Transcript Document

ROMANIAN INVESTMENT
CLIMATE
Stimulative for New
Business and Expansions
Ph.D. Iustina Lutan - Councelor
Romanian Agency for Foreign Investment
Antalya, March 2007
Eye on Romania
You are looking at your
next location in Eastern
Europe…
ROMANIA
… access to high competencies and
a growing market, where the costs
are low and the quality is high…
Macroeconomic Data
Total population (million)
38.2
Country
21.6
10.2
Poland
20,690
Rom ania
18,700
Czech
Rep.
10.1
Hungary
7.7
Bulgaria
GDP per capita
15,570
5.4
Slovakia
2.0
Slovenia
(EUR, 2006)
14,790
12,640
8,790
Slovenia
Czech
Hungary
Slovakia
Poland
Rep.
Vienna Institute of International Economic Studies
Rom ania
8,500
Bulgaria
GDP growth
rate
2006
Romania
7.5%
Slovakia
7.5%
Bulgaria
6.2%
Czech Rep.
5.9%
Poland
5.8%
Slovenia
5%
Hungary
4.0%
Great potential for growth
GDP Growth rate
Solid economic fundamentals
 Rapid real GDP growth
 Declining inflation
 Declining unemployment,
currently at 5.4% (average in
2006)
Steady credit rating improvement
 Moody’s increased its rating
from B3 in 2000 to Ba1 (positive)
currently
 S&P and Fitch ratings increased
from B- in 2000 to BBB(positive) currently
8.4%
5.7%
6.5%
4.1%
2.1%
2000
2001
2002
2003
40.7%
17.8%
2001
2004
2005
2006
2007e
Inflation rate
30.3%
2000
National Bank of Romania, National Commission for Prognosis
5.1% 5.2%
7.5%
2002
14.1%
2003
9.3%
8.6%
2004
2005
4.87% 4.0%
2006
2007e
EU financial assistance to
Romania, 2007-2013
Financial support
provided by E.U. to
Romania during 20072013 is up to Euro 30
billion through
structural and cohesion
funds;
Romanian coordinating
authority – Ministry of
Public Finances
Allocation by operational
program
transport
infrastructure,
23.7
Environment,
23.5
Regional
development,
19.4
Technical
assistance, 0.9
HR
development,
18.1
Administrative
capacity, 1.1
Competitivene
ss, 13.3
Competitive Taxation
 Central and Eastern European countries are trying to follow the successful
Irish example – to have faster economic growth through low taxes
Social Contributions
Corporate Tax
VAT
Employee
Employer
Bulgaria
10%
20%
12.43%
24-24.7%
Romania
16%
19%
17%
30.75-44.75%
Hungary
16%
20%
13.5%
33.5%
Poland
19%
22%
18.71%
17.23-20.12%
Slovakia
19%
19%
13.4%
34.4%
Croatia
20%
22%
N/A
17.2%
Czech Rep.
24%
19%
12.5%
35%
Slovenia
25%
20%
22.1%
16.10%
CEE-CIS Tax Notes - PriceWaterhouseCoopers
Competitive Labor Cost
 The average gross monthly wage in
Romania is the second lowest after
Bulgaria
 It is expected to grow by 12% yearly
Regional Comparison
1213
2006 - EUR
713
Slovenia
Czech
Rep
648
Hungary
637
Poland
504
Slovakia
326
Romania
181
Bulgaria
Vienna Institute of International Economic Studies, Romanian Central Bank
Gross monthly wages
EUR
Valuable Human Potential
City
Faculties
Students
enrolled
BUCHAREST
191
210.139
IASI
66
60.272
CLUJ
56
61.134
TIMISOARA
52
43.511
CRAIOVA
27
29.418
BRASOV
31
26.372
 high performances in international
competitions
 high percentage of technically
competent professionals
 highest growth rate of IT specialists
in the region
 strong language skills: English,
French, German, Italian, Spanish,
Russian, etc.
 large skilled labor force at
comparatively low wage rates
Source: National Institute of Statistics
Telecommunication infrastructure
– coverage area -
Inward FDI Performance
9,082
 Record values in 2004-2006
 FDI Stock EUR 31 bill.
