1. Getting the right deal - What should you consider when looking at an investment in Hungary and Budapest? 22 March 2013 Nick Kós Country Managing Partner PwC Hungary www.pwc.com/hu

2. PwC Getting the right deal 1.Strong tax competition for investors – What can be a winning formula? 2.What’s on the agenda of CEOs now? 3.Budapest – Could it be the city of the future? 2 22 March 2013Budapest International Business Center Conference

3. PwC Getting the right deal 1. Tax battle Budapest International Business Center Conference 3 22 March 2013

4. PwC Strong Competition for the Investors – Tax Battle How to attract them? Budapest International Business Center Conference 4 22 March 2013 The regional picture

5. PwC Paying Taxes 2013 Basic correlations Budapest International Business Center Conference 5 22 March 2013

6. PwC Budapest International Business Center Conference 6 22 March 2013 Paying Taxes 2013 Basic correlations

7. PwC Paying Taxes 2013 Key findings at the global and local level Budapest International Business Center Conference 7 22 March 2013 In Hungary

8. PwC Budapest International Business Center Conference 8 22 March 2013 Paying Taxes 2013 Corporate income tax is not everything!

9. PwC Budapest International Business Center Conference 9 22 March 2013 Paying Taxes 2013 Key findings at the global and local level

10. PwC Budapest International Business Center Conference 10 22 March 2013 Paying Taxes 2013 Key findings in the EU & EFTA

14. PwC Budapest International Business Center Conference 14 22 March 2013 Paying Taxes 2013 Regional comparison

15. PwC Budapest International Business Center Conference 15 22 March 2013 Paying Taxes 2013 Regional comparison

16. PwC Budapest International Business Center Conference 16 22 March 2013 Paying Taxes 2013 Regional comparison

17. PwC Individual perspectives Both refundable and non-refundable incentives are available to investors coming to or expanding in Hungary + „VIP” investment subsidy Budapest International Business Center Conference 17 22 March 2013 Source: HITA, 2012

18. PwC Recently published tax changes Budapest International Business Center Conference 18 22 March 2013 Extension of the applicability of investment incentives Realization of a flat personal income tax rate for all income Simplification of conditions for the implementation of e-invoicing Repeal of crisis taxes levied on special sectors Forward-looking elements of the envisaged tax policy Shift in the tax burdens from income to consumption taxes Tax incentives to enhance job creation Simplification of administrative requirements

19. PwC Getting the real deal 1.Tax battle 2.CEO’s views Budapest International Business Center Conference 19 22 March 2013

20. PwC PwC CEO Survey Budapest International Business Center Conference 20 22 March 2013

21. PwC PwC CEO Survey Budapest International Business Center Conference 21 22 March 2013

22. PwC How confident are CEOs about your company’s prospects for revenue growth over the next 12 months? Budapest International Business Center Conference 22 22 March 2013 Global (1330) CEE (95) Western Europe (312) Russia (41) Romania (55) Middle East (32) Very confident364222664253 Somewhat confident454146294434 Not very confident15 2351113 Not confident at all429040 18 Hungary 42

23. PwC Search for growing markets… Budapest International Business Center Conference 23 22 March 2013

24. PwC … but growth has more dimensions Budapest International Business Center Conference 24 22 March 2013

25. PwC Global fear of governmental actions, rising TAX burden Budapest International Business Center Conference 25 22 March 2013

26. PwC Government’s role – according to the CEOs Budapest International Business Center Conference 26 22 March 2013 … And in compariosn: what role and how does it take on now? Percentage of CEOs In Hungarian CEOs opinion what should be the government’s priority? ! !

27. PwC Getting the right deal 1.Tax battle 2.CEO’s views 3.What makes us a city/country of future? Budapest International Business Center Conference 27 22 March 2013

28. PwC 3 Hungarian „success indurties” we used to be proud of… -SSC -Automotive -Electronics Budapest International Business Center Conference 28 22 March 2013 … and what are the success factors here?

29. PwC Service sector 1991 1996 1998 1999 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

30. PwC Automotive Budapest International Business Center Conference 30 22 March 2013

31. PwC Electronics Industry Budapest International Business Center Conference 31 22 March 2013 Budapest

32. PwC Budapest – Could it be the city of the future? Capitals - the key issues: Intellectual and social capital Democratic capital Culture and leisure capital Environmental capital Technical capital Financial capital Source: ‘Cities of the future: Global competition, local leadership’, PwC 32 22 March 2013Budapest International Business Center Conference Economic factors are only part of the game!

33. PwC International success stories from the City Prezi.com Ustream Hungary LogMeIn 1 33 22 March 2013Budapest International Business Center Conference

34. PwC Assembly lines in Electronics vs. … Budapest International Business Center Conference 34 22 March 2013

35. PwC … High value added, creative industries Budapest International Business Center Conference 35 22 March 2013

36. … High value added, creative industries

37. PwC The city of tomorrow 1 37 22 March 2013Budapest International Business Center Conference