Doing Business in Romania
A marketplace of 22 million, 37 million acres of arable land, a vibrant oil and gas industry, breathtaking landscapes, an expanding economy, a well-educated workforce with more than 50,000 specialists in information technology, access to the Black Sea and Asia. These features of Romania have attracted U.S. investors in banking, energy,
biotechnology, manufacturing, electronic components, cable operation, consumer products, telecommunications and film production, among others. They have discovered that American management and capital works profitably in Romania. U.S. exports in Romanian are growing as well, fueled by Romania’s economic expansion and new reductions in trade barriers.
Romania offers significant opportunities to American businesses with products, services, or technologies that either meet growing private demand or contribute to the country’s development priorities. The country’s entry into the European Union in January 2007 was preceded by a series of government reforms in order to satisfy the conditions of EU membership. Now the requirements of membership – including EU directives – make up one of the driving forces in Romania’s program of reform, modernization and investment in infrastructure. More significantly, these directives are accompanied by funding from the EU in the form of Structural Adjustment Funds and other programs to enable the new members to align their economies with the rest of the EU.
Romania is a market with tremendous potential, a strategic location, and an increasingly solid business environment. While careful evaluation of the market is needed in order to seize business opportunities, exporting to or investing in Romania is less challenging than in previous years in terms of business and consumer confidence.
After 0.7% growth in GDP in 2012, last year Romania saw one of the most rapid growths among the EU member states (3.5%), driven by an increase in exports as well as agricultural production. Domestic demand and investment are expected to follow a gradual increase curve for the next two years. With a public budget deficit of 2.5% of GDP at the end of 2013, Romania is well under the EU-28 public budget deficit average of 3.5% of GDP and is part of the minority group of 11 EU member states not currently under the excessive deficit procedure. The macroeconomic outlook has improved in recent years and in April this year, Moody’s improved the outlook for Romania's government bond rating from negative to stable, mainly on the expectation that the macroeconomic indicators from 2013 will remain sustainable and the risks to Romania's growth and external financing, strongly connected to the Euro zone, will decline.
In the context of historically low inflation, the National Bank of Romania relaxed monetary policy in order to support the economy. The Romanian currency was one of the least unstable over the last two years, not only within the region (Central & Eastern Europe in particular), but also compared with other large emerging markets such as Brazil, Turkey or South Africa. While Romania is increasingly attractive for trade and investment, a coherent tax policy, liberalization of the energy supply, and reform of the education and healthcare systems are needed to register further progress in the next period and improve Romania’s business outlook.
Romania will be eligible to receive nearly €40 billion in Structural and Cohesion funds and Rural Development and Fisheries funds from the EU in the 2014-2020 programming period, with the possibility of an extension for an additional three years for funds usage. With EU funding to rise 20% in the 2014-2020 period compared to 2007-2013 and its own (co-financing) contributions, Romania will see total inflows of approximately €49 billion over the period.
Recognize these names?
Your competitors are in Romania or will be soon…
3M, AIG, Alcoa, Amway, Avon, Bunge, Cargill, Cisco, Citibank, Coca-Cola, Colgate Palmolive, Ernest & Young, Delphi, General Electric, HBO, Honeywell Garret, Howard Johnson’s, HP, IBM, Johnson Controls, Kodak, Kraft, Lockheed Martin, McDonald’s, Microsoft, Motorola, New Century Holdings, Oracle, Philip Morris, Proctor and Gamble, Qualcomm, RAEF, Solectron, Timken, UPS, Visa, Washington Group, Xerox...to name a few!
Can your company afford to miss out on this important opportunity?
Romanian Country Commercial Guide
The Country Commercial Guide (CCG) presents a comprehensive look at Romania's commercial environment using economic, political, and market analysis. The CCGs were established by recommendation of the Trade Promotion Coordinating Committee (TPCC), a multi agency task force, to consolidate various reporting documents prepared for the U.S. business community. Country Commercial Guides are prepared annually at American Embassies through the combined efforts of several U.S. government agencies.
Romania Country Commercial Guide 2014