Asian Business Forum

WELCOME ASIAN BUSINESS FORUM

OPENING REMARKS

Mr. Artūras Zuokas, Vilnius City Mayor

THE CITY OF VILNIUS: OPEN FOR BUSINESS AND GROWTH

Mr. Miroslavas Monkevičius, City Council Secretary Vilnius City Municipal Government

ASIAN BUSINESS FORUM 2014

MIROSLAVAS MONKEVIČIUS CITY COUNCIL SECRETARY

VILNIUS CITY MUNICIPAL GOVERNMENT

THE CITY OF VILNIUS: OPEN FOR BUSINESS AND GROWTH

VILNIUS: FACTS AND FIGURES WHY INVEST IN VILNIUS?

VILNIUS REGIONAL LEADER

q  16 Million inhabitants in a 300 km radius.

q  Vilnius Country generates approximately 40% of Lithuania’s GDP.

q  As of 2011, Vilnius’ economy reached 11,78 billion Euros

EASY ACCESS TO BOTH EASTERN AND WESTERN MARKETS SEA AND AIR

- 4 International Airports; it takes 2-3 hours to get to Lithuania from the major European cities - Klaipeda State Seaport is the northern-most ice-free port in the Baltic Sea

WHY INVEST IN VILNIUS?

HIGHLY EDUCATED AND MULTILINGUAL TALENT POOL WORLD CLASS ICT INFRASTRUCTURE EASY ACCESS TO BOTH EASTERN AND WESTERN MARKETS BUSINESS - FRIENDLY ENVIRONMENT HOME TO WORLD LEADERS IN LIFE SCIENCES HIGH QUALITY OF LIFE

HIGHLY EDUCATED AND MULTILINGUAL TALENT POOL

The Most Educated Labour Pool in the EU: ■ Labour pool size: 1.5 million1 1st in the EU: 93% of population have secondary or higher education2 12th in the World: 77% of population aged 20-24 are enrolled in tertiary education3 2nd in the EU: 47% of population aged 24 - 29 have a university degree2 1st in the World for the share of female labor force2

Foreign Language Knowledge4: ■ 92% of population speaks at least 1 foreign language* ■ 52% of population speaks at least 2 foreign languages* ■ Languages spoken: Russian (80% ), English (38%), Polish (19%), German (14%)

LABOUR POOL STRUCTURE

STUDENTS AT UNIVERSITIES AND COLLEGES 2012-2013

Source 1: Statistics Lithuania Source 2: Eurostat, 2011 Female labour force, as percentage of total labour force (50,29%) Source 3: Global Competitiveness Index 2011-2012 Source 4: European Commission, 2012 * EU average: 54% of population speak 1 foreign language, 25% speak 2 foreign languages

WORLD CLASS ICT INFRASTRUCTURE

1st for Internet upload and 3rd for download speed in the EU1

1st in the World Competitiveness Rankings for communication technology2

1st in Europe for density of network of public Internet access points (875) 3rd in the EU for the share of fixed broadband lines equal to or above 30Mbps3 •  The most up-to-date ICT technologies (LTE

technology, 3G mobile communications infrastructure, mobile WiMAX 4G Internet etc.) fully implemented and functioning in the entire country

•  93% of financial operations are performed via e-banking4

•  Among Top 10 countries in the world for cloud readiness5

17%

12%

11% 11%

10%

8%

8%

8%

8% 7%

Top 10 Countries by Internet Upload Speed (Mbps)

Hong Kong

South Korea

Singapore

Macau

Lithuania

Republic of Moldova

15%

12%

11%

10% 9% 9%

9%

9%

8% 8%

Top 10 Countries by Internet Download Speed (Mbps)

Hong Kong

Singapore

Romania

South Korea

Sweden

Macau

Source 1: Ookla Netindex, 2013 Source 2: IMD, The Word competitiveness yearbook, 2011-2012 Commun. techn. rank evaluates how communications technology (voice and data) meets business requirements Source 3: European Comission, 2012 Source 4: Statistics Lithuania, 2012 Source 5: Cisco Global Cloud Index, 2013. The Index evaluates Consumer and Business Fixed Network performance and Consumer and Business Mobile Network performance

HOME TO WORLD LEADERS IN IT

IT Sector in Lithuania Today: 24,500 employed IT professionals 2,185 IT enterprises

Large Talent Pool: ■ 6,200 IT students at 7 universities and 14 colleges ■ 1,750 IT graduates each year

High Growth Potential: ■ 2.98 mln. citizens - 4.53 mln. mobile subscribers by 2012, i.e. penetration of 152% ■ From 2009 to 2011 Lithuania went from 10-20 apps developed per year, to 200-300

<y(Plan

2nd biggest App store globally with over 2 billion downloads.

3rd best-selling mobile application on the Mac App Store. Apple Design Award 2011.

MagicDraw UML - 1st Java based UML tool trusted by multinational businesses and NASA; distributed in more than 70 countries.

1st commercial digital signature pilot for mobile in the World. 1st in the World with an online banking application using Natural User Interface (NUI).

World's first mobile only event booking app, has recently raised a $12 million for expansion in the US.

No. 1 social network in Nigeria with 6 M+ registered users and 13 M+ registered users across the World, focusing on the mobile customers in emerging markets.

