Renaud

In my discussions with investors - existing and potential as well as prospective employers a variety of needs come out. Below is a short list of what I hear on an going basis:

Based on face-to-face discussions.

1. Investment in People: Local, educated talent pool that is cost-effective. Some secondary cities are becoming real competition for Bucharest such as Cluj and Iasi for IT staff and programmers. Timisoara is still viewed as better choice than Cluj for IT employees.

2. Some employers are now avoiding Bucharest since lack of loyalty to the employer and higher paying jobs is creating rapid turnover and increased costs.

3. Employers are always addressing the ‘Access’ issue, i.e. they want to be close to:

• Access to public transportation, main roads and proximity to airport. In other words, what does the city provide as public transportation (buses, tram, etc.)?
• Access to Downtown in relatively short time and proximity to ring roads. Investors will decide to invest in particular cities after they are shown ‘planned infrastructure’ - both inside and outside that is, getting to and from a project from the main centre for example. Employers are more educated in staff loss of productivity because of careless lack on planning for normal day-to-day commuting.
• Schools are always mentioned (kindergarten, primary, foreign and High schools)
• They need highway infrastructure to get their products in and out of the country. Simplified procedures by the local administration to allow for easier access to public utilities networks and services;
• Access to EU post accession funds as well as simplicity and transparency in getting access to these funds.

4. Under normal circumstances, local councils may provide building tax and land tax exemptions for investments in industrial parks. Local councils may provide building tax and land tax exemptions for juridical persons based on the state aid scheme for regional development.

5. The simplest request is of course, access to inexpensive or free land but this applies mostly to manufacturing companies. Service based companies will move for a relatively short period (10 years) and they prefer to rent. If Builders or Developers are able to reduce their costs because of access to free land, then Builders in turn can pass that savings to the investor. International Universities for example would expect this since their funding is limited in comparison to Fortune 500 companies. Universities have access to funds but use them mostly for operations.

6. The assurance that anti-corruption legislation is enforced broadly and uniformly.

7. Standard taxation quota 16% is positively seen by the investors I have spoken to but is still not sufficient. If the Romanian government cannot modify this policy in their favor, what can the municipalities do in addition to what is offered to all investors coming into Romania?

8. Research and Deployment (R&D) Focus. Is the city/region promoting itself as a R&D hub? If so who are the current R&D players and what incentives is the city offering. Potential employers want to see a concerted effort to promote R&D through:

a) A R&D Policy and program in effect
b) Incentives for hiring researchers. The state has incentives to hire students (employment stimulation and modified by Law no. 107/2004) but this is not sufficient since it applies to university graduates.
c) Access to land tax exemptions

Based on market information

1. Exemption from building and land taxation; Local administrations may grant exemption or reduction of local taxes for investments exceeding EUR 500,000 for limited periods, either for investments commissioned before 1 January 2007 or for new investments. (Usually, this incentive is given for 5 years ).

Source: (http://www.arisinvest.ro/

2.      Providing adequate infrastructure and support (ways of access, water, electric power, natural gases, sewerage system and telecommunications).

Please see ARIS - the Romanian Agency for foreign development (http://www.arisinvest.ro/) for more details on what incentives exist for potential investors - they have improved their web site lately! I like referring to their site since it has a lot of informational to bring you up to speed. However they are not established to accommodate a great deal of queries and meetings nor are they organized with dedicated representatives that offer comprehensive services for investors similar to CzechInvest in the Czech Republic (http://www.czechinvest.org/en).

This is where Renaud Investments comes in as a solution for you!

Another source of information on foreign investment is the Foreign Investors Council. Their  site   is (http://www.fic.ro/ and it  can give you some ideas on how  this organization is       improving investment conditions in Romania.