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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. Structure of the Presentation. Geo-strategic position Macroeconomic outlook Valuable human potential FDI performance

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Romania – Top Destination for Investment

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Romania top destination for investment

romanian agency for foreign investment

Romania – Top Destination for Investment

by Oana Nisioi

Head of Investment Promotion Department

Bucharest, October 2007


Romania top destination for investment

Structure of the Presentation

  • Geo-strategic position

  • Macroeconomic outlook

  • Valuable human potential

  • FDI performance

  • Infrastructure development

  • Investment legalframework

  • Potentialsectors for development

  • ARIS – one stop shop


Romania top destination for investment

1. Geo-strategic position


Romania top destination for investment

Romania’s Geo-strategic Position

Our friend the wind


Romania top destination for investment

Pan European

Transport Corridors

IV

Dresden/Nuremberg - Bucharest

Constanta/Thessaloniki/

Istanbul

VII

The Danube river

2,300 km long

IX

Helsinki – Kiev - Bucharest –

Odessa/Alexandropoulos

Romania’s Strategic Location

  • The Eastern border of the inland European Union

  • Strategic position at the turning point where EU meets the Balkans and CIS countries


Romania top destination for investment

2. Macroeconomic outlook


Romania top destination for investment

GDP Growth Rate

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.


Romania top destination for investment

Inflation Rate

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;


Romania top destination for investment

3. Valuable Human Potential


Romania top destination for investment

Demographics

Talent pool

Human Capital

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

  • Almost21.7millionpeople

  • 160 higher education institutions

  • 109 thou university graduates

  • Availability of technical engineers

  • High industrial experience

  • Flexibility


Romania top destination for investment

ValuableHuman 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


Competitive labor cost

CompetitiveLabor 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


Romania top destination for investment

4. FDI Performance


Romania top destination for investment

Annual Inward FDI

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


Romania top destination for investment

1

2

3

4

5

6

7

8

9

10

Major Investing Countries

(1990-2005)

Source: National Bank of Romania


Romania top destination for investment

5. Infrastructure Development


Romania top destination for investment

Highway Infrastructure Development - 2013

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

FOCSANI

ORASTIE

TIMISOARA

BRASOV

CRISTIAN

GHIMBAV

LUGOJ

PREDEAL

COMARNIC

BUZAU

PLOIESTI

PITESTI

DROBETA TR. SEVERIN

DRAJNA

CERNAVODA

BUCURESTI

CONSTANTA

FETESTI

CRAIOVA

GIURGIU

CALAFAT


Romania top destination for investment

Ports and Airports

SATU MARE

BAIA 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


Mobile communication infrastructure coverage area

Mobile Communication Infrastructure– coverage area -

  • Consolidated market;

  • Major international players;

  • More than 90% network coverage.


Romania top destination for investment

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


Romania top destination for investment

6. Investment Legal Framework


Competitive taxation

CompetitiveTaxation

Source: CEE-CIS Tax Notes - PriceWaterhouseCoopers

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


Romania top destination for investment

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


  • Romania top destination for investment

    Structural Instruments (1+2+3)

    Structural Funds (1+2)

    Agriculture Funds

    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

    CohesionFund (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.


    Structural funds channeled by operational programmes

    Structural funds channeled by Operational Programmes

    Operational Programmes of interest tobusiness


    Romania top destination for investment

    7. Potential Sectors for Development


    Potential sectors for investment

    Potential Sectors for Investment


    Romania top destination for investment

    8. ARIS – one stop shop for foreign investors


    Who is a r i s

    SERVICES

    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 SERVICESfor foreign investors in Romania

    Search and advice

    on the best location in Romania to fulfill the company' needs including site search, analysis & touring around

    Value added information on incentives

    and other administrative procedures

    Search for

    industrial

    and service suppliers


    Thank you for your attention

    Thank you for your attention!

    tel: +40 21 233.91.03

    fax: +40 21 233.91.04

    email: [email protected]

    website: www.arisinvest.ro


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