ROMANIAROMANIA

Top Destination for Top Destination for InvestmentInvestment

December, 2010

Romania the largest Romania the largest market in South market in South Eastern EuropeEastern Europe Area:Area:

238,391 km2

(9th largest in (9th largest in EU)EU)

PopulatioPopulation:n:

21.5 million (7th largest in (7th largest in EU)EU)

Capital Capital city:city:

Bucharest2.1 million

European European Union Union statusstatus

Member since January1st,2007

Affiliation:Affiliation:NATO, WTO,WB, IMF.

Domestic Domestic currency:currency:

LEU (RON)1EUR=4.2920 RON1USD=3.0543 RON (As Nov. 03, 2010)(As Nov. 03, 2010)

Official Official language:language: Romanian

Administ. Administ. division:division:

41 counties and Bucharest

Bucharest

1000 km radius

1500 km radius

PAN EUROPEAN CORRIDORS CROSSING ROMANIA

Helsinki – Kiev - Bucharest –Odessa/Alexandropoulos

Pan European Corridors crossing Pan European Corridors crossing RomaniaRomania

IV Dresden/Nurnberg – Bucharest Constanta/Thessaloniki/Istanbul

VII The Danube river - 2,300km

IX Helsinki – Kiev - Bucharest –Odessa/Alexandropoulos

4.2%

7.9%

6.3%7.3%

8.5%

5.2%5.1%5.7%

2000 2001 2002 2003 2004 2005 2006 2007 2008

Significant Potential for Significant Potential for GrowthGrowth

2009

Rapid and sustainable GDP growth rate between 2000-2008;

Severe adjustment of GDP in 2009 triggered austerity measures and a Governmental anti-crisis program;

Forecast 2010: -2%; 2011: + 1.5%

Sou

rce:

EU

RO

STA

T;

Source: National Institute of Statistics; GDP EU 27

GDP Growth RatePoland 1.7%

Slovakia

-4.7%

Czech Republic -4.8%

Bulgaria -5.0%

Hungary -6.3%

Romania -7.1%

Slovenia -7.8%

EU 27 -4.2%

Inflation RateInflation Rate

National Bank of Romania is targeting the inflation;

Disinflation policy to join Euro zone in 2015;

Target 3.5% inflation rate in 2010 and 3.0% for 2011;

Sou

rce:

Eu

rosta

t

Source: National Institute of Statistics;

Inflation Rate

6.6% 6.3% 4.7%9.3%

14.1%17.8%

30.3%

40.7%

8.6%4.86%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Annual Average Annual Average Inflation Rate 2009Inflation Rate 2009

Romania 5.6%5.6%

HungaryHungary 4.0%

PolandPoland 4.0%4.0%

BulgariaBulgaria 2.5%2.5%

SloveniaSlovenia 0.9%0.9%

SlovakiaSlovakia 0.9%0.9%

Czech RepCzech Rep 0.6%0.6%

EU 27EU 27 1.0%1.0%

Human CapitalHuman Capital

Young population (more than 50% under 40 years old)Almost 21.5 million people

Demographics

Talent pool106 universities, 631 faculties125,000 university graduates/yrAvailability of technical engineers High industrial experienceFlexibilityForeign language skills

Cities with more than 100,000 inhabitants

more than 1,000,000 inhabitants

300,000 – 400,000 inhabitants

200,000 – 300,000 inhabitants

100,000 – 200,000 inhabitants

Source: National Institute of Statistics

Labor Cost – A debated Labor Cost – A debated topictopic

Gross average monthly Gross average monthly wageswages

EUREUR

Source: Vienna Institute for International Economic Studies

Romania will hold on its competitive advantage related to labour cost;

7% decrease in 2009 against 2008; Adjustment of the salaries growth in the administration

system;

174 179204

267326

428 474 445

0

50

100

150

200

250

300

350

400

450

2002 2003 2004 2005 2006 2007 2008 2009

1439

893745 717 713

445299

0

200

400

600

800

1000

1200

1400

1600

Slovenia Czech Rep. Slovakia Poland Hungary Romania Bulgaria

Source: National Institute of Statistics;

