New investments in ukraine and belarus and Made in Italy
NEW INVESTMENTS INUKRAINE AND BELARUS AND THE GROWING INTEREST IN “MADE IN ITALY”
MAJOR FACTS ABOUT UKRAINEUkraine is a country located in Eastern Europe. It is bordered by Belarus to the north ; Hungary, Slovakia, and Poland to the west; Russia to the north and east; and Romania and Moldova to the south.Kiev is the capital of Ukraine, with a population of 2,797,553, it is the largest city of Ukraine.The total area covered by Ukraine is 233,000 square miles. The population of Ukraine was estimated at 45,888,000.Ukraine is a unitary state sub-divided into twenty-four oblasts (provinces) and one autonomous republic , Crimea.The government of Ukraine is a unitary semi-presidential republic. President is Viktor Yanukovych, Prime Minister is Mykola Azarov.The hryvnia, denoted by the ISO code UAH is the official currency of Ukraine. It was adopted as the national currency on September 2, 1996. The hryvnia is subdivided into 100 kopiyok.Ukraine has a market-based economy. In 2010 the GDP (PPP) was estimated at $305.2 billion. The GDP per capita was $6,700.A modern interpretation of the meaning of the colors used in the Ukrainian flag is that the color blue represents the color of the sky, and yellow symbolizes the lush golden wheat fields of this country. This association is thought to have been developed in the mid nineteenth century. However, these two colors, blue and yellow, have been associated with Ukraine from the times before the introduction of Christianity.
Investing in Ukraine and Belarus is an opportunity to benefit from dynamic region with vast natural resourches friendly-business environment and cheap labour-forceGrowth of Gross Domestic Product (GDP) of Italy by investing money into Ukraine and Belarus economy;Increase of the export potential of Italy;Modernization of Ukrainian end Belarus industries;Increase of the competitiveness of Ukrainian and Belarus markets: providing of quality production, usage of new, innovative and resource-saving technologies , techniques and equipments;Simplified system of cooperation of Ukrainian and Belarus government and local authorities;
BELARUSCOUNTRY PROFILE Official Name Republic of Belarus Location Eastern Europe bordered by Russia,Ukraine,Poland,Lithuania,Latvia Capital Minsk Government Presidential republic President Alexander Lukashenko Prime Minister Mikhail Myasnikovich Total land area 207,600 km² Population 9.458 million Languages spoken Belarusian and Russian Currency of Belarus Belarusian rouble (Br)
ECONOMY Social market economy GNP (2011) Br274282 billion; per capita: Br28953 thousand Number of people in employment 4.6 million (2011) Unemployment in Belarus 28,2 thousand unemployed (2011)
ECONOMY MAIN AGRICULTURINDUSTRIES E Metallurgical Areas of speciality : industry grain mechanical potatoes engineering vegetables chemical and sugar beet petrochemical flax industry meat and dairy light industry industry food industry
NATURAL RESOURCES wood peat small oil and natural gas fields granite dolomite limestone clay sand
TRADEBelarus’ trade turnoverof goods amounted toUS$ 64.1 billion in 2012and compared to 2011grew by 13.7%.Exports totaled US$ 32.9billion and rose by23.4%.Imports amounted toUS$ 31.2 billion andgrew by 4%.The positive tradebalance totaled US$ 1.6billion.
