1. DR MILAN PARIVODIC CHAIRMAN 7th Vienna Economic Forum Move safely into Serbia www.investmentserbia.com

2. A really positive international outlook for Serbia A political and national consensus on EU accession (70%) EU candidacy status - probably in 2011 Kosovo problem in a calmer stage – dialogue beginning soon Better regional cooperation Better political international relations of Serbia Good Government macroeconomic handling of the world crisis New free trade agreements (Turkey, Belrus, Ukraine) Joining WTO next year Visa free travel for Serbian citizens

3. Rapid European Integration EU candidate status expected for 2011 SAA agreement undergoing ratification by EU Member States Interim Agreement on Trade with EU in force: f ull free trade within 5 years: 47.6% of products (current customs tariff 1.85% on average) liberalized immediately Participation in Instrument for Pre-Accession Assistance (IPA) and 7 th Framework Programme (FP7) ongoing

4.  CEFTA (South East Europe Free Trade Area) – market of app. 30 million consumers  Customs free exports to Russian Federation and Kazakhstan– market of 156 million consumers Free Trade – Exports from Serbia!  Complete liberalization with Belarus apart from 3 agricultural products  General System of Preferences for exports to USA ██ EU member states ██ EFTA member states ██ CEFTA member states  Customs free exports to EU – market of 500 million consumers

5. Key Economic Trends www.investmentserbia.com 200520062007200820092010 GDP growth (real, in %) 5.65.26.95.5-3.10.6 (Q1) 1.8 (Q2) GDP per capita in EUR 2,7923,1443,8994,5474,0934,138 Inflation (yearly average, in %) 16.211.77.013.58.64.4 Budget balance (in % of GDP) 0.3-1.9-1.7-1.8-3.4 -3.1 (Q1) -3.7 (Q1) Exports (in EUR mn) 3,6085,1026,4327,4295,9614,597 (Jan to Aug) Imports (in EUR mn) 8,43910,46313,50716,47811,5058,017 (Jan to Aug) Current Account (in % of GDP) -8.8-10.1-16.0-18.2-5.7-10.5 (Q1) -7.2 (Q2) Gross public debt (in % of GDP) 50.640.131.426.332.433.6 (Q1) 35.4 (Q2)

6. FDI Inflow

7. www.investmentserbia.com  Significant foreign enterprise share in Serbian export is a result of privatization, restructuring and Greenfield investments. Foreign - Owned Enterprises’ Share in Exports (25 Top Serbian Exporters)

8. www.investmentserbia.com Foreign Investor Legal Treatment National treatment of foreign companies Free transfer of financial and other assets comprising profits and dividends Invest freely 100% in all industries except minority stakes allowed in media and in production and armaments Corporate profit tax 10% Income tax 12%

9. Specific legislation enacted outlining guarantees and safeguards for foreign investors Company Laws Improved Business Law Framework Mortgage Law Law on Execution Procedure Foreign Investment Law Foreign Trade Law Bankruptcy Law Law on Arbitration Law on Special Authorities for Protection of Intellectual Property Law on Special Authorities for Protection of Intellectual Property Foreign Exchange Law

10. Favourable Tax Regime 10-year Corporate Tax holiday for investments over €6 million and 100 employees 5-year Corporate Tax holiday for investment in underdeveloped regions Corporate Tax reduction up to 80% of the fixed assets investment Salary Tax exemptions for employees below 30 and above 45 years of age Social insurance charges exemptions for employees below 30 and above 45 years of age Customs-free imports of equipment and certain raw materials Double taxation treaties in force with 31 countries, another 14 undergoing ratification (in the region: all ex-Yugoslav countries, plus Albania, Bulgaria, Hungary Romania and soon Austria-undergoing ratification).

