1. INVESTMENTOPPORTUNITIES IN VOJVODINA VOJVODINA INVESTMENT PROMOTION – VIP Branislav Bugarski, VIP CEO

2. DICTANCES FROM MAJOREUROPEANCITIES DICTANCES FROM MAJOR EUROPEAN CITIES

3. SUCCESS STORIES SUCCESS STORIES

4. MARKET ADVANTAGES CEFTA – FTA – 28.98 million EFTA – FTA – 12.6 million RUSSIA – FTA – 140 million TURKEY – FTA – 76.8 million BELARUS – FTA – 9.6 million EU – preferential status USA – preferential status CONSUMER MARKETS:

5. DOUBLE TAXATION TREATIES AlbaniaBelgiumBelarus B&H Bulgaria China Cyprus Finland France Germany Ghana Hungary India Italy South Korea Kuwait Latvia Macedonia MalaysiaMoldova Netherlands Norway Poland Romania Russia Slovak Republic Slovenia Sri Lanka SwedenSwitzerland Denmark Egypt UK Ukraine Turkey Czech Republic Croatia

6. OVERVIEW OF TAX RATES Annual Income Tax 10/15% (for annual income below or above 8 average annual salaries) Social Insurance Contributions Pension and disability insurance 11% Health insurance 6.15% Unemployment insurance 0.75% SALARY TAX IN CEE COUNTRIES (%)

7. TAX RATES BENCHMARK VAT EU + CEE (%) CORPORATE PROFIT TAX (%)

8. QUALITY WORKFORCE Average salary in Vojvodina, March 2011 NET Salary (EUR) %338.71 Personal Income Tax 12.0048.31 Contributions (employee) 17.9084.73 GROSS Salary471.75 Contributions (employer) 17.9084.73 TOTAL COST556.48

9. EMPLOYMENT SUBVENTIONS NATIONAL EMPLOYMENT SERVICE GOVERNMENT OF THE AP VOJVODINA GOVERNMENT OF THE REPUBLIC OF SERBIA € 2,000 - € 10,000 per employee (over 50 new employees) € 1,300 per every new job created Subventions for traineeship programs € 900 for co-financing retraining programs 1,000 – 4,000 per employee (over 50 new employees)

10. SUBSIDIZED INVESTMENT LOAN INVESTMENT LOANS Municipalities: Žitište, Plandište i Nova Crnja Up to € 8 million 3 years grace period 2.5 % interest rate DEVELOPMENT FUND OF THE REPUBLIC OF SERBIA LONGTERM & SHORT TERM LOANS Longterm loans - 3 years (12 moths grace period) 2.8% interest rate Short term loans – up to 12 months 4.2% interest rate VOJVODINA DEVELOPMENT FUND

11. TAX INCENTIVES 10-year corporate profit tax holiday 10-year corporate profit tax holiday for investment over app. €7.5 million and 100 new employees Corporate profit tax credits up to 80% Corporate profit tax credits up to 80% of the fixed assets investment Carrying forward of losses Carrying forward of losses over a period up to 5 years Accelerated depreciation Accelerated depreciation of fixed assets 5-year corporate profit tax holiday for concessions Salary tax exemptions Salary tax exemptions for employees under 30 and over 45 years Annual income tax deductions Annual income tax deductions up to 50% of the taxable income Social insurance contributions exemptions for employees under 30 and over 45 years Customs-free imports Customs-free imports of equipment based on foreign investment Salary tax base deduction Salary tax base deduction in the fixed amount of € 62 a month

12. INVESTMENT OPPORTUNITIES METAL PROCESSINGMETAL PROCESSING AUTOMOTIVE COMPONENTS INDUSTRYAUTOMOTIVE COMPONENTS INDUSTRY ELECTRONIC & ICTELECTRONIC & ICT PHARMACEUTICAL INDUSTRYPHARMACEUTICAL INDUSTRY AGRIBUSINESSAGRIBUSINESS