Communication Telephone: main telephone Facilities and equipment – about 4.2Transportation million, users of mobile phones – 10.7 million Internet users: more than 3.1 million Railways – 5,511 km, including 897km of electric track Highways – 85,700 km. Including paved roads 74,300 km Oil pipelines – 2,984 km Gas pipelines – 7,421 km
MEMBERSHIP OF INTERNATIONALORGANIZATIONS, FUNDS ANDPROGRAMMES
MEMBERSHIP OF INTERNATIONAL ORGANIZATIONS,FUNDS AND PROGRAMMES
MAIN BUSINESS PARTNERS OF BELARUSRussiaUkraineNetherlandsGermanyChinaPolandVenezuelaBrazilLatviaItaly
Main competitive advantages"Belarus has an enormous potential that has yet to be Stable political and social situation, low levelsfully engaged – an advantageous geographical of crime and corruptionposition, a well-developed infrastructure, social Significant progress in economicstability, a strong research and technologicalpotential and low levels of corruption. Belarus can liberalisation and new initiatives towardsoffer vast opportunities to investors, including a boosting business activitiesprivatisation programme for state-ownedenterprises." Advantageous geographical location between the European Union and RussiaCihan SultanogluUnited Nations Development Programme Customs union with Russia and Kazakhstan offers access to the vast and growing market of approximately 168 million"Belarus’ economic performances during the last five peopleyears [has been] one of the best in the CIS." WillyKiekens, executive director for the Republic of Transit opportunities including a developedBelarus, IMF transport infrastructure Various untapped sectors and niches;"Belarus has a rich industrial heritage resulting in a competition is still scarce and there ishigh level of economic diversification." Standard & room for growth and increasedPoor’s competitiveness across almost all sectors in Belarus"We can see the huge potential of the Belarusian IT- A highly skilled and cheap workforce and aindustry and are ready developed technological backgroundto invest in its development." Cliff Reeves, Microsoft Developed investment infrastructure including six free economic zones, a high tech park,"The last untapped market in Europe" Business New and a Foreign Investment AdvisoryEurope Council
HIGHLIGHTSStable political and social situationLow levels of crime and corruptionSignificant progress in economic liberalisationNew initiatives towards boosting business activitiesAdvantageous geographical locationCustoms union with Russia and KazakhstanTransit opportunities. Developed transport infrastructureVarious untapped sectors and niches; room for growth and increased competitivenessA highly skilled and cheap workforceDeveloped technological backgroundDeveloped investment infrastructure
REASONS TO INVEST IN UKRAINE The countrys main strong points are: - One of the biggest markets in Europe - The most dynamic GDP growth in Europe - A very good education system - A strategic geographical positioning - The emerging middle class - The presence of investors such as Kraft Foods, Coca-Cola, Hewlett Packard, Cargill, Knauf, Raiffeisen Bank, Credit Agricole and many others - The strengthening and reforms of the banking sectors
INVESTMENT CLIMATE IMPROVEMENT COMPLEX AND LARGE-SCALE ACTIONS OF THE GOVERNMENT The actions of the Government are aimed at the improvement of situation in such fields as: Fighting corruption Tax legislation Eliminating bureaucracy Deregulation in Permit system, Licensing Financial system Economy and corporate legislation
INVESTMENT CLIMATE IMPROVEMENTFIGHTING CORRUPTIONThe Law of Ukraine "On Principles of Preventionand Fighting Corruption in Ukraine" consistentwith the provisions of the UN Convention againstCorruption was adopted on 15 March 2011 byVerchovna Rada
INVESTMENT CLIMATE IN UKRAINE: TAX SYSTEM REFORM •The aim of the reform – ensure sustainable innovation development of the domestic economy •Reduction of quantity of taxes •Reduction of rates of main taxes •Income tax – gradual reduction up to 16%; New Tax Value added tax (VAT) – up to 17% Code •Automatic VAT reimbursement •Tax relief for small businesses: •tax exemption for 5 years •exemption from income tax once the funds are being used for production modernization and innovation upgrade
Number of redundant state institutions and structures were terminated Number of state institutions employees was reduced
INVESTMENT CLIMATE IMPROVEMENTFINANCIAL SYSTEM
ITALIAN DIRECT INVESTMENTS IN UKRAINE (MILLIONS OFU.S. DOLLARS)Economic activity 1/07/2011 %Total investments 945,6 100Financial activity 781,5 82,6Industry 122,2 12,9Real estate 14,8 1,6Trade 11,0 1,2Transport and telecommunication 7,1 0,8Agriculture 4,0 4,1
ITALIAN INVESTMENTS IN UKRAINE According to data released by ISTAT commercial exchange between Italy and Ukraine is growing up (+55,5% in the 1° semester of 2011 in comparison with the same period of 2010)
To summarize, Ukraine’s private sector represents substantial opportunities for foreign investors. Ukraine’s labor cos UKRAINIAN PRODUCTS OF MAIN INTEREST Iron and steel Fuels Oil seeds and oleaginous fruits Animal or vegetable fats and oils Cereals Fertilizers Salt, sulfur, earths and stone, limestone and cement Leather Wood Inorganic chemicals
•“market socialism”orientation (2005)•pervasive state controland involvement in theeconomy•marked degree ofmonopolization in mostindustries•low degree of economicintegration betweenBelarus and the EU•mutually restrictive visaregime (Belarus, the EU)•dependence on Russia
Main conclusionsand challenges :• High growth with extremedependence on Russianenergy andraw materials is notsustainable.• Inward-oriented agricultureneeds reforms.• Current planning systemleaves no chance to adjustto any global marketchallenges.• Liberalization of certainsegments of the internalmarket (especially services)is inevitable.(!)• Attracting FDI will require
Financial SectorKEY SECTORS (Banking andFOR Insurance);INVESTMENT IN Transport & Logistics;BELARUS Construction; Agriculture; Tourism; Retail; Manufacturing; Food and Beverages; Wood processing; Petrochemical complex; Energy sector.