Gross average monthly Gross average monthly wageswages

2009 - EUR2009 - EUR

BUCURESTIBUCURESTI

376 thou376 thouState: 67%State: 67% Private: 33%Private: 33%

CLUJ-CLUJ-NAPOCANAPOCA

SIBIUSIBIU

TIMISOARATIMISOARA

BRASOVBRASOV

IASIIASI

CRAIOVACRAIOVA

GALATIGALATI

70 thou70 thouS: 93%S: 93% P: 7%P: 7%

67 thou67 thouS: 90%S: 90% P: 10%P: 10%

51 thou51 thouS: 89%S: 89% P: 11%P: 11%

46 thou46 thouS: 69%S: 69% P: 31%P: 31%

34 thou34 thouS: 89%S: 89% P: 11%P: 11%

24 thou24 thouS: 92%S: 92% P: 8%P: 8%

21 thou21 thouS: 87%S: 87% P: 13%P: 13%

20 thou20 thouS: 86%S: 86% P: 14%P: 14%

PITESTIPITESTI

14 thou14 thouS: 79%S: 79% P: 21%P: 21%

TARGU - TARGU - MURESMURES

BUCURESTIBUCURESTI

10 Major University 10 Major University CentersCenters

Inward FDI FlowsInward FDI Flows

2009

Second largest inward FDI receiver in Central - Eastern Europe;

Stock EUR 50 bill. (1990–2009)

EUR 30 bill.attracted over the last 4 years only;

Source: Vienna Institute for International Economic Studies;

Source: National Bank of Romania

Annual Inward FDI

EU

R

million

Poland 8384

Romania 3488

Bulgaria 2845

Czech Republic

1935

Hungary 800

Slovenia - 481147 1294 1212

1946

5183 5213

9060

7250

9496

3488

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

7.9%

19.0%

12.3%

31.1%

1.4% 4.5%12.6% 5.8%

6.5%

ManufacturingTradeFinancial servicesIT&CReal Estate & ConstructionsEnergy&UtilitiesAgriculture,Forestry&FisheryMiningOthers

FDI by Field of ActivityFDI by Field of Activity(1990- 2009)(1990- 2009)

6.3%3.2%

13.9%

5.8%

11.6%

4.5% 5.2%22.3%

14.5%12.7%

MetallurgyFood, Beverages, TobaccoTransport meansOil processing, chemicals, rubber & plastic Construction materialsWood processingTextile, wearing apparel & leather goodsIT&C equipmentMachinery & equipmentOthers

Manufacturing

Total Economy

Source: National Bank of Romania

NetherlandsNetherlands AustriaAustria GermanyGermany FranceFrance GreeceGreece

21.8%21.8% 18.1%18.1% 13.4%13.4% 8.5%8.5% 6.6%6.6%

ItalyItaly CyprusCyprus SwitzerlandSwitzerland BelgiumBelgium USAUSA

5.1%5.1% 4.7%4.7% 4.2%4.2% 2.2%2.2% 2.1%2.1%

Top 10 Investing CountriesTop 10 Investing Countries(1990-2009)(1990-2009)

1 2 3 4 5

6 7 8 9 10

Source: National Bank of Romania

Main foreign companies by sector

Companies Sector of activity:

RENAULT; FORD; DELPHI; DURA; HONEYWELL; LEAR; TRW; YAZAKI; CALSONIC-KANSEI; CONTINENTAL AG; MICHELIN; PIRELLI; AUTOLIV; INA SCHEFFLER

Automotive

SOLECTRON; CELESTICA;NOKIA; SYSTRONICS; ELCOTEQ; BENCHMARK; ELBIT; SELEX; KATHREIN;

Electronics

MICROSOFT; ORACLE; HP; INTEL; IBM; CISCO; ACI;AMAZON; SIEMENS; WIPRO; SIVECO; ERICSSON;

IT services

ALPHA Bank; ING; ERSTE Bank; RAIFFEISEN Bank UNICREDIT; SOCIETE GENERALE; MILLENIUM; HVB;

Financial services

VODAFONE; ORANGE;UPC; OTE; ZAPP; Telecom

RENAULT TECH.; INFINEON; ALCATEL-LUCENT; FREESCALE; MICROCHIP; ALVARION;

R&D Centers

DHL; TNT; MAERSK; HAPAG; FRANS MAAS; Logistics

Gedeon-Richter; GlaxoSmithKline; Sandoz; Ranbaxy; Zentiva;