EASY ACCESS TO EASTERN & WESTERN MARKETS

Advanced Logistics:

■ Logistics accounts for 11.7% of GDP1

25,000 truck fleet*2: _ 75% comply with Euro-3/4/5 exhaust emission requirements _ International road transit accounts for 90% of total road transit > 850,000 m2 of logistics and warehousing facilities 2-3 hour flights to major European cities and Moscow Shuttle cargo services: direct railroads to Russia, Belarus, Latvia, Poland, Germany, Ukraine and Asia (incl. China) Ice-free Klaipeda State Seaport

Reliable and High-Quality Infrastructure: ■ NATO's Northern Distribution Network: 3,100-miles of sea, road, and rail routes connect Klaipeda (Lithuania) with central Asia

q  1 day q  2 days q  3 days q  4 days

* vehicles for international cargo shipment/transportation

COST-EFFECTIVE BUSINESS DEVELOPMENT LOCATION

Wages in the IT Industry in 2013 Wages in the Produc8on Industry in 2013

Source : Grafton Recruitment 2013 The information provided in this document constitutes a guide to salaries being paid against particular job titles/functions in Vilnius in average The salaries are stated gross in Euro per Year, the salaries are not including benefits / bonuses

IT Manager 27,500-34,300Technical Support (mid-level) 13,700-16,000Java Specialist (3-5 yrs experience) 22,900-28,800Java Specialist (1-3 yrs experience) 14,400-22,900.Net / C # (3-5 yrs experience) 23,000-27,500.Net / C # (1-3 yrs experience) 14,400-18,000Web Developer 18,300-24,000Software Engineer 23,000-27,500Network Engineer (3-5 yrs experience) 23,000-31,200System Analyst 18,300-20,000

Average Yearly Gross Salary,

EURPosition in the IT Industry

Production Manager 22,590-45,180Quality Manager 13,550-31,630Quality Engineer 11,300-22,590Manufacturing Shift Leader 9,040-13,550Machine Operator 5,420-9,040Logistic Manager 22,590-31,630Transport Co-ordinator 11,300-15,880Warehouseman 5,270-6,780Senior Buyer 9,040-15-810Junior Buyer 5,420-9,040

Position in the Production Industry

Average Yearly Gross Salary, EUR

Business-Friendly Environment

Incentives for Investment into New Technologies and R&D3: q  R&D and experimental expansion expenses are fully deductible three times q  very short depreciation periods and fast depreciation methods for equipment used for R&D activities

Incentives for Foreign Businesses Investing in: q  production of export-oriented high-quality services/products/R&D activities q  creation of new qualified jobs

Incentives for employment of youth: 23.3% of salary of a first-time employee (aged16 to 29) is reimbursed to employers for up to 12 months

TAX RATE SNAPSHOT 1,2

Source 1: PricewaterhouseCoopers Source 2: KPMG, Deloitte, 2012 Source 3: AmiCorp, “Lithuanian Company as Intellectual Property Holding”, January 2012

TAX RATESCorporate profit tax 15%VAT 21%Dividends* Up to 15%Personal income tax 15%Employee's social security tax 9%

Social security tax paid by the employer 30.98%

Real estate tax Up to 3%

SPECIAL TERRITORIES FOR BUSINESS DEVELOPMENT

2 Special Economic Zones (SEZ): q  0% corporate tax for the first 6 years q  50% discount on corporate tax over the next 10 years q  0% tax on dividends q  0% tax on real estate

GREAT PLACE TO LIVE, EAGER TO CHANGE, FAST TO INNOVATE

q  Vilnius is among 10 least expensive EU cities to live in1

q  Among Top 40 countries in the World for the quality of life2

q  17th in the World in the Environmental Performance Index 20123

q  62% of citizens either walk, bike or take a bus as a mode of transportation in the capital city Vilnius

q  10th place in the World in Smart City rankings4

q  Vilnius’ Old Town, a UNESCO World Heritage site, is vibrant and pedestrian-friendly

Source 1: Mercer Cost of Living Index 2012 Source 2: Quality of Life index, International Living 2011 Source 3: Environmental Performance Index , Yale Center for Environmental Law and Policy 2012 Source 4: Hip Cities That Think About How They Work’, The International Herald Tribune 2011

FOREIGN DIRECT INVESTMENT FROM ASIAN COUNTRIES

FOREIGN DIRECT INVESTMENT IN LITHUANIA FROM ASIA COUNTRIES

€86 million direct investments, 120 created jobs

THANK YOU FOR ATTENTION!

BUSINESS CO-OPERATION BETWEEN LITHUANIA AND ASIAN COUNTRIES: STRATEGY AND PERSPECTIVES

Vice - Minister Kęstutis Trečiokas The Ministry Of Economy of The Republic of Lithuania

Business Co-operation between Lithuania and Asian Countries: Strategy and Perspectives Kęstutis Trečiokas Vice minister of Economy

Lithuania: in the Center of Europe Size: 65,300 sq. km1

Population: 2.98 million

Capital: Vilnius

Official language: Lithuanian (One of the oldest languages in the world, originating from Sanskrit)

Dominant foreign languages:

English, Russian, German, Polish

Currency:

Lithuanian Litas (LTL) Pegged to EUR since 2002 1 EUR/3.45 LTL 1 USD/0.7339 EUR4

1 USD/2.5341 LTL4

From command economy to free market in 20 yrs.

