A look at the business sector in Romania.
In 2014, Romania managed to attract 62 projects with foreign investment, by 19% more than the previous year, thus ranking among Europe’s top 15 most attractive countries in terms of foreign investment. Romania now ranks 6th at European level in terms of the number of jobs made available with the help of foreign investment, according to the European Attractiveness Survey recently made public by Ernst&Young. According to the survey, foreign investment helped create some 11,000 jobs in Romania, putting our country ahead of Spain, Turkey or Slovakia. The number of jobs generated by foreign investment basically matched the one reported in Germany, going up by 77% as compared to 2013. For the first time in its history, in 2014 Romania ranked among Europe’s 15 most attractive countries in terms of the number of projects carried out with foreign investment, alongside other countries such as Poland, Serbia or the Czech Republic. The only other country except Romania from Central and Eastern Europe to keep its standing is Poland.
The Ernst&Young European Attractiveness Survey examines the attractiveness of a region or a specific country in terms of its investment potential and is carried out with the purpose of helping companies make investment decisions, as well as helping governments eliminate barriers to economic growth. In another study, Ernst&Young revealed that Romania needed 10 years at most in order to be able to offer a friendly business environment. The study documented the perception of Romanian entrepreneurs on the business environment and was grounded on five research pillars: access to funding, support for entrepreneurs, regulation and taxation, education and culture. Alexandru Lupea with Ernst&Young Romania told us more:
“82% of entrepreneurs see access to funding as deficient or extremely deficient. Loans and EU funds remain the most important sources of funding, as expressed by 45% of respondents, while a mere 6% referred to the Stock Exchange and alternative systems as other funding options. 2015 was the first year when I’ve noticed a genuine optimism among entrepreneurs in Romania. In 2014, exporters were mostly optimistic. Companies that produced for the internal market did not share in their enthusiasm. Now, in 2015, even those who do operate on the internal market are very optimistic. Most say they are planning to attract investment and to take on more people”.
369 business people from 14 institutions have been interviewed for this year’s edition of the survey.
The legal framework and taxation, with their numerous amendments, are some of the biggest challenges to Romania’s business environment, reads a survey published by TMF Group Romania, another administrative and financial consultancy group. However, the companies interviewed - big players in Romania’s economy – are optimistic concerning their evolution in 2015. More than half of the respondents are estimating that business will rise by more than 5%, whereas 22% are expecting an increase ranging from 10 to 15 % as compared to last year. The latter have also expressed their will to expand, but only 7% are orienting towards Romania, whereas the rest have voiced interest in foreign markets, such as Central and Eastern Europe, Africa and Asia-Pacific. 40% of the participants in the study, companies from the oil industry, retail as well as financial services, have mentioned that, as compared to the turnover, the highest taxes paid to the state are the local ones as well as social contributions. Nevertheless, Romania continues to be an attractive country for business, says Emine Constantin, a representative of the consultancy company that made the study.
“Although companies admit the legislative environment is a challenge and that it’s extremely difficult to find the right people to develop a business, they manage to make their business thrive in this environment. The most interesting regions for investors in Romania are the south and south-east and the Bucharest-Ilfov region.”
Here is economic analyst Aurelian Dochia with more on the issue:
“In order to achieve this objective, to channel investment in the best direction we have to create a climate in the business environment, which has to be suitable and attractive for both Romanian and foreign capital. If we listen to various addresses by world leaders, even those of the developed nations like Britain and France, we realize they see China as a major business opportunity, to make investment there, bring in money that might increase the local capital. So, we are in a competition with all sorts of players on the international market and if you want to remain attractive in such a race you’ll have to develop the sectors that can be attractive to all these players. In various rankings regarding attractiveness from the viewpoint of international investment we aren’t faring very well and for this reason I think we should seriously deal with this issue of creating a more friendly business environment, equally attractive to Romanian and foreign investors alike.”
The funding issue is one confronting the entire economy, particularly the small and medium-sized enterprises, Aurelian Dochia went on to say.