BUSINESS ENVIRONMENT AND INVESTMENT OPPORTUNITIES

BUSINESS ENVIRONMENT AND INVESTMENT OPPORTUNITIES TURKISH-ITALIAN COOPERATION MEETING ANKARA ISTANBUL IZMIR October 2015 1 ST FDI ATTRACTION ROADSHOW THE ITALIAN GOVERNMENT 0

CONTENT OF THE DOCUMENT WHY LOMBARDY BUSINESS OPPORTUNITIES IN LOMBARDY REGION INVEST IN LOMBARDY 1

LOMBARDY KEY FIGURES Switzerland Austria LOMBARDY France SO GDP: almost 25% of Italy s total GDP higher than Norway, Austria, Denmark, Finland, Ireland and Portugal VA CO LC BG MB MI LO CR PV BS MN Lombardy s per capita nominal GDP +23% of the average per capita European GDP Lombardy has more than 800.000 companies One of the four European economic engines One of the top ten World Economic Centers (According to Standard & Poor s) Over 60% of FDI coming to Italy (92 of the top 100 multinational companies in Italy) Milan, the European city with the highest density of multinational companies 2

ITALY AT ITS BEST 8 Belgium, France 110 Slovenia 64 Belgium Business Costs in Milan are lower than in Paris, Frankfurt, Berlin and London (according to KPMG, Competitive Alternatives) 7 59 France 6 United Kingdom 5 EU Average, Germany, Netherlands, Slovenia, Spain United States Bologna Milan Naples Palermo Rome Turin 5 4 3 2 1 Procedures (number) Bari, Cagliari, Campobasso, Catanzaro, L Aquila, Padua, EU Average 28 Potenza Austria, Finland Georgia, Portugal Austria 21 Finland 14 Spain 13 United States 12 Georgia 2 Time (days) 40 Germany 29 United Kingdom 24 Rome 18 Average 13 Italian cities 13 Bologna, Naples, Palermo 7 Netherlands 1 Portugal Registering property in Milan is faster and less expensive than in many EU economies Starting a business in Milan is faster than in UK or Germany Source: Doing Business database 3

A PERFECT MIX OF QUALITY AND COSTS Cost/quality matrix in wood manufacturing Top performance area 200 175 150 Milan (Region) Quality score 125 100 75 50 Barcelona (Region) Tuscany (Region) East Midlands Lorraine (Region) Munich (Region) Frankfurt (Region) Paris (Region) Greater London 25 60 80 100 120 140 160 Cost Index Source: FDI Benchmark 2014 4

THE EXCELLENCE OF SMEs IS LOOKING FOR NEW INVESTMENTS Number of companies per size and sector 99,4% of the total firms > 40% Total added value Manufacturing Real Estate Services 4,4 Mln 22.000 An additional unit of capital invested in a foreign branch makes in Lombardy 16 percent more in terms of gross margin then the European average 3.600 An additional unit of capital invested in a foreign branch in Lombardy makes 19 percent more in terms of turnover then the European average Micro & Small Middle Large Source: Based on Istat data 2011 5

HIGH TECHNOLOGY MANUFACTURING Number of employees in high tech manufacturing sector\ 000, Data 2013 High qualified human resources (e.g. engineers, skilled workers, etc.) have competitive salaries compared to other EU Countries 6 Source: Eurostat 6

WITH LOW COSTS Comparing ISTAT and OECD Data Comparing hours worked per worker 2014 2000-2014 Source: OECD Data and ISTAT, 2014 Source: OECD Data Considering OECD data, Italy has lower hourly wage and lower labour costs comparing to France, Germany, Austria and UK. In comparison with other countries (Austria, France, Uk, Germany) Italian workers have high average annual hours worked. 7

A BRIDGE BETWEEN EUROPE AND THE MEDITERRANEAN Companies in warehousing and storage Number of Companies, 2014 8

WITH SOME COMPETITIVE ADVANTAGES Logistic sector: real estate value per sq. /sq./year, 2014 Source: World Capital 9

