ROMANIAROMANIA
Top Destination for Top Destination for InvestmentInvestment
December, 2010
Romania the largest Romania the largest market in South market in South Eastern EuropeEastern Europe Area:Area:
238,391 km2
(9th largest in (9th largest in EU)EU)
PopulatioPopulation:n:
21.5 million (7th largest in (7th largest in EU)EU)
Capital Capital city:city:
Bucharest2.1 million
European European Union Union statusstatus
Member since January1st,2007
Affiliation:Affiliation:NATO, WTO,WB, IMF.
Domestic Domestic currency:currency:
LEU (RON)1EUR=4.2920 RON1USD=3.0543 RON (As Nov. 03, 2010)(As Nov. 03, 2010)
Official Official language:language: Romanian
Administ. Administ. division:division:
41 counties and Bucharest
Bucharest
1000 km radius
1500 km radius
PAN EUROPEAN CORRIDORS CROSSING ROMANIA
Helsinki – Kiev - Bucharest –Odessa/Alexandropoulos
Pan European Corridors crossing Pan European Corridors crossing RomaniaRomania
IV Dresden/Nurnberg – Bucharest Constanta/Thessaloniki/Istanbul
VII The Danube river - 2,300km
IX Helsinki – Kiev - Bucharest –Odessa/Alexandropoulos
4.2%
7.9%
6.3%7.3%
8.5%
5.2%5.1%5.7%
2000 2001 2002 2003 2004 2005 2006 2007 2008
Significant Potential for Significant Potential for GrowthGrowth
2009
Rapid and sustainable GDP growth rate between 2000-2008;
Severe adjustment of GDP in 2009 triggered austerity measures and a Governmental anti-crisis program;
Forecast 2010: -2%; 2011: + 1.5%
Sou
rce:
EU
RO
STA
T;
Source: National Institute of Statistics; GDP EU 27
GDP Growth RatePoland 1.7%
Slovakia
-4.7%
Czech Republic -4.8%
Bulgaria -5.0%
Hungary -6.3%
Romania -7.1%
Slovenia -7.8%
EU 27 -4.2%
Inflation RateInflation Rate
National Bank of Romania is targeting the inflation;
Disinflation policy to join Euro zone in 2015;
Target 3.5% inflation rate in 2010 and 3.0% for 2011;
Sou
rce:
Eu
rosta
t
Source: National Institute of Statistics;
Inflation Rate
6.6% 6.3% 4.7%9.3%
14.1%17.8%
30.3%
40.7%
8.6%4.86%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Annual Average Annual Average Inflation Rate 2009Inflation Rate 2009
Romania 5.6%5.6%
HungaryHungary 4.0%
PolandPoland 4.0%4.0%
BulgariaBulgaria 2.5%2.5%
SloveniaSlovenia 0.9%0.9%
SlovakiaSlovakia 0.9%0.9%
Czech RepCzech Rep 0.6%0.6%
EU 27EU 27 1.0%1.0%
Human CapitalHuman Capital
Young population (more than 50% under 40 years old)Almost 21.5 million people
Demographics
Talent pool106 universities, 631 faculties125,000 university graduates/yrAvailability of technical engineers High industrial experienceFlexibilityForeign language skills
Cities with more than 100,000 inhabitants
more than 1,000,000 inhabitants
300,000 – 400,000 inhabitants
200,000 – 300,000 inhabitants
100,000 – 200,000 inhabitants
Source: National Institute of Statistics
Labor Cost – A debated Labor Cost – A debated topictopic
Gross average monthly Gross average monthly wageswages
EUREUR
Source: Vienna Institute for International Economic Studies
Romania will hold on its competitive advantage related to labour cost;
7% decrease in 2009 against 2008; Adjustment of the salaries growth in the administration
system;
174 179204
267326
428 474 445
0
50
100
150
200
250
300
350
400
450
2002 2003 2004 2005 2006 2007 2008 2009
1439
893745 717 713
445299
0
200
400
600
800
1000
1200
1400
1600
Slovenia Czech Rep. Slovakia Poland Hungary Romania Bulgaria
Source: National Institute of Statistics;
Gross average monthly Gross average monthly wageswages
2009 - EUR2009 - EUR
BUCURESTIBUCURESTI
376 thou376 thouState: 67%State: 67% Private: 33%Private: 33%
CLUJ-CLUJ-NAPOCANAPOCA
SIBIUSIBIU
TIMISOARATIMISOARA
BRASOVBRASOV
IASIIASI
CRAIOVACRAIOVA
GALATIGALATI
70 thou70 thouS: 93%S: 93% P: 7%P: 7%
