MINISTRY FOR SMALL AND MEDIUM SIZED
ENTERPRISES, COMMERCE, TOURISM
AND LIBERAL PROFESSIONS
ECONOMIC DEVELOPMENTS AND
OPPORTUNITIES IN ROMANIA
ROMANIA
Luxembourg, 27 February 2008
1
Basic information
Romania
- Area:
Capital: Bucharest
238.391 sq. km.
- Population: 21,700,000
- Counties:
41
2
Benefits of EU Accession







Removal of any obstacles in the trade with EU Member
States
Common trade policy with third countries
Harmonization of entire legislation, capital market
regulations, taxation, accounting rules => higher
transparency and simplification
Structural funds (31 billion euro till 2013)
Open gate for EU towards CIS, Asia, Middle East,
Northern Africa
Participation in major projects in the Black Sea Extended
Area and in the Central & Eastern European Region
Romania-important role in assuring the energy security for
Europe (major transit pipelines, energy production &
supply)
3
Competitive Taxation
FLAT TAX
16%
VAT
SOCIAL
SECURITY
AVERAGE
WAGE (2007)
MINIMUM
WAGE
19%
43.5%
39.5% by the
end of 2008
380 euro
115 euro
Country
Romania
Hungary
Slovakia
Poland
Estonia
Croatia
Slovenia
Czech
Rep.
Corporate
Tax
16%
16%
19%
19%
20 %
20.32%
25%
28%
Macroeconomic Performance
GDP real growth
8,4%
5.7%
7,7%
6,1%
5,1%
5,2%
2002
2003
4,1%
2,1%
2000
2001
2004
Source: National Institute of Statistics
2005
2006
2007
5
Macroeconomic Performance
Inflation rate
40,7%
30.3%
17,8%
14,1%
2000
2001
2002
2003
9,3%
8,6%
2004
2005
Source: National Bank of Romania
4.86%
5,7%
4,3%
2006
2007
2008 e
6
Macroeconomic Performance
Unemployment rate
11,8
12
9,5
10
8,9
10,4
10,5
8,8
8,1
7
6,6
6,2
8
% 6
4
5,5
5,2
5
2
0
1995
1997
1999
2001
2003
2005
2007
7
COUNTRY RATINGS
ROMANIA





Fitch
Coface
JCR
Moody’ s
Standard & Poors
-
AA4
BBB+
Baa3
BBB-
(August 2006)
(January 2006)
(November 2006)
(September 2006)
(September 2006)
World Bank Report 2006: Romania – the most
reforming country in the business field
8
Foreign direct investments
- million Euro 10000
9100
9000
8000
8000
7000
5197
6000
5000
4098
4000
3000
2000 1294
1212
1627
1000
0
2001
2002
2003
2004
Source: National Bank of Romania
2005
2006
2007
9
FOREIGN DIRECT INVESTMENT
Share capital in FDI’s at
30.11.2007:
Country of
origin
Number of
companies
Share-capital in
Romanian
companies
- mil. EURO -
1
Netherlands
3093
3.208
2
Austria
4847
2.194
3
Germany
15472
1.783
4
France
5340
1.747
5
Cyprus
3494
870
6
Italy
24259
808
7
USA
5377
662
8
UK
3499
608
9
Greece
4061
571
Luxembourg
629
251
17.4 billion euro
1. The Netherlands - 18,41%
2. Austria - 12,60%
3. Germany - 10,23%
4. France - 10,03%
5. Cyprus – 4,99%
6. Italy - 4,64%
7. U.S.A. - 3,80%
8. United Kingdom - 3,49%
9. Greece – 3,28%
16. Luxembourg – 1,44%
16
Source: National Trade Register Office
Value of Subscribed Capital
by Field of Activity
Industry
50.7%
Services
27.8%
Retailing
5.3%
Construction
1.3%
Transport
Wholesale
6.2%
6.4%
Tourism
1.4%
Agriculture
0.9%
Source: Romanian Agency for Foreign Investment
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Foreign Investors Advantages


foreign investments allowed in all sectors of economy
possibility to freely manage the company with full
ownership rights

full repatriation of capital and profits

protection against expropriation and nationalization

national treatment for foreign investors
12
New Investment Law
- Draft under public debateObjectives:





Determines the principles, terms and modalities of stimulating investments in
Romania, aiming at contributing to the sustainable country development
Full compliance with the EU legislation
Legal/administrative documents will be issued by the Government in order to
regulate the state aids schemes for each objective
The goals, objectives, timing, budgets, beneficiaries, eligibility and selection
criteria, competent authorities responsible to grant incentives will be
established
A responsible authority for implementing and monitoring the legal provisions
will be set up
FOREIGN TRADE OF ROMANIA
2001 – November 2007
EURO mill.
50.000
40.000
30.000
20.000
10.000
0
-10.000
-20.000
-30.000
2001
2002
2003
2004
2005
2006
Nov.2007
Exports
12.722
14.675
15.614
18.935
22.255
25.850
27.127
Imports
17.383
18.881
21.201
26.281
32.569
40.745
46.557
Balance
-4.661
-4.206
-5.587
-7.346
-10.314
-14.895
-19.430
14
Source: National Institute of Statistics
MAIN TRADE PARTNERS
- November 2007 Top import partner countries
Top export partner countries
percentage of total import
percentage of total export
Italy
17.2
Germany
17,2
Germany
17,1
Italy
12,8
France
7,7
Hungary
7,0
Turkey
7,0
France
6.3
Hungary
5,6
Russian Federation
6,3
Great Britain
4.2
Turkey
5,5
Bulgaria
3,1
Austria
4,8
Austria
2,6
Holland
3.6
Spain
2.3
Poland
3.4
Poland
2.2
China
3,3
Luxembourg
0.10
Luxembourg
0,14
15
FOREIGN TRADE OF ROMANIA
- 11 month 2007 





Total volume: 73.687 million euro
(21,6% growth compared to 11 month 2006)
Total volume intrastate: 52.764 million euro
Total Export (FOB): 27.127 million euro
Intrastate export (FOB): 19.571 million euro,
representing 72,1% in total export (+13,5%
growth compared to 11 month 2006)
Total Import (CIF): 46.557 million euro
Intrastate import (CIF): 33.193 million euro,
representing 71,3% in total import (+31,5%
growth compared to 11 month 2006)
16
TRADE BETWEEN ROMANIA AND
LUXEMBOURG 2001 – November 2007
100
80
60
40
20
0
-20
-40
-60
2001
2002
2003
2004
2005
2006
2007-11
m
TOTAL
8,63
13,95
16,34
19,25
27,11
35,25
91,7
EXPORT
1,38
7,29
5,39
3,5
7,95
5,4
26,46
IMPORT
7,25
6,66
10,95
15,75
19,16
29,84
65,24
-5,87
0,63
-5,56
-12,25
-11,21
-24,44
-38,78
SOLD
17
STRUCTURE OF ROMANIA- LUXEMBOURG
BILATERAL TRADE
Romanian Exports






vehicles, transport equipment
(35,05%)
textiles and garments (27,7%);
furniture, wood products (22,5%);
machinery, electrical equipment
(2,9%);
metals and articles thereof (4%)
minerals (1,4%).
Romanian Imports





metals and articles thereof (52,1%)
machinery, electrical equipment
(29,4%);
plastics and rubber products
(6,2%)
stone products (3,4%);
vehicles, transport equipment
(1,9%);
18
LUXEMBURG FDI’s in Romania



200,73 million euro share-capital in
Romanian companies;
636 companies with Luxembourg capital
registered in Romania
Sectors for Luxembourg investments:
industry, services, retailing, wholesale,
constructions, agriculture
19
TOP REASONS TO INVEST IN ROMANIA (1)
Market & Location Advantage :
Second largest market in Central and Eastern Europe (over 21 million
inhabitants)
• Easy access to the countries of the former CIS countries, Balkans, the Middle
East and Northern Africa
• Junction of three prospective European transportation corridors nos. 4, 7 & 9
•
Resource Advantage:
• Skilled labor force, with solid knowledge in technology, IT and engineering
• Rich natural resources, including fertile agricultural land, oil and gas
• Important potential for tourism
20
TOP REASONS TO INVEST IN ROMANIA (2)
Economic Advantage
•
•
•
•
•
•
Sustainable economic growth
Functional Market Economy status
Competitive tax policy
Decreasing inflation
Permanent financial assistance for SME's Development
Structural funds
Improving Infrastructure Advantage
• Well-developed networks of mobile telecommunications in GSM systems
• Highly developed industrial infrastructure, including oil and petrochemicals
• Branch offices and representatives of well-known international banks
• Newly developed highway infrastructure
• Commitment to improve the highway infrastructure to EU standards
• Extensive maritime and river navigation facilities
21
Potential Sectors for Investment
o
o
o
o
o
Manufacturing
Automotive parts
IT & Communication
Electric & Electronics
Wood processing
o
o
o
o
o
Construction materials
Textile
Food processing
Infrastructure
Outsourcing and
logistics
22
THANK YOU !
MINISTRY FOR SMALL AND MEDIUM SIZED ENTERPRISES,
COMMERCE, TOURISM AND LIBERAL PROFESSIONS
Phone: +40 21 4010510
Fax:
+40 21 3150086
E-mail: dgrbea@dce.gov.ro
Website: www.dce.gov.ro
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