MAIN BUSINESS SECTORS IN LOMBARDY REGION Life Science & Chemical Industry Engineering Milan hosts 26% of Italian companies operating in biotechnology One third of Italian chemical local units and 40% of the sector work force are located in Lombardy First region in Europe for the number of chemical employees Manufacture of rubber and plastic products offer ROE higher than average returns obtained from foreign subsidiaries in the main European regions More than 83% of chemical companies involved in research and development activities make product innovation 4 districts specialized in engineering and mechanical sector Weight of mechanical sector on regional export is always more than 20% The engineering industry in Lombardy has 7064 local units for a total of 279377 employees ICT & Multimedia Design & Fashion Industry Financial Services Milan most wired city in Italy and one of the most wired in Europe 11709 companies (10% of total Italian ICT enterprises) Technology parks of international significance (e.g. Kilometro Rosso, ComoNext) 542 companies specialized in design (11.7% of total Italian design sector) 61% of the Italian turnover produced in the Province of Milan 17 specialized institutes Hosting Salone Internazionale del Mobile More than 15000 fashion companies with 45000 employees 13 trade fairs dedicated to fashion and accessories 140000 buyers and industry professionals during fashion trade shows Almost 10% of Italian financial services organizations are located in the province of Milan More than 40 foreign banks own their offices in Milan About 10000 people are specialized employees in this sector 11

INCENTIVES AVAILABLE IN LOMBARDY Lombardy Regional Incentives European Fund for Regional Development Italian National Incentives European Grants DOTE LAVORO: Regional founds for hiring: unemployed workers, new workers (entering the labor market), people with high risk of social exclusion COMPETITIVENESS COMMITMENT up to 1 million euro for R&D Total budget: 48 mln euro for the period 2013/2015 FESR (EUROPEAN FUND FOR REGIONAL DEVELOPMENT): support Research & Innovation and activities for Research & Development Total budget: 350 mln euro for R&D for the period 2014/2020 HIRING HUMAN RESOURCES: tax credit for hiring young (35% of the gross salary for 18 months) and woman personnel (50% of the gross salary for 18 months) ACQUISITION OF NEW MACHINERY: financial aid at subsidized rate for machinery acquisition in industrial sector: max 2 mln euro of loan (total budget available: 12 mln euro) INNOVATIVE START-UP: flexible working contract for hiring skilled personnel; tax credit for hiring skilled personnel (35% of the annual salary); easy access to financial credit (max 2,5 million euro) at subsidized and government warranties and accelerate procedures for the newco setting up and registration HORIZON 2020: 7-year program (2014-2020) Total funds: 80 billion euro in different sectors: - 24.5 billion to Excellent Science priority - 17.1 billion to Industrial Leadership priority - 29.7 billion to Societal Challenges priority 12

M&A OPPORTUNITIES WITHIN ITALIAN INDUSTRIES Main sectors of activities Invest in Lombardy portfolio features Other Automotive >100 Mln 0-5 Mln Mechanics 50-100 Mln 5-10 Mln Food Fashion Energy & Engineering Main sectors of activities Automotive components; Industrial mechanics; Fashion and accessories (apparel, shoes, jewelry); Food processing; Pharmaceutical; Renewable energy and engineering 10-50 Mln Invest in Lombardy portfolio features Companies biased toward industrial partners to support their growth abroad High skilled SME characterized by Made in Italy quality and expertise in niche sectors Opportunities turnover range from 2 mln euro to over 150 mln euro 13

INVEST IN LOMBARDY IN A SNAPSHOT Our Services Thinking of starting up a business in Lombardy? Our Stakeholders 15 PUBLIC PARTNERS 22 PRIVATE PARTNERS Investment Opportunities Business start-up Location search Recruitment Access to credit, incentives and finance Want to expand your business in Lombardy? Analisys and research Location search Recruitment Access to credit, incentives and finance Executive education Our Results > 8.000 meetings with foreign companies > 450 foreign investors supported by IIL 70 finalized investments 122 Investments generated throughout the territory for every euro invested by public institutions 15

Get in touch with us! S t e f a n o N i g r o Tel. +39 02 8515 5220 www.investinlombardy.com Thank you! Follow us: www.investinlombardy.com @investinlombard Invest in Lombardy InvestinLombardy 16

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