Foreign investments in Central and Eastern Europe (CEE) Theis Klauberg, bnt attorneys-at-law
Investment environment – Economic conditions Transition process of CEE countries completed CEE countries have overcome economic crises Emerging markets with ready excess to western European markets Steady GDP growth Skilled labour force Comparatively low labour costs Good transport infrastructure Investment incentives (SEZ, tax exemption etc.) Business friendly environment
Source: eurostat
Investment environment: Legal conditions Bilateral investment agreements between China and many CEE countries Modern legislation framework (often influenced by EU legislation/Western European legislation e.g. Baltic States) High level of legal certainty, rule of law, predictability Business friendly legal environment (e.g. little bureaucracy when setting up a company / acquiring shares) Anti corruption legislation No political risks
Poland: Acquisition of machinery division Investor: Chinese company LiuGong Machinery Limited In 2012 LiuGong acquired the construction machinery division of Polish company Huta Stalowa Wola (HSW) and its distribution subsidiary Dressta Investment volume approx. US-$ 100 million Objective of investment is transfer of technology and better access to European markets
Hungary: Construction of logistics center Investor: Huawei Technologies (Shenzhen/Guangdong) Huawei is currently the largest Chinese investor in Europe with 7000 employees around Europe In 2012 Huawei signed an agreement with the Hungarian government to set up a new logistics center in Hungary Investment volume US-$ 1.5 billions
Czech Republic: Production of meat products In 2006 Chinese Shanghai Maling Aquarius entered into a cooperation with Gastro Sunwick Ltd. for the construction of a factory in the Czech Republic Volume of investment: approx. US-$ 23 million In 2011 the company has employees and produced 3-4 thousand tons of meat in 2010
Latvia:Furniture production Aim: Establishment of furniture production in Latvia Investor: Chinese company based in Huzhou/China 300 Latvian employees / app. 5 Chinese specialists Locational advantage: Resources (wood) are locally available Part of the European Common Market Special Economic Zone: tax exemptions
Legal Services Provided Investors needed legal advice particularly in the following fields of law: – corporate law – labour law – law of contracts – commercial law – real estate – tax law
Summary CEE is an excellent region for foreign investments (cost structure, qualified labour force, geographical location) CEE countries are open to and are looking for foreign investments CEE countries have significantly improved their investment environment (infrastructure, SEZs, curbing corruption) CEE countries provide a stable legal and political environment