Investment climate in BelarusBelarus: Business reforms Privatisation a place to Investment incentives do business Free economic Zones High technologies Parka welcoming Taxation and attractive Labour market destination Investment guarantees Engaging with government for foreign International agreements investors
Reasons to invest in BelarusLocation Direct access to the market of the CES countries Belarus is in the heart of Europe Access to the 275 million strong CIS market and improving trade Target markets are near ties with EU via the ”Eastern partnership”
Reasons to invest in BelarusIncentives Developed transportation and logistics infrastructure Competitive investment Taxation conditions
Reasons to invest in Belarus High Technologies exceptional opportunities for the development of the Park IT industry unprecedented incentives for investors free from all taxes are not required to be physically located in the Park Exports constitutes 80% of the total production volume
Reasons to invest in BelarusPrivatisationopportunities Workforce Highly skilled (half with higher Abolition of the so-called education) ‘Golden Share’ Hard-working Low cost Tactics of step-by-step privatisation Establishing more open privatisation conditions understandable to foreign countries in Belarus
Reasons to invest in BelarusGovernance Protection Established legislative, Investment code: judicial and executive system guarantees for investors Business engagement in legal right to appeal Belarus: member of the World Foreign Investment Intellectual Property Advisory Council Organisation Belarus-EU Business Copyright laws Cooperation Council June 2012 - new Investment Council for law Entrepreneurship
Reasons to invest in BelarusEnvironment Decent living standards The living, dwelling costs, the A safe, clean, friendly place to costs of education and live and work with high various cultural events are educational standarts low A developed social infrastructure Eco-environment suitable for full and diverse life of people The best environment rating among all the CIS countries
Base of successful bilateralrelations Recuperation of Belarusian children in Italy Warmth, trust, gratitude and kind-heartedness Belarus - gateway to cooperation between the West and the East
Mutual Interest: Belarus Attracting Italian investments in the Purchasing economic high-tech sector equipment Stepping Benefits up energy for saving Increasing efforts Belarus export Upgrading supplies Enhancing the existing labour production efficiency facilities
Mutual Interest: Italy Industrial, scientific and Incentives Potential export potential Social, political and economic Stability stability Inexpensive but highly skilled Labour force labour force Reasonable infrastructure Infrastructure prices prices The favourable geographical location Location Preferences in the Belarusian free economic zones FEZ The infrastructure adapted to the needs of foreign business Adappted infrastructure
Branches of interest for Italy Branches Environment protection Energy conservation Agriculture Woodworking Granite proccessing Manufacturing footwear Clothing Cosmetics Pharmaceutical production Chemical production Credit sphere Tourism Logistics
Trade Belarus-Italy 2011 $150 million of net italian direct investment On the whole, Italian investors put nearly $200 million in the Belarusian economy Record high trade turnover with Italy of nearly $1.5 billion The export grew 2.8 times The import increased by 25% April 2012 Italian Day in Brest The Italian economy is represented mostly by small and medium-sized business (90-95% of the total) Bilateral cooperation is based on small economic projects worth of €3-10 million There are several large projects from €30 million to several billions
Belarus-Italy: Bilateral RelationsBelarus’ supplies to Italy Italy’s supplies to Belarus• wire and semi-finished • technology and products made of carbon steel • machines Belarus uses to• hardware modernise its industry and• leather goods upgrade production• lighting equipment facilities• glass fiber• ready-made clothes• synthetic threads• potash fertilizers• wooden structures
Investment projects “They might influence the investment climate in Belarus andItaly, and the European Union in general,” YevgenyShestakov, belarussian ambassador in Italy. 4-5 main investment projects with the participation of Italian investors a project on Minsk transport infrastructure, i.e. the construction of a hoist ring and rail network development constructing a modern gas-fired plant. The cost of the project is estimated at €300-400 million the production of high quality ceramic glass
