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Reasons for investment in Subotica

1.Easy acces to 200 million consumer market free trade agreement with Croatia, Bosnia and Herzegovina, Romania, Bulgaria, Macedonia, Albania and Moldova a 65 million consumer market free trade agreement with Russian Federation a 140 million consumer market 2. Perfect strategic location for business development Pan-European Corridor X two international border-crossings "Gate of Europe, dorstep of Balcan" 3. VAT 8 to 18%, PROFIT TAX 8% - lowest in Europe 4. Efficient and business friendly administration 5. 30 ha of tourist zone areas for Greenfield investments 6. Protected nature park Pali 7. Special discounts for investors 8. Satisfied present investors 9. Well trained hard working and easy to come by labour 10. Potential for education and science institutions

+1 Friendly and cheerful people and perfect atmosphere for living, entertainment and relaxation

INVESTORS INFORMATION

One of the great benefits for investors is provision of professional services and support from the company. This advantage is reflected in the company's coordination and association with all local city services and public as well as public utility companies which enables the investor to, through us, via an accelerated procedure, obtain all necessary information about the implementation of an investment. With the aim of more efficient informing and providing services to investors, the Public Company Economic and technological parks Subotica functions on One Stop Shop principle all in one place. From the initial phase of interest to the decision and realization of an investment, investors can get the following information from us:

I.

INFORMATION ON INFRASTRUCTURE

For all necesary information on existing infrastructure, necessary capacities, connection fees and other, the company is in contact with and in coordination with public i public utility companies in charge of this area. At the request of investors, the company is able to organize meetings with representatives of these companies or to provide the investor with a direct contact. Public utility company 'Vodovod i kanalizacija' Subotica Public utility company 'Suboticagas' Electric company Elektrodistribucija Subotica Stock company 'Telekom Srbija' Subotica

II.

INFORMATION ON AVAILABLE WORK FORCE IN SUBOTICA

In cooperation with the National Employment Service (affiliate in Subotica), we are able to ensure all necessary information on available workforce on the territory of Subotica and its surrounding area, as well as on programmes and services provided by the National Emoployment Service. At the request of investors, the company is able to organize meeting with the National employment service or to provide the investor with a direct contact.

Number of unemployed by age and gender on the territory of Subotica No. Of uneployed 16.882 (8.384 women) Age structure 30 - 40 40 - 50 3.618 3.993 (2.117 (2.110 women) women)

City Subotica

> 30 4.695 (2.459 women)

50 > 4.576 (1.698 women)

Number of unemployed by qualifications and gender on the territory of Suboica

Qualifications I II / III / IV V VI 1/2 VII 1/2 6.864 8.547 145 643 683 16.882 (8.384 women) (3.265 women) (4.292 women) (25 women) (362 women) (440 women) I Level four years of elementary school II Level elementary school III Level - SSS high school IV Level - SSS high school V Level - VKV - SSS high school VI Level - VS college VII Level - VSS graduate college degree VII-1 Level - Specialist VII-2 Level - Magistrate

III.

INFORMATION ON THE PROCEDURE OF OBTAINING A BUILDING PERMIT

In order to start construction on a specific parcel, the investor has to undergo the procedure of obtaining a location permit, detailed designs and issuance of a building permit. In cooperation with the Public company Zavod za urbanizam Subotica and the city service for construction, we are able to provide the investor with all necessary preconditions in order to obtain a location permit and building permit in a very short period of time. PROCEDURE FOR OBTAINING A BUILDING PERMIT First step: Documentation: The investor needs to have proof of ownership or, in case of lease, on lease, in order to obtain a location permit. Land subdivision: Has to be approved by the competent department within ten days. Second step: Location permit: along with all necessary documentation and project for the land subdivision, request for obtaining a location permit is submitted. The city construction service has 15 days to issue it.

 Third step: Main design:the main design is done by the responsible designer in the name of the investor and its compatibility with the town-planning scheme is verified by external control. Fee for infrastructure: the investitor is obliged to pay a fee for infrastructure in order to obtain a building permit. The fee is determined according to the degree of communal infrastructure, urban areas, use and net surface of the object. In case of a single payment, the investor gets 20% discount on the fee. Building permit: If the main design is in accordance with the parametres in the location permit, the city service for construction has 8 days to approve it.

IV.

INFORMATION ON ENVIRONMENTAL PROTECTION

Environment protection area in Serbia is regulated by the laws adjusted to European legislation on environmental protection. Prior to building of the facility, the investor is obligated to carry out the procedure of obtaining the approval for the assessment of the impact of the underlying facility on the environment. The influence of the facility is estimated based on the criteria according to law, which includes the influence of the facility on the environment during the construction of the facility and the eventual termination of the work of the facility. Overall, for the estimation, it would be helpful to us to have the information about the type of production and the main technological processes, about raw materials used in production along with extra funds, as well as finished product (material balance). Based on these data, we could provide you the information for all the parameters of the environmental protection (water, air, soil, waste). The procedure for obtaining the documentation includes: The application form; Conceptual design and main design; Approvals of other relevant organizations (water and sewage, electricity, telephone) that the investor will certainly need in the process of obtaining building permit. Analyzing these documents, we will be able to inform you as to whether the study evaluation on the environment is needed or solely measures are prescribed which need to be conducted and controlled.Download: Law on environmental protection

V.

INFORMATION ON INCENTIVES FOR INVESTORS

V.I. ALIENATION OF THE LAND OR GIVING LAND UNDER LEASE AT A RATE LOWER THAN THE MARKET RATE WITHOUT ANY CHARGES According to the Regulation Act, local authorities can alienate ili give under lease construction land ehich is public property at a price, or lease, at a price lower than the market price or without any charge, pursuant to a previously obtained approval by the government in accordance with the Law on planning and construction under the condition that this land is intended for construction.

