1. Mr. Bojan Jankovic SERBIA QUALITY WORKS QUALITY WORKS Serbia Investment and Export Promotion Agency

2. Basic facts about Serbia Location: South East Europe Crossroads of two Pan European corridors Population: 8 million Capital: Belgrade (around 2 million inhabitants) State form: Democratic republic Currency: Serbian Dinar (RSD) 1USD = 93 RSD 1EUR = 62 RSD GDP pc: $7,054 (2008)

3. 1 3 Southeast Europe Central Europe 14% 49% 10% 2 Labor cost 1 3 Southeast Europe Western Europe 18% 16% 2 Central Europe 36% Productivity increase 1 3 Southeast Europe Western Europe 15% 13% 2 Central Europe 33% Flexibility of labor legislation Russia Ukraine Belarus Which region in Europe is most attractive in terms of labor and productivity? Source: Ernst & Young Southeast Europe Attractiveness Survey 2008 - 216 international executives If you want to receive the full report please contact SIEPA or Ernst and Young SEE – Competitive and flexible

4. Southeast Europe Central Europe Western Europe Russia, Ukraine, Belarus Northern Africa Nordic countrie s Baltic countrie s 38% 12% 5% 3% 2% 1% Which region is most attractive for manufacturing activities? Source: Ernst & Young Southeast Europe Attractiveness Survey 2008 - 216 international executives Vs. 32% in 2007 SEE - Attractive destination

5. Net FDI inflow in millions of USD 2008 2007 3,569 2006 4,387 2005 1,550 2004 966 2003 1,360 Over $17bn of FDI since 2002 About 85% of inward FDI comes from EU countries USA, Germany, Austria, Italy, Slovenia in top 5 4,200

6. EU Integrations; Maintaning economic stability; Infrastructure development; Ensuring energy stability; Proactive trade diplomacy; Business reforms to support FDI; Government priorities

7. Integration processes The Stabilization and Association Agreement (SAA) with the EU signed and ratified; Membership candidacy planned for 2010; Serbia’s application for WTO accepted; accession expected in the first half of 2010;

8. Economic stability Strong economic performance since 2000; Average GDP growth between 2004-2008 over 7%; Low public debt – only 30% of GDP Agreement with IMF as a signal of stability;

9. Major investments into transportation corridors in the country, especially corridor X, highway and railroad; Telecom infrastructure improvement; Cargo terminal at Belgrade airport; Ports and terminals on the Danube river; Various other projects; Infrastructure development

10. Ensuring energy stability The “South stream” gas pipeline with a total capacity of 40 billion m3/year ; High capacity underground gas storage in Northern Serbia; Serbia as a regional hub for gas supply; Construction of additional thermal power plants –two ongoing projects over 1GW; Construction of an additional reversible major hydro power plant being evaluated; Modernization of 2 refineries and petrochemical industry;

11. Trade diplomacy – market access EU market with no customs; FTA with Russian Federation – custom free exports with limited number of exceptions; Turkey asymmetrical FTA signed, operational from 1.1.2010; FTA with Byelorussia; CEFTA – duty free access to a regional 20 million people market ;

12. Favorable tax regime One of the most attractive tax environments in Europe; A wide spread of benefits for investors; Free repatriation of profit; Corporate profit tax holidays easily achievable; No taxes on reinvested profit; National treatment for investors;

13. Financial incentives Non-refundable funds for investments Investment projects rated based on the : investors reference; participation of domestic suppliers; effects on R&D, HR etc.

14. Special investment incentives For large-scale investments of over EUR 200 million in three industrial sectors: Automotive Electronics ICT Government provides direct and indirect incentives amounting up to 25% of the value of total investment!

15. Trading with Serbia Strong growth of foreign trade; 30% average growth of exports since 2004; Serbia’s major trade partners: EU countries; Russian federation; CEFTA region;

16. Serbian exports Russia: Pharmaceuticals; Fruits and vegetables; Industrial&Electrical machinery; Road vehicles & components; EU: Steel, cooper, aluminum and related products; Passenger and truck tires; Petrochemicals; CEFTA: Electricity; Steel, cooper, aluminum and related products; Agrifood and confectionary;

17. Visit us on international fairs  Grune Woche,Berlin, Germany  Fruit Logistica, Berlin, Germany  BioFach Nirnberg, Germany  Gulfood, Dubai, UAE  CeBIT, Hanover, Germany  Gitex, Dubai, UAE  ProWein, Dizeldorf, Germany  Fancy Food, New york, USA  Anuga, Keln, Germany  Heimtextil, Germany  SIAL, Paris, France  World Food Moscow, Russia  Foodex, Tokyo, Japan  Maderalia, Valencia, Spain  Real Vienna, Vienna, Austria  Expo Real, Minhen, Germany  Auto Equip, Paris, France  Automechanika, Germany  MosBuild, Moscow, Russia  CPM textile, Moscow, Russia  Randez-vous, Paris, France

18. Serbian imports Russia: Oil and oil derivates; Gas; Fertilizers; EU: Passenger and other vehicles; Pharmaceuticals; Electronic and electric machines and products; CEFTA: Raw materials such as coal, wood, copper, etc; Pharmaceuticals; Food and agro products;

19. Perspective sectors for cooperation Metal processing; Automotive and components industry Food and related products; Furniture industry; Pharmaceutical industry; Textile and related products; IT industry; Contact our experts in charge of these and other sectors at: www.siepa.gov.rs - key industries

20. A Government organization supporting investors and Serbian companies; Investment consultancy from A to Z; Aftercare activities; Networking on all levels – from municipal to the highest Government levels; Linking potential investors to Brownfield, Greenfield, and JV opportunities, site visit organization, etc; Advice on business service providers; Administration of financial incentives; Linking investors with perspective suppliers; What can SIEPA do for you?

21. SIEPA database of locations We maintain and regularly update our locations database SIEPA will help select a location that best suit investor needs

22. SIEPA suppliers database On our website Search by: Sector / sub-sector Export markets Technologies used Products

23. SIEPA publications  General publications;  Sector analysis;  Regulation overview;  Download free of charge on our web site: www.siepa.gov.rs

24. THANK YOU! Serbia Investment And Export Promotion Agency SIEPA Vlajkoviceva 3/V 11000 Belgrade, Serbia Phone: +381 11 3398 550 Fax: +381 11 3398 814 office@siepa.gov.rswww.siepa.gov.rs