Romania Top Destination for Investment

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romanian agency for foreign investment
Romania Top Destination for Investment
by Oana Nisioi Head of Investment Promotion
Department
Bucharest, October 2007
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Structure of the Presentation

• Geo-strategic position
• Macroeconomic outlook
• Valuable human potential
• FDI performance
• Infrastructure development
• Investment legal framework
• Potential sectors for development
• ARIS one stop shop

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1. Geo-strategic position
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Romanias Geo-strategic Position
Our friend the wind
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Romanias Strategic Location

• The Eastern border of the inland European Union
• Strategic position at the turning point where EU
  meets the Balkans and CIS countries

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2. Macroeconomic outlook
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Significant Potential for Growth
2006
Source EUROSTAT, forecast
Source National Institute of Statistics

• Rapid sustainable GDP growth
• 7.7 in 2006, based on increases in final
  consumption by 11.5 and in investment by 16.1
• Highly comparable with EU25 GDP growth rate of
  2.9 in 2006.

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Declining Inflation
Source EUROSTAT
Source National Bank of Romania

• Consolidation of low inflation (sustainable
  disinflation)
• 3.66 (Mar'07/Mar'06), a record low for the
  post-1990 period

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3. Valuable Human Potential
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Human Capital

• Young population (more than 55 is under the age
  of 40 and 37 is between 25 and 49 years old)
• Almost 21.7 million people

• 160 higher education institutions
• 109 thou university graduates
• Availability of technical engineers
• High industrial experience
• Flexibility

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Valuable Human Potential

• high performances in international competitions
• high percentage of technically competent
  professionals (23 are engineering graduates out
  of 720 students enrolled)
• highest growth rate of IT specialists in the
  region (Annually 7000 university graduates in the
  software field More then 3.000 students in 105
  local Cisco academies)

University graduates in Romania (by education
field)
Source National Institute of Statistics

• strong language skills (English, French, German,
  Italian, Spanish, Russian, etc.)
• large skilled labor force at comparatively low
  wage rates

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Competitive Labor Cost
Regional Comparison 2006 - EUR
Gross monthly wages EUR
Source Vienna Institute of International
Economic Studies National Institutes of
Statistics

• The average gross monthly wage in Romania is the
  second lowest after Bulgaria
• It is expected to grow by 16.7 in 2007

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4. FDI Performance
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Inward FDI Flows
2006
EUR million
Source Vienna Institute of International
Economic Studies
Source National Bank of Romania

• Record value in 2006
• FDI Stock over EUR 30 bill (1990 2006)
• In the first 7 months of 2007 EUR 3.6 bill

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Major Investing Countries (1990-2005)
Source National Bank of Romania
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5. Infrastructure Development
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IASI
ORADEA
PIATRA NEAMT
BORS
SABAOANI
MIHAILESTI
SOVATA
BICAZ
ALBITA
CAMPIA TURZII
TARGU MURES
CLUJ NAPOCA
GHEORGHIENI
PRAID
NADLAC
SIGHISOARA
ARAD
DEVA
SEBES
FAGARAS
SIBIU
ORASTIE
FOCSANI
TIMISOARA
BRASOV
CRISTIAN GHIMBAV
LUGOJ
PREDEAL
COMARNIC
BUZAU
PLOIESTI
PITESTI
DROBETA TR. SEVERIN
DRAJNA
CERNAVODA
BUCURESTI
CONSTANTA
FETESTI
CRAIOVA
GIURGIU
CALAFAT
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Ports and Airports
BAIA MARE
SATU MARE
SUCEAVA
IASI
ORADEA
CLUJ NAPOCA
TARGU MURES
BACAU
ARAD
SIBIU
TIMISOARA
GALATI
BRAILA
CARAS-SEVERIN
SULINA
TULCEA
ORSOVA
OTOPENI
BANEASA
M. KOGALNICEANU
DROBETA TR. SEVERIN
CONSTANTA
CRAIOVA
CORABIA
OLTENITA
CALARASI
MANGALIA
GIURGIU
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Mobile Communication Infrastructure
coverage area -

• Consolidated market
• Major international players
• More than 90 network coverage.

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Map of Industrial Parks

• More than 40 Industrial Parks
• Both private public
• Greenfield Brownfield
• Access to utilities
• Package of services offered by the park
  administration
• Wide variety of activities to be developed
• Some created for high-tech activities

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6. Investment Legal Framework
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Competitive Taxation
Source CEE-CIS Tax Notes - PriceWaterhouseCoopers

• Many Central and Eastern European countries
  reduced considerably their corporate tax in order
  to diminish the fiscal burden

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New Investment Law

• Incentives for investments in Romania in
• regional development (including infrastructure)
• environment protection
• research and development
• human resources and social inclusion, including
  training
• Directed according to economic status of each
  region
• Law expected to be passed by end of this year,
  beginning of next year

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EU grant programmes Structural Instruments and
Agriculture Funds
European Fund for Regional Development (EFRD)
infrastructure local development job creation
maintaining heath education
European Social Fund (ESF) employment
training
Cohesion Fund (CF) large transport
environment projects
European Fund for Agriculture and Rural
Development (EFARD)
Fisheries Fund

• For post accession funds - the total amount
  allocated for the period 2007-2013 refers to more
  than Euro 33 billion
• For structural cohesion funds, the allocations
  are estimated around 19 bill euro for
  agriculture, rural development and fisheries more
  than 7 bill euro.

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Structural funds channeled by Operational
Programmes

• Operational Programmes of interest to business

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7. Potential Sectors for Development
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Potential Sectors for Investment
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8. ARIS one stop shop for foreign investors
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Who is A.R.I.S?
Governmental body under the authority of Prime
Minister
In charge with attracting and retaining foreign
direct investment
Interface between investors and central local
authorities
Providing free of charge SERVICES for foreign
investors in Romania
Search and advice on the best location in
Romania to fulfill the company' needs including
site search, analysis touring around
Search for industrial and service suppliers
Value added information on incentives and other
administrative procedures
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Thank you for your attention!