Our country is leading in the top of attractiveness. 58% of the international companies are willing to invest in Romania this year.

Romania has been designated the most attractive destination for investment in the Southeast, Central and West Europe, ahead of Poland and the Czech Republic. At the same time, according to the study “Southeast Europe Attractiveness Survey 2007” carried out by Ernst & Young, it is expected that its position as destination for future investment will be improved in the next three years.

The workforce cost and the potential of the work productivity increase will attract foreign investors in Romania, but the communication service and transport infrastructure, as well as the research activity shall be improved. Moreover, our country has been indicated as favourite destination for investment due to its low level of the profit tax, to the workforce cost, to the flexibility of the labour legislation, to the availability of the locations for investment, including the cost of lands and the legislation in the field.

The survey carried out in October 2006 with the participation of a number of 200 executive directors of companies in the entire world, also shows that Romania is the favourite choice for future investment in the Southeast Europe and that the investors’ general perception regarding the region of the Southeast Europe has constantly improved.  Thus, 58% of the respondents considered that they intend to invest in Romania this year, whereas 68% of them indicated the Romanian market as a potential destination for investment in the next three years.

Long-term attractiveness

Other states indicated by investors as favourite destinations for expansion were Turkey, chosen by 49% of the interlocutors, Greece, with 48%, and Bulgaria, with 44%. The other three countries in the region of the Southeast Europe included in the survey, Serbia, Cyprus and Moldavia were considered to be attractive only by a quarter or even fewer interlocutors. About two thirds of the participants in the survey ( 63%) asserted that their perception on the Southeast Europe improved in the last year and more than a half specified that the attractiveness of Bulgaria, Greece, Romania, Serbia and Turkey will be improved in the next three years.
“Romania, along with the other developing European markets, attracts infusion of capital due to the balance offered between the opportunities of economic increase and the risks; and the Southeast Europe seems  to be a major competitor with other emerging markets for the direct foreign investment”, stated Camelia Horlaci, country managing partner, Ernst & Young Romania.

New investment and expansion

Referring to the current operations and to the future plans for the Southeast Europe, a third of the respondents asserted that they intend to make a new investment or to expand the existing one, 28% mentioned Romania, 23% Turkey, 14% Bulgaria and 12 % Serbia as destination for this investment.
The Southeast Europe came out before the Central Europe as destination for future investment, due to its competitiveness in point of the workforce cost, the flexibility of the labour legislation, and the potential of the productivity increase.

Among those who confirmed the existence of the investment plans in the region, 50% intend to set up branch offices, 19% have development plans for the existing operations, and 15 % intend to purchase businesses or autochthonous companies. Moreover, 75% of those interviewed asserted that they would not move the already existing operations from the region. 

“The fiscal legislation is being stabilized”

As regards the investors’ expectations related to the improvement of the business environment in Romania, they asserted that the Romanian market still has to catch up with Greece or Turkey on the chapter of quality and availability of the research-development activity and on the infrastructural quality. Moreover, other expectations related to Romania concern the implementation of more flexible and simple administrative procedures, the stability of the political environment, the enforcement of the European standards and the improvement of the education system. Regarding the journalists’ questions on the instability of the fiscal legislation that might be a problem for the potential investors, Marc Lhermitte, partner within the Ernst & Young company, stated that this matter was not mentioned by the respondents. 

“The fiscal legislation is being stabilized, the amendments being fewer. The amendments occur only in the Fiscal Code or in the norms for the Code enforcement, being common changes that have to be made in order to implement the settlements of the European Union. We consider that the legislation will be stabilized in the next three years”, added Alexander Milcev, partner within the company.