46
Trade and Investment in Hungary and new States in the European Union Istvan A. MOLNAR Investment and Trade Commissioner Hungarian Consuate General Los Angeles, CA

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Page 1: Trade and Investment in Hungary and new States in the

Trade and Investment in Hungary

and new States in the European Union

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Hungary

Land 35919 sq miles - like Indiana

Population 101 millionndash like Michigan

GDPcapita at PPP USD 18840 (2009) ndash half of Florida

(wiiw EIU)GDP 199 b USD - like Connecticut

Arizona (World Bank)

A market of 250 million people within 1000 km

1000 km

EU-member since 2004

GDP growth 2010 +1 (2009 -63)

Export growth 2010 +16 (2009-91)

Industrial production +85 (2009 -159)

Average wage euro 750 (H1 2010)Unemployment rate 2010 113 (2009 101)

Average inflation rate 2010 48(2009 42)

GDP

Output

Inflation

Employment and wages

EU

Improving economic performance in 2010

Source GKI (Economic Research Institute) February 2010

Exchange rate 1 euro= 27149 HUF

2010 2011 2012 2013

Market growth

GDP per head (USD at PPP)

19 100 19 870 20 930 22 160

GDP growth () 03 25 35 33

Stability

Inflation () 44 30 24 20

Budget balance ( of GDP)

-39 -32 -30 -29

Current account balance (mill USD) -7158 -2072 -2655 -3426

Exchange rate (USD) 2201 2289 2275 2258

Competitiveness

Average wages (monthly USD) 9291 9337 9913 10525

FDI inflow(billion USD)

21 42 47 47

Recovery in 2011

Source Economist Intelligence Unit August 2010

Investors continue to see Central-Eastern Europe as top investmentdestination

Ernst and Youngrsquos 2010 European Attractiveness Survey

CEE confronted the crisis situation robustly and regained a top-three ranking as most attractive region

In 2009 Hungary was 6 in FDI job creation and 13 in the number of FDI projects in Europe by European Investment Monitor

Investors continue to see Central-Eastern Europe as top investment destination

Ernst and Youngrsquos 2010 European Attractiveness Survey

Cities in CEE will see the most expansion by 2015

Source European Cities Monitor 2010 Cushmand and Wakefield

Growing Stock of Foreign Direct Investments in Hungary(million EUR)

Source National Bank of Hungary 2010

New methodology

00

100000

200000

300000

400000

500000

600000

700000

800000

199519961997199819992000200120022003200420052006200720082009 2010

Q2

Other capital

Equity and

reinvested

earnings

High FDI stockcapita (EUR 2009)

Source wiiw 2010

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

ErnstampYoung trust of foreign investors already established in Hungary

Established investors considering developing activities in Hungary

5046

4

Yes

No

Cant say

Half of multinational companies are planning to expand

Source Ernst and Young CEE Attractiveness Survey 2009

Eighty percent of German investors would chose to locate in Hungary

German-Hungarian Industry and Trade Chamber Economic Trend Report Hungary 2010

FDI stock by country of origin 2008

Major investors Germany Austria Holland (Europe 75)

FDI stock by sector 2008

Manufacturing Services

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

At the cross roads of 4 main European transportation corridors

Extensive road and railway transportation network

Highly developed logistics and telecommunications infrastructure

Excellent access to key markets

CushmanampWakefield evaluatedthe European logistics sector

Hungary ranks 3rd in the keycost-benefit factors

CEE is a much sought after logistics and distributionlocation

Hungary offers a plentiful supply of land and availableproperties

Source CushmanampWakefield European Distribution Report 2008

Hungary 3rd in European Distribution Report

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 2: Trade and Investment in Hungary and new States in the

Hungary

Land 35919 sq miles - like Indiana

Population 101 millionndash like Michigan

GDPcapita at PPP USD 18840 (2009) ndash half of Florida

(wiiw EIU)GDP 199 b USD - like Connecticut

Arizona (World Bank)

A market of 250 million people within 1000 km

1000 km

EU-member since 2004

GDP growth 2010 +1 (2009 -63)

Export growth 2010 +16 (2009-91)

Industrial production +85 (2009 -159)

Average wage euro 750 (H1 2010)Unemployment rate 2010 113 (2009 101)

Average inflation rate 2010 48(2009 42)

GDP

Output

Inflation

Employment and wages

EU

Improving economic performance in 2010

Source GKI (Economic Research Institute) February 2010

Exchange rate 1 euro= 27149 HUF

2010 2011 2012 2013

Market growth

GDP per head (USD at PPP)

19 100 19 870 20 930 22 160

GDP growth () 03 25 35 33

Stability

Inflation () 44 30 24 20

Budget balance ( of GDP)

