Where Business Services come together KAUNAS REGION

Source: Statistics Lithuania, VRM, Invest Lithuania 2014 Welcome to Kaunas Region, Lithuania! KAUNAS REGION stats Regional capitalKaunas City Population593,000 Labour pool289,000 Unemployment31,300 (10.1%) FDI growth11.4% LITHUANIA stats Size65,300 km2 Population2.97 million CapitalVilnius Official languageLithuanian CurrencyLithuanian Litas (LTL) Pegged to Euro since Euro = 3.45 LTL Real GDP growth2013: 3.2% 2012: 3.7% 2011: 6.0% FDI growth8.1 % Annual inflation1.2% Lithuania is at the center of three of large consumer markets: Western Europe Baltic Sea Region Russia and former Soviet States (CIS) Kaunas Region KAUNAS REGION Where Business Services come together

Source: * World Bank, Invest Lithuania 2014 Lithuania, a gateway to the EU and CIS KAUNAS REGION Where Business Services come together Lithuania allows access to main markets*: – Member of the European Union – Member of the Schengen Agreement (free trade and travel) – Member of NATO – Member of the Nordic Investment Bank, and part of Nordic-Baltic cooperation of Northern European countries Lithuania is ranked 17th of the world on the Ease of Doing Business Index (higher than e.g. Germany, Latvia or Poland) * Lithuania is a low risk country in the Central and Eastern Europe region, making it an excellent alternative for nearby high risk countries as Russia or Belarus European Union is the largest single market in the world (almost double the GDP of China) with over 500 million consumers (source: IMF) Risk rating of Lithuania compared to other countries (100= most risky) Source: Economist Intelligence Unit Q2 2014

Lithuania’s business services market has been thriving for years, becoming an acknowledged hot spot for shared services centers (SSC) and Business Process Outsourcing (BPO) With a cluster of multinationals providing services in the English, German, Russian, Polish and Scandinavian languages for the entire European market, Lithuania has emerged as an attractive and still not overheated location for shared services and outsourcing business developments Market observers forecast a further rapid growth in the industry, whereas the Lithuanian Government has set a strategic goal to be achieved by the country by the year 2015 – to become the Northern Europe Service Hub By 2015 the share of exports of services is expected to be 1/2 of Lithuania’s total exports ActivityNumberJobs created IT162,550 Finance10870 Multifunction103,530 Contact Center83,330 Other4440 TOTAL4810,720 Shared Service Centers and BPO in Lithuania Source: Invest Lithuania 2013 KAUNAS REGION Where Business Services come together 3rd in Europe and 14th in the world in ranking of the best destinations for providing outsourcing activities* Vilnius a hotspot location with 82% growth for SSC in the past 3 years ** The strong growth puts pressure on the Vilnius labor market. Kaunas provides an excellent alternative Sources: *A.T. Kearney’s Global Services Location Index 2011, Invest Lithuania **Annual Shared Services and BPO Conference 2013, Deloitte, Invest Lithuania International rankings Business services sector Lithuania

Source: Invest Lithuania 2013 Kaunas Region is next to the capital Vilnius, Lithuania’s second city and an important hub for business services KAUNAS REGION Where Business Services come together Callcredit Information group Dematic Unicall Runway HP Nielsen&Nielsen IBM SEB Nielsen Atea Barclays COWI Danske Bank Matrix Software Western union Storebrand CSC Transcom Paroc CITCO INWINDO CSC Telecom Swedbank Worldone Mirror Telia Sonera BDC Omega Greencarrier Lintel Kaunas Region is proven to be an excellent alternative for the crowded and more costly Vilnius’ market

Highly educated and multilingual talent Cost attractiveness ICT infrastructure International accessibility Real Estate availability Where Business Services come together The Kaunas Region provides an unmatched mix of cost-effective talent and high class infrastructure In KAUNAS REGION it all comes together The right people The right education The right languages The right connectivity The right speed The right location The right direct flights The right offices The right cost advantages The right labor cost savings The right tax scheme KAUNAS REGION