§  21rd freest economy in the World2

§  17th in the ease of doing business3

§  16th in the overall attractiveness for FDI in the World5

Source 1: Statistics Lithuania Source 2: Heritage Foundation, Economic Freedom Index, 2014. Index measurements: Rule of Law, Limited Government, Regulatory Efficiency, and Open Markets Source 3: World Bank Doing Business Index,2014. The index looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle Source 4: bank of Lithuania, 4 February 2013 Source 5: The Baseline Profitability Index , 2013. Index measures: asset growth, preservation of value, and repatriation of capital

Key Milestones

o  Key Milestones

EU Presidency

EU and NATO Membership

OSCE Chairmanship

Goal to join the Eurozone

1990 2001 2002 2004 2007 2009 2011 2012 2013 2015

Lithuania regained Independence

WTO Membership

Investment Grade Ratings from Moody’s, S&P and Fitch

Schengen Area Membership

Lithuania’s Millennium Celebration

European Basketball Championship

A Growing Economy Real GDP growth rate in Selected Economies 2012-2013

Source: Eurostat

-8

-6

-4

-2

0

2

4

6

2012

2013

The Lithuanian Economy Main Characteristics

o  Export Oriented Growth o  Technologically Advanced & Hi-Tech Oriented o  High Skilled Talent Pool o  Entrepreneurial Culture o  Incentives for R&D & Investment

Recent Achievements

o  17th in the ease of doing business1

o  21st freest economy in the World 2

o  1st in the overall attractiveness for FDI in the Baltic states and 2nd in Europe for expected investment returns3

o  9th Best Country for Business in Eastern Europe and Central Asia4

Source 1: World Bank Doing Business Report, 2014 Source 2: Heritage Foundation, Economic Freedom Index, 2014 Source 3: The Baseline Profitability Index , 2014 Source 4: Best Countries for Business By Bloomberg Rankings, 2014

Lithuania’s merchandise exports to Asia, million EUR

332

666 758

695

934

655

825

1,102

1,346

1,665

00

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: Statistics Lithuania

Areas for cooperation between Lithuania and Asia

o  Laser industry

o  Biotechnology

o  Wood-processing industry

o  Processed food

o  Construction sector

o  Machinery and electronics

o  Transport and logistics

Asia's FDI in Lithuania, million EUR

16.03

40.21 43.3

76.59

149.39 154.33

201.14

246.99 243.29

215.38

0

50

100

150

200

250

300

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: Statistics Lithuania

Thank You!

DOING BUSINESS WITH JAPAN

Amb. Kazuko Shiraishi - Japan

June 6, 2014 Asian Business Forum

Kazuko Shiraishi, Ambassador of Japan to Lithuania

1.   Recent Economic Situa8on in Japan

2.   Trade and Investment between Lithuania and Japan

3.   Success Stories

4.   Key Factors for Doing Business with Japan

5.   Contacts Informa8on

Contents

Ø Japan is seeking to get rid of deflaSon and, at the same Sme, to steadily reduce government debt, while we are faced with a unique challenge—a society aging at an unprecedented rate, with a consequent reducSon in the naSon’s work force. Ø To overcome these challenges, Prime Minister Shinzo Abe has taken an iniSaSve of a decisive economic strategy consisSng of three pillars, dubbed “the three arrows”. These three arrows consist of aggressive monetary policy, flexible fiscal policy and structural reform of the economy.

Abenomics

8,830

15,627

12,445

16,291

14,485

8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000

36

Abenomics : Effectiveness of the two arrows GDP Growth Rate

ConsumpSon Capital Investment (nominal terms)

July-‐September 2012 January-‐March 2013 April -‐ June 2013 July-‐September 2012 October-‐December 2013

Minus 3.1% Plus 4.8% Plus 3.9% Plus 1.1% Plus 0.7%

July-‐September 2012 April-‐June 2013

Minus 1.0% Plus 1.7% (ContribuSon of final consumpSon expenditures by

households (in real terms) of GDP)

July-‐September 2012 April-‐June 2013 October-‐December 2013

Minus 1.0% Plus 0.1% Plus 0.7% (Change from previous quarter and these numbers are annual

rates)

(real terms)

The dissoluSon of the Lower House (2012/11/16)

2012/11/15

2013/5/22

2013/12/30

2013/6/13

Change in Nikkei Sｔock Average 2014/5/1

Went up about 64%

January-‐March 2014

Plus 1.5%

37

Target of the third arrow, “Growth Strategy” The Third Arrow

The First Arrow The Second Arrow

The New Growth Strategy: Realize a 2% real GDP growth rate on

average over 10 years

1.  PromoSng private investment based on bold regulatory & structural reform

2.  Maximizing uSlizaSon of human resources of women and elderly

3.  CreaSng new growth industries and overseas markets

Bold monetary policy: Ending Defla8on

Flexible fiscal policy: S8mula8ng the economy

Copyright (C) 2014 JETRO. All rights reserved.

India

China

Korea

Japan

AUS・NZ

Peru

Chile

Canada Mexico

EU

Regional Comprehensive Economic

Partnership（RCEP） Trans Pacific Partnership （TPP）

U.S.