-39 -32 -30 -29

Current account balance (mill USD) -7158 -2072 -2655 -3426

Exchange rate (USD) 2201 2289 2275 2258

Competitiveness

Average wages (monthly USD) 9291 9337 9913 10525

FDI inflow(billion USD)

21 42 47 47

Recovery in 2011

Source Economist Intelligence Unit August 2010

Investors continue to see Central-Eastern Europe as top investmentdestination

Ernst and Youngrsquos 2010 European Attractiveness Survey

CEE confronted the crisis situation robustly and regained a top-three ranking as most attractive region

In 2009 Hungary was 6 in FDI job creation and 13 in the number of FDI projects in Europe by European Investment Monitor

Investors continue to see Central-Eastern Europe as top investment destination

Ernst and Youngrsquos 2010 European Attractiveness Survey

Cities in CEE will see the most expansion by 2015

Source European Cities Monitor 2010 Cushmand and Wakefield

Growing Stock of Foreign Direct Investments in Hungary(million EUR)

Source National Bank of Hungary 2010

New methodology

00

100000

200000

300000

400000

500000

600000

700000

800000

199519961997199819992000200120022003200420052006200720082009 2010

Q2

Other capital

Equity and

reinvested

earnings

High FDI stockcapita (EUR 2009)

Source wiiw 2010

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

ErnstampYoung trust of foreign investors already established in Hungary

Established investors considering developing activities in Hungary

5046

4

Yes

No

Cant say

Half of multinational companies are planning to expand

Source Ernst and Young CEE Attractiveness Survey 2009

Eighty percent of German investors would chose to locate in Hungary

German-Hungarian Industry and Trade Chamber Economic Trend Report Hungary 2010

FDI stock by country of origin 2008

Major investors Germany Austria Holland (Europe 75)

FDI stock by sector 2008

Manufacturing Services

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

At the cross roads of 4 main European transportation corridors

Extensive road and railway transportation network

Highly developed logistics and telecommunications infrastructure

Excellent access to key markets

CushmanampWakefield evaluatedthe European logistics sector

Hungary ranks 3rd in the keycost-benefit factors

CEE is a much sought after logistics and distributionlocation

Hungary offers a plentiful supply of land and availableproperties

Source CushmanampWakefield European Distribution Report 2008

Hungary 3rd in European Distribution Report

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 3: Trade and Investment in Hungary and new States in the

EU-member since 2004

GDP growth 2010 +1 (2009 -63)

Export growth 2010 +16 (2009-91)

Industrial production +85 (2009 -159)

Average wage euro 750 (H1 2010)Unemployment rate 2010 113 (2009 101)

Average inflation rate 2010 48(2009 42)

GDP

Output

Inflation

Employment and wages

EU

Improving economic performance in 2010

Source GKI (Economic Research Institute) February 2010

Exchange rate 1 euro= 27149 HUF

2010 2011 2012 2013

Market growth

GDP per head (USD at PPP)

19 100 19 870 20 930 22 160

GDP growth () 03 25 35 33

Stability

Inflation () 44 30 24 20

Budget balance ( of GDP)

-39 -32 -30 -29

Current account balance (mill USD) -7158 -2072 -2655 -3426

Exchange rate (USD) 2201 2289 2275 2258

Competitiveness

Average wages (monthly USD) 9291 9337 9913 10525

FDI inflow(billion USD)

21 42 47 47

Recovery in 2011

Source Economist Intelligence Unit August 2010

Investors continue to see Central-Eastern Europe as top investmentdestination

Ernst and Youngrsquos 2010 European Attractiveness Survey

CEE confronted the crisis situation robustly and regained a top-three ranking as most attractive region

In 2009 Hungary was 6 in FDI job creation and 13 in the number of FDI projects in Europe by European Investment Monitor

Investors continue to see Central-Eastern Europe as top investment destination

Ernst and Youngrsquos 2010 European Attractiveness Survey

Cities in CEE will see the most expansion by 2015

Source European Cities Monitor 2010 Cushmand and Wakefield

Growing Stock of Foreign Direct Investments in Hungary(million EUR)

Source National Bank of Hungary 2010

New methodology

00

100000

200000

300000

400000

500000

600000

700000

800000

199519961997199819992000200120022003200420052006200720082009 2010

Q2

Other capital

Equity and

reinvested

earnings

High FDI stockcapita (EUR 2009)

