Romania

A Strategic Choice

February 2018
 Romania - Country overview

Area:
238,391 km2

Capital:
GDP Growth
Jan – Nov 2017
7% 2004 - NATO membership

Bucharest Best performance in EU

Currency: RON FDI stock € 70 bn

2016
2007 - EU membership
RON/ EUR: 4.5
Population: 2019 - EU Presidency
apox: 20 mill

Bucharest
Metropolitan Area: 3mill
S&P Moody’s Fitch Strategic US-Romanian
Bridge between East and partnership
BBB- Baa3- BBB- West for 500 mill consumers
Stable Stable Stable
market
At a glance

 2nd largest country in CEE and the

largest in SEE in terms of size (the 9th
in EU28) and population (the 7th in
EU28)

 At the crossroads of 3 great markets:

the European Union, the CIS
(Commonwealth of Independent
States) and the Middle East

 2nd in EU for average peak connection

speeds and 6th for 4 Mbps
broadband adoption in Q1 2017*

Source: *Akamai Q1 2017 State of the internet report

 Potential for Growth

GDP growth (%)

8.1 8.5
6.9 7.0 Q3-2017: 8.8%
4.2 -0.8 1.1 0.6 3.5 3.9 4.8
3.1
Jan – Nov 2017: 7.0 %
(Source: National Institute of Statistics)

-7.1
(Source: Eurostat)
Forecast
2018: 6.1%
(Source: National Commission of Prognosis)

9.1 9.5 FDI Inflows

7.3 (bn EUR)
5.2 4.5
3.4 2.5 2.7 2.4 3.5
2.3 1.7 FDI 2017 (11 months)
bn 4.4 EUR

(Source: National Bank of Romania)

Inflation

Inflation rate (%)

9.1 7.9
6.6 6.1 5.8
4.9 5.6
4.0
Target 2018: 2.5%
3.3
1.1 1.3
(Source: National Bank of Romania)

-0.6 -1.5

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

(Source: National Institute of Statistics)

Inflation started to be on a positive trend at the beginning of 2017 due to the persistence of the internal
inflationary pressures associated with the increase of aggregate demand and the rise in wage costs.
Unemployment

Unemployment rate (%)

7.2 7.3 7.0 7.2 6.8 7.1 6.8 6.8

6.4 6.5
5.9
Forecast 2018:
5.6
5.0 4.8%
(Source: National Commission for Prognosis)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: National Institute of Statistics

Minimum Wage in EU

Minimum Monthly Gross Wage in EU 1999

January 2018 (EUR)
1563 1578 1614
1498 1498

843 859
747
677 684

445 462 478 480 500 503

400 408 430
261

Source: EUROSTAT
Skilled labor force

Languages studied by Romanian students

• 97% of Romanian high school students study 2 or more foreign languages
97% • The predominant languages are English, French, German and Spanish, yet initiatives for
teaching Japanese, Nordic languages or the entire Latin language family (Spanish, Italian,
French) exist

University students in Romania are proficient in [% of total]:

90% 26% 17% 8% 5%

Source: ABSL, NIS, Eurostat

Skilled labor force
 Romania
Largest Market in the SEE

Hourly labor costs 2016

Maximum broadband speed

One of the most

2
Second in EU for

2
competitive
average peak labor force in the
UKR
connection speeds CEE
MD
HU
RO
Gas prices ranking
World Bank ease of doing business
SRB
4th lowest gas prices Ahead of Italy,
BG

4 45
Hungary, Bulgaria,
4th lowest electricity Croatia, Belgium,
price in Europe Cyprus, Turkey,
Luxembourg or
Greece
Source: World Bank, Doing Business Report 201; Akamai Q1 2017 Report; Eurostat 2017
VALUE FOR MONEY

BUCHAREST BERLIN LONDON

Consumer Prices €100 €168 €205

Rent Prices €100 €239 €549

Restaurant Prices €100 €161 €238

Groceries Prices €100 €167 €184

Standard of living
equivalency net €1,806 €3,325 €5,109
salary

Source: Numbeo, January, 2018

Overview of the Romanian tax system

VAT Social Security

Employee Employer
24% 20% 19% 18%
35% 2.25%
2015 2016 2017/18 2019
Food products: 9% Starting January 1st 2018

Income Tax Reinvested Tax System Corporate Tax Dividend Tax Rate
profit tax

16% 5%
10% 0%
Starting January 1st 2018 2017
IT&C - 0 % income tax for employees R&D - 0 % income tax for employees
 BA -14 technical specializations available Deduction of R&D eligible expenses:
 Employee is hired on a software engineer/  depreciation of R&D equipment, salaries for R&D
programmer/ software analyst position personnel; 50% of these expenses can be deducted from
 Annual revenue per exempted employee must be the taxable income
over USD 10 000
 Investment Support