The investor can apply for this kind of an incentive provided that he meets the condition of emloying more than 1% of all people employed in the city economy (in case of the city of Subotica that is over 250 workers). Alienation or giving into lease of land in public ownership at a price that is lower than the market price or alienation or leasing of construction land in public ownership without compensation is conducted by tendering through public advertising or direct negotiation V.II. INCENTIVES PER EMPLOYEE ('SIEPA' programme) In addition to existing benefits, such as an educated and cheap labour force, Pored postojeih prednosti, kao to su obrazovana i jeftina radna snaga, tax-free export to the countries of Southeast Europe and Russia, strategic geographic location and the lowest income tax rate in Europe of 10%, Serbia through 'SIEPA' offers financial assistance to potential investors. For standard-scale Greenfield and Brownfield projects in the manufacturing and exportrelated services sectors, non-refundable state funds are offered in the range between 2,000 and 10,000 per new job created. For large investors, a special financial package is available. If a project's value exceeds 200 million, with the minimum of 1,000 new jobs created, the state may cover 25% of the investment. Investments of over 50 million that create the minimum of 300 new jobs can be subsidized for 20% of the project's value. For large-scale projects, the amount of grants is determined by the government, depending on the investment's importance, value, and term. In case of standard-scale projects, state funds are awarded upon the scoring based on the following criteria: Investor's references: Participation of domestic suppliers in the final product and the investment effect on local companies, Investment sustainability, Effects related to R&D, Effects on human resources, Environmental impact, The value of international turnover for investments in the services sector, Imports substitution, Effects on the development of the local community, and Municipal support related to deduction of local fees. Upon the assessment of investment projects, the funds for selected projects are paid out in four increments throughout the project's lifetime: 1st increment - after concluding the contract for sale or lease of land; 2nd increment - after obtaining the construction approval; 3rd increment - after obtaining the right-to-use permit; 4th increment - after achieving full employment envisaged by the investment project.

INCENTIVES PER EMPLOYEE ('SIEPA' programme) In addition to existing benefits, such as an educated and cheap labour force, Pored postojeih prednosti, kao to su obrazovana i jeftina radna snaga, tax-free export to the countries of Southeast Europe and Russia, strategic geographic location and the lowest income tax rate in Europe of 10%, Serbia through SIEPA offers financial assistance to potential investors. V.III. INCENTIVES FOR ADDITIONAL TRAINING PER EMPLOYEE (programme of 'National Employment Agency') SUBSIDIES FOR CREATING NEW JOBS: Subsidies for opening new jobs are granted in a one time amount for employers who open up to 50 new jobs to employ unemployed people registered with the national employment agency. Exceptionally, the employer may be entitled to a subsidy for opening new jobs for over 50 people with the aim of harmonizing regional development, elimination of disparities on the work market and a higher level of employment in 'greenfield' and 'brownfield' investments The amount of subsidies depends on the development of the municipality in which the people are being employed and the number of employees. SUBSIDIES FOR TRAINING PROGRAMME (The condition is that the employer does not use the subsidy for opening new jobs under the programmes of the National Employment Agency): This competition represents a basis for allocation of state aid and includes: Participation in financing the training: At the request of the employer, provided that in records of the National Employment Service (hereafter NES) there are no unemployed people of the necessary job or with the knowledge and skills necessary to work on activities. The training lasts from Obuka traje od 40 do 1.040 asova, 40 to 1040 hours, or up to 6 months depending on the complexity of tasks Standards of professional preparation with examples of work and characteristic descriptions are on the NES website: www.nsz.gov.rs Subsidy of expences for compulsory social insurance for trained and employed people upon the copmletion of the training During the training, NSE covers the costs of the following: training, up to 90.000 RSD per person, the price of one hour of the training is equal to one hour of work of the employer for jobs the person is being trained for cost of engaging external instructors and provided that the programme foresees obtaining licences, manuals and other financial aid to trainees according to the contract insurance for trainees in case of injury and occupational ilness in accordance with the law

After the completion of the training, NSE covers the following cost:

Subsidy of expenses for cumpolsury social insurance from and to the base consisting of the minimun wage, in a lump sum, in advance for 6 months per apmloyee in the training. VI. INFORMATION ON ESTABLISHING A COMPANY (LLC Forming)

The following documents are submitted along with the application for registration: 1. Original application for company registration 2. Proof of identity of the founder (copy of ID or passport for a natural person and/or 3. Certificate of Registration issued by the Register in which the legal entity is registered) 4. Articles of Association (Decision or Agreement), with certified signatures of the founders Bank certificate on deposit of the monetary contribution to a interim account or a certified statement of the founder that he/she has provided the monetary contribution (250 deposit and additionally 250 within 2 years of formation) 5. Decision on the appointment of the company representative, unless the representative was designated in the Articles of Association 6. Certified signature of the authorized representative 7. Receipt of Payment Registration fee 8. Tax for the procurement of a registration number through the Agency Remark for Investors: Documentations from the foreign legal entity should be provided with official seal of authentication (Apostille) Certified translation into Serbian by an official court interpreter must be attached

REGISTRATION FEE: 4,600.00 RSD TAX FOR THE PROCUREMENT OF A REGISTRATION NUMBER: 1,750.00 RSD * Registration forms and instruction are available on-line at the Serbian Registers Agency website www.apr.gov.rs Companies registered with the Serbian Business Registers Agency (SBRA) receive: registration number Tax identification number (PIB) Serbian Business Registers Agency (SBRA), after registration, automatically sends required documentation to: Pension Fund (PIO) Health Fund After the registration, company should: Create a stamp Open a permanent bank account