Source wiiw 2010

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

ErnstampYoung trust of foreign investors already established in Hungary

Established investors considering developing activities in Hungary

5046

4

Yes

No

Cant say

Half of multinational companies are planning to expand

Source Ernst and Young CEE Attractiveness Survey 2009

Eighty percent of German investors would chose to locate in Hungary

German-Hungarian Industry and Trade Chamber Economic Trend Report Hungary 2010

FDI stock by country of origin 2008

Major investors Germany Austria Holland (Europe 75)

FDI stock by sector 2008

Manufacturing Services

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

At the cross roads of 4 main European transportation corridors

Extensive road and railway transportation network

Highly developed logistics and telecommunications infrastructure

Excellent access to key markets

CushmanampWakefield evaluatedthe European logistics sector

Hungary ranks 3rd in the keycost-benefit factors

CEE is a much sought after logistics and distributionlocation

Hungary offers a plentiful supply of land and availableproperties

Source CushmanampWakefield European Distribution Report 2008

Hungary 3rd in European Distribution Report

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 4: Trade and Investment in Hungary and new States in the

2010 2011 2012 2013

Market growth

GDP per head (USD at PPP)

19 100 19 870 20 930 22 160

GDP growth () 03 25 35 33

Stability

Inflation () 44 30 24 20

Budget balance ( of GDP)

-39 -32 -30 -29

Current account balance (mill USD) -7158 -2072 -2655 -3426

Exchange rate (USD) 2201 2289 2275 2258

Competitiveness

Average wages (monthly USD) 9291 9337 9913 10525

FDI inflow(billion USD)

21 42 47 47

Recovery in 2011

Source Economist Intelligence Unit August 2010

Investors continue to see Central-Eastern Europe as top investmentdestination

Ernst and Youngrsquos 2010 European Attractiveness Survey

CEE confronted the crisis situation robustly and regained a top-three ranking as most attractive region

In 2009 Hungary was 6 in FDI job creation and 13 in the number of FDI projects in Europe by European Investment Monitor

Investors continue to see Central-Eastern Europe as top investment destination

Ernst and Youngrsquos 2010 European Attractiveness Survey

Cities in CEE will see the most expansion by 2015

Source European Cities Monitor 2010 Cushmand and Wakefield

Growing Stock of Foreign Direct Investments in Hungary(million EUR)

Source National Bank of Hungary 2010

New methodology

00

100000

200000

300000

400000

500000

600000

700000

800000

199519961997199819992000200120022003200420052006200720082009 2010

Q2

Other capital

Equity and

reinvested

earnings

High FDI stockcapita (EUR 2009)

Source wiiw 2010

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

ErnstampYoung trust of foreign investors already established in Hungary

Established investors considering developing activities in Hungary

5046

4

Yes

No

Cant say

Half of multinational companies are planning to expand

Source Ernst and Young CEE Attractiveness Survey 2009

Eighty percent of German investors would chose to locate in Hungary

German-Hungarian Industry and Trade Chamber Economic Trend Report Hungary 2010

FDI stock by country of origin 2008

Major investors Germany Austria Holland (Europe 75)

FDI stock by sector 2008

Manufacturing Services

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

At the cross roads of 4 main European transportation corridors

Extensive road and railway transportation network

Highly developed logistics and telecommunications infrastructure

Excellent access to key markets

CushmanampWakefield evaluatedthe European logistics sector

Hungary ranks 3rd in the keycost-benefit factors

CEE is a much sought after logistics and distributionlocation

Hungary offers a plentiful supply of land and availableproperties

Source CushmanampWakefield European Distribution Report 2008

Hungary 3rd in European Distribution Report

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 5: Trade and Investment in Hungary and new States in the

Investors continue to see Central-Eastern Europe as top investmentdestination

Ernst and Youngrsquos 2010 European Attractiveness Survey

CEE confronted the crisis situation robustly and regained a top-three ranking as most attractive region

In 2009 Hungary was 6 in FDI job creation and 13 in the number of FDI projects in Europe by European Investment Monitor

Investors continue to see Central-Eastern Europe as top investment destination

Ernst and Youngrsquos 2010 European Attractiveness Survey

Cities in CEE will see the most expansion by 2015

Source European Cities Monitor 2010 Cushmand and Wakefield

Growing Stock of Foreign Direct Investments in Hungary(million EUR)

Source National Bank of Hungary 2010

New methodology

00

100000

200000

300000

400000

500000

600000

700000

800000

199519961997199819992000200120022003200420052006200720082009 2010

Q2

Other capital

Equity and

reinvested

earnings

High FDI stockcapita (EUR 2009)

Source wiiw 2010

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

ErnstampYoung trust of foreign investors already established in Hungary

Established investors considering developing activities in Hungary

5046

4

Yes

No

Cant say

Half of multinational companies are planning to expand

Source Ernst and Young CEE Attractiveness Survey 2009

Eighty percent of German investors would chose to locate in Hungary

German-Hungarian Industry and Trade Chamber Economic Trend Report Hungary 2010

FDI stock by country of origin 2008

Major investors Germany Austria Holland (Europe 75)

FDI stock by sector 2008

Manufacturing Services

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

At the cross roads of 4 main European transportation corridors

Extensive road and railway transportation network

Highly developed logistics and telecommunications infrastructure

Excellent access to key markets

CushmanampWakefield evaluatedthe European logistics sector

Hungary ranks 3rd in the keycost-benefit factors

CEE is a much sought after logistics and distributionlocation

Hungary offers a plentiful supply of land and availableproperties

Source CushmanampWakefield European Distribution Report 2008

Hungary 3rd in European Distribution Report

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 6: Trade and Investment in Hungary and new States in the

Investors continue to see Central-Eastern Europe as top investment destination

Ernst and Youngrsquos 2010 European Attractiveness Survey

Cities in CEE will see the most expansion by 2015

Source European Cities Monitor 2010 Cushmand and Wakefield

Growing Stock of Foreign Direct Investments in Hungary(million EUR)

Source National Bank of Hungary 2010

New methodology

00

100000

200000

300000

400000

500000

600000

700000

800000

199519961997199819992000200120022003200420052006200720082009 2010

Q2

Other capital

Equity and

reinvested

earnings

High FDI stockcapita (EUR 2009)

Source wiiw 2010

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

ErnstampYoung trust of foreign investors already established in Hungary

Established investors considering developing activities in Hungary

5046

4

Yes

No

Cant say

Half of multinational companies are planning to expand

Source Ernst and Young CEE Attractiveness Survey 2009

Eighty percent of German investors would chose to locate in Hungary

German-Hungarian Industry and Trade Chamber Economic Trend Report Hungary 2010

FDI stock by country of origin 2008

Major investors Germany Austria Holland (Europe 75)

FDI stock by sector 2008

Manufacturing Services

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

At the cross roads of 4 main European transportation corridors

Extensive road and railway transportation network

Highly developed logistics and telecommunications infrastructure

Excellent access to key markets

CushmanampWakefield evaluatedthe European logistics sector

Hungary ranks 3rd in the keycost-benefit factors

CEE is a much sought after logistics and distributionlocation

Hungary offers a plentiful supply of land and availableproperties

Source CushmanampWakefield European Distribution Report 2008

Hungary 3rd in European Distribution Report

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 7: Trade and Investment in Hungary and new States in the

Cities in CEE will see the most expansion by 2015

Source European Cities Monitor 2010 Cushmand and Wakefield

Growing Stock of Foreign Direct Investments in Hungary(million EUR)

Source National Bank of Hungary 2010

New methodology

00

100000

200000

300000

400000

500000

600000

700000

800000

199519961997199819992000200120022003200420052006200720082009 2010

Q2

Other capital

Equity and

reinvested

earnings

High FDI stockcapita (EUR 2009)

Source wiiw 2010

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

ErnstampYoung trust of foreign investors already established in Hungary

Established investors considering developing activities in Hungary

5046

4

Yes

No

Cant say

Half of multinational companies are planning to expand

Source Ernst and Young CEE Attractiveness Survey 2009

Eighty percent of German investors would chose to locate in Hungary

German-Hungarian Industry and Trade Chamber Economic Trend Report Hungary 2010

FDI stock by country of origin 2008

Major investors Germany Austria Holland (Europe 75)

FDI stock by sector 2008

Manufacturing Services

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

At the cross roads of 4 main European transportation corridors

Extensive road and railway transportation network

Highly developed logistics and telecommunications infrastructure

Excellent access to key markets

CushmanampWakefield evaluatedthe European logistics sector

Hungary ranks 3rd in the keycost-benefit factors

CEE is a much sought after logistics and distributionlocation

Hungary offers a plentiful supply of land and availableproperties

Source CushmanampWakefield European Distribution Report 2008

Hungary 3rd in European Distribution Report

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 8: Trade and Investment in Hungary and new States in the

Growing Stock of Foreign Direct Investments in Hungary(million EUR)

Source National Bank of Hungary 2010

New methodology

00

100000

200000

300000

400000

500000

600000

700000

800000

199519961997199819992000200120022003200420052006200720082009 2010

Q2

Other capital

Equity and

reinvested

earnings

High FDI stockcapita (EUR 2009)

