Vienna’s corporate tax rate of 25%, favourable rules on group taxation, close relations with central and eastern European countries and recent infrastructure development make it an increasingly attractive location for foreign investment. Recent development projects include an €850m expansion to Vienna’s airport, the A5 motorway to the Czech Republic, and a 2 million-square-metre project combining offices, R&D space, housing and schools.

In 2004, the Vienna region secured FDI deals worth €110m, with recent investors including Western Union Financial Services and Malaysia’s metal rod and wire manufacturer Metrod.

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CENTRAL EUROPE/SWITZERLAND:

Winner: Greater Zurich Area

fDi’s judging panel was impressed with Greater Zurich Area’s targeted approach to investment promotion. Recent investors include Google (which is setting up a pan-European research centre), Timberland (setting up an international finance centre) and Agile Software Corporation (setting up a shared services centre). The Greater Zurich Area, which crosses 11 cantons, registered GDP of €128bn in 2005, up 4.7% from 2004. It offers excellent human resources, with 50 university-level institutions and research centres.

 

CENTRAL EUROPE/VISEGRAD:

Winner: Central Hungary

Runners up: Moravian-Silesian Region, Czech Republic and South Moravia Region, Czech Republic (TIE)

Central Hungary ranked top because of its strong economic performance, excellent human resources, good transport, IT and telecommunications and quality of life. The judges gave the region top marks for hospitals, international schools and heritage.

South Moravia took a clear lead for its economic strategy, impressing the judges with its clearly explained incentives, ambitious development projects and overall attractiveness for foreign investment. The Czech Republic’s Moravian-Silesian Region received top marks for investment promotion and was also the most cost-effective location in the category. Meanwhile, the Plzen region in the Czech Republic registered the highest level of investment.

 

EASTERN EUROPE/BALTICS:

Winner: Vilnius and Kaunas, Lithuania

Runner up: Kaunas County, Lithuania

Lithuania’s Vilnius and Kaunas region showed the strongest economic potential of all the Baltic regions in the competition and urban infrastructure spending of more than €1bn promises to further boost its regional profile. The region’s GDP has been growing at more than 8% in recent years and it received €3.9bn in FDI in 2004. Lithuania’s Silute region is the most cost effective, but Alytus County in Lithuania offers the lowest industrial rents.

 

EASTERN EUROPE/WESTERN CIS:

Winner: Rivne, Ukraine

Rivne region, situated in north-west Ukraine, near the border with Belarus, has started to attract foreign investment in the past few years. Although 2004 levels of investment, at €14m, were modest, Rivne has received total FDI of more than €60m. Significant investments include a €20.8m investment from a UK company to build a glass factory. About 30% of the population owns a mobile phone and between 8% and 12% have access to the internet.

 

NORTHERN EUROPE/ BENELUX:

Winner: Flanders, Belgium

Runner up: Northern Netherlands

Flanders ranked top in Benelux for GDP, GDP growth, inward investment levels, FDI deals, housing, hospitals and its major infrastructure development projects surrounding the port, airport and railway. Recent major foreign investments include UK shipping company P&O and Singapore port operator PSA’s combined €900m investment in the port of Antwerp, Johnson & Johnson’s opening of a €68m research centre and British Telecom’s expansion of its European headquarters.

Northern Netherlands was the most cost-effective Benelux region, while Western Holland scored the most points for human resources and IT and telecommunications. Wallonia showed the best economic performance after Flanders and ranked equal top with Flanders for quality of life.

 

NORTHERN EUROPE/SCANDINAVIA:

Winner: Värmland, Sweden

Värmland’s concentration of paper and pulp manufacturers has attracted investment into the region and earned it the reputation of being Sweden’s ‘paper province’. Many of the world’s strongest operators in pulp and paper industry have operations in the area.

Regional capital Karstad is undergoing a city-centre makeover that includes the construction of 35,000 square metres for shops, apartments, a hotel and parking, and household furnishings retailer Ikea recently decided to set up a store in the area.

 

NORTHERN EUROPE/UK:

Winner: Scotland

Runner up: Northern Ireland

Scotland came top for its economic performance, human resources (followed by Yorkshire), IT and telecommunications (followed by Northern Ireland), transport (followed by North-east England and Yorkshire), quality of life (followed by Northern Ireland) and overall FDI promotion strategy (followed by Northern Ireland).

Northern Ireland picked up the judges’ vote for having the best economic potential. North-east England had the most impressive list of recent deals, which amounted to €1bn, while Cornwall is the most cost-effective UK region in the competition, followed by Northern Ireland.

