Where IT comes together KAUNAS REGION Where IT comes together

Welcome to Kaunas Region, Lithuania! Where IT comes together Lithuania is at the center of three of large consumer markets: Western Europe Baltic Sea Region Russia and former Soviet States (CIS) LITHUANIA stats Size 65,300 km2 Population 2.97 million Capital Vilnius Official language Lithuanian Currency Lithuanian Litas (LTL) Pegged to Euro since 2002 1 Euro = 3.45 LTL Real GDP growth 2013: 3.2% 2012: 3.7% 2011: 6.0% FDI growth 8.1 % Annual inflation 1.2% KAUNAS REGION stats Regional capital Kaunas City Population 593,000 Labour pool 289,000 Unemployment 31,300 (10.1%) FDI growth 11.4% Kaunas Region Source: Statistics Lithuania, VRM , Invest in Lithuania, 2014 Buck Consultants International

Lithuania, a gateway to the EU and CIS KAUNAS REGION Lithuania, a gateway to the EU and CIS Where IT comes together 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: * World Bank, Invest in Lithuania 2014 Source: Economist Intelligence Unit Q2 2014 Buck Consultants International

KAUNAS REGION IT sector Lithuania Where IT comes together Lithuanians are among the most IT-proficient people of the European Union – 96.7% of individuals aged 16-24 obtain IT skills through formal educational institutes More than 24,500 experienced IT professionals are currently employed in Lithuania in 2,185 companies. Over 8,000 employees are active in the area of computer programming Lithuania has 6,200 IT students at 7 universities and 14 colleges. A majority of ICT talent is located in Vilnius and Kaunas Lithuanian IT professionals feature strong competencies in: Java , Oracle, Microsoft (C#, C/C++, Visual Basic, ASP), Web Based (HTML, PHP, JavaScript, CSS, XML). Other well-spread competencies in the market are: Python, SAP, SharePoint Source: Invest Lithuania 2013 Lithuania ranked 1st globally on communications technology International rankings 1st in the World Competitiveness Rankings for communication technology * 1st for Internet upload and 3rd for download speed in the EU ** Among Top 10 countries in the world for cloud readiness ** Sources: * IMD, The Word competitiveness yearbook, 2011-2012 , Invest in Lithuania ** Ookla Netindex, 2013 , Invest in Lithuania *** Cisco Global Cloud Index, 2013. The Index evaluates Consumer and Business Fixed Network performance and Consumer and Business Mobile Network performance, Invest in Lithuania Answer to the question: Communications technology meets business requirements Source: IMD WCY Executive Opinion Survey based on an index from 0 to 10, 2013 survey results, Invest in Lithuania Buck Consultants International

Kaunas Region is next to the capital Vilnius, Lithuania’s second city and an important hub for IT Where IT comes together Callcredit Information group Dematic Unicall Runway HP Nielsen&Nielsen IBM SEB Nielsen Atea Barclays COWI Danske Bank Matrix Software Western union Storebrand CSC Transcom Paroc CITCO INWINDO CSC Telecom Swedbank Worldone Mirror   Telia Sonera BDC Omega Greencarrier Lintel Kaunas Region is proven to be an excellent alternative for the crowded and more costly Vilnius’ market Source: Invest Lithuania 2013 Buck Consultants International

In KAUNAS REGION it all comes together The Kaunas Region provides an unmatched mix of cost-effective talent and high class infrastructure Where IT comes together Highly educated IT talent The right people The right education The right languages Cost attractiveness ICT infrastructure The right connectivity The right speed The right labor cost savings The right tax scheme In KAUNAS REGION it all comes together Real Estate availability International accessibility The right offices The right cost advantages The right location The right direct flights

Highly educated and multilingual talent KAUNAS REGION Highly educated and multilingual talent Where IT comes together In Kaunas Region over 5,000 people are employed in the information and communication sector The Kaunas region workforce is highly educated with 39% of workers having a third level diploma (Lithuania: 34%; EU: 24%). Virtually all highly educated graduates speak English The majority of IT talent is located in two largest clusters – Vilnius and Kaunas with more than 4,800 young people studying IT curriculums in these cities Because of fast-growing IT centers like Barclays, Vilnius is experiencing a tight labour market for which Kaunas is an excellent alternative British company Callcredit expanded its IT center in Kaunas from 120 to 200 employees in 2014 benefiting from the large graduate potential Sources: Lithuanian Statistical Department, VRM, Invest Lithuania 2014 IT students Lithuania by field of study 2012-2013 Barclays Technology Centre has already reached more than 1000 FTE in less than four years since its establishment in 2009 in Lithuania Source: Invest Lithuania, 2014 Source: Invest Lithuania, 2014 Buck Consultants International

50% of the tax rate (subsequent 10 years) Cost attractiveness KAUNAS REGION Where IT comes together In general labour costs in Lithuania are less than half compared to Western European countries and the USA Kaunas is a very cost attractive location for IT as employers’ cost levels are 10-15% lower compared to Vilnius and 20-40% lower than in Poland, Slovakia and Hungary 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* * Source: Invest in Lithuania, FEZ Kaunas, Kedainiai 2014 Full employers cost per person per year (Euro) Tax rates 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 Source: Invest in Lithuania, FEZ Kaunas, FEZ Kedainiai 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 Buck Consultants International

ICT infrastructure KAUNAS REGION Where IT comes together The ICT infrastructure in Lithuania (and Kaunas Region) is the best in Europe with 33% of homes/buildings directly connected to fiber The most up-to-date ICT technologies are implemented and functioning in the entire country (LTE technology, 3G mobile communications, infrastructure, mobile WiMAX 4G Internet etc.)* * Source: Invest in Lithuania Also on the achieved internet speeds Lithuania scores very high at 7th globally Countries with the highest penetration of fiber-to-the-home / building Lithuania ranked 7th globally on achieved internet speeds (Mbps) Source: Speedtest.net, 2014 Source: FTTH Council Europe 2013 Buck Consultants International

International accessibility KAUNAS REGION Where IT comes together 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 Buck Consultants International

Availability of affordable real estate KAUNAS REGION Where IT comes together Average annual occupancy costs office (Euro/sqm) Kaunas Region provides affordable office space which is 25% cheaper compared to Vilnius Kaunas Free Economic Zone (FEZ) provides opportunities for setting up an office. The zone provides favourable and lower taxes for investors investing at least Euro 1 million Within the city of Kaunas, new high quality developments are underway to accommodate the business services industry Note: Cost for a Grade A office space, excluding average local rates and service charges Source: CBRE, Jones Lang LaSalle, UBS, Ober-Haus, Colliers International ,2014 New office building Kaunas City Source: Invest Lithuania, FEZ Kaunas, 2014 Buck Consultants International

National incentives support program KAUNAS REGION National incentives support program Where IT comes together 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 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 Source: Invest Lithuania, 2014 Buck Consultants International

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