Source wiiw 2010

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

ErnstampYoung trust of foreign investors already established in Hungary

Established investors considering developing activities in Hungary

5046

4

Yes

No

Cant say

Half of multinational companies are planning to expand

Source Ernst and Young CEE Attractiveness Survey 2009

Eighty percent of German investors would chose to locate in Hungary

German-Hungarian Industry and Trade Chamber Economic Trend Report Hungary 2010

FDI stock by country of origin 2008

Major investors Germany Austria Holland (Europe 75)

FDI stock by sector 2008

Manufacturing Services

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

At the cross roads of 4 main European transportation corridors

Extensive road and railway transportation network

Highly developed logistics and telecommunications infrastructure

Excellent access to key markets

CushmanampWakefield evaluatedthe European logistics sector

Hungary ranks 3rd in the keycost-benefit factors

CEE is a much sought after logistics and distributionlocation

Hungary offers a plentiful supply of land and availableproperties

Source CushmanampWakefield European Distribution Report 2008

Hungary 3rd in European Distribution Report

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 9: Trade and Investment in Hungary and new States in the

High FDI stockcapita (EUR 2009)

Source wiiw 2010

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

ErnstampYoung trust of foreign investors already established in Hungary

Established investors considering developing activities in Hungary

5046

4

Yes

No

Cant say

Half of multinational companies are planning to expand

Source Ernst and Young CEE Attractiveness Survey 2009

Eighty percent of German investors would chose to locate in Hungary

German-Hungarian Industry and Trade Chamber Economic Trend Report Hungary 2010

FDI stock by country of origin 2008

Major investors Germany Austria Holland (Europe 75)

FDI stock by sector 2008

Manufacturing Services

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

At the cross roads of 4 main European transportation corridors

Extensive road and railway transportation network

Highly developed logistics and telecommunications infrastructure

Excellent access to key markets

CushmanampWakefield evaluatedthe European logistics sector

Hungary ranks 3rd in the keycost-benefit factors

CEE is a much sought after logistics and distributionlocation

Hungary offers a plentiful supply of land and availableproperties

Source CushmanampWakefield European Distribution Report 2008

Hungary 3rd in European Distribution Report

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 10: Trade and Investment in Hungary and new States in the

ErnstampYoung trust of foreign investors already established in Hungary

Established investors considering developing activities in Hungary

5046

4

Yes

No

Cant say

Half of multinational companies are planning to expand

Source Ernst and Young CEE Attractiveness Survey 2009

Eighty percent of German investors would chose to locate in Hungary

German-Hungarian Industry and Trade Chamber Economic Trend Report Hungary 2010

FDI stock by country of origin 2008

Major investors Germany Austria Holland (Europe 75)

FDI stock by sector 2008

Manufacturing Services

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

At the cross roads of 4 main European transportation corridors

Extensive road and railway transportation network

Highly developed logistics and telecommunications infrastructure

Excellent access to key markets

CushmanampWakefield evaluatedthe European logistics sector

Hungary ranks 3rd in the keycost-benefit factors

CEE is a much sought after logistics and distributionlocation

Hungary offers a plentiful supply of land and availableproperties

Source CushmanampWakefield European Distribution Report 2008

Hungary 3rd in European Distribution Report

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 11: Trade and Investment in Hungary and new States in the

Eighty percent of German investors would chose to locate in Hungary

German-Hungarian Industry and Trade Chamber Economic Trend Report Hungary 2010

FDI stock by country of origin 2008

Major investors Germany Austria Holland (Europe 75)

FDI stock by sector 2008

Manufacturing Services

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

At the cross roads of 4 main European transportation corridors

Extensive road and railway transportation network

Highly developed logistics and telecommunications infrastructure

Excellent access to key markets

CushmanampWakefield evaluatedthe European logistics sector

Hungary ranks 3rd in the keycost-benefit factors

CEE is a much sought after logistics and distributionlocation

Hungary offers a plentiful supply of land and availableproperties

Source CushmanampWakefield European Distribution Report 2008

Hungary 3rd in European Distribution Report

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 12: Trade and Investment in Hungary and new States in the

FDI stock by country of origin 2008

Major investors Germany Austria Holland (Europe 75)

FDI stock by sector 2008

Manufacturing Services

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

At the cross roads of 4 main European transportation corridors

Extensive road and railway transportation network

Highly developed logistics and telecommunications infrastructure

Excellent access to key markets

CushmanampWakefield evaluatedthe European logistics sector

Hungary ranks 3rd in the keycost-benefit factors

CEE is a much sought after logistics and distributionlocation

Hungary offers a plentiful supply of land and availableproperties

Source CushmanampWakefield European Distribution Report 2008

Hungary 3rd in European Distribution Report

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 13: Trade and Investment in Hungary and new States in the