(1990 –December 2006)
 EUR 9.1 bill. in 2006
Inward FDI
2004
2005
1,946
1,294
1,212
2001
2002
2006, EUR million
9082
4752
4500
4015
3500
2000
264
Poland
5,213
EUR billion
Regional Comparison
11691
5,183
Rom ania
Czech
Rep.
Hungary Bulgaria Slovakia
Croatia Slovenia
Vienna Institute of International Economic Studies
2003
2006
FDI by Country
and by Field of Activity
- 2006 –
No
Country
No. of
companies
Subscribed
capital
(EURO mil.)
1
Netherlands
2688
3223
2
Austria
4192
1980
3
France
4691
1572
4
Germany
14214
1567
5
Italy
21519
851
6
USA
4919
722
7
Great Britain
2708
678
8
Cyprus
2416
606
9
Dutch Antilles
12
559
10
Greece
3608
552
11
Turkey
9640
462
National Trade Register Office
Value of Subscribed Capital
by Field of Activity
Industry
50.8%
Services
26.4%
Retailing
5.8%
Wholesale
6.4%
Tourism
1.5%
Construction Transport
1.6%
6.6%
Agriculture
0.9%
Turkish Investment in Romania
1990 – 2006
Number of registered
companies
Share in the total number of
companies with foreign capital
Total value of capital in
foreign currency
Share by capital
Ranking by the value of the
subscribed capital
Source: National Trade Register Office – Ministry of Justice
9640
7.40%
Euro 462 mill
2.93%
11
Top 10 Turkish Companies
in Romania
Companies
Shareholder
PROLEMN SA Reghin (Wood industry)
KASTAMONU ENTEGRE AGAC SANAYI
VE TICARET ANONIM SIRKETI AS
RULMENTI SA Barlad (roller bearings)
KOMBASSAN INSAAT TARIM VE SANAYII
ISLETMELERI TICARET AS
ROMPAK SRL Pascani (Food Industry)
PINAT GIDA SANAYI VE TICARET AS
UNVER SRL Harghita (central heating systems, water
supplies, drain pipes)
UNVER MUHARREM
ERDEMIR Targoviste– ROMANIA SRL ( Ferous products)
S.C. EREGLI DEMIR VE CELIK
FABRICALARI TAS
ROMDIL COM SRL Baia Mare ( Food Industry)
ANDIC AHMET
MAJESTIC TOURISM SA Bucuresti (Hotels; Tourism)
SELIM SUAT ORSAN
AKROM AKAL TEXTILE ROMANIA SRL Suceava (Light
Industry)
AK-AL TEKSTIL SANAYII AS
GKY REAL ESTATE INVESTMENT SA Bucuresti
GARANTY GAYRIMENKUL YATIRIM
ORTAKLIGI AS
PROVUS SERVICE PROVIDER SA Bucuresti
SC SERVUS BILGISAYAR AS
Source: National Trade Register Office – Ministry of Justice
Automotive Industry
Opportunities



Experience in the field of car makers
Automotive component parts – rapidly growing sector:
currently over 175 major manufacturers
Availability of labor force
 Labor cost: monthly average salary approx. Euro 250;
 Total number employed: 120.000;

Trained work force
 7 colleges in vehicle technology – 500 graduates each
year;
 25 colleges in mechanical engineering – 1.000 graduates
each year;



Availability of suppliers and subcontractors
Presence of R&D centers
Success investment stories in the field
MAJOR FOREIGN INVESTMENT
in automotive industry
JAPAN
Sumitomo Electric Wiring Systems, Yazaki Corp, Koyo Seiko Takata
Corp.
Baumeister & Oustler, Continental Automotive Products, Continental
GERMANY
Automotive System, Conti-Tech, DaimlerChrysler,
INA Scheaffer, Kromberg&Schubert, Lisa Draxlmaier, Leoni Wiring
System, Pirelli/Continental, Siemens Automotive
USA
FRANCE
OTHERS
IN PROGRES
Johnson Controls, Honeywell Garrett, Alcoa Fujikura Inc., Dow
Automotive, Borla Romcat, Lear Corporation, Delphi Packard
Michelin, Valeo, SNR Roulements, Faurecia, Auto Chassis Intl.
