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Benefits of EU Accession - PowerPoint PPT Presentation

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Benefits of EU Accession

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    Slide 1: MINISTRY OF ECONOMY AND COMMERCE

    ROMANIA Member of the European Union ECONOMIC DEVELOPMENTS AND OPPORTUNITIES IN ROMANIA by Varujan VOSGANIAN , Minister

    Slide 2:Benefits of EU Accession

    Removal of any obstacles in the trade with EU Member States Common trade policy with third countries Harmonization of entire legislation, capital market regulations, taxation, accounting rules => higher transparency and simplification Structural funds (31 billion euro for 2007-2013) Open gate for EU towards CIS, Asia, Middle East, Northern Africa Participation in major projects in the Black Sea Extended Area and in the Central & Eastern European Region Romania-important role in assuring the energy security for Europe (major transit pipelines, energy production & supply)

    Competitive Taxation

    Slide 3:Most industrial countries have pursued tax reforms to ensure that their economies remain attractive for investment. Starting January this year, Romania introduced a 16% flat tax on profit, which means in fact a reduction by 9 percent as against the previous tax rate. What all this shows is that tax competition is working in Central and Eastern European countries and most of them are trying to follow the successful Irish example to have faster economic growth through low taxes and free economy. The CEE countries with the lowest rates for 2004 are Serbia (14%), Macedonia (15%), Romania (16%) and Hungary (16%).Most industrial countries have pursued tax reforms to ensure that their economies remain attractive for investment. Starting January this year, Romania introduced a 16% flat tax on profit, which means in fact a reduction by 9 percent as against the previous tax rate. What all this shows is that tax competition is working in Central and Eastern European countries and most of them are trying to follow the successful Irish example to have faster economic growth through low taxes and free economy. The CEE countries with the lowest rates for 2004 are Serbia (14%), Macedonia (15%), Romania (16%) and Hungary (16%).

    Slide 4:Macroeconomic Performance GDP real growth

    Slide 5:Macroeconomic Performance Inflation rate

    Slide 6:Macroeconomic Performance Unemployment rate

    Slide 7: COUNTRY RATINGS ROMANIA

    Fitch - A- (August 2006) Coface - A4 (January 2006) JCR - BBB+ (November 2006) Moody s - Baa3 (September 2006) Standard & Poors - BBB- (September 2006) World Bank Report 2006: Romania the most reforming country in the business field

    Slide 8:Foreign direct investments - million Euro -

    Slide 9: FOREIGN DIRECT INVESTMENT

    Total FDIs until 31.12.2006: 31 billion euro 1. The Netherlands - 21,06% 2. Austria - 12,94% 3. France - 10,27% 4. Germany - 10,24% 5 . Italy - 5,56% 6. U.S.A. - 4,72% 7. United Kingdom - 4,43% 8. Netherlands Antilles 3,65% 9. Greece 3,61% Source: National Trade Register Office

    Slide 10:DIRECT INVESTMENT WITH SIGNIFICANT IMPACT ON ROMANIAN ECONOMY, BY MAIN FIELDS, IN 2006

    Source: Romanian Agency for Foreign Investment

    Slide 11:Foreign Investor Advantages

    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 national treatment for foreign investors

    Slide 12:New Investment Law Draft under public debate

    Objectives: Determines the principles, terms and modalities of stimulating investments in Romania, aiming at contributing to the sustainable country development Full compliance with the EU legislation The Government will issue also legal/administrative acts in order to regulate the state aids schemes for each objective The goals, objectives, timing, budgets, beneficiaries, eligibility and selection criteria, competent authorities responsible to grant incentives will be established A responsible authority for implementing and monitoring the legal provisions will be set up

    Slide 13: FOREIGN TRADE, IN THE PERIOD 2001 2006

    Source: National Institute of Statistics (www.insse.ro)

    GEOGRAPHICAL ORIENTATION OF THE ROMANIAN EXPORTS, IN 2006 Source: National Institute of Statistics (www.insse.ro) GEOGRAPHICAL ORIENTATION OF THE ROMANIAN IMPORTS, IN 2006 Source: National Institute of Statistics (www.insse.ro)

