Incentives for innovations in Lodz Special Economic Zone

1. Incentives for innovations in Lodz SpecialEconomic Zone Anna Kądzielewska – Specialist for Investment Development September 2013

2. LODZ REGION ACCESIBILITY A1 and A2 motorways junctions, S8 and S14 express roads

3. THE REGION OF LODZ - HUMAN RESOURCES The Region of Lodz is an excellent academic centre where almost 120 000 students attend 24 higher universities with more than 90% speaking English, 40% German. Apart from the most popular languages, students can choose different languages offered by the universities (Chinesse, Japanese, French, Russian, Arabic). Annualy, almost 30 000 young and competent people graduate from the universities in Lodz ready to enter the labour market. The number of students in Lodz allows the city to place 6th in Poland in the ranking among economic faculties, 4th among IT faculties and 6th among technical faculties.

4. SEZs IN POLAND • A special economic zone (SEZ) is a designated area in which manufacturing or distribution activities can be conducted on preferential terms • The purpose of SEZs is to support regional development • Currently, there are 14 SEZs in Poland, each consisting of several subzones • Total area of all SEZ – 20 000 hectares approx. 16 000 already occupied • SEZ will operate until 2020 • Permits to conduct activities in SEZ are issued by the authorities of each SEZ • Minimum investment: EUR 100,000 • Possibility of cover the land selected by an investor by SEZ

5. ABOUT LODZ SEZ Lodz Special Economic Zone administrativelyseparated part of the territory of Poland, wherecompaniesmayconducttheir business activities on special, preferentialtermsdetermined by the Law on SEZ. Lodz Special Economic Zone one of the most dynamically developing economicareas in Poland, perfectlocalisation, taxincentives, richtraditions and fullsupport in investment projectimplementation.

6. LODZ SEZ LOCATION 45subzones The area of1290 ha • developedarea • freearea

7. RANGE OF ACTIVITIES IN LODZ SEZ Productionincluding foodprocessing Servicesincluding transportand storage BPO/ SSC/ IT/ R&Dincludingaccountancy and book-keeping, call centreservices,technical analyses

8. BENEFITS • a total CIT exemption from (corporate income tax) in the amount calculated as 50% oftwo-year labour costs of newly hired employees or of investment expenditures • intensity of the aid for SME’s sector:60-70% - the highest level of State Aid in the European Union • plots of land prepared for investment projects, available at competitive prices • free assistance in dealing with formalities related to the investment project • assistance in finding business partners (HR, consulting,construction, finances) – Partner Program.

9. POSSIBILITY OF COVERING AREA WITH SEZ STATUS Based on the Law on SEZ it is possible to establishanew SEZsubzoneon a land selected by a companyfor the purpose of a new investment project. The projecthas to meet the ministerial criteria in terms of number of newjobs and/orvalue of an investment.

10. CONDITIONS FOR ENLARGING THE ZONE I. Citerionreferring to the unemploymentrate in a district (poviat): 1) in a district (powiat) in which the unemployment rate is equal to or lower than 60% of the national average, the entrepreneur undertakes to create at least 500 new workplaces or to cover qualified investment expenditure in the amount of at least 350 million zlotys; 2) where unemployment is higher than 60% but not higher than the national average - creation of at least 250 new jobs or investing at least 155 million zlotys; 3) where unemployment rate is higher than the national average, but not higher than 130% of the national average -creation of at least 200 new workplaces or investment of at least 138 million zlotys; 4) where unemployment rate is higher than 130% of the national average, but not higher than 160% of the average – creation of at least 170 new workplaces or investment of at least 120 million zlotys; 5) where unemployment rate is higher than 160% of the national average, but not higher than 200% of the average – creation of at least 150 new workplaces or invests at least 100 million zlotys; 6) in a district (powiat) in which the unemployment rate is higher than 200% of the national average, but not higher than 250% - creation of at least 100 new workplaces or investment of at least 70 million zlotys;

11. PREFERENTIAL CONDITIONS FOR ENLARGING THE ZONE • II. Criterionreferring to innovation • activity carried out as a result of the investment shall consist in implementation of new products manufacturing or manufacturing of significantly improved goods not manufactured on the Polish market or rendering services having such features and not being offered within the region or new technological solutions which have not been used so far or have been used on the Polish market for the period no longer than one year; fulfillment of the criterion shall be confirmed by the opinions of at least two scientific entities within the meaning of Article 2 item 9 of the Act of 8 October 2004 on principles of financing science (Journal of Laws of 2008, No. 169, item 1049), and • 2) at least 30 new workplaces shall be created in connection with the investment and qualified investment costs in the value of at least 20 million zlotys shall be incurred.

12. CONDITIONS • A new investment project of minimium value EUR 100.000, • The investment and business activity has to be maintained for a period of minimum 5 years(3 years for SMEs*), • Creation of new jobs and maintaining employment level for a period of minimum 5 years(3 years for SMEs*), • Maintenance of the assets for which the investment costs were incurred for a minimum period of at least 5 years after they had been put into the fixed assets evidence (3 years – SMEs*) * According to EU definition SMEs are companies that employ up to 50-250 workers and their yearly turnover does not exceed EUR 10-50M

13. POST-INVESTMENT CARE • Lodz SEZ is in constant contact with companies during the whole process of implementing investment project: • cooperation with local authorities; • support in contacts and negotiations with infrastructure companies (gas electricity power, etc. suppliers); • organization of free trainings and conferences; • annual meetings integrating entrepreneurs; • promotion of companies; • support in contacts with the Ministry of Economy.

14. LODZ SEZ - RESULTS New workplaces Investment expendituresin billion EUR * * 1 Euro = 4,00 PLN

15. 230 COMPANIES ALREADY TRUSTED US IT Pharmeceutics & cosmetics Household appliances / electro - engineering Packaging Others

16. LODZ SEZ’S BUSINESS PARTNERS Architektura i generalne wykonawstwo Budownictwo HR Dostawcy mediów

17. LODZ SEZ’S BUSINESS PARTNERS Finanse i consulting Inne

18. Adaptation and development of 19th century Ludwik Grohman’s factory for office spaces for Lodz SEZ and its investors – year 2011

19. Adaptation and development of 19th century Ludwik Grohman’s factory for office spaces for Lodz SEZ and its investors – year 2013 April 2013 May 2013

20. LODZ SPECIAL ECONOMIC ZONE One of the best rated by investors Special Economic Zone in Poland in years 2009-2012 * KPMG Report „Specjalne Strefy Ekonomiczne.”Edition 2012.

21. LODZ SPECIAL ECONOMIC ZONE 3rd place in Europe 18thplace among Special Economic Zones worldwide Taking into account Lodz SEZ’s results, incentives, marketing tools and investment potential *„Financial Times” fDi Global Freezones of the Future 2012/13

22. LODZ SPECIAL ECONOMIC ZONE 1st placein Europe 4th place among Special Economic Zones worldwide* Taking into account Lodz SEZ’s marketing tools used to attract potential investors * The fDi Digital Marketing Awards 2012, Financial Times

23. WE INVITE YOU TO Lodz Special Economic Zone Joint Stock Co. 22/24. Tymienieckiego St. 90-349 Lodz, Poland Tel.: +48 42 676 27 53, +48 42 676 27 54,Fax.: +48 42 676 27 55 www.sse.lodz.pl