ABOUT ROMANIA
REASONS TO INVEST IN ROMANIA


ADVANTAGES - in brief:

  • A large domestic market, the second largest in Central Europe
  • An excellent location at the cross-roads of traditional commercial routes
  • Access to over 200 million consumers in a 1000 kilometres radius
  • Ideally located for goods transiting between: Caspian Sea, Black Sea, Western Europe
  • Available facilities offered by the Free Zones
  • Extensive maritime and river navigation facilities
  • Facilities available in the Romanian shipyards
  • 6 international airports (Henry Coanda and Baneasa Airports in Bucharest and the airports in Timisoara, Cluj, Sibiu, Constanta)
  • Interconnection of the national electricity transport network system to main European networks
  • A national telecommunication network based on optic fibbers and large capacity digital equipment integrated in the European optic cables thoroughfares and via satellite
  • Networks of mobile telecommunications in GSM and NMT / LEMS systems
  • A highly developed industrial infrastructure, including oil and petrochemicals
  • A skilled, relatively low priced labour force, well trained particularly in technology and engineering
  • A wide range of natural resources, including fertile agricultural land, coal, oil and gas and a significant tourist potential
  • A liberal investment legislation, based on free, non-discriminatory access to markets and economic sectors
  • The presence of branch offices and representatives of well-known international banks (City Bank, ABN-AMRO, ING Bank, Chemical Bank, Creditanstallt etc.)
  • Diplomatic relations with 176 countries
  • Compatibility with “acquis communautaire”
  • European Union accession on January 1 st, 2007
  • Market Economy Status recognized by the US Government (March 2003)
  • Functioning Market Economy recognized by the European Union (November 2003)
  • Member of the UN and of numerous international organizations (associate member in EU, CEFTA, BSEC etc).

The Romanian economy met a significant growth in the last years, beginning with 1999, registering an annual growth rhythm of approx. 5.4%.

We consider the above mentioned aspect as one of Romania's strongest points. The improvement of the country's rating from ‘stable' to ‘positive' (according to ‘Standard & Poor's') together with the existence of some important material resources (oil, gas, coal, ferrous and non-ferrous ores, wood, wool etc.) and the highly qualified and competitive labour force also offer a wide and diversified internal market, the second on in size in the Central and Eastern Europe after Poland.

Also Romania, a country having an excellent geographical position, at the crossroads of some great trade routes that connect the Far East with the Western Europe on the East-West axis, and which through the Rhine-Main-Danube Canal can ensure important connections between North and South, allows the access to over  200 million consumers in a 1000 kilometres radius.

In what regards the series of advantages offered by Romania as destination for the foreign direct investments, we must also mention:


ADVANTAGES - in political plan:

  • In April 25th, 2005 Romania signed the Agreement regarding European Union accession on January 1st, 2007;
  • Romania is a politically stable country and has the political willingness of continuing the firmer promotion of the reforms with a view to consolidate the economy, to increase the competitiveness thereof to a level close to the one of the European Union Member States. These are elements that can directly influence the enhancement of the investors' trust;
  • Romania fulfils all the conditions of a an operational market economy – qualification that has been recognised both by the European Union and the United States of America;
  • Industrial policies that are adequate for the priority development of some sectors;
  • Romania is a full right member of NATO and of other international organisations;
  • The trustworthiness climate created by means of all the points mentioned above determined the presence in Romania of some subsidiaries and representations of worldwide known banks (ABN-AMRO, ING Bank, Citibank, Chemical Bank, Creditanstallt etc.). On overall, 15 international banks are present in Romania.


ADVANTAGES - in economic plan:

  • Facilities offered by the Romanian ports. Thus, Constanta Port can serve ships with a capacity of more than 100,000 tdw. From Constanta, on the Danube-Black Sea Canal the commodities transport can be ensured through the connection Rhine-Main up to Rotterdam, ensuring the most optimal costs. Also, by means of Constanta Port, we can ensure the re-establishment of Asia-Europe Transit Corridor (The ‘Silk Road') using the connection through Batumi Harbour towards the Caspian Region and Asia, this being an ideal location for the commodities transited between the Caspian Sea, the Black Sea and the Western Europe;
  • Access to international airports (‘Henri Coanda' and ‘Baneasa' Airports in Bucharest and the airports in Timisoara, Cluj, Sibiu, Constanta);
  • A system of electricity transmission grids that is interconnected at UCTE, also having interconnection possibilities with other not connected countries, in competitiveness conditions;
  • A national telecommunication network based on fibre optics and high capacities of digital equipment integrated in the European system of fibre optics and satellite relay;
  • A mobile telecommunication network in GSM and NMT / LEMS systems;
  • The existence of 48 industrial parks.