Belarus-Italy: Credit-Investment activity & Joint Ventures Belarusian-Italian There are 60 companies in joint ventures and Belarus with the Italian foreign enterprises: ownership. Every year there • Belita (makeup) emerge new joint projects in such areas as: • Dinamo Program Pinsk (outer garments)• energy saving, • Bitrans (shipping and• woodworking, forwarding services)• production of medical preparations • Italiano-Ricambi (car and• tourism truck maintenance) • Bedocci (woodworking) A joint venture to produce • surgical sutures • electric heating units A project on setting up a joint transportation- logistics centre
Use of Italian technologies The National Library of Belarus The modern railway terminal in Minsk, the House of Mercy
Belarus-Italy: In Search of New Opportunities For Belarus it is beneficial to participate in various exhibitions in Italy. Italy is a trendsetter in many spheres. Businessmen come to Italy from every corner of the world. The exhibitions help Belarusian manufacturers gain a better exposure and toehold into the global market. “We view Italy as a privileged partner and we are ready to create the most favorable environment for bilateral cooperation,” said the Belarusian President
New Investments inUkraine and Belarus & Growing Interest in “Made in Italy”
In order to becertified ‘Made in Manufactured completely inItaly’, a product has Italyto respect thefollowing Made in accordancerequirements: with security and health criteria Constructed with first choice, high quality, natural materials
If a product satisfy/fulfil these requirements theycan receive „Made in Italy 100% certification‟ by the Institute for the Protection of Italian Manufacturers. (Istituto per la Tutela dei Produttori Italiani).The guaranteed label,„Made in Italy‟ was bornin 1990, and isapplicable to any sector.The authentication100% „Made in Italy isgiven only after aninquiry verified by theInstitute for theProtection of ItalianManufacturers.
The Made in Italy denomination ought to denote the actual andtotal provenance and production in Italy of the article that bears its name; ought because unfortunately in many cases this is not so.In fact, many products have the Made in Italy brandeven though they are almost entirely made abroad!
“Made in Italy” is the third mostrecognized brand in the world, just after Coca-Cola and Visa.*Source KPMG 2012
Both Ukraine and Belarus were part of USSR. The economy was entirely planned bythe State, that is the Communist Party. Few chances of free market.
After the Fall of Soviet Union they had to face many social and economic changes They needed to transform theireconomies in order to attract foreign investments
The importation of goods from abroad is constantly growing both in Ukraine and Belarus. Importations from Italy:• Ukraine +44% in • Belarus +25% in 2011* 2011* Italy is the third business Great potential but less partner of Ukraine dynamic economy*Compared to 2010, Source ISTAT.
UKRAINE: BELARUS:• Mechanical Machineries • Mineral Products• Furniture • Mechanical Machinery and• Clothing equipments• Electrical Machineries • Vehicles• Footwear• Plastics • Metals• Garments, knit dresses • Chemicals and the like• Iron, steel, cast iron • Food• Combustibles and Fuels** • Textiles• Ceramic products
THANKS – СПАСИБО New Investments in Ukraine and Belarus and the Growing Interest in“Made in Italy” Prof. M.R. BuriKaterina YasemchykJulija KoshchiiMassimiliano MacrìNatalia SemiankivOlga Belash
To Estimate: to form an approximate idea of (distance, size, cost, etc.); calculate roughly; gauge.STIMARE , VALUTARE.Oblast: an administrative division or region of Russia and the former Soviet Union countries.OBLAST’.Hryvna: the standard monetary unit of Ukraine, divided into 100 kopiykas. GRIVNA.Per Capita: of or for each person. A TESTA, PRO CAPITE.Watershed: 1) the dividing line between two adjacent river systems, such as a ridge 2) an importantperiod or factor that serves as a dividing line. SPARTIACQUE, (fig) SVOLTA.Ruble/ Rouble: the standard monetary unit of Belarus and Russia, divided into 100 kopecks.RUBLO, COPECOEnact: 1) to make into an act or statute 2) to establish by law; ordain or decree.RAPPRESENTARE, PROMULGARE, APPROVARE.Pulp/ Pulpwood: a moist mixture of cellulose fibres, as obtained from wood, from which paper ismade. POLTIGLIA DI LEGNO.