Note：Made by JETRO from various materials

※Among ASEAN: Singapore, Malaysia, Vietnam, Brunei par8cipates in TPP nego8a8ons

Japan-‐EU・EPA

ASEAN

Acceleration of FTAs: TPP, RCEP, Japan-EU EPA

Japan-Australia EPA

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2007 2008 2009 2010 2011 2012 2013

Furniture OpScal instruments TexSle Dairy products Tabacco Fish and crustaceans Processed food Organic chemicals Others

+33%

(thousad EUR)

Export from Lithuania to Japan

+44%

+31%

Japanese companies investing Lithuania

Success Story 1 Windows & Doors Producer

Medical Equipments Producer

Success Story 2

TexSle Producer

Success Story 3: Mangalica

"Mangalica Pig" -‐ Hungarian eatable naSonal treasure

Key Factors

1.   High Quality (Technique, Design, Safety etc.)

2.   Bland Image

3.   Pa8ence

Contacts Information

Embassy of Japan in Lithuania

POLICY ON COMMERCIAL AND TRADE POTENTIAL BETWEEN LITHUANIA AND INDONESIA

Mrs. Ima Siti Fatimah, Trade Attache Embassy of Indonesia, Copenhagen

DOING BUSINESS WITH DELHI: GREAT POTENTIAL FOR ALL

Mr. Vijay Mehta, President Indo-Polish Chamber of Commerce, Delhi

SESSION II ASIAN BUSINESS FORUM

THAILAND: ECONOMY, POTENTIAL & OPPORTUNITIES Ms. Ketsuda Supradit, The Minister of Economy And Finance for U.K. And Europe The Royal Thai Embassy In London

INVESTMENT OPPORTUNITIES IN INDONESIA

Mr. J. S. Meyer Siburian, Head of Indonesia Investment Promotion Center (IIPC), London

LITHUANIA – ASIA: BUSINESS PARTNERSHIP OUTLOOK

Mr. Aleksandr Izgorodin, Analyst of Economic And Finance, Lithuanian Confederation of Industrialists

Aleksandr Izgorodin Analyst

Lithuanian Confederation of Industrialists

LITHUANIA – ASIA

BUSINESS PARTNERSHIP OUTLOOK

2014-06-06

LPK: MAIN FACTS

•  2105 member companies. 52 business associations 1

•  LPK members generate over 60% of Lithuanian GNP and employ over 30% of Lithuanian workforce

2

• Number one business advocate (lobbyist) in Lithuania (survey of magazine “Veidas”, 2011) 3

•  Strong participation in government and ministry working groups, Tripartite Council, etc.

4

• More than 30 business missions to more than 40 countries since 2000 5

• One of the most quotable organizations in Lithuania 6

LPK: THE VOICE OF BUSINESS IN LITHUANIA

p  Lithuanian Confederation of Industrialists (LPK) is the biggest business organization in Lithuania, established in 1989. LPK is the business voice in Lithuania.

p  LPK is a member of: n  International Organization of Employers (151 employer organizations

from 144 countries all over the world); n  BUSINESSEUROPE (main horizontal business organization at EU level.

41 member organizations from 35 countries. 20 million companies); n  International Congress of Industrialists and Entrepreneurs.

LITHUANIAN EXPORT IS POORLY DIVERSIFIED

10% 14%

12% 7% 11%

9% 9% 9% 8%

9%

74% 68% 66% 68%

63% 67% 64% 64% 63% 60%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Lithuanian export structure, 2013

EU

OTHER

CIS

160

Source: Lithuanian Statistics Department

LITHUANIAN TRADE BALANCE IS NEGATIVE

305

121.7

165.35

0

50

100

150

200

250

300

350

China Japan ASEAN

Export, mln. Lt, 2013

1951.7

88.2 184

0

500

1000

1500

2000

2500

China Japan ASEAN

Import, mln. Lt, 2013


LITHUANIAN EXPORT TO ASIA ACCOUNTS FOR 1,21% OF TOTAL EXPORT

0.63

0.25

0.17

0.05 0.04 0.03 0.02 0.02 0.01 0.00 0.00 0.00 0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

Export structure, 2013, %


LITHUANIAN EXPORT IS 40 % ABOVE PRE-CRISIS LEVEL, BUT EXPORT GROTH IS DIMINISHING

Export – Overall CIS

EU (without Latvia and Estonia)

Latvia and Estonia

Other countries

Food products -7,2 11,1 -0,5 15,8 -37,0

Chemical products, plastics -17,6 0,5 -17,6 -0,4 -43,0

Wood products and furniture 16,1 10,6 8,9 26,9 69,4

Textile and leather 10,1 -12,7 11,2 -6,7 25,2

Metals and electric mashines 11,8 -11,3 12,6 -26,4 86,3

Transportation vehicles -23,4 -12,6 -30,7 -1,3 66,8

Other 13,7 9,6 13,3 6,2 21,1

Export - Overall -1,4 3,1 -0,3 6,2 -13,8

Source:

New business opportunities for Lithuanian products in Asia:

Malaysia

Kazakhstan

China

LITHUANIA – MALAYSIA

LITHUANIAN – MALAYSIAN BUSINESS COUNCIL

p  Lithuanian – Malaysian business council was established in March 2013 with the provision of LPK

p  Paulius Kunčinas is the president of this council – a graduate of Oxford University p  He currently is the head of “Oxford Business Group”, which is a consultancy and publishing

company based in Great Britain

p  Paulius constantly monitors economic, business and political movement in Mongolia, China, India, Indonesia, Malaysia, Thailand, Phillipines, Vietnam and Myanmar.