67 thou67 thouS: 90%S: 90% P: 10%P: 10%
51 thou51 thouS: 89%S: 89% P: 11%P: 11%
46 thou46 thouS: 69%S: 69% P: 31%P: 31%
34 thou34 thouS: 89%S: 89% P: 11%P: 11%
24 thou24 thouS: 92%S: 92% P: 8%P: 8%
21 thou21 thouS: 87%S: 87% P: 13%P: 13%
20 thou20 thouS: 86%S: 86% P: 14%P: 14%
PITESTIPITESTI
14 thou14 thouS: 79%S: 79% P: 21%P: 21%
TARGU - TARGU - MURESMURES
BUCURESTIBUCURESTI
10 Major University 10 Major University CentersCenters
Inward FDI FlowsInward FDI Flows
2009
Second largest inward FDI receiver in Central - Eastern Europe;
Stock EUR 50 bill. (1990–2009)
EUR 30 bill.attracted over the last 4 years only;
Source: Vienna Institute for International Economic Studies;
Source: National Bank of Romania
Annual Inward FDI
EU
R
million
Poland 8384
Romania 3488
Bulgaria 2845
Czech Republic
1935
Hungary 800
Slovenia - 481147 1294 1212
1946
5183 5213
9060
7250
9496
3488
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
7.9%
19.0%
12.3%
31.1%
1.4% 4.5%12.6% 5.8%
6.5%
ManufacturingTradeFinancial servicesIT&CReal Estate & ConstructionsEnergy&UtilitiesAgriculture,Forestry&FisheryMiningOthers
FDI by Field of ActivityFDI by Field of Activity(1990- 2009)(1990- 2009)
6.3%3.2%
13.9%
5.8%
11.6%
4.5% 5.2%22.3%
14.5%12.7%
MetallurgyFood, Beverages, TobaccoTransport meansOil processing, chemicals, rubber & plastic Construction materialsWood processingTextile, wearing apparel & leather goodsIT&C equipmentMachinery & equipmentOthers
Manufacturing
Total Economy
Source: National Bank of Romania
NetherlandsNetherlands AustriaAustria GermanyGermany FranceFrance GreeceGreece
21.8%21.8% 18.1%18.1% 13.4%13.4% 8.5%8.5% 6.6%6.6%
ItalyItaly CyprusCyprus SwitzerlandSwitzerland BelgiumBelgium USAUSA
5.1%5.1% 4.7%4.7% 4.2%4.2% 2.2%2.2% 2.1%2.1%
Top 10 Investing CountriesTop 10 Investing Countries(1990-2009)(1990-2009)
1 2 3 4 5
6 7 8 9 10
Source: National Bank of Romania
Main foreign companies by sector
Companies Sector of activity:
RENAULT; FORD; DELPHI; DURA; HONEYWELL; LEAR; TRW; YAZAKI; CALSONIC-KANSEI; CONTINENTAL AG; MICHELIN; PIRELLI; AUTOLIV; INA SCHEFFLER
Automotive
SOLECTRON; CELESTICA;NOKIA; SYSTRONICS; ELCOTEQ; BENCHMARK; ELBIT; SELEX; KATHREIN;
Electronics
MICROSOFT; ORACLE; HP; INTEL; IBM; CISCO; ACI;AMAZON; SIEMENS; WIPRO; SIVECO; ERICSSON;
IT services
ALPHA Bank; ING; ERSTE Bank; RAIFFEISEN Bank UNICREDIT; SOCIETE GENERALE; MILLENIUM; HVB;
Financial services
VODAFONE; ORANGE;UPC; OTE; ZAPP; Telecom
RENAULT TECH.; INFINEON; ALCATEL-LUCENT; FREESCALE; MICROCHIP; ALVARION;
R&D Centers
DHL; TNT; MAERSK; HAPAG; FRANS MAAS; Logistics
Gedeon-Richter; GlaxoSmithKline; Sandoz; Ranbaxy; Zentiva;
Pharmaceutical
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Highway Infrastructure Development - 2014
In use: 1099 km
Under construction 1452 km
Under design and expropriation 850 km
NADLAC
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DEVA ORASTIE
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GIURGIU
Source: CNADR
ARADARAD
CRAIOVCRAIOVAA
TIMISOATIMISOARARA
BAIA MAREBAIA MARESATU SATU MAREMARE
CLUJ CLUJ NAPOCANAPOCA TARGU TARGU
MURESMURES
SIBIUSIBIU
OTOPEOTOPENINI
IASIIASI
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SUCEAVSUCEAVAA
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SULINSULINAA
CORABICORABIAA
DROBETA TR. DROBETA TR. SEVERINSEVERIN
Ports and AirportsPorts and Airports
International flights
Domestic Flights
Under construction
TULCETULCEAA
BRASOVBRASOV
ORADEAORADEA
Mobile Communication Mobile Communication InfrastructureInfrastructure
– coverage area -– coverage area -
Deregulated market;
Major international players;
More than 90% network coverage.
