Where Logistics comes together

KAUNAS REGION

Source: Statistics Lithuania, VRM , Invest Lithuania 2014

Welcome to Kaunas Region, Lithuania!

KAUNAS REGION stats

Regional capital Kaunas City

Population 593,000

Labour pool 289,000

Unemployment 31,300 (10.1%)

FDI growth 11.4%

LITHUANIA stats

Size 65,300 km2

Population 2.97 million

Capital Vilnius

Official language Lithuanian

Currency Lithuanian Litas (LTL)Pegged to Euro since 20021 Euro = 3.45 LTL

Real GDP growth 2013: 3.2%2012: 3.7%2011: 6.0%

FDI growth 8.1 %

Annual inflation 1.2%

Lithuania is at the center of three of large consumer markets: • Western Europe• Baltic Sea Region• Russia and former Soviet States (CIS)

Kaunas Region

KAUNAS REGIONWhere Logistics comes together

Source: * World Bank, Invest Lithuania 2014

Lithuania, a gateway to the EU and CISKAUNAS REGION

• Lithuania allows access to main markets*:– Member of the European Union– Member of the Schengen Agreement

(free trade and travel)– Member of NATO– Member of the Nordic Investment

Bank, and part of Nordic-Baltic cooperation of Northern European countries

• Lithuania is ranked 17th of the world on the Ease of Doing Business Index (higher than e.g. Germany, Latvia or Poland) *

• Lithuania is a low risk country in the Central and Eastern Europe region, making it an excellent alternative for nearby high risk countries as Russia or Belarus

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European Union is the largest single market in the world (almost double the GDP of China) with over 500 million consumers (source: IMF)

Risk rating of Lithuania compared to other countries (100= most risky)

Source: Economist Intelligence Unit Q2 2014

Where Logistics comes together

Two of Lithuania’s five largest logistics centers are in Kaunas

KAUNAS REGION

Source: Invest Lithuania 2013, Colliers 2013

Major logistics FDI in Lithuania

Logistics sector Lithuania

Source: Invest Lithuania 2014

• With approximately 80% of freight which is transported through international transport corridors passing through Lithuania, the country has become one of the most important transport centres in the European Union, linking the EU with the East (Source: Datamonitor)

• The North-South highway, the railway route connecting Scandinavia with Central Europe, and the East-West route that connects vast Eastern markets with the rest of Europe, all figure among the 10 principal freight routes in Europe. The expansive network of central motorways and European railroads, along with the ice-free port of Klaipėda and 4 international airports comprise the key infrastructure of the Lithuanian transport network

• The largest warehouse in Lithuania is situated in Kaunas. “Senukai Logistics Park” and measures 70,000 m2• The greatest supply of modern warehousing facilities in 2010 remained in Vilnius (334.400 m2), with

Kaunas following in the 2nd place (184.300 m2). Kaunas is a dynamic, upcoming location

Where Logistics comes together

Largest Logistics Centres Area, m2 City

Senukai Logistics Park 70,000 Kaunas

Laistai International Trade Center

32,000 Klaipėda

Tromina 30,000 Vilnius

Kaunas Terminal 30,000 Kaunas

Business Park E67 28,000 Panevėžys

DHLDPDGefcoUPSDSVTNT

AutoLogic Group Rhenus Logistics Schenker Maersk LineMsc

Location Cost attractiveness

International accessibilityReal Estate availability

KAUNAS REGIONWhere Logistics come togetherThe Kaunas Region provides an

unmatched mix of cost-effective talent and high class infrastructure

InKAUNAS REGION

it all comes together

• The right labor cost savings• The right tax scheme

• The right location• The right logistics

• The right industrial parks• The right cost advantages

• The right connection to:• EU• CIS• Baltics• Russia

LocationKAUNAS REGION

Baltics, Russia, CIS, CEE and Germany are reached within two truck days*

Kaunas connected to Poland (and rest of Europe), Belarus and Russia by rail and road*

Where Logistics comes together

• The international competitiveness of Lithuania in the transport and logistics sector is to a large extent determined by its geographical position

• Many companies see Lithuania as a springboard from which to penetrate the vast markets of the EU and the Russia-Kazakhstan-Belarus Customs Union and other CIS countries. The latter is increasingly important now that Russia has joined the World Trade Organization*

• Kaunas is connected to Poland (and rest of Europe), Belarus and Russia by rail and road