Within Kaunas Region approximately 15,000 people are employed in the business services sector The Kaunas region workforce is highly educated with 39% of workers having a third level diploma (Lithuania: 34%; EU: 24%). Virtually all highly educated graduates speak English Lithuania ranks 5th in EU for population speaking at least 1 foreign language (>90% of population) and 7th in EU for 2 foreign languages (>50% of population)* The study of foreign languages is widely practiced in Lithuania and Kaunas Region Contact centers in Kaunas region benefit from multilingual capabilities - Unicall KAUNAS REGION Where Business Services come together Source: Eurostat, 2012, Language% of Lithuanians speak Russian90% English38% Polish19% German14% Languages studied in Lithuania 2010 Current language capabilities Lithuanians Highly educated and multilingual talent * Source: Invest Lithuania 2013

In general labour costs in Lithuania are less than half compared to Western European countries and the USA Kaunas is a very cost attractive location for BPO/call centers and shared services centers as employers’ cost levels are 10-15% lower compared to Vilnius Standard income tax rate is one of the lowest in Europe at 15%. If established in a Free Economic Zone (FEZ), property and dividend tax is at 0% and income tax is at 0% for the first 6 years and 7.5% for the following 10 years* 1Employer cost are based on the following expenses: gross salary, social security, medical and pension costs in addition to social security and performance bonuses Source: National/Regional Statistical Offices, IMD, UBS, 2014 KAUNAS REGION Where Business Services come together Full employers cost per person per year (Euro) Source: Invest in Lithuania, FEZ Kaunas, FEZ Kėdainiai 2014 TaxGeneralFree Economic Zone Income tax15 % 0 % (first 6 years) 50% of the tax rate (subsequent 10 years) Property tax1 %0 % Dividend tax15 %0 % Tax rates Cost attractiveness *Source: Invest in Lithuania, FEZ Kaunas, Kėdainiai 2014

The ICT infrastructure in Lithuania (and Kaunas Region) is the best in Europe with 33% of homes/buildings directly connected to fiber The most up-to-date ICT technologies are implemented and functioning in the entire country (LTE technology, 3G mobile communications, infrastructure, mobile WiMAX 4G Internet etc.)* Source: Speedtest.net, 2014 KAUNAS REGION Where Business Services come together Lithuania ranked 7th globally on achieved internet speeds (Mbps) Source: FTTH Council Europe 2014 ICT infrastructure Also on the achieved internet speeds Lithuania scores very high at 7 th globally Countries with the highest penetration of fiber-to-the-home / building * Source: Invest Lithuania 2013

International accessibility Kaunas Region is situated at the geographical centre of Lithuania and is further developing and strengthening its transport infrastructure Kaunas Region is well connected by road to Vilnius, Klaipeda, Riga and Poland. Kaunas airport, which is the second largest airport in Lithuania, serves 8 international destinations (incl. London, Birmingham, Dublin, Oslo and Frankfurt) throughout the year on a weekly basis Vilnius International Airport is located within a one hour drive providing 2-3 flights per hour and more daily direct flights to major European capitals and cities KAUNAS REGION Where Business Services come together

Kaunas Region provides affordable office space which is 25% cheaper compared to Vilnius Kaunas Free Economic Zone (FEZ) provides opportunities for setting up an office. The zone provides favourable and lower taxes for investors investing at least Euro 1 million Within the city of Kaunas, new high quality developments are underway to accommodate the business services industry Note: Cost for a Grade A office space, excluding average local rates and service charges Source: CBRE, Jones Lang LaSalle, UBS, Ober-Haus, Colliers International,2014 Source: Invest Lithuania, FEZ Kaunas, 2014 Average annual occupancy costs office (Euro/sqm) New office building Kaunas City Availability of affordable real estate KAUNAS REGION Where Business Services come together

Source: Invest Lithuania, 2014 KAUNAS REGION Where Business Services come together Financial support available per FDI project in the field of services Construction, Infrastructure, Salary costsPersonnel training costs Up to Euro 1.5 millionUp to Euro 2 million Max. possible support 3.5 million Euro National incentives support program Foreign investors interested in locating a business in Lithuania as well as foreign companies already operating in the Lithuanian market but eager to further expand may apply for Invest in Lithuania’s financial investment support of up to Euro 3.5 million per investment project Invest in Lithuania provides financial support to cover personnel training costs (up to Euro 2 million) as well as eligible construction, infrastructure and salary costs (up to Euro 1.5 million), incurred by foreign investors establishing a services business unit in Lithuania The financial support tool is designed to support foreign businesses investing into the production of export-oriented high-quality services as well as establishment of qualified jobs on the market

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