ROMANIA - YOUR BUSINESS PARTNER

1. ROMANIA - YOUR BUSINESS PARTNER Seminar “Doing Business in Romania” – 14 September 2010 Source: ROMANIAN CENTER FOR TRADE AND INVESTMENT

2. Macroeconomic Data

3. Macroeconomic Data • GDP: EUR 117.02 billion (current market prices, 2009 f.); • GDP annual growth rate: -7.1% (current market prices, 2009); • GDP structure by sector: agriculture 6.4%, industry 23.7%, construction 9.8%, trade and services 50.1%, and net taxes on products 10.0%; • Inflation rate (Dec./Dec.): 4.74% (2009); • Unemployment rate (end of the year): 7.8% (2009); • Trade balance (goods & services, fob-fob): EUR -6,78 billion (2009); • Current account balance: EUR -5.16 billion (2009); • External debt balance: EUR 78.66 billion (2009 provisional data); • International reserves: EUR 30.86 billion (as of December 31st, 2009).

4. Reasons to Invest Market & Location Advantage One of the largest markets in Central and Eastern Europe (ranking 7th, with over 21 million inhabitants); EU market gateway 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.

5. Reasons to Invest 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; WTO member since January 1995. 

6. Reasons to Invest Other Advantages 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

7. Reasons to Invest Economical Advantage State aid schemes for encouraging investors to take upon Romania; Increasing interest on behalf of Foreign Investors – leader destination for FDI in the region (source: 2010 A.T. Kearney Foreign Direct Investment Confidence index); Sound fiscal policy (16% flat tax). Social Advantage Agreement between Government and major unions; No major union movements; Labor relations regulated by the Romanian Labor Code.

8. FDI Statistics

9. Doing Business in Romania Competition Since Romania’s accession to the European Union, competition has been governed by both the domestic and the EU legislation. The relevant domestic legislation on merger control (control of economic concentrations), anti-competitive agreements, concerted practices and abuse of dominant position includes Competition Law no. 21/1996, as well as the secondary legislation issued by the Competition Council. The national legal framework regulating national state aid procedures is mainly Emergency Government Ordinance no. 117/2006. Labour and Employment Regulations The Labour Code covers Romanian employees with employment contract who perform activities in Romania or abroad for a Romanian employer, as well as foreign individuals with employment contract who perform activities for a Romanian employer in Romania.

10. Doing Business in Romania Real Estate Romanian citizens and companies (regardless of shareholder or management citizenship) have the free and unrestricted right to acquire and own real estate. In this regard, Law no. 312/2005 regarding the right of foreign citizens, of stateless persons, as well as of legal entities to acquire ownership over the land, which entered into force upon Romania’s E.U. accession, sets the general rules under which foreign nationals/legal entities may acquire ownership rights over land. Romanian residents who are citizens of a member state of the E.U. may acquire land ownership rights in the same manner and under the same conditions as Romanian citizens (i.e. 2007) except for agricultural land and forest (for which other conditions should be met). 

11. Doing Business in Romania Work Regulations for Foreigners Citizens of EU countries and of the European Economic Area (EEA) member states (i.e., Norway, Liechtenstein, Iceland) may enter Romania without a visa, and are allowed to stay for a period or several periods not exceeding 90 consecutive days.  Special conditions are stipulated by existing legislation with regard to foreigners who intend to set up companies in Romania. Foreign Trade Regulations With Romania’s Accession to the European Union on 1 January 2007, the customs borders with other Member States were removed. Consequently the movement of community goods between Romania and those States is no longer subject to customs control.  

12. Doing Business in Romania Public Procurement Contracts Romanian law provides for several types of instruments through which State or local authorities entrust undertaking of works, supplying of goods or services to private investors, namely by means of public procurement, public works concessions and services concessions contracts and joint venture contracts. The relevant legal framework was dramatically modified during last years, following European Commission’s recommendations and with a view to comply with Romania’s engagements in the field of ensuring free movement of goods in the context of Romania’s accession to the EU.

13. Doing Business in Romania Romanian Capital Markets Currently in Romania there are two market operators, certified to operate two regulated markets, respectively the Bucharest Stock Exchange (RASDAQ stock exchanges merged with the Bucharest Stock Exchange) and the Monetary and Commodities Exchange Market based in Sibiu ("BMFMS"). Financial Institutions The Romanian banking sector is organized into a two tier system, with the National Bank acting as the independent central bank. Currently, the minimum share capital for setting up a bank is RON 37 million (approximately EUR 9,5 million).

14. Doing Business in Romania Investment Support Following the accession to the European Union (January 1st, 2007), Romania enjoys EU financial assistance under the form of structural and cohesion funds allocated for a five consecutive year period, 2007-2013. During this period, Romania will be allocated a total of Euro 33.53 billion in EU funds and national public contribution. Romanian Government adopted a large number of state aid schemes stimulating economic growth by means of investment facilities granting. According to Romanian legislation in force, all investors enjoy the same rights and incur the same obligations, irrespectively of their being Romanian or foreign citizens, residents or non-residents. State aid can be granted to large, small and medium-sized enterprises (including microenterprises), depending on the type of investment, the field in which the investment will be implemented and the provisions of the state aid scheme applied for.

15. Foreign Trade • Total value of the international trade of Romania in the first five months of 2010 was 31,510.6 million Euros, up with 20.8% over the same period of the last year, exports registered an increase to 13,846.5 million Euros (25.0%) and imports to 17,664.1 million Euros(17.8%). • Community trade (with the 26 EU countries) has a share of 73.6% in export and 72.2% in import • In the first five months of 2010, top 3 destinations for Romanian exports were: Germany (with a share of total Romanian exports of 18.9%), Italy (14.0%), France (8.8%) • In the first five months of 2010, top 3 countries for Romanian imports were : Germany 17.0%, Italy 12.1%, Hungary 8.1%

16. Bilateral Trade On May 31, 2010, the volume of total bilateral trade was 196.24 million Euros. Romanian exports totaled 80.24 million Euros, while imports amounted to 116.00 million Euros. The evolution of export and import on 31 May 2010 compared with the same period of 2009 is: export increased by 28.74% and import increased by 14.90%. Main Romanian export products represent: electric machinery and equipment, transport vehicles and equipment and plastic and rubber articles. Main Romanian import products represent: products of the chemical industry, electric machinery and equipment, transport vehicles and equipment. On June 30, 2010 in Romania were registered 158 Romanian-Slovenian joint ventures, with a total invested capital of about 36.62 million Euros, Slovenia ranking in the top 37 foreign investors in Romania.

17. Thank You! Emil Incze Economic Counsellor Embassy of Romania in Ljubljana Smrekarjeva 33A, 1107, Ljubljana +386 (0)1 5055855 +386 (0)40 392168 +386 (0)1 5055432economic.romania@siol.net