Romania – Top Destination for Investment

1. Romania – Top Destination for Investment by Daniel PRUNARIU Technical Assistance Department Strategic Seminar on Romanian Market & Investment Bucharest, August 2007

2. Structure of the Presentation • Positioning Romania • Macroeconomic outlook • Valuable human potential • FDI performance • Infrastructure development • Investment legalframework • Potentialsectors for development • ARIS – one stop shop

3. 1. Positioning Romania

4. Romaniathe largest market in CE Europe Our friend the wind

5. Pan European Transport Corridors IV Dresden/Nuremberg Constanta/Thessaloniki/Istanbul VII The Danube river 2,300 km long IX Helsinki – Bucharest – Odessa/Alexandropoulo Romania’s Strategic Location • Strategic position at the turning point where EU meets the Balkans and CIS countries

6. 2. Macroeconomic outlook

7. Perception 2007 3 years improvement Romania – leader of the SEE regionErnst&Young Attractiveness Survey 2007 • Romania is perceived as the most attractive SEE country; • Romania’s position will consolidate; • International investors are confident in Romania’s future: 68% believe it will improve within 3 years.

8. GDP Growth Rate Significant Potential for Growth 2006 Source: EUROSTAT, *forecast Source: National Institute of Statistics • Rapid & sustainable GDP growth; • 7.7% in 2006, based on increases in final consumption by 11.5% and in investment by 16.1%; • Highly comparable with EU25 GDP growth rate of 2.9% in 2006.

9. Inflation Rate Declining Inflation Source: EUROSTAT Source: National Bank of Romania • Consolidation of low inflation (sustainable disinflation); • Inflation rate 3.77% (Apr'07/Apr'06)

10. 3. Valuable Human Potential

11. ValuableHuman Potential high performances in international competitions high percentage of technically competent professionals(23% are engineering graduates out of 720 students enrolled) highest growth rate of IT specialists in the region(Annually 7000 university graduates in the software field & More then 3.000 students in 105 local Cisco academies) University graduates in Romania (by education field) Source: National Institute of Statistics • strong language skills(English, French, German, Italian, Spanish, Russian, etc.) • large skilled labor force at comparatively low wage rates

12. CompetitiveLabor Cost Regional Comparison 2006 - EUR Gross monthly wages EUR Source: Vienna Institute of International Economic Studies; National Institutes of Statistics • The average gross monthly wage in Romania is the second lowest after Bulgaria • It is expected to grow by 16.7% in 2007

13. 4. FDI Performance

14. Annual Inward FDI Inward FDI Flows 2006 EUR million Source: Vienna Institute of International Economic Studies Source: National Bank of Romania • Record value in 2006; • FDI Stock over EUR 34 bill (1990 – June 2007); • First semester of 2007 – EUR 2984 mill

15. 1 2 3 4 5 6 7 8 9 10 Major Investing Countries (1990-2005) Source: National Bank of Romania

16. Korean Investment in Romania Source: National Trade Register Office; 1990 – June 2007

17. 5. Infrastructure Development

18. SUPLACU DE BARCAU IASI Highway Infrastructure Development - 2013 PIATRA NEAMT BORS SABAOANI MIHAILESTI SOVATA BICAZ ALBITA CAMPIA TURZII TARGU MURES GILAU GHEORGHIENI PRAID NADLAC SIGHISOARA ARAD DEVA SEBES FAGARAS SIBIU FOCSANI ORASTIE TIMISOARA BRASOV CRISTIAN GHIMBAV LUGOJ PREDEAL COMARNIC BUZAU PLOIESTI PITESTI DRAJNA CERNAVODA BUCURESTI CONSTANTA FETESTI CRAIOVA ADUNATII COPACENI GIURGIU CALAFAT

19. Portsand Airports SATU MARE BAIA MARE SUCEAVA IASI ORADEA CLUJ NAPOCA TARGU MURES BACAU ARAD SIBIU TIMISOARA GALATI BRAILA SULINA TULCEA OTOPENI BANEASA DROBETA TR. SEVERIN M. KOGALNICEANU CONSTANTA CRAIOVA CORABIA OLTENITA MANGALIA GIURGIU

20. Mobile Communication Infrastructure– coverage area - • Consolidated market; • Major international players; • More than 90% network coverage.

21. Map 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

22. 6. Investment Legal Framework

23. CompetitiveTaxation Source: CEE-CIS Tax Notes - PriceWaterhouseCoopers Many Central and Eastern European countries reduced considerably their corporate tax in order to diminish the fiscal burden

24. New Investment Law • Incentives for investments in Romania in: • regional development (including infrastructure) • environment protection • research and development • human resources and social inclusion, including training • Directed according to economic status of each region • Law expected to be passed by Autumn 2007

25. Structural funds channeled by Operational Programmes Operational Programmes of interest tobusiness

26. 7. Potential Sectors for Development

27. Potential Sectors for Investment

28. 9. ARIS – one stop shop for foreign investors

29. SERVICES WHO is A.R.I.S? Governmental body under the authority of Prime Minister In charge with attracting and retaining foreign direct investment Interface between investors and central & local authorities Providing free of charge SERVICESfor foreign investors in Romania Search and advice on the best location in Romania to fulfill the company' needs including site search, analysis & touring around Value added information on incentives and other administrative procedures Search for industrial and service suppliers

30. Thank you for your attention! tel: +40 21 233.91.03 fax: +40 21 233.91.04 email: aris@arisinvest.ro website: www.arisinvest.ro