FDI stock by sector 2008

Manufacturing Services

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

At the cross roads of 4 main European transportation corridors

Extensive road and railway transportation network

Highly developed logistics and telecommunications infrastructure

Excellent access to key markets

CushmanampWakefield evaluatedthe European logistics sector

Hungary ranks 3rd in the keycost-benefit factors

CEE is a much sought after logistics and distributionlocation

Hungary offers a plentiful supply of land and availableproperties

Source CushmanampWakefield European Distribution Report 2008

Hungary 3rd in European Distribution Report

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 14: Trade and Investment in Hungary and new States in the

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

At the cross roads of 4 main European transportation corridors

Extensive road and railway transportation network

Highly developed logistics and telecommunications infrastructure

Excellent access to key markets

CushmanampWakefield evaluatedthe European logistics sector

Hungary ranks 3rd in the keycost-benefit factors

CEE is a much sought after logistics and distributionlocation

Hungary offers a plentiful supply of land and availableproperties

Source CushmanampWakefield European Distribution Report 2008

Hungary 3rd in European Distribution Report

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 15: Trade and Investment in Hungary and new States in the

At the cross roads of 4 main European transportation corridors

Extensive road and railway transportation network

Highly developed logistics and telecommunications infrastructure

Excellent access to key markets

CushmanampWakefield evaluatedthe European logistics sector

Hungary ranks 3rd in the keycost-benefit factors

CEE is a much sought after logistics and distributionlocation

Hungary offers a plentiful supply of land and availableproperties

Source CushmanampWakefield European Distribution Report 2008

Hungary 3rd in European Distribution Report

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 16: Trade and Investment in Hungary and new States in the

CushmanampWakefield evaluatedthe European logistics sector

Hungary ranks 3rd in the keycost-benefit factors

CEE is a much sought after logistics and distributionlocation

Hungary offers a plentiful supply of land and availableproperties

Source CushmanampWakefield European Distribution Report 2008

Hungary 3rd in European Distribution Report

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 17: Trade and Investment in Hungary and new States in the

Expanding highway network

Prague 5 hrs

Munich 6 hrs

Hamburg 8hrs

Bucharest 10 hrs

Constanza 12 hrs

Zagreb 1 hr

Trieste 6 hrs

Koper 6 hrs Beograd 4hrs

Vienna 1 hr

Rotterdam 12 hrs

Warsaw 10 hrs

Kyiv 12 hrs

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 18: Trade and Investment in Hungary and new States in the

Lively Office market

bdquoArdquo class offices

Stock in Budapest (2009 Q4)3000000 m

Average rental price (headline rents) Budapest

EUR 12-15m month EUR 20 m month (premium categories)

University cities EUR 8-12 m month

Vacancy rate in Budapest in 2009 Q4 249

Business infrastructure in Hungary - Top-quality telecommunications services- Easy access to 3T xDSL connections

Millennium TowerMillennium TowerCorvin Offices

Capital Square

EiffelSquare

Source CBRE 2010 Q1

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 19: Trade and Investment in Hungary and new States in the

Low Corporate Income Tax

Source European Commission 2010 France Germany Asia KPMG 2009

CountryCorporate income

tax

France 3333

Spain 3000

Germany 2944

UK 2800

Greece 2500

Czech Republic 1900

Slovakia 1900

Poland 1900

Hungary 1019

Asian countriesCorporate income

tax

Japan 4069

Malaysia 2500

China 2500

South Korea 2420

Singapore 1700

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 20: Trade and Investment in Hungary and new States in the

International schools in BudapestBritish American German French Chinese Japanese Austrian etc

Private medical services Well-known across Europe

Entertainment facilitiesThermal baths wellness recreations centres throughout the countryPublic golf coursesRich cultural lifeExcellent food and wine

Expats like Hungary

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 21: Trade and Investment in Hungary and new States in the

Quality of life in Hungary

Rank CountryFinal

Score

1 France 82

2 Australia 81

3 Switzerland 81

4 Germany 81

5 New Zealand 79

hellip

20 Hungary 74

hellip

24 Czech Republic 73

25 United Kingdom 73

hellip

27 Slovenia 72

hellip

35 Poland 71

hellip

41 Ireland 70

43 Slovakia 69

44 Bulgaria 69

hellip

53 Romania 65

Hungary excels in civil liberties safety and health

Source International Living 2010

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 22: Trade and Investment in Hungary and new States in the

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 23: Trade and Investment in Hungary and new States in the

Hungary is perceived as a quality location

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

61

64

56

54

69Telecommunication infrastructure

Transport and logistic infrastructure

Local labor skills level

Quality of education

Quality of life

Top 5 satisfaction assets

Respondents 202

rsquoVery attractiversquo + lsquofairly attractiversquo responses

Hungary Attractiveness Survey 2009

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 24: Trade and Investment in Hungary and new States in the

