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2 Right place, Right people for Your Business

Rezekne is the seventh largest city in Latvia ( inhabitants in 2015), Rezekne region is the largest in Latvia ( inhabitants in 2015) The main industrial sectors – woodworking, metalworking, food processing industry, construction The average net monthly wage in Rezekne in 2014 was 578 EUR, in Riga EUR, in Liepaja EUR, Ventspils EUR Population of working age is 65,24 % 3 Profile of the Rezekne and Rezekne region

Rezekne Special Economic Zone Total area of Rezekne SEZ: 1155 ha Founded in 1997 Legal form: Joint municipal institution of Rezekne city and Rezekne Region Municipality councils Term of operation: till 2035 Information about Rezekne SEZ investment objects for business development is available at: n.php 4

Granting RSEZ status The Terms for Granting a RSEZ Company Status: Legal address of the company should be registered in the territory of RSEZ Business activities should be conducted in the territory of RSEZ Company should own or rent real estate in the territory of RSEZ Administrative Services Offered by RSEZ: Consultation on company registration in Latvia Consultation on granting the RSEZ status Consultation on available EU Structural Funds and other financial sources 5

Advantages of RSEZ Direct access to the international market with more than 500 million of EU consumers Tax relief Skilled labour force International importance transport and logistics centre Support from government and municipalities Stable cooperation traditions with European countries, Russia, the Commonwealth of Independent States (CIS) 6

Tax relief A significant return on investment through a very favourable tax environment The applicable corporate income tax (in Latvia 15 %, in RSEZ 3%) 80% discount on the applicable property tax (in Latvia – 1,5% of the cadastral value, in RSEZ it is 0% – 0,3%) Creating a free customs zone in the SEZ: exemption from VAT, excise and customs duties on imports in the SEZ from abroad and exported to foreign countries 7

RSEZ tax relief exampe Investments = 10 million EUR Profit = 1 million EUR Real estate cadastral value = 0.5 million EUR Savings per year: 157, 500 – 31, 500 = EUR Intensity of support – 35 %- 55% depending on the size of the entreprise Tax relief calculator is available on the RSEZ home page: 8 Taxation in Latvia:Taxation in RSEZ: Profit tax15 %150, 000 EURProfit tax3 %30, 000 EUR Real estate tax 1.5 %7, 500 EURReal estate tax 0.3 %1, 500 EUR Total157, 500 EURTotal31, 500 EUR

Import of goods through RSEZ RSEZ It is possible to release goods for free circulation in the European Union by paying only customs duty (VAT is paid by the final recipient in any of the EU countries) Customs procedures are not applicable to transportation of goods from the point of import (Latvia) to the final recipient EU 9 China

RSEZ LATVIA The example shows how the importer saves 5-7% from the total costs of the product, by establishing a company in the territory of RSEZ EU Customs duty 5% Customs duty 15% 3%-5% Assembling, labelling and other value - added activities The EU border ~ 5% less than the “price X” “Price X” Save up to 5% if the goods are processed in the RSEZ Value added activities 10

Transit through RSEZ CHINA RSEZ submission Purchase and sales operations in a free zone of RSEZ with no VAT applicable completion 11 RUSSIA

Professional human resources Educational institutions in Rezekne: Academy of Technology and the five branches of higher educational institutions of Latvia, Rezekne State Border Guard College, Rezekne Technical Collage and other Rezekne Techncal College implements 18 curricula (energy economics and electrical engineering, road transport, wooden articles manufacturing, construction, business studies, food technology, programming, computer systems, hotel industry and catering, et al.) serving 800 students 12

Rezekne Academy of Technology Rezekne Academy of Technology implements 39 curricula (21 for bachelor’s degree, 15 for master’s degree and 3 for doctoral degree) for involving over full-time and part-time students Approximately 35% of all students study in Faculty of Engineering, where the most popular study programs are environmental engineering, mechatronics and IT 13 Rezekne Academy of Technology students according to the field of studies

Labor costs and expenses 14 Sense of responsibility, diligence and efficiency at work – the inherent features of Rēzekne labour force Labor costs are among the most competitive in Latvia Competitive operating expenses

International importance transport and logistics centre Excellent logistics and transportation connections to the EU, Russia and CIS: Modern embarkation park at the railway station “Rezekne- 2” Crossroads of Trans-European Network (TEN) motorways and railways The nearest major international airports: Riga, Vilnius Major ports: Freeport of Riga, Freeport of Ventspils (422 km), Freeport of Liepaja (448 km), Freeport of Klaipėda (495 km) 15 Riga 242 km St. Petersburg 457 km Moscow 685 km Warsaw 860 km

Facts about the RSEZ enterprises The main sectors: metal working, wood processing, food processing, warehouse transactions Totally RSEZ companies in 2014 employed 772 workers. The number of companies: 18 The overall turnover: 65 million euro, SEZ accounted for 80% of all direct foreign investment in the city of Rezekne 16

Thank You for Attention! Joint Municipal Institution “Rezekne Special Economic Zone Authority” Atbrivosanas aleja 93, Rezekne, LV-4601 Phone/fax: