1. April, 2013 Agency for Investments and Competitiveness

2. ABOUT US  The Agency for Investments and Competitiveness (AIK) was established by the Croatian Government on April 29, 2012 (Official Gazette, 53/12)  Objective: Implementation of policies and measures for increasing competitiveness of the Croatian economy with special emphasis on promoting investments  The AIK’s activities started in September 2012  Currently, there are 25 people employed and it is planned to increase this number up to 40 people in the course of 2013  The AIK’s Supervisory Board (SB) is comprised of 15 members, representatives of relevant ministries (for economy, finance, regional development and EU funds, entrepreneurship and crafts etc.).  AIK focus are investors (companies) that meet EU criteria for large companies (250 employees, turnover of 50 mil Eur and assets 43 mil Eur). The companies that qualify as SME enterprises are subject to the Croatian Agency for Small and Medium Enterprises (HAMAG Invest)

3. Implementation of policies and measures for increasing competitiveness of Croatian economy with special emphasis on promoting investments, improving efficiency in application of innovation and promoting use of financial mechanisms in order to support economy ABOUT US InvestmentsCompetitiveness Providing active support to investors Promoting Croatia as investment destination Improving investment environment Reducing red tape

4. WHAT WE CAN DO FOR INVESTORS WE PROVIDE INVESTOR WITH: Business intelligence Site selection Operation costs analysis WE CONNECT INVESTOR WITH: Government bodies Local and regional institutions Utility companies WE ASSIST INVESTOR WITH: Organizing site visits Assistance with gaining all necessary permits Assistance with gaining state incentives ACTIVE SUPPORT TO INVESTOR

5. REDUCING RED TAPE IMPROVING INVESTMENT ENVIRONMENT SUPPORTING DEVELOPMENT OF COMPETITIVENESS CLUSTERS LINKING NEEDS OF BUSINESS SECTOR WITH LABOR MARKET SUPPORTING SPECIALIZATION OF REGIONS INCREASING COMPETITIVENESS HOW CAN WE EFFECT COMPETITIVENESS

6. CURRENT RESULTS More than 60 PROJECTS PROJECTS in Agency's portfolio More than 60 PROJECTS PROJECTS in Agency's portfolio eCatalog of Investment projects - IN DEVELOPMENT (Agency gather, update and publish list of projects ready to invest) eCatalog of Investment projects - IN DEVELOPMENT (Agency gather, update and publish list of projects ready to invest) 3 COMPETITIVENESS CLUSTERS Automotive, Wood processing and Food processing clusters (in plan is 9 more clusters) 3 COMPETITIVENESS CLUSTERS Automotive, Wood processing and Food processing clusters (in plan is 9 more clusters) WORKING GROUP FOR BUSINESS CLIMATE AND PRIVATE INVESTMENTS as a part of Government Coordination of economy, investments and EU funds WORKING GROUP FOR BUSINESS CLIMATE AND PRIVATE INVESTMENTS as a part of Government Coordination of economy, investments and EU funds

7. WORKING GROUP FOR BUSINESS CLIMATE AND PRIVATE INVESTMENTS Agency for Investments and Competitiveness - main expert operational body  Agency will focus on reducing barriers in realization of major private investment projects and removing obstacles  Analyzing and identifying key segments and priorities for improving business and investment climate in Croatia  Proposals of legislative and other solutions to the Government, to enable the improvement of business and investment climate in Croatia  Systematically following preparation and realization of private investment projects  Agency is providing operational platform for realization of working group aims MAIN AIMS MAIN AIMS

8. Regulatory framework already in place: IMPROVING INVESTMENT ENVIRONMENT AND ENCOURAGING INVESTMENT INCENTIVES Agency for Investments and Competitiveness supporting investors INVEST IN CROATIA – EASIER THAN 6 MONTHS AGO Act on Investment Promotion and Enhancement of Investment Environment

9. Manufacturing activities Technology centeres Strategic business support services Tourism (4 plus star hotels and resorts, sports and health centers, etc) Sectors Tax incentives Customs preferences Employment and education grants Incentives for modernization of technology and R&D activities Incentives for initial and capital expenses of the investment project Incentives for labor intensive investment projects Incentives Equipment and machinery and intangible assets: patent rights, licenses, know-how, or 2 year-gross salaries Eligible investment costs INVESTMENT INCENTIVES ELIGIBLE SECTORS AND COSTS

10. Incentives Tax incentives0% - 10% profit tax rate Employment incentives€3,000 – €18,000 per employee Incentives for Innovation and Development 20% of the eligible cost of buying the equipment/machinery (up to € 0.5 million) Incentives for Initial and Capital Expenses of the Investment Project Cash grant in amount of 10% of the eligible costs (up to € 1.0 million) Respective investment incentives are calculated on an individual basis. Minimum investment: 150.000 € - SME’s and large size companies INVESTMENT INCENTIVES

11. CALCULATOR You can calculate your investment incentives in Croatia by Investment Incentives Calculator available at AIK web pages www.aik-invest.hr You can calculate your investment incentives in Croatia by Investment Incentives Calculator available at AIK web pages www.aik-invest.hr

12. Next steps: Lex Specialis on investment projects of special interest to the Republic of Croatia Development of Investment Promotion Strategy – middle of 2013 IMPROVING INVESTMENT ENVIRONMENT Ministry of Economy

13. THANK YOU! We are standing at your disposal for any additional questions: www.aik-invest.hr