* Source: Invest in Lithuania,, 2013

KAUNAS REGION

The Kaunas Region interconnects the Nordics and Western Europe with Russia and CIS

Kaunas Region is conveniently located on crossroads of modalities

Where Logistics comes together

• Some of the major logistics centres in Lithuania are in Kaunas Region• The Kaunas region has a highly developed railway infrastructure. Three railway lines cross the

region: Moscow-Minsk-Kaliningrad, Vilnius-Kaunas-Klaipeda and Kaunas- Siauliai-Riga. The “Rail Baltica” or “Baltic” rail (standard European gauge) section between the Lithuanian-Polish border and the Marijampole-Kaunas line is under development. It will connect Kaunas Region to Warsaw and the Western EU markets.

Location

Source: Invest in Lithuania, 2013Source: BCI,, 2014

1 Employer cost are based on the following expenses: gross salary, social security, medical and pension costs in addition to social security and performance bonuses

Source: National/Regional Statistical Offices, IMD, UBS, 2014

KAUNAS REGION

Annual full employers cost warehouse employee

Source: Invest Lithuania, FEZ Kaunas, FEZ Kėdainiai 2014

Tax General Free Economic Zone

Income tax 15 %0 % (first 6 years)

50% of the tax rate (subsequent 10 years)

Property tax 1 % 0 %

Dividend tax 15 % 0 %

Tax rates

• In general labour costs in Lithuania are less than half compared to Western European countries and the USA

• Truck operating costs in Lithuania are among the lowest in Europe and 20-25% lower than Western Europe

• Labour costs in Kaunas Region are approximately 10% lower than in Vilnius and 25-40% lower than in Poland and Slovakia

• Standard income tax rate is one of the lowest in Europe at 15%. If established in a Free Economic Zone (FEZ), property and dividend tax is at 0% and income tax is at 0% for the first 6 years and 7.5% for the following 10 years

Where Logistics comes together

Source: Invest Lithuania 2013, PwC 2013

Cost attractiveness

Kosice - Sk Katowice - Pl

Tallinn - Est

Gdansk - Pl

Gyor - Hun Vilnius - Lith

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• Kaunas Region is situated at the geographical centre of Lithuania and is further developing and strengthening its transport infrastructure

• Kaunas Region is well connected by road to Vilnius, Klaipeda, Riga and Poland • Kaunas airport, which is the second largest airport in Lithuania, serves 8 international

destinations (incl. London, Birmingham, Dublin, Oslo and Frankfurt) throughout the year on a weekly basis

• Vilnius International Airport is located within a one hour drive providing 2-3 flights per hour and more daily direct flights to major European capitals and cities

KAUNAS REGIONWhere Logistics comes togetherInternational accessibility

• The two Free Economic Zones of Kaunas Region are good locations for the setting up of logistics facilities. The zones provide favourable and lower taxes for investors investing at least Euro 1 million

• Kaunas Free Economic Zone (FEZ) offers a total of 294 hectares for logistics and manufacturing. Logistics companies are already present. Direct foreign investments in Kaunas FEZ account for 76% of all investments

• The Kėdainiai FEZ offers 9 plots for investors, with already installed water supply, sewage, surface waste water, pipeline and road infrastructure. The size of the proposed plots varies from 6,26 to 20,86 ha. Targeted activities are industrial and logistics/warehouwing

KAUNAS REGION

The Kaunas FEZ provides 294 hectares of logistics and production area

Where Logistics comes together

The Kėdainiai FEZ provides 9 ‘ plug-and-play’ plots

Real Estate Availability

Source: Kėdainiai FEZ, FEZ Kaunas, 2014

Source: Invest Lithuania, 2014

KAUNAS REGION

Financial support available per FDI project in the field of services

Construction, Infrastructure, Salary costs Personnel training costs

Up to Euro 1.5 million Up to Euro 2 million

Max. possible support 3.5 million Euro

National incentives support program

• Foreign investors interested in locating a business in Lithuania as well as foreign companies already operating in the Lithuanian market but eager to further expand may apply for Invest in Lithuania’s financial investment support of up to Euro 3.5 million per investment project

• Invest in Lithuania provides financial support to cover personnel training costs (up to Euro 2 million) as well as eligible construction, infrastructure and salary costs (up to Euro 1.5 million), incurred by foreign investors establishing a services business unit in Lithuania

• The financial support tool is designed to support foreign businesses investing into the production of export-oriented high-quality services as well as establishment of qualified jobs on the market

Where Logistics comes together

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