The counicil obojective is to encourage Lithuanian – Malaysian economic – trade realationships. September 2013 – visit of Lithuanian delegation to Malaysia led by Minister of Economy Evaldas Gustas organized. During the visit meetings with Malaysian government and business officials were held – overall 23 meetings.

LITHUANIAN – MALAYSIAN BUSINESS COUNCIL

Although Lithuania and Malaysia are small countries in the context of EU and Southern Asia their export accounts for 84% and 130% of GDP respectively.

Both countries are pursuing to extend the levels of foreign trade diversification Lithuania is targeting the Southeastern Asian markets, whereas Malaysian businesses are

concentrating on EU and CIS trade routes.

Despite similar strategic objectives Lithuanian and Malaysian businesses do not compete in most of world wide markets.

MALAYSIA IS PREPARING TO BECOME A DEVELOPED COUNTRY UNTIL YEAR 2020

A stable government, orientated to new business projects Supports high added value business Encourages foreign direct investment

In 2012 GDP growth reached 5,6% - an all time high

Consumption grows 7,2% annually Unemployment and inflation are as low as 3% and 1,7% respectively

Stable interest rates

From the year 2015 Southeastern Asia will start to act similary to EU Tariff and other trade bariers will be abolished

A unified Southeastern Asian product and service market will be introduced Malaysia is a good base for entering the Southeastern Asian counties

MALAYSIA IN THE DOING BUSINESS 2014 RATING TOOK 6TH PLACE

11

39

75

6

28

68

56

15 17

44

17 16

43

21

35

1 4

36

5

30

42

6

0

10

20

30

40

50

60

70

80

Lithuanian and Malaysian comparison. Doing Business 2014 components.

Lithuania

Malaysia

ACCORDING TO THE WORLD WIDE BOING BUSINESS RATING MALAYSIA IS TAKING THE 6TH PLACE.

Source: „Doing Business 2014”

1

12 18

79

99

120

133 138

163

1 6

18

59

99

120

137

108

159

0

20

40

60

80

100

120

140

160

180

Singapore Malaysia Thailand Brunei Vietnam Indonesia Cambodia Phillipines Laos PDR

Doing Business 2014 rating

2013

2014

LITHUANIA-MALAYSIA BUSINESS OPPORTUNITIES

p  Medicine p  Construction (energy-efficient housing) p  Renewable energy p  Export – dairy, chocolate, beverages p  ICT, laser industry p  Joint venture companies in Lithuania, production in Lithuania with

the goal to export into ASEAN region

LITHUANIA - KAZAKHSTAN

KAZAKHSTAN IS THE DRIVETRAIN OF EXPORT TO THE CIS REGION

Russia Ukraine Belarus Kazakhstan

CIS -‐overall

63 % of all Lithuanian export to CIS countries

11 % of all Lithuanian export to CIS countries

16% of all Lithuanian export to CIS countries

6% of all Lithuanian export to CIS countries

Food products 11,1 -‐5,7 -‐27,4 138,2 11,1

•  Meat and meat products -‐21,2 -‐ -‐93,5 -‐ -‐23,5

•  Milk and milk products 12,5 -‐15,1 -‐33,3 73,3 11,5

Chemicals and plasScs 54,8 -‐44,9 -‐5,6 -‐66,5 0,5

Wood products and furniture 9,6 -‐9,4 22,3 118,1 10,6

TeSle and leather -‐21 -‐11,8 -‐8,9 -‐1,5 -‐12,7

Metals, electrical pruducSon 3,6 -‐53,5 -‐16,9 -‐37,4 -‐11,3

TransportaSon vechicles -‐33,3 -‐27,1 -‐15,4 1143,3 -‐12,6

Other 16,3 -‐26,2 -‐1,7 123,9 9,6

Export -‐ Overall 12 -‐36,8 -‐9,4 42,1 3,1

WHY KAZAKHSTAN?

p  Kazakhstan market has good potential: 1.  Big market – 16,7 mln. citizens 2.  Forecasted GDP growth 2014-2018:

5,6%; 3.  Low level of unemployment and

growing purshasing power; 4.  Kazakhstan has reached 21 place on

Doing Business rating; 5.  Cultural business aspects are

familiar.

62.77

16.43

10.92

5.68

1.15 0.99 0.86 0.4 0.36 0.33 0.1 0

10

20

30

40

50

60

70

Export to CIS, 2013, %


THE MOST PERSPECTIVE INDUSTRIES FOR EXPORT TO KAZAKCHSTAN

1.  Food industry (milk products, “Halal” food products) 2.  Alcochol drink industry 3.  Machine industry 4.  Wood industry 5.  Metal industry 6.  Electrical industry 7.  Optical device sector 8.  Education services 9.  Transportation and logistics services

p  Kazakhstan is a leading economy in the Central Asia and positions itself as a bridge from China to Europe

p  The most perspective sectors of Kazakhstan product export to Lithuania are the following: oil industry, textile industry (cotton), metal industry (iron and steel, cooper), sulphur extraction, transportation and logistic services.

