Most Attractive Eastern European Countries For Investments in 2013
The World Bank, European Investment Bank and European Bank for Reconstruction and Development announced an investment plan of more than 30 billion euros to boost economic growth in Central and Southeastern Europe in years 2013 and 2014. Despite financial crisis which is still apparent in Europe, economy of this continent remains the largest in the World and very important for every international company. With the investment into the one of the new European member states with low cost of working force, company can easily reach also high income markets of Western Europe. There are 17 countries in this region who will get funding from the banks in next 2 years: Albania, Bosnia and Herzegovina, Bulgaria, Czech Republic, Croatia, Estonia, FYR Macedonia, Hungary, Kosovo, Latvia, Lithuania, Montenegro, Poland, Romania, Serbia, Slovakia and Slovenia. Easteconomist prepared ranking of top 5 most interesting countries in the region for Foreign investors:
Poland is the biggest ex-communnist country in the European Union. Almost 40 million of the population and stable economic growth through times of recession made Poland one of the most positive economic stories in the European Union. According to Polish statistical office, average gross salary in Poland in September 2012 was 3641 PLN (about 900 EUR). Nominal GDP per capita in 2011 was 13,469 USD according to data from International Monetary Fund. Poland ranks high in international rankings for foreign investments. Major advantage of the country is inexpensive and well educated work force. Large domestic market and location between eastern and western part of the continent are additional reasons to invest in Poland. One of the disadvantages of Poland is bad transport infrastructure, however this is improving rapidly. Foreign direct investment inflow increase to Poland was considerably higher than the global average. According to UNCTAD, in 2011 global FDI increased by 17 %. FDI inflow to Poland increased by 46.7% amounting to USD 14.2 bln compared with USD 9.7 bln in the year before. Poland will at least achieve 2011 FDI inflow in 2012 and could reach record FDI growth in 2013, reports Warsaw Voice. Gazeta Wyborcza reports that according to UNCTAD Poland is worlds 6th most atractive country for foreign direct investment by 2013. In 2011, new trend amongst investors were investments in outsourcing of financial and IT services. Last year numerous multinational companies opened outsource centers in Poland: Nordea Bank, BNP Paribas, rosyjski Luxoft, Credit Suisse, PwC, Bridgeston and many others. On 30. 11.2012 Polish Information and Foreign Investment Agency reported, that the majority of investments to Poland still flows from United States of America, following by Germany, China and UK. Most popular still is the BPO industry – currently 27 investment projects with a total value of EUR 26.35 million are in realization process, which could create 6,838 jobs, the automotive sector (21 projects EUR 1,622.5 million, 8,119 jobs) and R&D (12 projects, EUR 9.1 million, 1,215 jobs). The following areas are ICT (10 projects) and machine industry (8).Polish Information and Foreign Investment Agency.
2. Czech Republic
Czech Republic is, after Slovenia, second most developed country in the region. GDP per capita in 2011 was 20,436 USD (Wikipedia). Latest information on Czech Statistical Office website is that average gross salary is slightly higher as compared to Poland and amounts 25.626 Czech Crowns (about 1025 EUR). The introduction of investment incentives in 1998 stimulated a massive inflow of FDI into greenfield projects. The Czech Republic’s accession to the European Union in 2004 and the amendments to the investment-incentives legislation have further boosted investment. According to an Economist Intelligence Unit database, the Czech Republic consistently attracted a high rate of foreign direct investment per capita since 2000, which confirms the country’s strong attractiveness for foreign investors. The Czech Republic is one of the most successful CEE countries in terms of attracting foreign direct investments. Over 173,000 Czech firms across all sectors are now supported by foreign capital, according to Czech Invest.
World economic crisis strongly affected small and export orientated Slovenian economy but with GDP per capita of 24,900 USD, Slovenia remains the most developed country amongst new EU members. Despite the fact that some economists are talking about bailout of Slovenia, this is probably not going to happen as Slovenia has very moderate debt in comparison to other countries of the EU. Slovenia differs from other countries in the region by strong domestic industrial production: Gorenje, Iskra, Hidria, Krka… Biggest foreign investor in the country is French car producer Renault. Average gross salary in Slovenia for August 2012 was 1515 EUR. In addition to the salary, slovenian workers are entitled to reimbursement for the cost of commuting to work and some other costs. Although some economists estimate that Slovenian workers are to expensive and not competitive in comparison to some other countries of Eastern Europe, Slovenia still offers plenty interesting opportunities to invest and best business evironment among competition from Eastern Europe. Slovenia is combination of not to expensive workforce and modern western life standard. Slovenia was the first country amogst new EU members which adopted euro in 2007. According to IMD – World Competitiveness Yearbook 2011, Slovenia offers the most productive and qualified workforce in the region. Slovenians are best foreign language speakers. You can find more information on Slovenia here: Invest Slovenia.
Slovakia is an interesting investment destination. Nominal GDP per capita reached 17,644 USD in 2011 according International Monetary Fund. Slovak Statistical office reported average mothy bruto salary in the first half of 2012 to be 781 EUR. Reasons for Slovakia’s high and fast economic development in recent year are numerous: currency Euro, simple and fair taxation system incl. 19% flat tax rate and 0% dividend tax as well as availability of highly skilled and educated workforce. Slovakia reported the eighth lowest debt in the EU in 2011, though it grew y/y from 41% to last year’s 43.3% of GDP. According to Eurostat data, Slovakia is one of twelve EU countries that posted debt below 60% of GDP last year. The Slovak Investment and Trade Development Agency (SARIO) helps and informs Foreign investors. A yearly survey among German investors in central and eastern Europe shows that Slovakia is rated second best in terms of its tax system and tax burden. German investors placed Slovakia on fourth place (after Poland, Czech Republic and Slovenia) when estimating an overall economic rating in the 20 CEE countries. Slovakia is a target country for many car producers, such asVolkswagen, PSA Peugeot Citroën, Kia Motors as well as companies from IT like Accenture, Dell, Hewlett Packard, IBM, Lenovo, T-Systems or Siemens.
Hungary, a country with a population of 10 million, nominal GDP per capita 14,050 USD and average gross salary about 219 000 HUF (about 780 EUR) , has to date attracted Foreign Direct Investment (FDI) of more than EUR 60 billion. Hungary is interesting for several industries. According to PWC, country is the largest electronics producer in the CEE region, providing 26% of total regional production. 6 out of the top 10 Electronic Manufacturing Services (“EMS”) providers in Europe are present in Hungary (Jabil, Flextronics, Foxconn, Sanmina, Zollner and Videoton). Pwc investing guide 2012 reportes that all major pharmaceutical companies are present in the country. Other most interesting sectors are Automotive, ICT and Food industry. As in other countries in the region, both refundable and nonrefundable incentives are available to investors coming to or expanding in Hungary.