ADVANTAGES - in legislative plan:
  • The existence of a transparent legislation regarding the investments, based on the free non-discriminating access to the market in all the sectors of the economy;
  • A much more improved investment climate, also supported by an adequate legislation.

The main legislative regulations are:
  1. The Law no. 241/1998 regarding the stimulation of the foreign investments and establishing the rights and guarantees offered to the investors;
  2. The Law no. 332/2001 regarding the promotion of the foreign direct investments with a significant impact upon the economy (investments higher than USD 1 million) establishing the enforcement fields of the law, the conditions, the guarantees, the rights and the facilities offered for such investments;
  3. The Government Ordinance no. 16/2000 regarding the public-private partnership contracts, meant to promote the achievement of national interest projects;
  4. The Law no. 678/2002 defining the geographical areas to whom certain facilities address and are provided for;
  5. The Law no. 84/1992 regarding the free areas, specifying the activities that can be developed and providing certain facilities that can be granted;
  6. The Law no. 490/2002 regarding the regime for the establishment and operation of the Industrial Parks;
  7. The Government Ordinance no. 14/2002 regarding the regime for the establishment and operation of the Industrial Parks;
  8. The Law no. 346/2004 regarding the stimulation and development of SMEs;
  9. Other specific legislative regulations that support the investment process are those regarding the concession regime, the Mining Law, the Oil Law, the maritime transport activity, the rural tourism etc.
 
ADVANTAGES - in fiscal plan:
  • The Law no. 571/2003 regarding the approval of the Fiscal Code, regulating in an unitary form the payment of the fees and taxes, also providing for certain fiscal facilities, thus responding to the requests of the businessmen community in Romania within which an important role is held by the Foreign Investors Council;
  • The Emergency Ordinance no. 138 / 2004 for the amendment and completion of the Law no. 571/2003 regarding the Fiscal Code, by means of which the new Government promotes a fiscal relaxation by introducing a new fiscal quota that is applied to the taxable profit, of 16 %.

The foreign investments volume of EUR 9.95 billion that has been registered since 1990 up to now, having higher values in the last period, is still far from Romania's needs. Romania has to approach its competitiveness to the level of the one registered by the EU Member States.The current internal and international evolution makes us hope that Romania can, in a short period of time, become a ‘receptacle' for the direct foreign investments. In order to meet these expectations, Romania comes with an important volume of projects, some of these envisaging the gas corridor of transport from Asia towards Europe and the oil pipeline Constanta – Pancevo – Omisalj – Trieste for the oil in the Caspian region. The two projects that have just been mentioned are of even international importance.


ADVANTAGES - in the energy sector:

  • On the energy market, in the South-East Europe, Romania can play a very important role. The finalisation of Unit 3 Cernavoda of 700 MW, besides the supply of a clean and safety energy, can create availability for the external market in this region and not only here – the interconnection systems also allow energy export for other beneficiaries;
  • The fact that the energetic coal is available for a period of more than 35 years and the fact that, presently, more than 50 % of the electricity is produced in thermo system, made the Strategy in the Energy Field to mention, as energetic priorities, the following:
    • the rehabilitation and upgrading of the potentially efficient thermo power plants;
    • the equipping thereof with non  pollutant systems that will diminish the NOx emissions on the level of the legal limits.
  • In line with the ideas mentioned above, we have provided investment projects for the Energetic complexes of Turceni, Rovinari and Craiova, for the thermo power plants belonging to SC Termoelectrica SA Bucharest, to SC Electrocentrale Deva, Galati and Bucharest.
  • In order to produce electricity in hydro system (the purest energy), we have provided for projects envisaging the finalisation of the construction-mounting operations for some hydro power plants that are in different phases of execution (not finalised due to the lack of financing), such as:
    1. the hydro power plant Borca-Poiana Teiului, on Bistrita River;
    2. the hydro power plant Cosmesti-Movileni, on Siret River;
    3. the hydro power plant Valea Sadului-Vadeni, on Jiu River;
    4. the hydro power plant Subcetate-Simeria, on Strei River;
    5. the hydro power plant Fagaras-Hoghiz, on Olt river;
    6. the creation of a hydro power plant with pumping accumulation Tarnita-Lapusesti. We must mention that this power plant, having the power variation of ± 1,000 MW ensures the deficit capacity in the peak hours by transfer in the low load hours in its own system or in the interconnected one, filling the night gap, also ensuring services of adjusting the frequency-power in its own system or in the interconnected one.

