2004 - NATO membership
2007 - EU membership
2019 - EU Presidency
Strategic US-Romanian partnership
Area: 238,391 km2
Capital: Bucharest
Population:19.4M
(1st Jan 2019) BucharestMetropolitan Area: ~3M
Currency: RONRON/EUR: 4.75
(2019)
Bridge between East and Westfor 500M consumers market
GDP Growth 4.1%
FDI flows € 5.3B
FDI stock € 86.4B
Romania - Country overview
20
19
▪ 2nd largest country in CEE
▪ Largest country in SEE interms of size (the 9th in EU28)and population (the 7th inEU28)
▪ At the crossroads of 3 greatmarkets: the European Union,the CIS (Commonwealth ofIndependent States) and theMiddle East
At a glance
4.7
8.07.2
9.3
-5.5
-3.9
2.0 2.13.5 3.4 3.9
4.8
7.1
4.4 4.1
2005 2006 2007 2008 2011 2012 2013 2014 2015 2016 2017 2018 2019
Forecast
2020: 4.1%
GDP growth (%)
(Source: National Commission of Strategy and Prognosis)
2009 2010
Potential for growth
(Source: National Institute of Statistics)
10.0 15.0 21.9 34.5 42.8 48.8 48.8 51.4 53.7 57.9 60.0 60.2 64.4 70.1 75.9 81.1 86.4
1.9
5.2 5.2
9.1
7.3
9.5
3.4
2.31.7
2.52.7
2.4
3.5
4.54.8
5.3 5.3
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
FDI stock FDI flows(Source: National Bank of Romania)
FDI stocks for 2009-2018 were recalculated based on the BPM6 methodological framework
(EUR Bn)
FDI Flows and Stock
4.8
7.9
5.6 6.1 5.8 3.3
4.0
1.1
-0.6-1.5
1.3
4.63.8
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Forecast
2020: 3.1 %(Source: National Commission of Strategy and Prognosis)
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.
(Source: National Institute of Statistics)
Inflation rate (%)
Inflation
7.1 7.26.4
5.66.5 7.0 7.2 6.8 7.1 6.8 6.8
5.94.9
4.2 3.9
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Forecast 2020: 3.8%(Source: National Commission of Strategy and Prognosis)
(Source: National Institute of Statistics)
Unemployment rate (%)
Unemployment
Note: Denmark, Italy, Cyprus, Finland and Sweden have no national minimum wage
(Source: Eurostat)
312430 466 487 546 575 580 584 607 611
741 758 777
9411,050
1,539 1,584 1,594 1,599 1,636 1,656
2,142Minimum Monthly Gross Wage in EUJanuary 2020 (EUR)
Minimum Wage in EU
(Source: ABSL, NIS, Eurostat)
Languages studied by Romanian students
99%• 99% of Romanian high school students study two or more foreign languages
• Predominant languages: 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]:
Skilled labor force
90% 26% 17% 8% 5%
RO
UKR
MD
BG
SRB
HU
Ahead of Italy, Bulgaria, Luxembourg, Greece or Malta
World Bank ease of doing business
One of the most competitive labor force in the CEE (€7.7)
Hourly labor costs 2019Natural gas & Electricity prices
EU27 ranking (S2 2019)*
14th lowest naturalgas prices
*Excluding VAT and other recoverable taxes and levies
14th lowest electricity prices
(Source: Eurostat, March 2020)
(Source: World Bank Report, 2019)
(Source: Eurostat)
Romania, the largest market in the SEE
55
214
14
(Source: Numbeo, May, 2020)
Value for money
Consumer Prices
BERLIN PARIS
Rent Prices
Restaurant Prices
Groceries Prices
Standard of living equivalency net salary
BUCHAREST
€155
€1,966 €3,600
€170
€152
€163
€4,898
€140€100
€100
€100
€100
€158
€131
€138
Tax System
The Romanian tax system
Social Security
EmployerEmployee
35%
R&D - 0 % income tax for employeesDeduction of R&D eligible expenses:▪ depreciation of R&D equipment, salaries for R&D
personnel; 50% of these expenses can be deducted fromthe taxable income
Dividends are distributed to shareholders each trimester
based on interim financial statements and annually
2.25%
Dividend Tax RateCorporate Tax
16% 5%
2015 2016
VAT
▪ 9% - foodstuffs, pharmaceutical products, water supplies, some agricultural supplies
▪ 5% - hotel accommodation, restaurants & catering services
2017/2019
IT&C - 0 % income tax for employees▪ BA -14 technical specializations available▪ Employee is hired on a software engineer/programmer/
software analyst position▪ Annual revenue per exempted employee must be over
USD 10,000
24% 20% 19%
