23 January 2015 - Results of the December 2014 survey on credit terms and conditions in...
Romania, a key member of the European Union is a country located at the crossroads of southeastern and central Europe. It is situated on the northern regions of the historically important place, the Balkan Province bordering the black sea. Romania shares its border with Serbia and Hungary on its western coast and it is bordered with Bulgaria on the south and in the North East it is surrounded by Ukraine and Republic of Moldova.
With 238,391 square kilometers (approximately) of land area, Romania is one of the largest (ranked 9th) countries in the European Union. Romania also is known for its dense population. It is the seventh largest populated countries in the European Union, about 21.5 million inhabitants residing in the country. Bucharest, the capital city of Romania is also the largest city in the country. It is also the 6th largest city in the European Union both in terms of its size and residents residing in there (about 2 million people live in the country).
There are several factors that are deemed to attract huge amounts of FDI in the near future; some of the most important benefits foreign investors can avail by investing in the country are as follows:
• Given the large size of the country, Romania is one the top ranked countries in the CEE region with a large market base. Foreign investors have the scope to cater to these markets and earn valuable returns on their investments.
• Since the Inception of Romania into European Union on 1st January, 2007, the country has undergone a drastic change in its political structure. Today, Romania boasts itself of being one of the most politically and socially stable countries in the European Union.
• Being a part of the European Union, Romania has access to funds directed towards the development of the member countries (European funds). Romania has several bilateral agreements with other countries and diplomatic relations and it has signed free trade agreements with other EU countries.
• One of the most significant advantages of investing in Romania is the strategic Geographic location of the country; its central location in the EU provides a easy gateway for foreign investors to easily access other markets within the European Union and also allows the investors to penetrate through the lucrative markets of Middle-East countries.
• Foreign investors can readily have access to highly qualified labor force with technical qualification at a very low cost.
• The country has abundant high quality natural resources including mineral deposits and highly fertile agricultural land. The Romanian government offers free access to the energy supplies.
In a recent statistics released by the Romania Central Bank, it indicates that Romania shows an tremendous increase in the foreign investment in the country during the year 2008. According to the bank figures the FDI in Romania in 2008 totaled up to 9.02 billion Euros which was about 25% increase from 2007 that was about 7.25 billion Euros.
Just like in 2008, FDI continued to grow at a consistent pace in the 2009. According to the official reports released by the Official Government Investment Agency, several foreign companies including Proctor & Gamble that have invested in the country are expected to double their investment over the next few years in the future.
With a GDP (Gross Domestic Product) amounting up to $271 billion (approximately) and a GDP Per capita of about $12,600 for the year 2008, Romania is considered to be upper-middle income economy.
Since the dawn of the new millennium in the year 2000 the Romanian economy underwent a radical makeover, it was emancipated from the rigid clutches of the communist regime and was transformed into a liberal economy characterized by macroeconomic stability, low unemployment and declining inflation.
It is a fact that FDI has increased dramatically in Romania, the investor friendly policies, strategic location and availability of abundant natural resource and skilled labors have worked in favor of Romania. Some of the best industries that foreign companies can consider investing in are:
Property / Real Estate: The overall economic growth of Romania and the surge in foreign investment is creating an environment of prosperity through out Romania. The Real Estate industry in Romania is on the rise and has a vast scope for foreign investment. The foreign investors in Romanian property are taking the advantage of the existing low real estate prices in Europe, which is inevitable to increase in the future.
Advantages of investing in Real Estate in Romania:
• The demand for real estate properties greatly outstrips the supply; thereby there is great scope for rise in the prices of the properties. It thus presents a great opportunity for foreign investors to earn profits.
• Romania has a strong currency; the beneficial exchange rate means even better buying power for investors.
• The central bank of Romania is implementing 100% mortgage scheme for property buyers, this will further push the property prices by about 15%.
Tourism: Romania is an exotic tourist destination. It is popular for its fairy tale romantic destination. It thus opens up great avenues for foreign investment. Investors can greatly invest in establishing restaurants, buying motels, hotels, luxurious beach side villa and other accommodation facilities and rent it out to the visiting tourists.
IT (Information Technology): Romania is one of the rapidly growing IT markets in the central European region. The country has made tremendous progress in all IT sectors including mobile phones and Internet. The growth leaves a scope for foreign investment in the sector. The investors can invest in establishing Research and Development centers in the country.
The Romania government enacted a special law in 1991 that would regulate the foreign investments in the country. The law is very investor friendly. As per the law foreign investors are provides several financial benefits in terms of tax exemptions on their capital investments, Loans at reduced rates of interests and also tax benefits on investment in real estate.
The law also grants other fringe benefits to foreign investors including complete ownership rights of the Business enterprise and repatriation of after tax profits.
The Romanian Government’s rule to levy a flat rate of corporate tax at 16%, which is one of the lowest tax rates in the European Union, can greatly benefit the foreign investors.
Romania is sure to become a global economic super power in the future. All foreign investors investing in the country are sure to earn valuable profits from their investments.
Invest Romania is a company that is operating to assist investors who are keen in investing in Romania. It is one stop shop fro investors to gain information about investment laws, subsidies and other fringe benefits available to investors. The agency provides all the information that would help the investors to gain significant advantage by investing in Romania
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