ADVANTAGES - in the field of energy resources, coal extraction, oil and natural gas, the investment projects envisage:
  • The upgrading of the high capacity equipment from the lignite quarries of SNLO SA Tg. Jiu;
  • The development of the natural gas underground storage capacity by building new deposits (Margineni-Roman region);
  • The rehabilitation of the internal infrastructures of natural gas transport;
  • Building the natural gas corridor of transport from the Caspian Sea / Middle East region, via Romania, towards Europe (the capacity of 30 billion m3 / year – Nabucco Pipeline). The corridor will be connected to Transgaz Medias piping system.
  • The upgrading of the infrastructures for petroleum products infrastructure, beginning with the pipes connection network between the terminal of Constanta Port and the Southern Deposit, continuing with the internal routes of pipelines and last but not least, the interconnection of the national system of crude oil transport with ADRIA System (Constanta - Pancevo - Omisalj - Trieste Pipeline);
  • The investments volume for the 53 projects in the energy and energetic resources field amounts more than EUR 5,600 million. The highest investments provided for are the Unit 3 Cernavoda (EUR 850 million), Tarnita-Lapusesti (EUR 700 million), Nabucco Pipeline (EUR 600 million), Constanta -Trieste Pipeline (more than EUR 400 million).

ADVANTAGES - in the manufacturing industry field:
  • New green field projects envisaging the modern manufacture of household electric appliances;
  • The manufacture of photovoltaic parts and solar thermo systems, with a view to develop the renewable energy sources;
  • Projects that will allow the development of the services area by building, in the developed industrial areas, manufacturing capacities for the metallurgic products (metal sheets and straps) that will be offered in the shapes requested by the client, pre-shaped metal profile wires and concrete iron for the manufacture of metal sub-assemblies (Center - Service).

In what regards the policies for the attraction of the foreign investors, we consider that we already have an attractive legislation. The signals we have received after the recent adoption by the Government and after the approval by the Parliament of limiting the profit tax at 16 % are promising in what regards Romania's transformation – in a very near perspective – in ‘receptacle' for the foreign investments.


ADVANTAGES - the initiative for direct investments:

The legal framework is ensured by the law referring to the promotion of the direct investments with a major impact upon the economy (the Law no. 332/2001, amended by the Laws no. 414/2002 and no. 345/2002):

  • The direct investments with a major impact upon the economy represent those  investments that over-pass the equivalent of 1 USD million;
  • The Direct participation to the investment may be done through cash, in ROL or foreign currency;
  • Machinery, technological equipment, installations, tools, measurement and control instruments, automations, industrial transport means, manufactured less than a year before their entry in the country  and  that are new;
  • The Foreign investors have the right to transfer the profit abroad;
  • The investments made in Romania can't be nationalised, with the exception of the public interest cases.


ADVANTAGES - the initiative for the disadvantaged areas:

According to the Law no. 20/1999:

  • The Postponement of VAT payment for the motor cars, the transport means bought for the development of the production activities, the technological equipment, the installations, the tools, the measurement and control instruments that have been manufactured less than a year before and that have been never used, or until the amortisation of the investment; but no longer than 12 months after the creations;
  • The full reimbursement of the customs fees for the raw materials, spare parts or of the imports that are necessary for the production;
  • The exemption of the profit tax all along the existence of the disadvantaged area.


ADVANTAGES - the initiatives for free areas:

According to the Law no. 84/1992 (amended by the Law no. 414/2002):

  • The land and constructions of the free areas may be leased or let to the persons having Romanian nationality. The leasing period may be of no more than 50 years and it is established considering the value of the investment or of  the activity;
  • The transport means, the goods and other values originating from abroad that are introduced or taken out  from the free  areas are  exempted from the payment of the customs  fees;
  • For the activities developed in the free areas, The economic agents  are exempted from VAT payment and from the profit tax during the entire activity After finishing or interrupting the activity in the free areas, the foreign economic agents may transfer their capital and profit, after the payment of the  liabilities to the Romanian State and to the  business partners.