Income Tax Reinvested Profit tax
10% 0%
STATE AID - GD 807/ 2014
Minimum EUR 1M investment▪ Construction of new buildings▪ Renting costs for existing buildings▪ CAPEX aimed at technical installations and tools▪ Acquisition of intellectual property
FISCAL INCENTIVESInvestors 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
STATE AID 2014-2020 Total Budget EUR 925M
Investment Support
North-West50%
West35%
North-East50%
Center50%
South-East50%
South-West50%
South50%
10%
35%
State aid intensity, according to development region:
North West – 50%
North East – 50%
South East – 50%
South – 50%
South West – 50%
West – 35%
Ilfov County – 35%
Bucharest – 10%
(Source: Ministry of Public Finance)
State Aid intensity 2018-2020
International Fligths
Ports
Under construction
SATU MARE
ORADEA
SUCEAVA
TIMISOARA
CRAIOVA
SIBIU
TARGU MURESCLUJ-
NAPOCA
BACAU
IASI
BUCURESTI OTOPENI
M.KOGALNICEANU
DROBETA TR. SEVERIN
GIURGIU
MANGALIA
CONSTANTA
SULINATULCEABRAILA
GALATI
BAIA MARE
ARAD
BRASOV
▪ 130 direct flights leading to 76 destinations in 31 countries worldwide
▪ 14 international airports and 8 major ports
▪ Constanta Port - the deepest and largest port at the Black Sea
Aircraft traffic reached over21,8M passengers in 2018, upby 7.9% compared to 2017
(Source: National Institute of Statistics)
Ports and Airports
▪ 92 industrial parks spread across Romania - both private and public ownership▪ Access to utilities & benefits packages according to their focus ▪ Exemption on land, building and urban planning taxes
North West Region: 23 parks
West Region: 6 parks
South West Region: 7 parks
South Region: 24 parks
South East Region: 2 parks
North East Region: 8 parks
Center: 18 parks
Bucharest-Ilfov Region: 4 parks
Status at regional level(April, 2020)2
71
1
1
3
1
1
23
2
415
13
21
23
12
3 10
11
112
1
2
3
(Source: Ministry of Regional Development and Public Administration)
Industrial Parks
In Romania there are currently five Free
Zones
▪ Arad
▪ Giurgiu
▪ Braila
▪ Galati
▪ Sulina
Romania’s five free zones
By economic activity, FDI stock was channeled primarily to manufacturing (30.9% of total FDI), out of which the largest recipients were:• 6.7% transport equipment• 6.4% oil processing, chemical, rubber & plastic
products• 3.9% metallurgy
Apart from industry, other activities that also attracted significant FDI were:• 16.8% construction & real estate transactions• 15.8% trade• 11.5% financial intermediation & insurance
(Source: National Bank of Romania)
SectorsEUR
million
% of total
FDITOTAL 81,124 100.0Manufacturing 25,032 30.9Construction & real estate transactions 13,651 16.8Trade 12,865 15.8Financial intermediation and insurance 9,308 11.5Electricity, gas and water supply 6,006 7.4Professional, scientific, technical and
administrative activities and support
services
3,991 4.9
IT&C 3,321 4.1Agriculture, forestry and fishing 2,406 3.0Mining 2,273 2.8Transportation 1,281 1.6Accommodation & food service activities 528 0.6Other 524 0.7
FDI Stock by Field of Activity at 31 December 2018
(Source: OPIAR Report 2018, ANIS Report 2018 - estimation, ACAROM Report Feb 2019)
AUTOMOTIVE
INDUSTRY SIZE KEY PLAYERS KEY PROJECTS
• Premium Aerotec EUR 100M investment
• Sonaca EUR 100M investment• Airbus Helicopters EUR 15M
investment• UAC Europe 100M investment
EUR
580M
EUR
4.5B
EUR
28.8B
• Siemens software dev. worked on the Mars Rover
• Deutsche Bank EUR 40M investment
• LiveRail was acquired by Facebook for EUR 600M
• Continental EUR 175M investment in 2017
• Daimler EUR 250M in 2018 investment for gear boxes
• Ford EUR 200M investment for production of new model
Key facts for top tech oriented industries in Romania (2018)
IT&C
AEROSPACE
“one-stop-shop” 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
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)
InvestRomania in a nutshell
GOVERNMENT OF ROMANIAMinistry of Economy, Energy and Business Environment
152 Victoriei Av.District 1, Bucharest, Romania
www.investromania.gov.roE-mail: [email protected]