania The subscribed share capital accounts for only a part of the total FDI. According to ONRC, the country of origin of the investment is the country where the capital comes from and not the country of origin of the transnational company. No. of companies2,700 % of the total no. of companies1% Subscribed share capital in company with Swiss interest USD 1,400 mill. % of the total value of capital2% Ranking11 th CompanyProduct Holcimcement Swissporbuilding materials Sikabuilding materials ABBenergy Greenfibertextiles Ameropapetrochemistry Sandozpharma Helvetica Profarmpharma Nestléfood industry Philipp Morristobacco Karpaten Meatlivestock Riekerfootwear (December April 2016) Swiss firms operate from multiple production plants in Romania Source: National Office of the Trade Register (ONRC)

The Government of Romania Bilateral relations between Romania and Switzerland At 31 December 2015, 6 groups of product concentrated % of Romanian exports to Switzerland, of which the first 3 groups are:  Machinery and electrical equipment: millions EUR (29.5%);  Metals and metal product: millions EUR (12.40%);  Vehicles, aircraft and transport equipment: millions EUR (11.80%); At 31 December 2015, 2 groups of product represent 78.70% of Romanian imports from Switzerland:  Chemicals and related products (mainly pharmaceuticals): millions EUR (46.40%);  Machinery and electrical equipment millions EUR (32.30%).

The Government of Romania Romania – a promising investment destination Area: 238,391 km2 Capital: Bucharest Currency: LEU (RON) Population: 19,5 mn ppl S-E Europe Economic growth in Romania is among the highest in the EU with 4.2%, and is forecast to remain above potential in 2016 and 2017 EUR BN EXPORTS 55 EUR BN NOMINAL GDP 160 EUR BN NET FDI INFLOW 3 Romania has been a member of EU since 2007 and a member of NATO since 2004 BBB- Stable BBB- Stable Baa3- Positive S & P Moody’s Fitch In 2021, Romania will host the European Capital of Culture for the second time, after Sibiu in Baia Mare, Bucharest, Cluj and Timisoara have been shortlisted for this role Romania is ranked 1 st in the EU for maximum speed of internet connectivity and 2 nd for high speed broadband adoption

The Government of Romania RO UKR MD BG SRB HU 37 Ahead of Bulgaria, Croatia, Hungary, Italy, Turkey, Serbia or Greece Source: World Banks, Doing Business Report 2016 World Bank ease of doing business rank 1 Low gas prices and 5 th lowest electricity in Europe EU gas prices rank 2 Romania has a very competitive labor force in the EU EU labor costs rank Historically, investing in Romania has never been easier, with the government becoming a partner for businesses and entrepreneurs 1 Romania’s maximum broadband ranks first in the EU Maximum broadband speed

The Government of Romania Romania is now more connected than ever, boasting a transport network of 14 international & domestic airports and 8 major ports International Fligths Domestic Fligths Ports Under construction SATU MARE ORADEA SUCEAVA TIMISOARA CRAIOVA SIBIU TARGU MURES CLUJ-NAPOCA BACAU IASI BUCURESTI OTOPENI M. KOGALNICEANU DROBETA TR. SEVERIN GIURGIU MANGALIA CONSTANTA SULINA TULCEA BRAILA GALATI BAIA MARE ARAD BRASOV