Coindu, Dura Automotive, Eybl International, Magnetto Group, Momo,
Cortubi/Cowell, Solvay Inergi, Autoliv Inc. ACE
Coficab, Hella, Pirelli, Renault Nissan, Schlemmer, TRW
Romanian ITC Industry
Trends
 High density of Romanian IT specialists (five times higher
than in Russia, and seven times than in India).
 Romanian Olympic students are usually placed in top 4
with China, US and Russia.
 In Microsoft the second spoken language is Romanian;
 Low brain drain phenomenon in Romania;
 IT sector is in constant growing;
 Major multinational IT companies such as Microsoft, HP,
Oracle, Cisco, Intel and Motorola are present in Romania many of them use Romania as regional headquarters;
A Top European Location for
R&D and specialized BPO
2500+ engineers developing embedded
automotive
systems
and
network
operator equipment all over Romania
In 2006 Microsoft decided to set up a
Global Technical Support Center –
700 employees
1200 engineers developing network
operator equipment in Western
Romania
Employs 170 and plans to expand to
1500 for IT outsourcing, financial
services and supply chain BPO
Intel Capital invested $12M in
Romanian IT services and outsourcing
company, Siveco, in Bucharest
HP set up a BPO in Bucharest for
financial and administrative services,
dedicated to EMEA region - up to
1200 employees in few years
250 R&D engineers working on
semiconductor design in conjunction
with Bucharest Polytechnic
In 2006 WIPRO decided to set up a
BPO center in Bucharest for IT
services covering the East European
market - 700 employees
100 engineers developing compilers
and development tools in Bucharest
Operates five global IT & Technology
Centers including development and a
15-language call center
Strong outsourcing and
technology players*
700 employees focusing on CRM contact center, application development
especially in structured content (eContent)
350 employees primarily in application development, maintenance and
integration
570 employees focused primarily on outsourced technical support and
outsourced manufacturing
200 engineers focused on application development and R&D.
Romsys is a Lockheed Martin Star Supplier
Founded by Cap Gemini execs, 150 engineers focused on application
development primarily for the German and UK markets
Development
subsidiary
for
2400
employee
US-based
Tech
Team
provides application development for the automotive sector
Provides multilingual research services for Frost & Sullivan and other
complex BPO for clients like Alfa Romeo and Fiat
200 employees provide technical documentation,
inventories for Airbus and other aviation clients
drawing
and
parts
*includes company with primary development locations in Romania. Multinationals like Ness and Wipro are excluded
Source: Ministry of Communication and Information Technology
WHO is A.R.I.S?
 Established in July 2002;
 Governmental body under
the authority of Prime
Minister
 In charge with attracting and retaining foreign direct
investment;
 “One stop shop” for foreign investors;
 Interface between investors and central
& local
authorities;
 Providing “free of charge” services for new comers
and existing investors in Romania;
Long Term Visa for
Commercial Activities
ARIS ENDORSMENT
- ARIS is granting an endorsement to the foreign citizens requesting
the long term visa for developing commercial activities in Romania.
NECESSARY DOCUMENTS FOR APPLICATION
-availble on line at: www.arisinvest.ro
VISA REQUEST
– submitted to the Consulates of Romania
- Documents: ARIS endorsement; criminal record certificate or
other document with the same legal value; Medical insurance for
the visa validity period.
- 1st application – visa granted for 6 months;
- visa extended for new intervals of up to 1 year – granted by the
Authority for Aliens
Review of Major Reasons to
Invest Romania
Healthy and Predictable Investment Climate
EU member state from January 2007
Supportive Operational Conditions
Favorable Economic Conditions
European Structural Funds available
Specialized authority in the field of direct investment
Thank you
for your attention!
Tel: +40 21 233.91.03
Fax: +40 21 233.91.04
Email: [email protected]
Website: www.arisinvest.ro