Romania Capital Bucharest Currency Leu (RON, replaced ROL in 2006) Language Romanian Population 22.3 million EU status member GDP 2006 $79.17 billion Employment 93.9% Exports $33 billion f.o.b. (2006 est.) Imports $46.48 billion f.o.b. (2006 est.)

Setting up business Number of days to start business 11 Cost (% of income per capita) 4.4% Nonwage labor cost (% of salary) 33.3% Total tax rate (% profits) 48.9%

Romania

Skilled manufacturing is an important sector

As Romania stabilizes its economy and begins to develop a modern industrial and transport infrastructure, international investors have increasingly been seeing it as a base for their operations, notably in manufacturing and retail, although there is lively FDI involvement in almost all sectors of the economy. The level of investment rose sharply between 2004 and 2005, as did the level of spending per individual projects – in 2004, FDI stood at $2 billion invested in 177 projects, whilst in 2005, it was at $9.3 billion between 261 projects. In 2006, total annual FDI had continued to grow, although not as spectacularly, to $12.2 billion across 361 projects – proof that the strong growth seen the previous year was more than just a flash in the pan. Romania’s accession to the EU at the beginning of 2007 will be seen as further proof that the country has achieved a certain level of political and economic maturity.

It also provides access to a vastly increased potential marketplace, and gives potential investors the opportunity to access EU development funds designed to encourage investment in less developed regions. With GDP growth currently at 6.4 %, the IMF has expressed concern about the possibility of the economy overheating, although investor confidence appears to remain high.

ongoing privatiZation

Renewal of the country’s infrastructure remains a major task for the government, which aims to accomplish much of it through an ongoing program of privatization. The power industry, the telecoms industry and several auto manufacturing plants are currently open to investors under this scheme.

Manufacturing

A number of automotive and parts manufacturers have opened plants in Romania in recent years, with major investors including Pirelli, Renault and Automobile Dacia. Altogether, there have been some 354 FDI-backed manufacturing projects in Romania, taking advantage of the relatively low cost basis and ready access to south-eastern Europe. Manufacturing and industry currently account for about a third of the total economy, while the service and financial sectors now account for about half.

Transport

The road network is undergoing modernization. Romania is also well-placed for multi-modal transport. In addition to three sea ports, there are 13 river ports on the Danube, a major river transport artery that is navigable upstream as far as Austria, and is connected by canal to the Rhine.

Moving forward

One of the major issues that had to be tackled before accession to the EU was the issue of corruption. According to Transparency International Romania, while appropriate legislation and anticorruption measures have now been put in place, it remains to be seen whether they will be enforced.

Setting up

The service sector is growing rapidly

Since Romania’s accession to the EU, foreign investors have access to EU development funds available to companies that create jobs or provide training, particularly in underdeveloped areas. On the legal side, 100% foreign ownership of companies is permitted, although a number of US sources advise that joint ventures are usually more successful. Foreign-owned companies may repatriate 100% of profits after tax.

According to the Federation of International Trade Associations, nonresident companies are taxed at the standard rate of 16% on earnings derived from their Romanian operations. Personal income tax is also 16% of earnings, and VAT is 19%. Visas are necessary for stays of over 90 days. These may be applied for after entry to the country.

AMCHAM Romania

The American Chamber of Commerce in Romania is a non-profit organization founded in 1993 by American investors in Romania, with membership open to American companies, multinationals, and local companies having strong business ties with the United States. The Chamber assists members with development of their business in Romania, and works to improve the Romanian business climate and regulatory framework and to support US–Romanian business ties.

 

Contact Information

American Chamber of Commerce in Romania
Union International Center
11 Ion Cimpineanu Street
Sector 1
70116 Bucharest
Romania
Tel: +40 21 315 8694
E-mail: amcham@amcham.ro
Website: www.amcham.ro

 

Useful websites

www.usembassy.ro	US Embassy in Romania
www.investromania.ro	Business news, economy focus, investment opportunities
www.arisinvest.ro	Government agency for foreign investors
www.insse.ro	National Institute of Statistics (in Romanian only)
www.businessromania.com	Business news portal
www.ebrd.com/country/...	EBRD projects in Romania, including news on privatisation prospects
www.romaniatourism.com	Official tourism portal, country info, etc.

 

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