ROMANIANINVESTMENT CLIMATE Stimulative for New Business and Expansions

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ROMANIAN INVESTMENT CLIMATE Stimulative for New
Business and Expansions

• Prague, December 2006

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Eye on Romania
You are looking at your next location in Eastern
Europe
ROMANIA
access to high competencies and a growing
market, where the costs are low and the quality
is high
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Romania large EU accession economy
Total population (million)

• Country with almost 22 million inhabitants
• Close ties with and good integration into EU
  economies
• Clear accession plan to join the EU by January
  2007

GDP per capita (EUR, 2005)
Vienna Institute of International Economic Studies
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with significant growth still ahead
GDP Growth rate

• Solid economic fundamentals
• Rapid real GDP growth
• Declining inflation, below 9
• Declining unemployment, currently at 5.2
• Steady credit rating improvement
• Moodys increased its rating from B3 in 2000 to
  Ba1 (positive) currently
• SP and Fitch ratings increased from B- in 2000
  to BBB- (positive) currently

Inflation rate
National Bank of Romania
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Competitive Taxation

• Central and Eastern European countries are
  trying to follow the successful Irish example
  to have faster economic growth through low taxes

CEE-CIS Tax Notes - PriceWaterhouseCoopers
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Competitive Labor Cost

• The average gross monthly wage in Romania is the
  second lowest after Bulgaria
• It is expected to grow by 12 yearly

Gross monthly wages EUR
Regional Comparison 2005 - EUR
Vienna Institute of International Economic Studies
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Valuable Human Potential
University graduates in Romania (by education
field)

• high performances in international competitions
• high percentage of technically competent
  professionals
• highest growth rate of IT specialists in the
  region
• strong language skills English, French, German,
  Italian, Spanish, Russian, etc.
• large skilled labor force at comparatively low
  wage rates

Total number of University graduates in
2003/2004 110,533
Source National Institute of Statistics
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Pupils enrolled in pre-university education -
2004/2005 - by studied modern
language -
First modern language
Second modern language
Source National Institute of Statistics
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Major University Centers
Source National Institute of Statistics
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Telecommunication infrastructure
coverage area -
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Foreign Investor Rights

• 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
• national treatment for foreign investors

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A new investment law now in public debate

• The proposed bill provides a set of incentives
  for the investments that aim
• regional development
• research and development
• environmental protection
• human resource development
• improving social inclusion and cohesion.

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Inward FDI Performance

• Record value in 2005
• FDI Stock EUR 24 bill.
• (1990 August 2006)
• EUR 4.3 bill. in August 2006

Inward FDI EUR billion
Regional Comparison 2005 - EUR million
Vienna Institute of International Economic Studies
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FDI by Country and by Field of Activity-
September 2006
Value of Subscribed Capital by Field of Activity
National Trade Register Office
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Romanian competitiveness
on the global ITC market
Romania has a long history of education and
research in all fields of engineering and
software 116 universities, 36 have a computer
science related faculty
Romanias location is an advantage in itself -
major multinational IT companies are present in
Romania
Romanian graduates are multi-lingual (1st place
in the Certificate of Proficiency in English exam
at Cambridge University) and world class
concerning their competencies
Made in Romania
Romanias legal system and culture - similar to
those in Europe and US.
Romanias density of software graduates per
thousand inhabitants is significantly higher than
in USA, five times higher than in Russia and
nearly seven times bigger than in India.
The cost of IT-skilled professionals 1/3 in US
and Europe
Ministry of Communication and Information
Technology
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A Top European Location for RD and specialized
BPO (1)
2500 engineers developing embedded automotive
systems and network operator equipment all over
Romania
1200 engineers developing network operator
equipment in Western Romania
Intel Capital invested 12M in Romanian IT
services and outsourcing company, Siveco, in
Bucharest
250 RD engineers working on semiconductor design
in conjunction with Bucharest Polytechnic
100 engineers developing compilers and
development tools in Bucharest
Operates five global IT Technology Centers
including development and a 15-language call
center
Ministry of Communication and Information
Technology
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A Top European Location for RD and specialized
BPO (2)
In 2006 Microsoft decided to set up a Global
Technical Support Center 700 employees
The global outsourcing firm, owned by GE and Oak
Hill Partners, employs 170 and plans to expand to
1500 for IT outsourcing, financial services and
supply chain BPO
HP set up a BPO in Bucharest for financial and
administrative services, dedicated to EMEA region
- up to 1200 employees in few years
In 2006 WIPRO decided to set up a BPO center in
Bucharest for IT services covering the East
European market - 700 employees
RD center for software applications in
Timisoara, due to be open starting with beginning
of 2007
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Strong outsourcing and technology players
includes company with primary development
locations in Romania. Multinationals like Ness
and Wipro are excluded
Ministry of Communication and Information
Technology
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Major call centers in Romania
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Review of Major Reasons to Invest Romania

• Healthy and Predictable Investment Climate
• EU member state in January 2007
• Supportive Operational Conditions
• Stimulating and Stable General Legal Framework
• Favorable Economic Conditions
• European Structural Funds available

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WHO is A.R.I.S?

• Established in July 2002
• Governmental body under the authority of Prime
  Minister
• In charge with attracting and retaining foreign
  direct investment
• One stop shop for foreign investors
• Interface between investors and central local
  authorities
• Providing free of charge services for new
  comers and existing investors in Romania

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How can A.R.I.S. help you?

• One-stop shop for dealing with the Central
  Local Authorities and other institutions.
• Search and advice on the best location in Romania
  to fulfill the company' needs (industrial land,
  buildings and office space) including site
  search, analysis and touring around .
• Value added information on incentives and other
  administrative procedures.
• Search for industrial and service suppliers.
• Advice on staff selection and recruitment in
  terms of cost and availability.
• Lists of consultancy, recruitment, real estate
  companies, and other providers operating in
  Romania.

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Thank you for your attention!
Tel [phone] Fax 40 21
233.91.04 Email aris_at_arisinvest.ro Website
www.arisinvest.ro