The Government of Romania 130 direct flights can be accessed from 4 Romanian international airports, leading to 76 destinations in 31 countries worldwide TIMISOARA 17 direct flights CLUJ-NAPOCA 26 direct flights IASI 14 direct flights BUCURESTI OTOPENI 73 direct flights Alghero Alicante Amman Amsterdam Athens Barcelona Bari Basel Beirut Belgrade Berlin Birmingham Bologna Brussels Budapest Catani Chisinau Cluj-Napoca Copenhagen Doha Doncaster Dortmund Dubai Dublin Düsseldorf Eindhoven Florence Frankfurt Geneva Glasgow Hamburg Iași Istanbul Larnaca Liverpool London Madrid Málaga Malmö Malta Milan Moscow Munich Naples Nice Nuremberg Oradea Oslo Paris Perugia Pescara Pisa Prague Rome Satu Mare Sibiu Sofia Stockholm Strasbourg Stuttgart Suceava Tel Aviv Thessaloniki Timisoara Turin Valencia Venice Verona Vienna Warsaw Zaragoza Zürich Barcelona Bari Bologna Brussels Bucharest Dortmund Eindhoven Frankfurt London Madrid Memmingen Milan Munich Paris Rome Valencia Venice Barcelona Bologna Brussels Bucharest Istanbul London Milan Munich Paris Rome Tel Aviv-Yafo Turin Venice Vienna Barcelona Bari Basel Bologna Brussels Bucharest Cologne Dortmund Dubai Eindhoven Geneva London Madrid Malmö Memmingen Milan Munich Nuremberg Paris Rome Tel Aviv-Yafo Valencia Venice Vienna Warsaw Zaragoza

The Government of Romania 70 industrial parks are spread across Romania, most offering capabilities suited for industries like aerospace, IT&C and industry Industrial parks in Romania North West Region: 15 parks West Region: 3 parks South West Region: 6 parks South Region: 22 parks South East Region: 2 parks North East Region: 4 parks Center: 16 parks Bucharest: 2 parks There are 70 industrial parks spread across Romania, placed under both private and public ownership All offer access to utilities, particular benefits packages according to their focus and potential for synergies Also, investors are exempted from land, building and urban planning taxes as well as for land destination changing Status at regional level

The Government of Romania Technology is becoming a significant part of Romania’s backbone infrastructure, being leveraged by a talented pool of developers Source: Akamai Technologies; InvestRomania ILBERONLCHSENODKFICZ The internet infrastructure has developed along with the developers, who are leveraging the network to offer high quality outsourcing services, although the focus is now shifting towards product design and, consequently, startups HUUKRUBECHFISEILRONL FIAU HU 94.0 RO 95.0 IL CH 93.0 DKNL SEBE 90.0 Share between MbpsShare above 10 Mbps Top 10 EMEA countries by avg. speed (Q2 2015, Mbps) Top 10 EMEA countries by top speed (Q2 2015, Mbps) Top 10 EMEA countries by Mbps Broadband adoption (Q2 2015, % > 4 Mbps)

The Government of Romania Source: Eurostat; UNCTAD; InvestRomania Evolution of nominal GDP in Romania 2000 – 2014 [EURbn] Nominal GDP grew by a total 275% between 2000 and 2014, while FDI stock grew by 971% for the same interval % Nominal GDP % FDI stock Evolution of FDI stock in Romania 2000 – 2014 [USDbn] CAGR

The Government of Romania Manufacturing, financial services and trade account for approx. 56% of FDI stock existing in Romania, followed by utilities and real estate Source: National Bank of Romania; InvestRomania 5,1% 6,0% 2,5% 5,6% 1,7% 9,8% 11,1% 11,7% 13,0% 32,0% 0,9% 0,6% Extractive industry Prof., scientific, tech. and admin. Agribusiness Transportation IT&C Real estate Financial services Manufacturing Trade Utilities Other HoReCa Spread of FDI stock among different sectors [%, 2014] The computer & electronics manufacturing sector as well as utilities are registering the highest FDI growth rates IT&C, while not growing at the same acceleration, is becoming a focus sector with strong connections to international markets 1,25 1,05 0, , , % 2014 Computer & electronics FDI (EUR billion) Utilities FDI (EUR billion) % ,87 6, , ,70 5,72 IT&C FDI (EUR billion) % 2, ,13 2, ,08 3, CAGR

The Government of Romania Most of the local FDI stock is owned by companies originating from Western and Central Europe, led by the Netherlands, Austria, Germany, France and Italy The US is being responsible for only 1.8% of FDI stock in Romania However the presence of companies of American and transcontinental origin is significant in Romania, due to investments executed through European based proxies due to fiscal reasons 10,5% 1,8% 87,7% OthersUSAEurope A large majority of FDI stock in Romania is of European origin, with Western Europe (NL, AT, DE) in the lead with EUR 31 billion (52%) Global spread of FDI stock in Romania (%) 4,1% 18,4% 27,0% 14,2% 7,8% 5,3% 8,1% 15,3% Cyprus Switzerland Austria NetherlandsGermany France Italy Others European spread of FDI stock in Romania (%)