Turnover: the amount of business, usually expressed in terms of gross revenue, transacted during aspecified period. GIRO/VOLUME D’AFFARIFriendly-business environment:Untapped: not yet used. NON SFRUTTATO/UTILIZZATO.Niche Market: a demand for a very specialized product or commodity. MERCATO DI NICCHIA.Insurmountable: incapable of being overcome. INSORMONTABILE.Limited liability company (ltd): a company whose owners enjoy limited liability for the companysdebts and losses. SOCIETA’ A RESPONSABILITA’ LIMITATA (srl).VAT: abbreviation for value-added tax: a tax levied on the difference between the cost of materials andthe selling price of a commodity or service. IVA (Imposta sul valore aggiunto).Capital or Fixed assets: nontrading business assets of a relatively permanent nature, such asplant, fixtures, or goodwill. ATTIVITA’ FISSE, IMMOBILIZZAZIONI.Levy: the act of imposing and collecting a tax, tariff, etc. TASSA, IMPOSTA.Clay: ARGILLA.Peat: TORBA.Sugar Beet: BARBAIETOLA DA ZUCCHERO.
Crossroads: the point at which an important choice has to be made. CROCEVIA, SVOLTA.Cattle Breeding: ALLEVAMENTO DI BOVINI.Woodworking: FALEGNAMERIA, CARPENTERIA.To Be Operational: ESSERE FUNZIONANTE/ATTIVO.To Be Underway: in progress; in operation. ESSERE IN MOTO, IN CORSO.Ongoing Trend: TENDENZA IN CORSO.To Boost the Sales: to increase or raise smth. AUMENTARE LE VENDITE.To Set up Enterprises: APRIRE UN’AZIENDA/UN’ATTIVITA’.To Complement: to add to, make complete, or form a complement to.INTEGRARE, COMPLETARE QLC.To Showcase: a setting in which anything may be displayed to best advantage. SERVIRE COMETRAMPOLINO DI LANCIO.
GDP: Prodotto Interno Lordo PILGNP: Prodotto Nazionale Lordo PNLGNI: Reddito Nazionale Lordo RNLPlanned/Command Economy: an economy in which production, prices and incomes are decidedand fixed by the central government . ECONOMIA PIANIFICATA(Free) Market Economy: A market economy is an economy in which decisions regardinginvestment, production and distribution are based on supply and demand, and the prices of goods andservices are determined in a free price system. LIBERO MERCATOMixed Economy:is an economic system in which both the state and private sector direct theeconomy, reflecting characteristics of both market economies and planned economies. ECONOMIAMISTAUSSR Union of Soviet Socialist Republics: Unione delle Repubbliche Socialiste SovieticheURSSCIS: Commonwealth of Independent States (a group of independent countries that were part of theSoviet Union until 1991). CSI (Comunità Degli Stati Indipendenti)Kolkhoz: is a coinage used for the rural economics of collective farming in the Soviet Union.KOLCHOZChairman: PRESIDENTETo get a Toehold in : FARE BRECCIA IN (mercato, organizzazione)Trendsetter: CHI LANCIA NUOVE TENDENZEDeveloping Countries: poor countries trying to make their industry and economic system moreadvanced. PAESI IN VIA DI SVILUPPO.Counterfeit: FALSIFICAZIONE, CONTRAFFAZIONE