LITHUANIA - CHINA

ESTABLISHMENT OF LITHUANIA-CHINA BUSINESS COUNCIL (1)

p  The intention of Lithuanian companies to diversify trade and

strengthen economic relations with developing markets has increased significantly. The interest in strengthening economic relations with China is particularly high among Lithuanian companies

p  The survey of 150 biggest Lithuanian manufacturing companies conducted by LPK shows that in 2014 one in five (18,7%) Lithuanian manufacturers intent to strengthen economic relationship with China

p  Lithuania-China economic relations are insufficiently developed so far – for example, the share of Lithuanian export to China in 2013 accounted for only 0,34% of total Lithuanian export and stood at LTL 304 mln.

p  However, there is a strong will on both sides to significantly strengthen bilateral economic relations between Lithuanian and China


p  Lithuanian Confederation of Industrialists has a significant experience

in operating of various business councils. Thus, in order to strengthen and develop economic relations with China, the Lithuania-China Business Council (Council) under the auspices of Lithuanian Confederation of Industrialists has been established

p  The establishment of the Council has been actively coordinated between Lithuanian Confederation of Industrialists, Government of Republic of Lithuania and Embassy of People’s Republic of China in Lithuania

p  The Council will seek to contribute significantly to strengthening of bilateral Lithuania-China economic relations, both in terms of bilateral trade and attracting of FDI from China


p  The biggest potential for Chinese FDI in Lithuania n  Extraction of natural resources n  Public and private infrastructure projects n  Investments into already operating companies (establishment of

joint-ventures, acquisitions of the companies) n  Investments in order to increase Chinese exports (establishment

of new companies, production lines, increases in operating capacity) using Lithuania as a production hub and exploiting the advantages of “made in EU brand” as well as inwards processing procedures (customs and tariffs are not applied)

p  Lithuanian export opportunities: n  Ecological and natural food products; n  High-added value, niche market products; n  ICT; n  Wood and timber.

ACHIEVEMENTS SINCE ESTABLISHMENT OF THE COUNCIL

p  The Council has organized a business mission to Ningbo region, which will

accompany the Minister of Economy of Lithuania during his visit to China p  The Council has met with 4 official and business delegations from China

from Tianjing, Ningbo, Hangzhou, Xinjiang regions p  Business trip of Chairman of Lithuania-China Business Council has been

organized. Connections with Chinese stakeholders established p  The Council, together with Enterprise Lithuania, has organized a seminar

on increase of Lithuania-China bilateral trade for Lithuanian companies p  The Council is in close and constant contact with Lithuanian government,

Lithuanian embassy in China, Chinese embassy in Lithuania p  Internet site of the Council is being created

CONTACT INFORMATION

Aleksandr Izgorodin Analyst Lithuanian Confederation of Industrialists T.: +370 698 74451 Email: [email protected] www.lpk.lt

Thank you for your attention!

WHAT YOU CAN LEARN FROM INDIAN BUSINESSES IN EUROPE

Mr. Jawahar Jyoti Singh, President of Indo Polish Chamber of Commerce & Industry, Poland

SESSION III ASIAN BUSINESS FORUM

Logistics Between the Regions: a Challenge Requiring a Long Term Strategy

DISCUSSION I

GLOBAL & REGIONAL DISTRIBUTION NETWORK

Network of the Southern part of the BalSc Sea region serves 2.3% of Asia -‐ Europe trade segment.

INTERNATIONAL TRADE VOLUME OF EAST-‐WEST TRANSPORT CORRIDOR (552 bln. €)

STRATEGIC LOCATION

340 mn WESTERN EUROPEAN POPULATION

250 mn CIS POPULATION

110 mn BALTIC SEA REGION

POPULATION

Lithuania is a strategic loca8on with very business-‐friendly dynamics. The country offers easy and rapid access to three important markets: the Bal8c Sea Region, the European Union (EU) and the Commonwealth of Independent S tates (C IS ) . Th i s amounts to approximately 750 million consumers on Lithuania’s doorstep.

Developed solu5on: AB Lietuvos paštas acts as a transit postal operator for delivery of parcels from China to EU / CIS countries.

E-‐COMMERCE

TOMAS KERŠIS Commerce Department Director Lithuanian railways

LITHUANIAN RAILWAYS -‐ YOUR PARTNER FOR LOGISTICS

LITHUANIAN RAILWAYS

•  Track gauges – 1520 mm and 1435 mm •  Number of stations – 108 •  Representatives of JSC Lithuanian Railways work in China, Russia and Belarus •  Number of employees – 10.600 •  100% of the company's shares belong to the State

•  Railway infrastructure manager

•  150-‐year experience in advanced complex logistic solutions Freight carrier, m t

2008 55

2009 42,7

2010 48,1

2011 52,3

2012 49,4

2013 48,03

Passenger carrier, m pass.

2008 5,1

2009 4,4

2010 4,4

2011 4,7

2012 4,8

2013 4,9

FREIGHT VOLUME

86%

5% 7% 2%

Railway freight transport in Lithuania by region

Eastern European countries

Western European countries

The BalSc States

Asian region

113,317

15,088

2,322 0

20,000

40,000

60,000

80,000

100,000

120,000

2009 2010 2011

TOP10 in EUROPE

WHY LITHUANIA?

