Business Opportunities ROMANIA - THAILAND

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► ROMANIA - Economic profile

With a population of 22 million, Romania is Central Europe’s second largest market.

Romania boasts several real advantages:

• an excellent location at the crossroads of the main trade routes between western Europe and Asia, between South Europe (the Mediterranean) and northern Europe;

• important river and sea navigation facilities (Constanta is the biggest port on the Black Sea; proximity to the Danube – Rhine – Main canal connecting the Black Sea to the North Sea);

• skilled labour, including highly trained specialists in the fields of technology, IT and engineering;

• plenty of natural resources (oil, gas etc.) and vast fertile croplands;

• a huge tourism potential;

• diversified industrial structure;

• legislation favouring foreign investment, based on free and nondiscriminatory access to the market.

The interval 2000-2008 brought a marked economic recovery, with an annual growth rate above 6%, higher over 2003-2008 when Romania posted a sizable rise in consumption and productive investment.

Improvement of the business environment, the effects of the flat taxation rate and foreign partners’ positive attitude towards Romania in the context of accession to NATO and the EU helped attract a record volume of foreign investment.

Over 2005-2008 inflows of foreign direct investment amounted to approx. EUR 28 billion. i.e. more than half the total foreign investment of the last 20 years. Foreign trade grew sensibly in point of both quality and quantity.

The value of Romania’s trade exchanges has grown significantly, notably in recent years, when annual growth rates higher than 10% have been recorded. 2008 saw a peak in foreign trade which aggregated approx. EUR 90 billion (of which approx. 34 billion in exports).

Romania’s main trade partners in the last decade have been Germany, Italy, France, Turkey,Hungary, the Netherlands, the UK, and Austria. In point of quality, the structure of commercial exchanges has been marked by major changes, Romania exporting more and more value-added products and services, that mirroring the economic restructuring, the capacity of the national economy to supply goods and services and a better utilization of facilities of access to foreign markets.

Currently, the EU accounts for over 70% of Romania’s foreign trade, which indicates the level of economic integration in the European single market. As the world financial crisis that started in autumn 2008 caused commercial and credit flows to drop, 2009 and 2010 were years of economic downturn.

Although the Romanian banking system is solid and the economy grew for nearly one decade,Romania has still been affected by the global economic and financial crisis, posting drops in GDP of 7% in 2009 and an estimated 2% in 2010, concurrently with an expanding budget deficit and unemployment. Foreign direct investment, too, declined in 2009, standing at about EUR 4.5-5 billion (roughly half the figure of the previous year).

Romania’s strategic priorities for the next period are to develop the infrastructure, to ensure energy security and supply from alternative sources, modernize agriculture, enhance the quality of education and health care services.

Source: http://bangkok.mae.ro/en/romania/316

When considering Romania as a possible location for developing their businesses, foreign investors take a close look to the advantages provided by our country:

Market & Location Advantage

• One of the largest markets in Central and Eastern Europe (ranking 7th in EU , with over 21 million inhabitants);

• EU unique market gateway (access to approximately 500 million consumers);

• Attractive location: situated at the turning point between EU, the Balkans and CIS countries, Romania is crossed by three important pan-European transportation corridors: corridor no. IV linking Western and Eastern Europe, corridor no. IX connecting Northern and Southern Europe and no. VII – Danube River, facilitating inland water transportation, at the same time connecting the Romanian Port of Constanta (the biggest Port to the Black Sea) to Northern Europe, through the Rhine.

Resource Advantage

• Highly skilled labor force at competitive prices (solid knowledge in foreign languages, technology, IT, engineering, etc);

• Rich natural resources, including surface and underground waters, fertile agricultural land, oil and gas;

High potential for tourism.

Political Advantage

• Stability factor in the Area - NATO membership;

• Stability Guarantee in South Eastern Europe;

 • EU membership.

IR Advantage

 • Bilateral agreements between Romania and other countries on investments promotion and protection;

• Bilateral diplomatic relations with 177 out of the 191 UN member states, plus the Holy See, the Sovereign Military Order of Malta and the Palestinian National Authority;

• Member of the UN and other international organizations, like: OSCE, Council of Europe and International Organization of La Francophonie;

• Free trade agreements with EU, EFTA countries, CEFTA countries;

• WTO member since January 1995.

Economic Advantages

• State aid schemes for encouraging investors to take upon Romania;

• Major interest of Foreign Investors – leader destination for FDI in the region;

• Sound fiscal policy (16% flat tax)

Legislative Advantages

• Similar legal provisions as in EU (AcquisCommunautaire implementation);

• Fiscal policy regulated by the Fiscal Code.

Social Advantages

• Agreement between Government and major unions;

• No major union movements;

• Labor relations regulated by the Romanian Labor Code.

Other Advantages

• Similar legal provisions as in EU (AcquisCommunautaire implementation);

• Fiscal policy regulated by the Fiscal Code.

• Continuously improving infrastructure (Executive’s commitment to improve the highway infrastructure to EU standards);

• Well-developed networks of mobile telecommunications in GSM systems;

• Highly developed industrial infrastructure, including oil and petrochemicals;

• Presence of branch offices and representatives of various well-known international banks;

• Extensive maritime and river navigation facilities.

 Source: http://ukinromania.fco.gov.uk/ro/business/business-investment-in-uk