national treatment for foreign investors;
foreign investment 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;
Access to incentives and funds provided by EU
and Romanian legislation;
Foreign Investor RightsForeign Investor Rights
Incentives and subsidies IIncentives and subsidies I
FISCAL CODE:
Tax exemption for reinvested profit;
Possibility to use accelerate depreciation of equipments (50% in
the first year);
Possibility to carry forward the fiscal losses for a period of up to 7
years;
Exemptions from the payment of taxes on buildings and land
applied by local councils in Romania on basis of state aid
schemes;
Fiscal incentives for R&D: additional deduction of 20% from the
eligible expenses from research and development activities;
Subsidies for hiring and training new personnel.
Incentives and subsidies IIIncentives and subsidies II
STATE AID SCHEMES/INCENTIVES FOR:
investments between EUR 05-10 mill and creating at least 50 new jobs;
investments between EUR 10-20 mill and creating at least 100 new jobs
investments between EUR 20-30 mill and creating at least 200 new jobs;
investments over EUR 30 mill and creating at least 300 new jobs;
investments over EUR 100 mill and 500 new jobs; eligible costs over Euro 50
mill;
investments in green energy - 50% subsidy from the total eligible expenses
for all regions in Romania, except Bucharest (40% subsidy); Eligible expenses:
investment in tangible assets (land, buildings, new equipments, installations)
and intangible assets. Intensity ceilings increase by 20% in case of small
enterprises, and by 10% in case of medium sized enterprises (Exception:
economic agents activating in the field of transport)
Map of Industrial ParksMap 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
CompetitiveCompetitive TaxationTaxation
Corporate Corporate TaxTax VATVAT
Social ContributionsSocial Contributions
EmployeeEmployee EmployerEmployer
BulgariaBulgaria 10% 22% 13% 20.5%
Romania 16% 24% 16.5% 27.75-38.45%
HungaryHungary 19% 25% 17% 32%
PolandPoland 19% 22% 18.71% 19.5-22.4%
SlovakiaSlovakia 19% 19% 13.4% 35.2%
Czech Rep.Czech Rep. 19% 20% 11% 34%
SloveniaSlovenia 20% 20% 22.1% 16.1%Source: National IPA’sSource: National IPA’s
Many Central and Eastern European countries increased Many Central and Eastern European countries increased the VAT in order to cope with economic crisis; the VAT in order to cope with economic crisis;
Romania is maintaining the flat corporate tax;Romania is maintaining the flat corporate tax;
EU financial assistance to EU financial assistance to Romania Romania
Romania could receive Romania could receive up to EUR 33 billion up to EUR 33 billion during 2007 – 2013 during 2007 – 2013 through EU funding; through EU funding;
Financial support Financial support provided by European provided by European Regional Economic and Regional Economic and Social Cohesion Policy Social Cohesion Policy is delivered through 3 is delivered through 3 main structural main structural instruments and 2 funds instruments and 2 funds dedicated to agriculture dedicated to agriculture and fisheries.and fisheries.
Allocation by operational programme
Administrative capacity
1.1%
Technical assistance
0.9%
Competitiveness13.3%
Transport infrastructure
23.7%
Regional development
19.4%
HR development
18.1%
Environment 23.5%
Thank you Thank you for your attention!for your attention!