    Slide 16:TRADE BETWEEN ROMANIA AND AUSTRIA, IN THE PERIOD 1999 2006

    Slide 17:STRUCTURE OF THE BILATERAL COMMERCE, BY MAIN GROUPS OF PRODUCTS, IN 2006

    Romanian Exports Machinery and electrical equipment 42,5 % Furniture, toys and other 10,8 % Textile and garments - 8,9 % Metals and articles thereof 7,9 % Transport equipment - 7,6 % Romanian Imports Machinery and electrical equipment 35,1 % Plastics and rubber 14,9 % Metals and articles thereof 9,5 % Transport equipment - 7,3 % Chemical products 5,3 %

    Slide 18:Austrian FDIs in Romania

    Austria ranking 2nd among the foreign investors in Romania 2 billion euro share-capital in Romanian companies / 7 billion euro effective investments, according to Austrian sources 4192 companies with Austrian capital registered in Romania Main sectors for Austrian investments: banking, petrochemical industry, wood procesing, food industry

    Market & Location Advantage : Second largest market in Central and Eastern Europe (over 21 million inhabitants) Easy access to the countries of the former CIS countries, Balkans, the Middle East and Northern Africa Junction of three prospective European transportation corridors nos. 4, 7 & 9 Resource Advantage: Skilled labor force, with solid knowledge in technology, IT and engineering Rich natural resources, including fertile agricultural land, oil and gas Important potential for tourism TOP REASONS TO INVEST IN ROMANIA (1)

    Slide 19:Concluding, I would like to draw your attention to the top 5 reasons to invest in our country: the strong market potential, the functional market economy status, high skilled labor force, significant economic growth and the competitive tax policy. All the reasons I mentioned in my brief presentation are the proof that Romania can favorably compete with other countries in the region for foreign direct investment. I hope I succeeded in convincing you to take a closer and fresh look at Romania. Concluding, I would like to draw your attention to the top 5 reasons to invest in our country: the strong market potential, the functional market economy status, high skilled labor force, significant economic growth and the competitive tax policy. All the reasons I mentioned in my brief presentation are the proof that Romania can favorably compete with other countries in the region for foreign direct investment. I hope I succeeded in convincing you to take a closer and fresh look at Romania.

    Economic Advantage Sustainable economic growth Functional Market Economy status Competitive tax policy Decreasing inflation Permanent financial assistance for SME's Development Structural funds Improving Infrastructure Advantage Well-developed networks of mobile telecommunications in GSM systems Highly developed industrial infrastructure, including oil and petrochemicals Branch offices and representatives of various well-known international banks Newly developed highway infrastructure Commitment to improve the highway infrastructure to EU standards Extensive maritime and river navigation facilities TOP REASONS TO INVEST IN ROMANIA (2)

    Slide 20:Concluding, I would like to draw your attention to the top 5 reasons to invest in our country: the strong market potential, the functional market economy status, high skilled labor force, significant economic growth and the competitive tax policy. All the reasons I mentioned in my brief presentation are the proof that Romania can favorably compete with other countries in the region for foreign direct investment. I hope I succeeded in convincing you to take a closer and fresh look at Romania. Concluding, I would like to draw your attention to the top 5 reasons to invest in our country: the strong market potential, the functional market economy status, high skilled labor force, significant economic growth and the competitive tax policy. All the reasons I mentioned in my brief presentation are the proof that Romania can favorably compete with other countries in the region for foreign direct investment. I hope I succeeded in convincing you to take a closer and fresh look at Romania.

    Slide 21:Potential Sectors for Investment

    Manufacturing Automotive parts IT & Communication Electric & Electronics Wood processing Construction materials Textile Food processing Infrastructure Outsourcing and logistics

    MINISTER OF ECONOMY AND COMMERCE ROMANIA Phone: +40 21 202 51 40 Fax: +40 21 202 51 77 E-mail: varujan_vosganian@minind.ro Website: www.minind.ro THANK YOU !