Cage_Framework

Cultural Distance Administrative Distance Geographic Distance  Economic Distance Albania Wide spread Italian or Greek language skills. 1. Free trade agreements with the rest of the Balkan countries 2. Outside the EU and Eurozone 3. Albania 1 Euro scheme 4. Tax and customs exemptions 5. Subsidised lease of state premises 1. Small domestic market 2. Bad quality of inland road connections 3. Favours sea transport as a mode of moving goods to the destination market 4. Proximity to Italy and Greece, as well as the Balkans 5. Located within the Mediterranean region 1. Fastest growing country in South Eastern Europe in the last 10 year period 2. Low inflation rate 3.90% of exports designated to the EU 4. Low costs of utilities 5. Young labour force 6. Simplification of procedure 7. Ongoing privatization programme 8. Available pool of a low cost labour force 9. Shadow economy of substantial size 10. Under developed infrastructure Cultural Distance Administrative Distance Geographic Distance Economic Distance Bosnia and Herzegovina 1. Ethnic tensions persist 1. The country is divided into cantons in which the legal environment is not homogenous. 2. Favourable legislative environment for investors. 3. Varying legal systems between cantons 4. Established foreign investors support fund 5. Tax exemptions 6. Free trade zones 7. Political risk still exists 8. Currency exchange risk 1. Landlocked and mountainous 2. Forestry–50% of the land is forested 3. Under developed transport infrastructure 1. Agriculture ,especially the production of fruits and vegetable 2. Currency pegged to the Euro 3. Accession talks with the EU started 4. Ongoing privatization programme 5. 10%corporateincometax 6. Available pool of working force Cultural Distance Administrative Distance Geographic Distance Economic Distance Bulgaria 1. Member of the EU 2. Stable political environment 3. Favourable legal environment for investor 4. Stable currency , for years pegged with the Euro 5. Relaxed legal obligations 1. Located on the coast of the Black Sea and close to the Mediterranean 2. Under developed transport infrastructure 3. Limited size of the domestic market 1. Currency pegged to the Euro 2.10% corporate income tax 3. Available pool of working force 4. Skilled work force 5. Employment costs lowest in the region 6. Current account deficit exceeds 10% of the GDP Cultural Distance Administrative Distance Geographic Distance Economic Distance Estonia 1. Tense relations with Russia 1. Low bureaucracy level 2. E-government already introduced 3. Stable political environment 4. Balanced state budget 5. Corporate income tax of 21% but reduced to 0% on reinvested earnings 1. Located between Finland and Russia 2. Developed telecommunication infrastructure 1. Currency pegged to the Euro 2. Third GDP per capita in the region 3. Ranked 12 thin the Economic Freedom Index 2007 4. Pool of knowledge intensive workers–30% of all jobs 5. Low cost energy supplies 6. Access to raw materials– wood 7. Access to the Baltic markets and Russia 8. Start up programme and loans 9. Export marketing support programme 10. Technology investment grants 11. R&D support programme Cultural Distance Administrative Distance Geographic Distance Economic Distance Hungary 1. Cash subsidy decided individually by the Hungarian Government 2. Development tax allowance 3. Training subsidy 4. Job creation subsidy 1. Proximity of Austria, Czech Republic, Slovakia and Balkans 2. Developed infrastructure 1. Fifth highest GDP per capita in the region 2. EU membership 3. Educational and R&D base 4. Relatively low employment costs 5. Skilled work force 6. Strong domestic market 7. Existing supplier base 8. Industry tradition 9. Historical problems with budget deficit (9.4% of GDP in 2006), now it is at 4% of the GDP 10. Local currency volatility and currency exchange risk Cultural Distance Administrative Distance Geographic Distance Economic Distance Latvia 1.90% of Latvians are fluent in Russian 1. Number of various investment state aid programmes 2. Special Economic Zones 3. Stable political environment 1. Developed infrastructure 1. EU membership 2. Educational and R&D base 3. Low employment costs 4. Skilled work force 5. Fast GDP growth rate 10.3% in 2007 and 11.9% in 2006 6. Currency exchange risk 7. Current account deficit exceeds 10% of the GDP 8. High inflation 2. Geographical location, especially in terms of seaports 3. Gate way to Russia Macedonia 1. Currency exchange risk 1. Macedonia is run by relatively young and dynamic people that are strongly aware that there is only one thing the country could do in order to develop further. 2. Four Technical-Industrial Development Zones with 10year profit tax exemption and effective rate of 5% personal income tax 3. Low taxes also outside the Zones 4. Companies can be registered in just 4 hours 5. SME support programme 6. Relaxed legal requirements 1. Geographical location and well developed infrastructure 2. Located in the south of the Balkans, it offers an interesting location to those companies that plan to target exYugoslavian markets but also Greece, Italy, Bulgaria or Turkey. 1. EU candidate state with increasing national stability, low inflation, stable GDP growth rate and a well-educated, skilled workforce. 2. Big pool of labour force 3. Relatively low employment costs 4. EU candidate state, Increasing stability 5. Stable GDP growth rate, Low inflation Cultural Distance Administrative Distance Geographic Distance Economic Distance Ukraine 1. Ukraine has strong industrial and agricultural traditions spanning from Soviet times 1. Lots of red tape 2. High 25% corporate income tax 3. Income tax relief 4. Compensation for the employers social security contribution 5. Energy support 6. Free land allocation 7. R&D support 8. Network of the Technology Development Zones 9. Employment incentives inform of much reduced social insurance premiums 10. Internal political problems 11. Unlikely to enter the EU soon 12. Strong currency exchange risk 13. High poverty level 10. Skilled work force in certain areas 11. Free land allocation 6. Euro 2012 football games speed up changes and creates extra investment possibilities 7. Low cost labour force 8. Access to natural resources 9. Low operational costs 1. Gate way to Russia 2. Well developed railway transport 3. Logistic difficulties in trading with the EU 4. Underdeveloped road infrastructure 1. 46 mln people market 2. Industrial traditions 3. Low costs utilities 4. Introducing legal changes 5. Interesting natural resources 2. A majority of the population speaking Russian as its first or second language. 3. Ukraine is made up of a mix of Ukrainian Orthodox - Moscow Patriarchate, Ukrainian Orthodox - Kiev Patriarchate, Ukrainian Autocephalous Orthodox, Ukrainian Catholic (Uniate), Protestant and Jewish faiths