Higher education - Well trained creative and flexible human capital

90 of students speak English

2nd most popular foreign language German

Followed by French Italian Spanish

All degrees include foreign-language certificate and computer skills

Budapest

SzegedPeacutecs

Veszpreacutem

Miskolc

Debrecen

University Towns

Number of institutions in higher education 70

Number of locations 172

Number of students in higher education 381033

Majoring in

Business and Administration 91501

Engineering 34622

Informatics 31021

Foreign languages 14100

Number of graduates in 2008 55368

Academic year 20082009

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 25: Trade and Investment in Hungary and new States in the

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the labour regulations

According to the surveylabour regulations do not hinder business activities

Source IMD World Competitiveness Yearbook 2010

Rank Country Scores

1 Iceland 78

2 Singapore 75

3 Switzerland 73

19 Hungary 50

20 United Kingdom 48

23 Ireland 47

35 Bulgaria 41

38 Poland 40

40 Slovak Republic 38

46 Czech Republic 35

48 Romania 33

Liberal labour regulations

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 26: Trade and Investment in Hungary and new States in the

Source IMD World Competitiveness Yearbook 2010

High number of working hours

IMDrsquos World Competitiveness Yearbook ranks 58 countries by the working hours

According to the surveyHungary ranks 26 among58 countries

Rank Country

Average

number of

working hours

per year

1 Qatar 2600

2 Korea 2312

3 Hong Kong 2295

19 Bulgaria 1993

25 USA 1911

26 Hungary 1909

30 Czech Republic 1859

32 Slovak Republic 1827

44 United Kingdom 1762

46 Poland 1756

53 Spain 1714

54 Romania 1712

55 Germany 1704

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 27: Trade and Investment in Hungary and new States in the

The World Economic Forum ranks Hungary 18 of 131 countries for the quality of scientific research institutions

Source Global Competitiveness Report World Economic Forum 20102011

Strong scientific capacity

Country Ranking

Israel 1

Switzerland 2

USA 4

Germany 6

Japan 15

Ireland 16

Hungary 18

Czech R 21

Austria 20

China 39

Spain 43

Poland 47

Greece 88

Slovakia 90

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 28: Trade and Investment in Hungary and new States in the

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Monthly gross average wages in EUR in 2008

latest available year 2007

EU27 - average

Source National statistical offices 2009

Low competitive average wages

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 29: Trade and Investment in Hungary and new States in the

Still attractive labour costs in CEE 2010

Source Eurostat JP Morgan forecasts for 2010

Level as of euro area hourly labour costs in industry and services

0

5

10

15

20

25

30

35

40

Pl Hu Sk Cz

2000

2010f

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 30: Trade and Investment in Hungary and new States in the

Competitive wage levels in Budapest

Source UBS Wealth Management Research Prices and Earnings 2009

The survey of 73 cities found that wages costs in Budapest are verycompetitive in Europe

CityGross wage levelNew York=100

Copenhagen 1255

Zurich 1158

Geneva 1115

New York 1000

Munich 879

Dublin 841

Chicago 802

Tokyo 740

Vienna 720

London 690

Madrid 551

Barcelona 549

Seoul 303

Prague 248

Warsaw 214

Bratislava 212

Budarest 186

Bucharest 154

Sofia 134

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 31: Trade and Investment in Hungary and new States in the

Cost of staff

Europersquos largest companieswere asked to rank cities in terms of cost of staff

Budapest is in the thirdplace

Source CushmanampWakefield European Cities Monitor 2009

City Rank Score

Bucharest 1 151

Istanbul 2 119

Budapest 3 116

Warsaw 4 104

Lisbon 4 104

Leeds 6 081

Prague 6 081

Berlin 15 038

London 28 012

Madrid 12 053

Paris 28 012

Vienna 27 013

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 32: Trade and Investment in Hungary and new States in the

Future expansion plans of large companies

The cities in CEE are the most popular destinations for potential expansion

Budapest is anticipated to attract a large numbers of investors

Source CushmanampWakefield European Cities Monitor 2009

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 33: Trade and Investment in Hungary and new States in the

Average office rents in the CEE and in Europe

Source Jones Lang LaSalle 2009

0

10

20

30

40

50

60

Budapest Berlin Warsaw Prague Bucharest Brussels Paris

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 34: Trade and Investment in Hungary and new States in the

Budapest is the best city to live in within CEE

Source Economist Intelligence Unit 2010

Liveability ranking 2010

stabilityhealth care culture and environmenteducation andinfrastructure

Education received an outstanding 100 points in Budapest

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 35: Trade and Investment in Hungary and new States in the