NORTHERN EUROPE/ IRELAND:

Winner: Cork

Cork has attracted investment in sectors such as pharmaceuticals and healthcare, information and communication technology and services. Between 2004 and 2005 the region attracted 10 new FDI projects that created 1150 jobs and brought in capital investment of €700m.

These include significant investments from biotech company Centocor and computer software company McAfee. Investment incentives include a corporate tax rate of just 12.5%, tax credits for research and tax advantages for setting up corporate headquarters.

 

SOUTHERN EUROPE/GREECE:

Winner: Central Macedonia

Central Macedonia, located in northern Greece on the borders with Bulgaria and the former Yugoslav republic of Macedonia, has experienced strong economic growth, with 7.4% GDP growth in 2004. The region, once home to Alexander the Great, is offering significant cash grants, tax breaks and other subsidies to potential investors. It has also invested in improved road and rail connections to major Greek cities and in the main international airport near the regional capital Thessaloniki.

SOUTHERN EUROPE/MEDITERRANEAN ISLANDS:

Winner: Canary Islands, Spain

Runner up: Madeira, Portugal

The Canary Islands scored top marks for economic performance, cost effectiveness, human resources and transport. The islands are home to two of Spain’s five free trade zones and companies in the special economic zone pay between 1% and 5% corporation tax. Meanwhile, the Canaries have the second lowest labour costs in Spain.

Madeira scored the most points for IT and telecommunications and tied with the Canaries on quality of life and overall FDI promotion strategy.

 

SOUTHERN EUROPE/SOTH-EAST CENTRAL EUROPE:

Winner: Pomurje, Slovenia

Runner up: Central Bosnia and Herzegovina

Pomurje scored top for human resources, IT and telecommunications, quality of life and overall FDI promotion strategy and development. The Slovenian region has attracted foreign investment from German companies such as fashion clothing company Rene Lezard. Pomurje and Central Bosnia and Herzegovina tied on cost effectiveness, while Central Bosnia and Herzegovina scored the most points for economic performance, with significant foreign investments in steel and paper operations.

 

SOUTHERN EUROPE/TURKEY:

Winner: Kocaeli

Runner up: Adana

Turkey’s industrial region of Kocaeli (just east of the Istanbul region) ranked top for economic potential, IT and telecommunications, transport and overall FDI promotion and development. The region has 16 special industrial zones, three technology parks and two free zones. Transport connections include two international airports within 90 kilometres and access to 40 ports and docks, as well as road and rail connections to Istanbul and Ankara.

Adana scored the most points for cost effectiveness while Adana and Kocaeli tied on points for human resources and quality of life.

 

WESTERN EUROPE/FRANCE:

Winner: Côte d’Azur

Runner up: Rhone Alps

Côte d’Azur emerged top of the regional league, helped by southern France’s lower employment costs. Secretaries earn an average of just €11,196 a year, with middle managers earning €18,173 and manual workers €6.86 an hour. Sophia Antipolis in Nice is one of the eight French test sites for the latest technology allowing 40 gigabits-a-second internet connection.

Côte d’Azur also won the judges’ vote for best French regional transport, international schools, heritage, projects and attractiveness to FDI. Rhone Alps has the cheapest industrial rents and impressed the judges with the quality of its healthcare.

Western France came out top for universities, international schools, promotion strategy and clear incentives, while the judges noted Bordeaux’s economic potential and choice of cost-effective housing.

 

WESTERN EUROPE/GERMANY:

Winner: Eastern Germany

Runner up: Saxony

Heavy investment in Eastern Germany is creating an increasingly bright economic future for the region. In 2004, €473m was invested by companies such as Californian computer chip maker AMD (which is expanding in Dresden), Japanese auto technology group Hitachi Automotive (in Saxony), Canadian pulp and paper producer Mercer International (in Stendal) and Telecom Italia (in Berlin, Rostock and other locations).

Despite slightly higher costs, Saxony was a close runner up to Eastern Germany, with fDi’s judges rating its economic potential and promotion strategy highly. North Rhine Westphalia scored as the German region with the highest standards of living, best transport and human resources.

 

WESTERN EUROPE/ITALY:

Winner: Lazio

Runner up: Molise

Lazio’s mighty economic strength made it one of the strongest first-round winners. The capital region’s real GDP growth of 4.6% in 2004 compares with a national GDP growth of just 1.2% for the same period. Lazio scored top marks for human resources, transport, hospitals, international schools, heritage, promotion strategy, incentives and public sector investment projects. Major private sector investors include US real estate investor AIG Lincoln and Daimler Chrysler, which has invested in a regional logistics centre in Lazio.

The central Italian region of Molise offered the lowest office and industrial rents.