To Draw up Contract: STILARE/REDIGERE UN CONTRATTOTo Testify sth: TESTIMONIAREtrade turnover : GIRO D’AFFARI COMMERCIALEsemi-finished products : SEMILAVORATIcooperation avenue: POSSIBILITA’ DI COOPERAZIONEDOP, Denominazione di Origine Protetta : PROTECTED DESIGNATION OF ORIGINVAT value-added tax : IVA imposta sul Valore aggiuntoto enter new markets: PENETRARE IN ALTRI MERCATIHeadquartered in : AVERE IN QUARTIER GENERALE, SEDE PRINCIPALE.to play a key role: GIOCARE/SVOLGERE/AVERE UN RUOLO CHIAVE/CENTRALEBranch: FILIALE, SUCCURSALECustom Duties: TASSE/DAZI DOGANALIunder constant scrutiny: ESSERE SOTTO COSTANTE SORVEGLIANZAto meet a target: RAGGIUNGERE UN OBIETTIVOto carry out a project: PORTARE AVANTI UN PROGETTOtalks are underway with on sth: LE TRATTATIVE SONO IN CORSOto settle a problem: RISOLVERE UN PROBLEMAto render assistance: PRESTARE ASSISTENZAto foster bilateral contacts: INCORAGGIARE/PROMUOVERE CONTATTI BILATERALItrade surplus: ECCEDENZA DELLA BILANCIA COMMERCIALEOwnership: POSSESSO/ PROPRIETA‟Inflation: INFLAZIONETo be byword for: ESSERE SINONIMO DI
Middle class: CLASSE MEDIAEducation system: SISTEMA EDUCATIVO/SCOLASTICOReforms: RIFORMELegislature: LEGISLATURAPermit system:Licensing Authority: AUTORITA’ CHE RILASCIA AUTORIZZAZIONI PER qlcsTax legislation: LEGISLAZIONE TRIBUTARIADeregulation: DEREGOLAMENTAZIONEBureaucracy: BUROCRAZIACorruption: CORRUZIONEFinancial instruments: STRUMENTI FINANZIARITax rates: ALIQUOTA D’IMPOSTAIncome tax: IMPOSTA SUL REDDITOValue added tax (VAT): IVA imposta sul valore aggiuntoVAT reimbursement: RIMBORSO IVAExemption from income tax: ESENZIONE DELL’IMPOSTA SUL REDDITOState registration:Monetary policy: POLITICA MONETARIALoan: PRESTITO/ MUTUOForeign direct investments (FDI) : INVESTIMENTI ESTERI DIRETTICommercial exchange: SCAMBIO COMMERCIALEEconomic activity: ATTIVITA’ ECONOMICADomestic economy: ECONOMIA INTERNA
Target audience: TARGET DI PUBBLICOshow interest towards: MOSTRARE INTERESSE VERSOtax exemption : ESENZIONE FISCALEpreferential regime: REGIME PREFERENZIALETaxation: TASSAZIONEOptimization : OTTIMIZZAZIONEnetwork of: UNA RETE DIMotorway: AUTOSTRADARailways: FERROVIAtraffic capacity :to intervene in sth : INTERVENIRE IN QLCSprivatised businesses: PRIVATIZZAZIONEspeedy development: VELOCE SVILUPPOstep up : AUMENTARE/ INTENSIFICAREthe governmental sector: SETTORE GOVERNATIVOstrategic investors: INVESTITORI STRATEGICIstep-by-step privatization:jointly with : CONGIUNTAMENTEintroduces modern approaches: INTRODURRE MODERNI APPROCCIconditions understandable:High Technologies Park (HTP):exceptional opportunities: ECCEZIONALI OPPORTUNITA‟IT industry: INDUSTRIA INFORMATICA
to be free from all taxes:to be physically located: ESSERE FISICAMENTE LOCALIZZATOenjoy the rights: GODERE DI DIRITTIto be in demand: ESSERE RICHIESTObiotechnologies : BIOTECNOLOGIEsoftware development: SVILUPPO DI SOWTWAREacquisition : ACQUISIZIONEAssets: BENE, VANTAGGIO, RISORSAto inflict losses : INFLIGGERE/SUBIRE PERDITEFledged: EFFETTIVO / ESPERTOCopyright law: LEGGE SUI DIRITTI D’AUTOREFree Economic Zones:Tax Burden: PRESSIONE FISCALETax Allowance: SGRAVIO/DETRAZIONE FISCALETax Exemption/immunity : ESENZIONE FISCALETax Relief/break : AGEVOLAZIONE FISCALEWordy: PROLISSO, VERBOSOCast Iron: GHISASpending/Purchasing Power: POTERE D’ACQUISTOLiteracy: ALFABETIZZAZIONEImport levy/duty: TASSA SULLE IMPORTAZIONI