The Government of Romania Romanian labor costs are some of the lowest in the EU, maintaining a competitive position relative to member states Source: Eurostat National minimum wages in the EU (EUR/ month, 2016)* PLEE SLCY 16 RO 5 HUHR 10 GRPTES 21 MTLT 7 LVBG CZ 9 SK ATNL 36 SEUKDK LUDE 32 BE FRFI IE 22 IT Estimated average hourly labor costs (EUR/ h, 2014)** ROBGLTLUIEUKMTGRPTPLDEBEFRNLSLESHRSKEELVHUCZ National minimum wage * Denmark, Italy, Cyprus, Austria and Finland have not implemented a national minimum wage; ** Enterprises with 10 or more employees Other labor costsWages and salaries

The Government of Romania Social Security With the local taxes already low compared to European peers, the government plans future tax cuts through the new fiscal code VAT Individual Tax RateCorporate Tax Rate EmployerEmployee 16% The government is committed to reducing the tax burden – 2016 marked the drop in VAT to 20%, which will be followed by another drop to 19% in 2017 VAT on food products is 9% The individual tax rate does not have any planned cuts for the near future However, the new fiscal code planned a reduction of the dividend tax from 16% to 5% The government’s commitment to lower the tax burden covers the corporate tax rate as well, with a reduction to 14% planned for 2019 Tax System of Romania Source: InvestRomania Overview of the Romanian tax system 16% 20% 16% 23%

The Government of Romania The top university centers in Romania are Bucharest, Cluj – Napoca and Iasi, followed by Timisoara, Sibiu, Brasov and Constanta Bucharest - 33 Universities Cluj - 10 Universities Iasi - 10 Universities CJ 10 B 29 SB 3 AR 3 BVDJ 4 CT TMIS Number of graduates by University Center [‘000] Sources: NIS, World Economic Forum = City 50,000 – 100,000 inhabitants = City >100,000 inhabitants Arad Bacau Baia Mare Botosani Braila Brasov Bucuresti Buzau Cluj-Napoca Constanta Craiova Drobeta-Turnu Severin Focsani Galati Oradea Piatra Neamt Pitesti Ploiesti Ramnicu Valcea Satu Mare Sibiu Suceava Targu Mures Timisoara Alba Iulia Birlad Bistrita Calarasi Deva Giurgiu Hunedoara Medias Onesti Resita Roman Sfantul Gheorghe Slatina Slobozia Targoviste Targu Jiu Tulcea Turda Vaslui Zalau Iasi Human Capital Index Rank 39 Upper-middle income Country - Rank 3 Age group rankings Human Capital Index Top 3 University Centers 15 – 24 Rank – 54 Rank – 64 Rank 29

The Government of Romania Over a 25% of graduating students will have a technical degree, followed by approx. another quarter in business and economics Source: NIS, Eurostat Percentage of university graduates by subject of degree (2014) The quality of education in Romania is recognized internationally, local students consistently ranking in the top 10 in International Olympiad competitions in math and informatics, better than any other country in the EU The focus on technical subjects is significant, with the number of engineers/ capita – higher than the US, India, China or Russia With 5 polytechnic universities, 59 domain specific universities and 174 private colleges, the most successful students tend to pick high tech industries, such as IT – the local education system supplies over 7,000 IT&C engineers every year 99% of Romanian students learn two or more languages in upper secondary education 10% 23% 11% 28% 2% 26% Number of students by subject of degree (‘000, 2014) * Includes: mathematics, physics, biology, chemistry, geography, journalism, history, political and administrative science, philosophy Economics Science and humanities Medical Arts Technical Law

