Slovakia – Best Bet for Your Business Slovak - Portugese Business Forum Bratislava, 8 July 2009

great export potential COUNTRY PROFILE Strategic location with great export potential MARKET OF 300 MILLION IN 1000KM Area (km2): 49,035 Population: 5,379,000 Capital: Bratislava Member of OECD, WTO, NATO, EU, Schengen border-free area, Euro currency zone

MACROECONOMIC OVERVIEW Basic macroeconomic indicators 2008 Real GDP growth 6,4% Labour productivity growth 5,8 % Real wages growth 3,3% HICP Inflation 3,9 % Unemployment 9,6% Average monthly salary (EUR) 723 6,8 10,4% 4,3 Growing 2007 real wages productivity GDP Sovereign credit rating (Long-term Foreign Currency Debt) A1 positive outlook A+ stable outlook A positive outlook

CURRENCY EXCHANGE-RATE DEVELOPMENT € CURRENCY EXCHANGE-RATE DEVELOPMENT SLOVAKIA JOINED THE EURO ZONE 1st JANUARY 2009 THE EXCHANGE RATE FOR CONVERSION SET AT 30,126 SKK/EUR EURO IMPLEMENTATION IMPACT: Limitation of Foreign Exchange Risk Lowering Transaction Costs Growth in Foreign Trade Increase financial stability

STABILITY IN THE CRISIS Source: European Central Bank, 2008

19% Flat Tax Rate 19% 0% PAYING TAXES - Simple and Fair Corporae & Personal Income Tax Value Added Tax Dividend tax Inheritance and Gift Tax Real Estate Transfer Tax Repatriation of profits: 100% 19% 0%

Source: Statistical Office of the Slovak Republic, 2009 LABOUR MARKET Weekly working time 40 hrs (excluding 30 min. break) + 8 hrs overtime per week 3 months probation period 150 of overtime per year can be ordered + 250 hrs agreed with employee No obligation to pay bonuses (25%) for 150 hrs of overtime per year Minimum salary: 296 EUR / month (2008) Average salary : 723 EUR / month (2008) Annual leave of 20 days (25 days after 15 years of employment) Bonuses for overtime (25%) and for working on bank holidays (50%) Source: Statistical Office of the Slovak Republic, 2009

Methodology (conditions included) DOING BUSINESS 2009 1st rank indicates the easiest conditions for doing business Methodology (conditions included) Starting a business Employing workers Paying taxes Enforcing contracts Protecting investors Closing business.... Source: World Bank Group – Doing Business Report 2008

FDI is growing steadily Source: Slovak National Bank , 2007 9

WAGES and SOCIAL CONTRIBUTIONS Minimum monthly wage Slovakia 269 EUR / month (2008) Average monthly salary Slovakia 723 EUR / month (average 2008) Soc. security covered by employer 35,2 % Soc. security covered by employee 13,4 % Excl. social security contributions covered by employer Slovakia 723 EUR 843 EUR Poland Czech rep. 942 EUR Source: Statistical Office of Slovak Republic, ČSOB bank 792 EUR Hungary

NETWORK OF UNIVERSITIES East Slovakia university region West Slovakia university region Central Slovakia university region Study branch in % (2007/08): Technical sciences 28,54% Natural sciences: 6,22% Medical and farmaceutical sciences: 6,77% Bratislava university region Number of universities: 33 Total Number of Students in 08/09: 208 072 Graduates in 08/09: 58 447

ROAD NETWORK and INDUSTRIAL PARKS PLAN 2012 to connect Bratislava and Kośice Large selection of available land in more then 50 industrial parks

AIRPORT INFRASTRUCTURE Žilina Prague Poprad Bratislava London Bologna Basel Košice Vienna Prague Bratislava Manchester Poprad Piešťany Sliač Bratislava Vienna (A) All major European cities All major European & World cities Note: Flight destinations as of January 2009

AUTOMOTIVE SECTOR IN SLOVAKIA 1991 – 2000: 1 220 MIL. EUR Planned: 350 000 cars/year Volkswagen 2003 – 2009: 1 100 MIL. EUR Planned: 300 000 cars/year 2004 – 2009: 1 250 MIL. EUR Planned: 300 000 cars/year 14

SLOVAK SUCCESS K1 ATTACK 15

Expansion of activities ELECTRONIC SECTOR IN SLOVAKIA Expansion of capacity Assembly of Bravia models for the European market to be doubled in 2008 to 4mil. Expansion of activities Production of LCD 10 mil pcs. Assembly of LCD Logistic center Europe service center

Research and Development in SR Slovak R&D network of domestic and foreign companies Žilina region Poprad region Michalovce region The main R&D locations in Slovakia are: Košice region Košice region Banská Bystrica region Bratislava region Source: Statistical Office of the Slovak Republic

State aid: eligible projects Technological Centres Industry Shared Services Centres Tourism

Minumum investment amount Industry 1. 4. 2009 – 31. 12. 2010 Tourism

Other conditions Industry: Technological centres: Procurement of machinery / technological equipment in the amount of at least 40% of the total eligible costs At least 50% of the minimum amount of investment to be covered by own equity Compliance with the environmental protection rules Technological centres: At least 50% of the minimum investment amount to be covered by own equity University education – at least 60% of the employees Shared service centres: University education – at least 30% of the employees Tourism: Procurement of machinery / technological equipment in the amount of at least 20% of the total eligible costs

Regional aid intensity Regional aid intensity is calculated as a percentage of the eligible costs:

SLOVAKIA - Top reasons to remember 1. Central European hub and favourable geographic location 2. Political & economic stability, the highest economic growth in the region 3. 19% flat tax rate and 0% dividend tax 4. Availability of highly skilled workforce 5. Low labour costs vs. high labour productivity 6. Euro as an official currency from 2009 7. Large selection of industrial land and offices available for purchase/lease 8. Harmonised investment incentives 9. Infrastructure that is growing steadily 10. High innovation potential for R&D projects

SUCCESS STORIES – Hi-Tech, R&D

FOREIGN TRADE SLOVAKIA - PORTUGAL mil. EUR 2004 2005 2006 2007 2008 Export SR 48,7 44,5 62,3 141,6 170,9 Import SR 47,6 51,2 85,6 85,0 80,5 Turnover 96,2 95,7 147,9 226,6 251,4 Balance - 1,1 - 6,7 - 23,3 56,6 90,3

FOREIGN TRADE SLOVAKIA - PORTUGAL Statistics of the year 2008: Export commodities to Portugal Total value 170,9 mil. € Electric machinery, TV-sets Motor cars and motor vehicles Iron and steel Machinery and equipment Wood and wooden products Artificial fibres Products from iron and steel Products from basic metals Shoes Plastics and plastic products Import commodities from Portugal Total value 80,5 mil. € Electric machinery, TV-sets Motor cars and motor vehicles Plastics and plastic products Products from basic metals India rubber and products Shoes Machinery and equipment Raw leather Pharmaceutical products Textile

SARIO - WHO WE ARE? Slovak Investment and Trade Development Agency is a government funded organisation under the direction of the Slovak Ministry of Economy. SARIO´s primary objective is: to improve the standard of living of Slovak citizens to increase the employment rate - to reduce regional disparities

Thank you for your attention Slovak Investment & Trade Development Agency Contact Information: Alexander Škurla Assigned Head of International Cooperation Department Section of Foreign Trade tel.: +421 2 58 260 341 cell: +421 910 828 311 alexander.skurla@sario.sk www.sario.sk