MODERN AND EFFICIENT TRANSPORT AND

LOGISTICS SOLUTIONS

PORT OF KLAIPEDA •  The port fully operates 24 hours a day, 7 days a week, all year round

•  The annual port cargo handling capacity is up to 60 million tons

•  Biggest container terminals in Baltic states and MSC hub

•  Ice-‐free port

OK

EU AND CIS BORDER CROSSING IN 30 MINUTES

Kena

Station is fully modernized and developed: tracks for long trains, IT systems for declaration and control of wagons, automated switch system, commercial control system, electronic dynamic scales, radiation meter, X-‐ray and other modern equipment

All implemented measures let perform border crossing procedures fast and precisely

RAIL BALTICA

Latvia

Estonia

Lithuania

Belarus

Ukraine

Russia

Finland

Poland

Czechia Slovakia

Hungary Austria

Germany

Track gauge 1435 mm

Rail Baltica

EU member states

Non EU member states

Track gauge 1520/(1524) mm

Helsinki

Warsaw Track gauge 1435 mm (reconstruction)

Rail Baltica II (project)

Track gauge 1435 mm (building a new line)

Riga

Kaunas

Tallinn

CONTAINER TRAINS NETWORK

SUN TRAIN

The main purpose of intermodal train “SUN train” is to establish effective logistic chain between East and West.

VIKING TRAIN Award:

“Best intermodal project”

Istanbul – Kapi Kule (~220 km)/Svilengrad izt. fr. – Ruse fr. (406 km)/Giurgiu Nord – Dornesti (605 km)/Vadul Siret – Berezhest (852 km)/Slovechno – Gudogai (554 km)/Kena – Draugyste (427 km)-‐ Scandinavia

8 Day

ŠEŠTOKAI RAILWAY STATION AND TRAIN – ŠEŠTOKAI EXPRESS

•  Reloading cargo from standart (1435 mm) to wide (1520 mm) gauge railway

•  Bulk cargo terminal project

•  ŠEŠTOKAI EXPRESS – intermodal train from Poland to Russia

Intermodal train – ,,Šeštokai Express”

Route: Warsaw – Sestokai – Minsk –

Sestokai

Distance: 1126 km

Transit 8me: 3 days

State partners: Russia, Belarus, Lithuania, Poland

Operator: Hupac Intermodal SA, Intermodal

Express

MERCURY TRAIN

•  Currently, container train “Mercury” is operating on the route Klaipėda-‐Moscow twice a month.

BALTIC WIND

•  Travel time -‐ 5 days. •  Main purpose of the “BALTIC WIND“ train is to provide regular shipment service in containers to various clients from Lithuania to Central Asia and broaden the possibilities of Russian Freight passing from one country to another through a third country. •  Going further the frequency of the train departure is planned at 2-‐3 times per month.

On 26 September 2013 hirst train with automotive components departed from the Paneriai station of the Lithuanian railways to the Kustanay station of the Kazakhstan railways.

CONTAINER TRAINS NETWORK

TRAIN NAME 2012 2013 CHANGE, %

Viking train 49.178 38.173 -‐22,4

Vilnius shuple 3.986 10.697 +168,4

Šeštokai Express 1 034 2 139 +106,9

Mercury train 361 1.633 +352,4

Saulė 354 1.188 +235,5

Bal8ka-‐Tranzit 387 503 +30,0

Bal8c Wind -‐ 428 New Project

•  “Nemunas” project is a contrailer train by which trucks with semitrailers are transported •  Routes:

•  Kaunas (Palemonas) – Vilnius (Paneriai) – Minsk (Koliadichi) – Vilnius (Paneriai) – Kaunas (Palemonas).

“NEMUNAS” PROJECT IS AN EXCELLENT SOLUTION FOR ROAD TRANSPORT – THE WAY TO AVOID TRAFFIC JAMS AT STATE BORDER

CROSSING POINTS •  One of the problems in organizing transportation by roads between Lithuania and Belarus is long queues at the state border.

•  To solve this problem JSC Lithuanian Railways together with its partners offers new service called “Nemunas” contrailer train.

ALTERNATIVE

“NEMUNAS” contrailer train

Time of delivery up to 10 hr

Length of train: 30 trucks with semitrailers

Passenger wagon for drivers

Thursday morning – from Minsk to Vilnius/Kaunas. Friday evening – from Kaunas/Vilnius back to

Belarus

PUBLIC LOGISTIC CENTERS

PUBLIC LOGISTIC CENTERS

VILNIUS PUBLIC LOGISTIC CENTER

KAUNAS PUBLIC LOGISTIC CENTRE

KLAIPĖDA PUBLIC LOGISTIC CENTER

Storage – 1 500 TEU Storage – 550 TEU Storage – 1200 TEU

Loading area – 600 m (1st stage) and 1000 m (2d stage). Loading area – 4 x 442 m 4 railways 1000 meters length each

Loading capacity – more than 100.000 TEU per year

Loading capacity –50.000 TEU per year

Loading capacity –80.000 TEU per year

Will be hinished in 2014 Will be hinished in 2014 Plan to start third stage intermodal terminal is in 2015

PUBLIC LOGISTIC CENTERS (VILNIUS)

Finished 46%

TOMAS KERŠIS Commerce Department Director Lithuanian Railways

LET‘S DO LOGISTICS TOGETHER

SESSION IV ASIAN BUSINESS FORUM

Lithuanian Business Sectors Bringing the Most Value

DISCUSSION II

Asian Countries in Lithuania: the Specifics of Doing Business in Lithuania

DISCUSSION III

The Specifics of doing business in Lithuania

Dovile Burgiene LAWIN Lideika, Petrauskas, Valiūnas ir partneriai

Head of the Lithuania Corporate and M&A practice group Partner

T. +370 52681826 M. +370 68677649

E. [email protected]

Vilnius, 6 June 2014

Doing Business / World Bank / 2014

216

Rank % distance to frontier * Change in Rank

2014

17 75.79

8

2013 25 73.54 2.25

/  Doing business provides objective measures of business regulations and their enforcement across 189 economies.