STATE AID 2014-2020 Total Budget EUR 1.5 billion

STATE AID - GD 807/ 2014

STATE AID - GD 332 / 2014
Minimum EUR 10 mil. investment
Minimum 10 new jobs/ per location
 Construction of new buildings
 Salary costs registered for a 2
 Renting costs for existing buildings
consecutive year period resulted as a
 CAPEX aimed at technical
direct consequence of the investment
installations and tools
 Salary costs are comprised of gross
 Acquisition of intellectual property
average annual salary plus benefits

FISCAL INCENTIVES
Investors that set up manufacturing locations or offices in an
industrial, scientific or technological park benefit from :
 Exemption on land, building and urban planning tax
 Taxes charged for changing land destination
Intensity
State Aid
State aid intensity,
according to development
region:

North-West • North West – 50%

50%
North-East
50% • North East – 50%

• South East – 50%

Center
50%
West • South – 50%
35%
South-East
50% • South West – 50%

35%
• West – 35%
South-West
50%
South • Ilfov County – 35%
50%
10%
• Bucharest – 10%

Source: Ministry of Public Finance

Investment Support

37.4 mill Eur

28 mill Eur

Ploiesti West Industrial Park

Park Sebes
11 mill Eur
Tetarom Jucu Park/
16 mill Eur Cluj-Napoca 15 mill Eur

Tetarom Jucu Park/

Cluj-Napoca Ploiesti West Park
Ports and Airports

 130 direct flights leading to 76

SUCEAVA
destinations in 31 countries
SATU BAIA MARE IASI worldwide
MARE

ORADEA BACAU  14 international airports and 8

CLUJ-
NAPOCA
TARGU MURES
major ports
GALATI
ARAD

SIBIU BRASOV
TULCEA
SULINA  Constanta Port - the deepest and
BRAILA
TIMISOARA largest port at the Black Sea.
M.KOGALNICEANU CONSTANTA International Fligths
BUCURESTI
DROBETA TR. OTOPENI Ports
SEVERIN MANGALIA
CRAIOVA Under construction
GIURGIU

Aircraft trafic reached 16 mill. passengers in 2016, up by 20% compared to 2015

Industrial Parks

Status at regional level

1 (January , 2018)
1
1
1 2
North West Region: 18 parks
1
4 1
11 West Region: 6 parks
1
1 1 South West Region: 7 parks
2
1
3 2
3 10 1 South Region: 22 parks
1 South East Region: 2 parks
1 2 14
4 North East Region: 6 parks
1
2
1
3 1 Center: 17 parks
2

Bucharest: 2 parks

 80 industrial parks spread across Romania - both private and public ownership
 Access to utilities & benefits packages according to their focus Source: Ministry of Regional Development
 Exemption on land, building and urban planning taxes and Public Administration
Industrial Parks

Industrial Park
Ploiești
Industrial Park
Brașov

Industrial Park
Slatina
FDI Stock by Field of Activity
at 31 December 2016

Sectors EUR % of
million total FDI
TOTAL 70,113 100.0 By economic activity, FDI stock was
Manufacturing 22,435 32.0 channeled primarily to
manufacturing, with the following
Construction and real estate transactions 9,794 14.0
largest recipients:
Trade 8,994 12.8  transport equipment
 oil processing
Financial intermediation and insurance 8,844 12.6
 chemical
Electricity, gas and water supply 6,713 9.6  rubber and plastic products
Professional, scientific, technical and  metallurgy
administrative activities and support 3,908 5.6  food
services  beverages and tobacco
 manufacture of computer
IT&C 3,628 5.2
 electronic
Mining 1,831 2.6  optical and electrical
products
Agriculture, forestry and fishing 1,836 2.6
Other 2,130 3.0
Source: National Bank of Romania
 Key facts for top tech oriented industries in Romania

INDUSTRY SIZE KEY PLAYERS KEY PROJECTS

AEROSPACE
EUR • Premium Aerotec EUR 50m
investment
400M •
•
Sonaca EUR 12m investment
Airbus Helicopters EUR 15m
investment

IT&C
• Siemens software dev. worked
EUR on the Mars Rover
• Deutsche Bank EUR 40m
4.0B •
investment
LiveRail was acquired by
Facebook for EUR 600m

AUTOMOTIVE • Continental EUR 26m

investment in R&D center
EUR • Daimler EUR 300m
investment for gear boxes
22B • Ford EUR 200m investment
for production of new model

Source: Invest Romania

InvestRomania In a nutshell

“Single point of contact” for foreign investors, assisting and advising

international companies for project implementation in the country
Promoting and facilitating foreign investment in Romania
Main interface between foreign companies and central/local authorities
Assisting worldwide entrepreneurs in project implementation, including
those financed through PPP
Tailored and individually custom-made solutions for developing new or
current units
Consultancy and guidance during all stages of the decisional process
(state aid & fiscal incentives)
 Single point of contact
for foreign investors

office@investromania.gov.ro
investromania@investromania.gov.ro

www.investromania.gov.ro

www.businessromania.gov.ro