Renaud

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As the largest country in southeastern Europe and the twelfth-largest in Europe, Romania has 21.6 million people, the 7th largest population among the EU member states. Its capital and largest city is Bucharest the sixth largest city in the EU with almost 2.5 million people.

As a new member of the European Union beginning with January 1st, 2007, Romania enjoys real competitive advantages that recommend it as an attractive market for foreign investment and exports. It encompasses one of the largest customer markets in the region driven by a steady economic growth and accompanied by a rising consumer demand and falling inflation. Its accession to the European Union ensures a good anchor for future consumption and investment growth, as well as progress in the judiciary area and its banking system.

The Romanian economy has grown significantly in the last few years. Real growth rates in the past 5 years have been from a low of 4.2% to a high of 8.5% (see here). How many other countries other than Chin can claim such an important milestone?

GDP per capita is still very low at 5.500 EUR, or half that of Slovakia and less than a quarter that of Italy. The country is expected to achieve Poland’s current GDP per capita level in 2011, Hungary’s in 2015, and Czech Republic’s in 2017. This is related to the high levels of foreign direct investment in Romania, which totaled approximately 20B USD between 2004 and 2006. About two thirds of this investment was directed at Bucharest in the past several years, but this is expected to shift more toward regional centers in the future.

Personal income has grown even more rapidly than GDP per capita, from 107 EUR/ month in 2000 to 246 EUR/ month today. It should be noted that both nationally average incomes are significantly higher than what is reported due to significant gray and black market economic activity. Some estimate this constitutes as much as 40% of the Romanian economy

Romania is clearly a favored destination country for foreign direct investment. In 2006 the country was subject to 11, 4 B USD of FDI, which was one of the highest values in the entire region. The FDI flows are growing every year at CAGR of 49% over the past 6 years.

(click on image to enlarge) Source: UNCTAD

Romania has an expanding economy, a well-educated workforce that is still relatively untapped, with more than 50,000 specialists in information technology and access to the Black Sea and Asia. Romania offers one of the most transparent and cost-efficient corporate tax environments in the world, with a simple 16 percent flat tax on profits.

Some other specific advantages offered by the Romanian blossoming market include:

• * Extensive maritime and river navigation facilities, for the transport and distribution of goods;
• * Free trade zones and shipyard facilities;
• * 17 regional and six international airports with one of the highest numbers of international passengers rates in South Eastern Europe;
• * Road density Romania: 33,5km / 100 km2 comparable with Hungary (road density: 33,4km / 100 km2);
• * Diplomatic relations with 176 countries; member of the UN, NATO and numerous other international organizations.

Romania has been ranked as one of the top performers in the World Bank’s “Doing Business Report” two years running. There are five cities with topflight technical universities, and ten more in the second tier, which will help smooth demand as the market grows.