Where Logistics comes together KAUNAS REGION. Source: Statistics Lithuania, VRM, Invest Lithuania 2014 Welcome to Kaunas Region, Lithuania! KAUNAS REGION

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Where Logistics comes together KAUNAS REGION Slide 2 Source: Statistics Lithuania, VRM, Invest Lithuania 2014 Welcome to Kaunas Region, Lithuania! KAUNAS REGION stats Regional capitalKaunas City Population593,000 Labour pool289,000 Unemployment31,300 (10.1%) FDI growth11.4% LITHUANIA stats Size65,300 km2 Population2.97 million CapitalVilnius Official languageLithuanian CurrencyLithuanian Litas (LTL) Pegged to Euro since 2002 1 Euro = 3.45 LTL Real GDP growth2013: 3.2% 2012: 3.7% 2011: 6.0% FDI growth8.1 % Annual inflation1.2% 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 REGION Where Logistics comes together Slide 3 Source: * World Bank, Invest Lithuania 2014 Lithuania, a gateway to the EU and CIS KAUNAS 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 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 Slide 4 Two of Lithuanias 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 Klaipda 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 CentresArea, m2City Senukai Logistics Park70,000Kaunas Laistai International Trade Center 32,000Klaipda Tromina30,000Vilnius Kaunas Terminal30,000Kaunas Business Park E6728,000Panevys DHL DPD Gefco UPS DSV TNT AutoLogic Group Rhenus Logistics Schenker Maersk Line Msc Slide 5 Location Cost attractiveness International accessibility Real Estate availability KAUNAS REGION Where Logistics come together The Kaunas Region provides an unmatched mix of cost-effective talent and high class infrastructure In KAUNAS 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 Slide 6 Location KAUNAS 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 Slide 7 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, 2013 Source: BCI,, 2014 Slide 8 1Employer 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 Kdainiai 2014 TaxGeneralFree Economic Zone Income tax15 % 0 % (first 6 years) 50% of the tax rate (subsequent 10 years) Property tax1 %0 % Dividend tax15 %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 Slide 9 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 REGION Where Logistics comes together International accessibility Slide 10 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 Kdainiai 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 Kdainiai FEZ provides 9 plug-and- play plots Real Estate Availability Source: Kdainiai FEZ, FEZ Kaunas, 2014 Slide 11 Source: Invest Lithuania, 2014 KAUNAS REGION Financial support available per FDI project in the field of services Construction, Infrastructure, Salary costsPersonnel training costs Up to Euro 1.5 millionUp 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 Lithuanias 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 Slide 12 Information Consultancy Analysis Search Guidance Networking Assistance Aftercare One stop shop TBD Contact Information: +370 . @ www KAUNAS REGION Contact us Where Logistics comes together