1) INVEST IN MACEDONIA K l i m e nt S e ke rov s k i D e p u t y - C EO, A ge n c y fo r F D I O c t o b e r, 2 0 1 4 

2) GOALS OF THE AGENCY Enhanced organizational structure to support main activities: INVESTOR SERVICING POLICY ADVOCACY AFTERCARE EXPORT PROMOTION COUNTRY PROMOTION AND INVESTMENT GENERATION Agency for Foreign Investments and Export Promotion www.investinmacedonia.com 2 

3) ORGANIZATION AND ACTIVITIES Evaluation & Strategy Decision & Investment Aftercare • • • • • • • Business opportunity analysis Identification of supplier base Identification of project-specific location factors Cost analysis Site pre-selection Organization of meetings with state and local authorities Organization of meetings with legal advisors and financial partners • Site visit organization • Final site decision support • Incentives negotiations and establishment of formalities • Support with relevant tax and legal issues • Coordination and support of negotiations with other state and local authorities • Support with your future expansion or reinvestment needs Agency for Foreign Investments and Export Promotion www.investinmacedonia.com 3 

4) ORGANIZATION AND ACTIVITIES Export Promotion Country Promotion • Business development – promotion to foreign markets and support for companies in aspects of business contacts through: trade fairs, B2B meetings, and generating leads through a network of economic promoters • Build the image of Macedonia as an attractive business destination • Organization of a media campaign “Invest in Macedonia” • Studies on target sectors • Presentation and participation at expositions • Coordination of road shows as part of Team Macedonia • Appointment of economic promoters to target countries to promote investment incentives, opportunities and potentials in Macedonia Agency for Foreign Investments and Export Promotion www.investinmacedonia.com 4 

5) Country promotion and Investment generation  Foreign offices - 27 economic promoters operate from Invest Macedonia’s offices abroad Agency for Foreign Investments and Export Promotion www.investinmacedonia.com 5 

6) Countries covered- EUROPE 1 ITALY 2 GERMANY 3 AUSTRIA 4 SWITZERLAND 5 UNITED KINGDOM with IRELAND and ICELAND 6 BELGIUM 7 POLAND with, CZECH REPUBLIC , HUNGARY and SLOVAKIA 8 NETHERLANDS 9 FRANCE 10 SWEDEN with FINLAND 11 RUSSIA 12 BULGARIA with SERBIA 13 TURKEY 14 ALBANIA Agency for Foreign Investments and Export Promotion www.investinmacedonia.com 6 

7) Countries covered- WORLD 1 USA - Chicago 2 USA - Miami 3 USA – Los Angeles 4 USA - Washington 5 CANADA 6 MEXICO 7 AZERBAIJAN Agency for Foreign Investments and Export Promotion www.investinmacedonia.com 7 

8) WHY MACEDONIA? Corporate Income Tax Macedonia* Romania* 10% Personal Income Tax General VAT Rates Macedonia Turkey 16% 18% 18% Czech Republic 19% Czech Republic 20% Hungary 19% Slovakia 20% Poland 19% Ukraine 20% Slovakia* 19% Poland Croatia 20% Romania Turkey 20% Croatia Ukraine 21% Agency for Foreign Investments and Export Promotion Hungary 23% 24% 25% 27% www.investinmacedonia.com 8 

9) WHY MACEDONIA €334 €336 €352 €362 €364 €374 Data for 2014 • • • • • • • 2008 2009 2010 2011 Agency for Foreign Investments and Export Promotion 2012 Construction: 307€ Transportation: 273€ Tourism: 268€ Administration: 237€ Automotive: 234€ Food: 272€ Agriculture: 240€ 2013 www.investinmacedonia.com 9 

10) WHY MACEDONIA Sector Polog – Tetovo and Gostivar Manufacturing 311 € Wholesale & Retail trade 352 € Administrative services 311 € Construction 350 € Sector Southwest- Ohrid and Struga Manufacturing 336 € Wholesale & Retail trade 299 € Administrative services 313 € Construction 309 € Sector Vardar-Veles Manufacturing 359 € Wholesale & Retail trade 292 € Administrative services 274 € Construction 377 € Salaries in the region according to sector The minimum wage for July 2014 was 198.90€ Agency for Foreign Investments and Export Promotion www.investinmacedonia.com 10 

11) READILY AVAILABLE WORKFORCE with Technical Skills Agency for Foreign Investments and Export Promotion www.investinmacedonia.com 11 

12) Corruption perception index Agency for Foreign Investments and Export Promotion www.investinmacedonia.com 12 

13) SUCCESS STORY! Macedonia scores best for labour, lower on logistics. (Czech/Poland: €7k/year: 1 day truck, Macedonia: €4k/year: 2.5 days truck) Signing of the Memorandum of Cooperation between Mr.Jaffray, Director, Strategic Planning and Prime Minister Gruevski March 2007 Agency for Foreign Investments and Export Promotion Johnson Matthey www.investinmacedonia.com 13 

14) Need for relocation and project scope ï‚· Johnson Matthey Europe will need substantially increased capacity in the period 2007 - 2012 ï‚· Growing market, increasing share, new products and processes. Royston & Brussels are ‘full’. ï‚· ‘Contingency’ plan for South Africa ï‚· East Europe appears a low cost option Considerations ï‚· ï‚· ï‚· ï‚· ï‚· Investment phasing: 2006  2012 Land: 15 hectares Power: 15 Mw People 300 (80:20 blue : white collar) ~ €75 m. total investment Agency for Foreign Investments and Export Promotion  Labour cost and availability  Logistics/infrastructure  Incentives (land, tax, employee cost support)  Timings for any investment  production Countries considered Czech Republic (labor availability, logistics), Hungary (labour availability, plot sizes), Poland (labour availability, infra-structure ‘confidence), Slovakia, Croatia (expensive), Bulgaria (labour costs) Macedonia (late entrant). www.investinmacedonia.com 14 

15) The team from INVEST IN MACEDONIA at Your Service… Identification of project specific location factors Cost analysis Identification of supplier base Detailed due diligence Business opportunities analysis Locations, operational costs and competitiveness One-stop-shop and project management approach Creating linkages Our Services Design and infrastructure approvals Issuing building and operational permits One-stop-shop Customs outpost in the Zone Zone infrastructure maintenanceAgency forupgrade and Foreign Investments and Export Promotion Aftercare University linkages Reference company linkages Recruitment agencies linkages Organization of meetings with legal advisors and financial partners Labor availability, HR companies and consulting Ensure success! Support with relevant tax and customs issues Assistance in acquiring visas/work permits Coordination and support in contacts with other state and local authorities www.investinmacedonia.com 15 

16) Thank You! AGENCY FOR FOREIGN INVESTMENTS OF THE REPUBLIC OF MACEDONIA Nikola Vapcarov 7 1000 Skopje Republic of Macedonia Tel.: + 389 2 3100 111 Fax: + 389 2 3122 098 e-mail: k.sekerovski@investinmacedonia.com web: www.investinmacedonia.com Agency for Foreign Investments and Export Promotion www.investinmacedonia.com 16