Pharmaceutical

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Highway Infrastructure Development - 2014

In use: 1099 km

Under construction 1452 km

Under design and expropriation 850 km

NADLAC

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ARADARAD

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BAIA MAREBAIA MARESATU SATU MAREMARE

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MURESMURES

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Ports and AirportsPorts and Airports

International flights

Domestic Flights

Under construction

TULCETULCEAA

BRASOVBRASOV

ORADEAORADEA

Mobile Communication Mobile Communication InfrastructureInfrastructure

– coverage area -– coverage area -

Deregulated market;

Major international players;

More than 90% network coverage.

national treatment for foreign investors;

foreign investment allowed in all sectors of

economy;

possibility to freely manage the company with

full ownership rights;

full repatriation of capital and profits;

protection against expropriation and

nationalization;

Access to incentives and funds provided by EU

and Romanian legislation;

Foreign Investor RightsForeign Investor Rights

Incentives and subsidies IIncentives and subsidies I

FISCAL CODE:

Tax exemption for reinvested profit;

Possibility to use accelerate depreciation of equipments (50% in

the first year);

Possibility to carry forward the fiscal losses for a period of up to 7

years;

Exemptions from the payment of taxes on buildings and land

applied by local councils in Romania on basis of state aid

schemes;

Fiscal incentives for R&D: additional deduction of 20% from the

eligible expenses from research and development activities;

Subsidies for hiring and training new personnel.

Incentives and subsidies IIIncentives and subsidies II

STATE AID SCHEMES/INCENTIVES FOR:

investments between EUR 05-10 mill and creating at least 50 new jobs;

investments between EUR 10-20 mill and creating at least 100 new jobs

investments between EUR 20-30 mill and creating at least 200 new jobs;

investments over EUR 30 mill and creating at least 300 new jobs;

investments over EUR 100 mill and 500 new jobs; eligible costs over Euro 50

mill;

investments in green energy - 50% subsidy from the total eligible expenses

for all regions in Romania, except Bucharest (40% subsidy); Eligible expenses:

investment in tangible assets (land, buildings, new equipments, installations)

and intangible assets. Intensity ceilings increase by 20% in case of small

enterprises, and by 10% in case of medium sized enterprises (Exception:

economic agents activating in the field of transport)

Map of Industrial ParksMap of Industrial Parks

More than 40 Industrial Parks

Both private & public

Greenfield & Brownfield

Access to utilities

Package of services offered by the park administration

Wide variety of activities to be developed

Some created for high-tech activities

CompetitiveCompetitive TaxationTaxation

Corporate Corporate TaxTax VATVAT

Social ContributionsSocial Contributions

EmployeeEmployee EmployerEmployer

BulgariaBulgaria 10% 22% 13% 20.5%

Romania 16% 24% 16.5% 27.75-38.45%

HungaryHungary 19% 25% 17% 32%

PolandPoland 19% 22% 18.71% 19.5-22.4%

SlovakiaSlovakia 19% 19% 13.4% 35.2%

Czech Rep.Czech Rep. 19% 20% 11% 34%

SloveniaSlovenia 20% 20% 22.1% 16.1%Source: National IPA’sSource: National IPA’s

Many Central and Eastern European countries increased Many Central and Eastern European countries increased the VAT in order to cope with economic crisis; the VAT in order to cope with economic crisis;

Romania is maintaining the flat corporate tax;Romania is maintaining the flat corporate tax;

EU financial assistance to EU financial assistance to Romania Romania

Romania could receive Romania could receive up to EUR 33 billion up to EUR 33 billion during 2007 – 2013 during 2007 – 2013 through EU funding; through EU funding;

Financial support Financial support provided by European provided by European Regional Economic and Regional Economic and Social Cohesion Policy Social Cohesion Policy is delivered through 3 is delivered through 3 main structural main structural instruments and 2 funds instruments and 2 funds dedicated to agriculture dedicated to agriculture and fisheries.and fisheries.

Allocation by operational programme

Administrative capacity

1.1%

Technical assistance

0.9%

Competitiveness13.3%

Transport infrastructure

23.7%

Regional development

19.4%

HR development

18.1%

Environment 23.5%

Thank you Thank you for your attention!for your attention!