11. www.investmentserbia.com Double Taxation Avoidance Treaty Swiss Serbian – Dividends and Interest Dividends (previously 20% tax): 5% withholding tax if the beneficial owner of dividend is a company (but not a partnership) holding directly at least 25% of the capital of the paying company 15% withholding tax (in all other cases) Interest (previously 20%) Source country has right to tax up to maximum of 10%

12. www.investmentserbia.com Double Taxation Treaty-Austria Royalties and Capital Gains Royalties (previously 20%) 5% tax on royalties – copyright-protected works 10% tax on royalties – patents, trademarks, designs, models, plans, secret formulae or processes, use or lease of equipment (industrial, commercial, scientific), information on industrial, commercial or scientific experience. Capital gains: May be taxed only in the state of residence of alienator Except companies that derive more then 50% of its value directly or indirectly from immovable property, where the sale of shares in such company may be taxed also by the country in which such immovable property is situated, while the residence country must provide relief from double taxation (tax credit).

13. www.investmentserbia.com Financial Incentives for Job Creation ScaleLarge-ScaleStandard Scale Project Categories Manufacturing and Export- Related Manufacturing Export- Related Capital and Labour- Intensive Capital- Intensive Underdevelop ed Regions/Regio ns of Special Interest Auto, Electronics, IT and Special Interest Regions Other Regions Any Region Grant 25% of total investment 20% of total investment €4,000 to €10,000 per new job €5,000 to €10,000 per new job €2,000 to €5,000 per new job €2,000 to €10,000 per new job Minimum investment €200 mn€50 mn€0.5mn €1 mn€0.5mn Minimum new jobs 1,00030050 10

14. www.investmentserbia.com Distribution of Incentives per Industry

15. Distribution of Incentives by Nationality of Investor

16. Recent Major Foreign Investors COMPANY COUNTRY OF ORIGIN SECTOR TYPE OF INVESTMENT app. INVESTMENT AMOUNT (MIL EUR) Telenor – Mobi 63NorwayTelecommunicationsPrivatization1,513 FIAT Philip Morris – DIN Italy USA Automobiles Tobacco Joint venture with State Privatization 940 518 STADA - HemofarmGermanyPharmaceuticalsAcquisition475 Intesa – Delta BankaItalyBankingBrownfield462 InBev – Apatinska pivaraBelgiumBeerAcquisition430 Lukoil – BeopetrolRussiaOilPrivatization400 NBG – Vojvodjanska bankaGreeceBankingAcquisition385 MerkatorSloveniaRetailGreenfield240 Holcim – Novi PopovacSwitzerlandCementPrivatization185 OTP BankHungaryBankingAcquisition176 Alpha – JubankaGreeceBankingBrownfield168 US Steel – SARTIDUSASteelBrownfield150 Metro Cash&CarryGermanyWholesaleGreenfield150 OMVAustriaOilGreenfield150 Coca-Cola HBC – VlasinkaGreeceBeveragesPrivatization142 Eurobank EFG – Nacionalna štedionica GreeceBankingBrownfield130 (Source: Ministry of International Economic Relations of the Republic of Serbia – September 2006)

17. FOREIGN INVESTORS SERVICES (FIS): OUR MISSION With our unparalleled experience we give focal Strategic Support and secure best in class Professional Support to Foreign Businesses in Serbia and the SEE region developing jointly your full market potential in the shortest possible time www.investmentserbia.com

18. FOCAL STRATEGIC SUPPORT An Advisory Board for your business project composed of first-class professionals – leaders in their respective lines of business Your Business Strategy for Serbia and the SEE region developed with our assistance We find opportunities and reliable business partners for you (land, real estate, suppliers, distributors, etc.) www.investmentserbia.com

19. PARTNERSHIPS AND SOLUTIONS Establishing partnerships for your project – Central government partnership – Local government partnership – Timely issuance of all permits Finding solutions to problems – Start-up problems – Course-of-business problems www.investmentserbia.com

20. STAR CLUB Partnership assistance rendered by a coordinated group of number 1 professionals: Lawyers Accountants Market researchers PR and advertising Construction companies Large wholesellers and retailers Suppliers, etc. Priority access to owners, general managers or managing partners of best service providing and other companies, saving time and money FIS IS YOUR RELIABLE PARTNER IN SERBIA www.investmentserbia.com

21. DR. MILAN PARIVODIC milan.parivodic@investmentserbia.com fis@investmentserbia.com Tel. +381 11 2200590 Address: PC Usce, 15th floor Bulevar Mihajla Pupina 6, 11070 Beograd THANK YOU FOR YOUR ATTENTION! www.investmentserbia.com