Overall ease of doing business

Starting a business

* Distance to frontier – distance of each economy to the "frontier," which represents the highest performance observed on each of the topics across all economies included in Doing Business. An economy’s distance to frontier is indicated on a scale from 0 to 100, where 0 represents the lowest performance and 100 the frontier.

Rank % distance to frontier * Change in Rank

2014

11 93.23 94

2013 105 83.47 9.76

Corporate presence Most popular type of company – private limited liability company, in Lithuanian – uždaroji akcinė bendrovė (UAB)

/  Incorporation: •  Time – 3 business days as of signing of incorporation documents •  Expenses:

o  LTL 10,000 (EUR 2,900) – minimum share capital o  LTL 1,000 (EUR 290) – notarization and registration costs

•  VAT payer registration – 3 business days, free of charge

/  Shareholders: •  1 – 249 •  Lithuanian or foreign individuals or legal entities •  Limited liability except when company cannot discharge its obligations due to unfair actions of shareholders

/  Management: •  Must to have 1 CEO – to be employed or seconded •  Board of Directors – not compulsory

/  Accountancy: •  Must to have accountant – employee or service provider •  Annual financial reporting to local company register, tax declarations •  Audit of financial accounts – if required

/  Public trading in securities prohibited. If preferable – choose another company type – public limited liability company (in Lithuanian – akcinė bendrovė)

217

Employment Employment contracts /  Generally – open-ended contracts

/  Termination at no fault of employee (economic, technological reasons, etc.): •  notice period 2 – 4 months •  severance payment 1 – 6 monthly salaries

/  Alternative – temporary employment through employment agencies

Working time /  Regular – 40 working hours per week

/  Overtime: •  in exceptional cases •  not more than 4 hours in 2 consequent days and 120 hours per year •  pay (for overtime and night work) – minimum 1.5 times salary

/  Alternative – shift work under more flexible aggregate time scheme, avoidance for paying extra

/  Vacation: minimum paid 28-35 calendar days per year

Wages / Minimum monthly salary gross – LTL 1,000 (~ EUR 290)

/ Average monthly salary gross – LTL 2,305 (~ EUR 668)

218

Immigration EU citizens /  Schengen area – generally EU citizens enjoy freedom of movement

and work permits are not required

/  Formal requirement to declare place of residence when stay in Lithuania exceeds 3 months within 180 days

Non-EU citizens

/  Generally no visa if stay does not exceed 3 months within period of 6 months (subject to international treaties)

/  If longer stay – temporary residence permit or national long-term visa required (issues Lithuanian consulate or immigration office in Lithuania)

/  May be subject to work permits (issues State Labor Exchange). But many exceptions may apply, for example:

•  No work permit required if employee works in Lithuanian subsidiary / branch / representative office of foreign company up to 3 years, provided such professional has minimum 1 year’s work experience in foreign group company

•  No work permit may be required for highly-qualified employees provided their salary amounts to not less than 2 state average salaries gross (currently, LTL 4,610 (~ EUR 1,335) and their university diplomas are recognized by respective recognition authority in Lithuania

219

MAIN TAXES

220

Corporate income tax – 15% /  Possibility to transfer tax losses

between group companies /  CIT incentive for investments into

s u b s t a n t i a l t e c h n o l o g i c a l improvements

/  Cost related to R&D may be deducted 3 times from income

VAT – 21% /  Ful l deduct ion of input VAT

available as long as all income is earned from VAT taxable activities

/  Possibility to refund VAT within ~1 month from submission of request to refund VAT

Personal income tax – 15%

Dividends 0% – 15%

Employment related taxes 30,98% – 32,60% - social insurance 9% - health insurance 0,2 % - guarantee fund

Real estate tax 0.3 % – 3% Imposed on real estate (except for land) located in Lithuania and owned by Lithuanian or foreign companies

Subsidies EU funding /  Investors eligible for funding – foreign investors interested in locating

business in Lithuania as well as foreign companies already operating on Lithuanian market but eager to further expand

/  Distribution of EU support for period 2014 – 2020 has not yet started (EU Commission has to approve the Operational Programme for Lithuania)

/  Support for big companies in current period will be reduced and generally will be available in sector of research and development (R&D) and innovation (Smart Specialisation)

/  Support to foreign investors is planned under the measure – SMARTINVEST LT+ (only project is available)

•  Aid intensity – up to 80% (small and medium companies) and up to 65% (big companies)

•  Maximum support – up to LTL 10 million (~EUR 2,9 million)

National subsidies

/  Lithuania is currently preparing national measures, designed for foreign investors, these would be available only at the end of this year (4th quarter)

/  Currently there is so called “transitional period” - no actual measures are available, because the funds from the programming period of 2007-2013 have already been used and the funds under 2014-2020 period are still not available

221