13. METAL PROCESSING CategoryJob description Total Costs € Gross €Net € Production Blue Collar production 390331239 Blue Collar metal industry 412349252 Machine assembler 503427306 Machine technician 573487348 Electrical technician 558473339 CNC/PLC operator 491416299 CNC/PLC programmer 612519 371 Engineers Electrical engineer 874741 527 Machine engineer 755640456 Maintenance engineer 795675480

14. “Just–in-time” and “just-in-sequence” possibilities AUTOMOTIVE SUPPLY INDUSTRY Average total cost: € 405 (Net € 250) Number of employees: 8,548

15. ELECTRONICS & ICT Trim your operating costs, increase work productivity, maintain quality EMS sector Intensive development of EMS sector 1,000 students in Electrical Engineering and Computer Science 1,000 students in Serbia graduate in Electrical Engineering and Computer Science = 7% of total university graduates 68% of the market value comprises equipment, 20% are services, and the remaining 12% goes to packet software ICT Cluster - 28 companies employ 1,500 engineers EUR 44 million in annual turnover ICT Cluster - 28 companies in Vojvodina which employ 1,500 engineers, and in 2010 have had over EUR 44 million in annual turnover

16. Rising market volume trend with intensive R&D investments Approx. 10 % of total FDI inflow - € 530 million, 2,381 employees Estimated 10% annual production growth rate Investment opportunityPrivatization of Jugoremedija Investment opportunity: Privatization of Jugoremedija Cost effective healthy investments committed to high quality standards Average gross salary – January 2010: € 630 Number of employees – average 2009: 3.087 PHARMACEUTICAL INDUSTRY

17. Arable areas covering 1.78 million hectares - 89% of the total land The region is rich in water - rivers the Danube, the Sava and the Tisa flow through Vojvodina 40% of total industrial production and 30% of total export TOP EXPORT COUNTRIES Romania, Hungary, Italy, Slovenia, Bulgaria, Greece, Germany, Austria, Belgium and Holland AGRIBUSINESS

18. INVESTMENT OPPORTUNITIES „VRSACKI VINOGRADI“ VINEYARD „VRSACKA PIVARA“ BREWERY „AGROZIV“ MEAT INDUSTRY „JUGOREMEDIJA“ PHARMACEUTICAL INDUSTRY

19. AGROZIV Leading chicken meat producer in Serbia From animal feed to processed chicken products Feed production 1,100 t per week Slaughter capacity 180,000 chicken a week

20. Largest vineyard in the region 1,300 ha of vineyards Mainly white grape varieties Winery’s capacity 10,000 l/h Storage capacity 321,000 hl Yield in 2009 was 7,500 t of grapes VRSACKI VINOGRADI

21. One of the oldest breweries in the region 91 % state owened 340 employees Products: ligth and dark beer and non-alcoholic bevereges Annual production: beer - 10,000 l non-alcoholic beverages – 2,500 l Production capacity: 320,000 hl/year VRSACKA PIVARA

22. JUGOREMEDIJA Ownership: Ownership: 48% State, 52% private stake holders 429 employees 429 employees domestic market was 87 % foreign market 13% Sale structure in 2008 on domestic market was 87 % and foreign market 13% Holds 7% of Serbian market Exporter to Russian market via FTA quality assurance certificate ISO 9001, and GMP The Company owns quality assurance certificate ISO 9001, and GMP land surface of 72,692 m2 It has total land surface of 72,692 m2 (production facilities on 9,250 m2, administration buildings 1,921 m2, warehouses 5,153 m2 New plant for production of solid and semi-solid medicines July 2009 - New plant for production of solid and semi-solid medicines (pills, film pills, coating pills, creams and suppositories), quality control is complied with both domestic and European pharmaceutical regulations. The plant has established and certified quality system.

23. → → Location Marketing → → “Tailor made solutions” for potential and existing investors → → After Care → → Policy advocacy → → Development of business incubators Vojvodina Investment Promotion - VIP

24. Vojvodina Investment Promotion – VIP Narodnog fronta 23d, 21000 Novi Sad, Serbia Tel: +381 21 472 3241 Fax: +381 21 472 1921 E-mail: office@vip.org.rs Web: www.vip.org.rs Thank you for your attention!