Benefit from a good balance of quality and cost of labour

Take advantage of high-quality infrastructure and a stable business environment

Build on Hungaryrsquos knowledge-based economy

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 36: Trade and Investment in Hungary and new States in the

The strength of the ICT sector with good eSkills strategic assets for Hungary

Hungaryrsquos ICT sector represents a fifth of its exports the third highest in the EU The percentage of persons employed withICT user skills exceeds the EU averageMajor software developers IBM HP Siemens CISCO SAP Oracle Microsoftand TATASeveral IT companies such as BT EDS-HP and Getronics operate technology service centres in HungaryICT-related RampD drives more than a quarter of total RampD

Source Europersquos Digital Competitiveness Report - i2020 ndash ICT Country Profiles August 2009

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 37: Trade and Investment in Hungary and new States in the

Biotechnology amp Pharmaceuticals

The 5th largest drug producer in EuropeHungary ranks top in clinical research (Buck Consultants)

Hungaryrsquos biotechnology sector on par with some Western European countries (Eurapabio 2009)

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 38: Trade and Investment in Hungary and new States in the

Original manufacturers Suzuki Audi Suzuki 282000 pcs (2008) Audi Motor 60000+ TT coupeacutes and roadsters A3

cabriolet

Engine manufacturing (2008)

Audi Hungary 19 million engines

GM Opel 400 thousand engines

Automotive electronics prod+RampDBosch ThyssenKrupp Knorr Bremse etc

TIER 1s14 of the worldrsquos top 20 present inHungary

Automotive

Worldrsquos 2nd largest powertrain plant in Hungary by Audi

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 39: Trade and Investment in Hungary and new States in the

Largest electronics producer andexporter in the CEE

Major global manufacturers Samsung GE Philips Sanyo Sonyand Jabil Flextronics

Booming sectors IT manufacturing telecommunications consumer electronics

Electronics

bdquoHungary provides an ideal environment for electronic manufacturing services as the country has good industrial infrastructure and a strong industrial

culturerdquo Hannu Hanatala Managing Director Elcoteq

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 40: Trade and Investment in Hungary and new States in the

Renewable energy

Hungary plans to reach 13 of RES in total energy production by 2020 Major areas of growth biomass biogas wind powerCompulsory feed-in tariff of between 5-13 cents depending on plant sizeEU provides EUR 600 million to support renewable energy-related investmentsEmerging solar panel technology industry

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 41: Trade and Investment in Hungary and new States in the

Shared Service Centers

Hungary had the highestnumber of shared service investments between 2002-2006 in Europe (ErnstampYoung 2007)

SSCs throughout the country Debrecen Miskolc Peacutecs Szeacutekesfeheacutervaacuter etc

Positive feedback fromcompanies already present in Hungary

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 42: Trade and Investment in Hungary and new States in the

The logistics sector gives 45 -5 of the Hungarian GDP

Logistics activities are the most often outsourced

Integrated Supply Chain solutions and logistics services provided by global contract logistics players 0

2

4

6

8

10

12

14

16

18

20

2001

2002

2003

2004

2005

2006

e

2007

e

2008

f

2009

f

2010

f

2011

f

2012

f

Turnover in billion USD

Logistics

Dynamic growth of the logistics market

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 43: Trade and Investment in Hungary and new States in the

Innovation in Hungary

Large presence of multinationals investinginto RampD activities

Continuously expanding RampD investments inautomotive manufacturing software development and life sciences

Latest developmentsLife sciencesAMRI (USA) CodexisRichterEGIS-ServierSanofiICTEricsson (Sweden) SAPOracleAutomotiveSchefenacker ZF Knorr-Bremse Valeo

Bosch

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 44: Trade and Investment in Hungary and new States in the

Hungarian Investment Projects (HIP) competitive projects for financial and strategic investors

More than 40 outstanding innovative projects

Biotechnology (15) euro1000000 - euro15000000

(ROI 3-8 years)

ICT (5) euro200000 - euro1000000

(ROI 1-5 years)

Renewable Energy (10) euro500000 - 150000000

(ROI 5-10 years)

Tourism (10) euro25000000 - euro100000000

(ROI 8-20 years)

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 45: Trade and Investment in Hungary and new States in the

Our references

HanKooK

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom

Page 46: Trade and Investment in Hungary and new States in the

Thank you for your attention

Istvan A MOLNARInvestment and Trade

Commissioner

Hungarian Consuate GeneralLos Angeles CA

Phone (310) 479-7878E-mail istvanmolnar at itdhcom

Internet wwwitdhcom