The Government of Romania 9 out of 10 university students are proficient in English, as a result of the fact that almost all students study 2 languages in high school Source: Assoc. of Business Services Leaders, NIS, Eurostat Languages studied by Romanian students (2014) 97% 97% of Romanian high school students study 2 or more foreign languages while in secondary education The predominant languages are English, French, German and Spanish, yet initiatives for teaching Japanese, Nordic languages or the entire Latin language family (Spanish, Italian, French) exist University students in Romania are proficient in (% of total): 90%26%17%8%5%

The Government of Romania With a budget of EURm 600 for the next 6 years, the two schemes for regional state aid aim to support value adding investments The two schemes offer state aid in the form of non reimbursable grants from the state budget, caped by the limit of maxim intensity approved according to the regional map GD 2014/ 807 Aim To support minimum investments valued at EUR 10 million The creation of at least 10 jobs per location, out of which 3 jobs are for unfavored workers GD 2014/ 332 Eligible Costs Construction of new buildings Renting costs for existing buildings CAPEX aimed at technical installations and tools Acquisition of intellectual property Salary costs registered for a 2 consecutive year period resulted as a direct consequence of the investment Salary costs are comprised of gross annual salary plus benefits Budget Total budget for the two schemes is EUR 600 million, with annual investments projected at EUR 100 million Payout 2015 – – 2025 Sources: Ministry of public Finance

The Government of Romania The intensity of state aid varies according to the region, varying from 15% (in Bucharest) to 50% in most of the country North-West 50% West 35% North-East 50% Center 50% South-East 50% South-West 50% South 50% 15% 35% State aid intensity, according to development region: North West – 50% North East – 50% South East – 50% South – 50% South West – 50% West – 35% Ilfov County – 35% Bucharest – 15% State aid intensity is established as per EU and national regulations and is subject to change according to EU law on the matter Development regions of Romania represent a split of counties into larger regions in order to technically better target development programs and policies

The Government of Romania More than 10 nationalities have developed expat communities in Romania, particularly in its large urban centers (Bucharest, Cluj) Expats networks in Romania by home country and main originating cities Sources: InterNations Toronto Vancouver Montreal Ottawa London Birmingham Glasgow Liverpool Rome Milan Turin Genoa New Delhi Mumbai Kolkata Bangalore Warsaw Katowice Krakow Lodz New York Chicago Houston Los Angeles Berlin Hamburg Munich Cologne Paris Marseille Lyon Lille Madrid Barcelona Valencia Seville Amsterdam Rotterdam The Hague

The Government of Romania Life in Romania is good: the culture, the people and the places make it rich in great experiences for expats In Bucharest, you need a monthly salary of… Sources: Numbeo Czech Koruna Zlotys Euro Pounds Euro Euro Forints … to maintain the same standard of living from… Prague Warsaw Vienna London Paris Berlin Budapest Czech Koruna Zlotys Euro Pounds Euro Euro Forints … with a salary of:

The Government of Romania Compared with other EU capital cities, the standard of living in Romania is high considering the differences in living costs Consumer Prices BUCHAREST vs. BERLIN BUCHAREST vs. LONDON Rent Prices Restaurant Prices Groceries Prices 41% lower in Bucharest 57% lower in Bucharest 56% lower in Bucharest 86% lower in Bucharest 38% lower in Bucharest 64% lower in Bucharest 44% lower in Bucharest 55% lower in Bucharest Source: Numbeo; InvestRomania Standard of living equivalency (EUR 1,700 net salary in Bucharest) EUR 3,100 net salary in Berlin ensures the same standard of living EUR 5,707 net salary in London ensures the same standard of living

The Government of Romania Romania – a stable business climate, great investment opportunities, competitive workforce and outstanding lifestyle options 2016 Investing in Romania An important domestic market and stable/safe country A competitive tax policy and state support for businesses Talented and skilled workforce High life standards, great lifestyle and rich personal experience Potential market of over 20 million consumers One of the most dynamic economies in Central and Eastern Europe More than 10 nationalities have developed expat communities High living standards and lifestyle Rich experiences for expats Few cultural and linguistic barriers University graduates are flexible, innovative and future-oriented One single corporate tax level of 16% 43 billion EUR European funds assigned before the end of 2020 Tax exemption for reinvested profit