Transcript Slide 1

Romania – Top Destination for
Investments
Thessaloniki, June, 2007
Structure of the Presentation
1.Positioning Romania
2.Macroeconomics
3.Valuable human potential
4.FDI performance
5.Infrastructure development
6.Investment legal framework
7.Potential sectors for development
8.ARIS – one stop shop
2
1. Positioning Romania
Romania the largest market in CE Europe
Our friend the wind
Area
238,391 km2
Population
21.6 mill
inhabitants
Capital city
Bucharest
1.9 mill inh
Member of
EU, WTO,
IMF, WB,
EFTA, NATO
Major Cities
Iasi,
Timisoara,
Cluj-Napoca,
Brasov,
Constanta
4
Romania’s Strategic Location
Pan European
Transport Corridors
IV
Dresden/Nuremberg
Constanta/Thessaloniki/
Istanbul
VII
The Danube river
2,300 km long
IX
Helsinki – Bucharest –
Odessa/Alexandropoulo
Strategic position at the
turning point where EU meets
the Balkans and CIS countries
5
2. Macroeconomics
Significant Potential for Growth
2006
Slovakia
8.3%
Romania
7.7%
Czech Republic*
6.1%
Bulgaria
6.1%
Poland
5.8%
Slovenia
5.2%
Hungary
3.9%
GDP Growth Rate
8.4%
7.7%
6.5%
5.7%
5.1% 5.2%
4.1%
2.1%
2000
Source: EUROSTAT, *forecast
2001
2002
2003
2004
2005
2006
2007e
Source: National Institute of Statistics
Rapid & sustainable GDP growth;
7.7% in 2006, based on increases in final consumption by 11.5%
and in investment by 16.1%;
Highly comparable with EU25 GDP growth rate of 2.9% in 2006.
7
Declining Inflation
Annual Inflation Rate
Dec'06/Dec'05
Hungary
6.6%
Bulgaria
6.1%
Romania
4.9%
Slovakia
3.7%
Slovenia
3.0%
Czech Rep
1.5%
Poland
1.4%
Source: EUROSTAT
Inflation Rate
40.7%
30.3%
17.8%
14.1%
9.3%
2000
2001
2002
2003
2004
8.6%
2005
4.86% 4.0%
2006
3.8%
2007e 2008e
Source: National Bank of Romania
Consolidation of low inflation (sustainable disinflation);
3.66% (Mar'07/Mar'06), a record low for the post-1990 period;
Average annual rate - 6.56% in 2006.
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3. Valuable Human Potential
Human Capital
Demographics
Young population (more than 50%
under 40 years old)
Almost 21.7 million people
Talent pool
Cities with more than 100,000 inhabitants
more than 1,000,000 inhabitants
300,000 – 400,000 inhabitants
200,000 – 300,000 inhabitants
100,000 – 200,000 inhabitants
Source: National Institute of Statistics
160 higher education institutions
109 thou university graduates
Availability of technical engineers
High industrial experience
Flexibility
Increased labor productivity
Low unionization
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10 Major University Centers
CLUJ-NAPOCA
70 thou
S: 93% P: 7%
TARGU - MURES
IASI
14 thou
S: 79% P: 21%
67 thou
S: 90% P: 10%
SIBIU
BRASOV
24 thou
S: 92% P: 8%
46 thou
S: 69% P: 31%
GALATI
21 thou
S: 87% P: 13%
TIMISOARA
51 thou
S: 89% P: 11%
PITESTI
CRAIOVA
34 thou
S: 89% P: 11%
BUCURESTI
BUCURESTI
376 thou
State: 67% Private: 33%
20 thou
S: 86% P: 14%
11
Competitive Labor Cost
Regional Comparison
Gross monthly wages
2006 - EUR
EUR
1213
713
648
637
504
326
174
179
2002
2003
204
267
326
380
181
Slovenia Czech Rep
Ungaria
Poland
Slovakia
Romania
Bulgaria
2004
2005
2006
2007e
Source: Vienna Institute of International Economic Studies; National Institutes of Statistics
The average gross monthly wage in Romania is the second
lowest after Bulgaria
It is expected to grow by 16.7% in 2007
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4. FDI Performance
Inward FDI Flows
2006
11093
2 Romania
9082
3 Hungary
4874
4 Czech Republic
4752
5 Bulgaria
4105
6 Slovakia
3324
7 Slovenia
303
EUR million
1 Poland
Annual Inward FDI
Source: Vienna Institute of International Economic Studies
9082
1147
1294
1212
2000
2001
2002
Record value in 2006;
5183
5213
2004
2005
1946
2003
2006
Source: National Bank of Romania
FDI Stock over EUR 30 bill (1990 –2006);
In February 2007 – EUR 870 mill
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Subscribed Capital by Country
and by Field of Activity
- March 2007 –
Subscribed
capital
EURO mill
No
Country
No. of
companies
1
Netherlands
2787
3210
2
Austria
4357
2182
3
France
4877
1574
4
Germany
14569
1562
5
Italy
22314
736
6
USA
5043
674
7
Great Britain
2901
630
8
Cyprus
2693
617
9
Greece
3712
554
12
547
10
Dutch Antilles
Source: National Trade Register Office
Value of Subscribed Capital
by Field of Activity
Industry
50.7%
Services
27.8%
Retailing
5.3%
Construction
1.3%
Wholesale
Transport
6.4%
6.2%
Tourism
1.4%
Agriculture
0.9%
15
Major Investing Countries
(1990-2005)
the Netherlands
Austria
Germany
Greece
France
4.26
3.38
2.34
1.86
1.83
bill EUR
1
bill EUR
2
bill EUR
3
bill EUR
4
bill EUR
Switzerland
Italy
Cyprus
USA
Hungary
1.56
1.50
0.82
0.57
0.42
bill EUR
bill EUR
bill EUR
bill EUR
bill EUR
6
7
8
Source: National Bank of Romania
9
5
10
16
FDI by Field of Activity
(1990-2005)
Main Activities – 21.9
10.9%
7.7%
bill EUR
7.3%
4.2%
3.0%
Manufacturing – 8.2 bill EUR
14.5%
37.3%
13.7%
17.4%
11.0%
8.6%
15.0%
22.0%
Manufacturing
Trade
Financial services
Communication
Services
Mining
Utilities
Others
Source: National Bank of Romania
3.8%
4.3%
4.8%
7.0%
7.5%
Methalurgy
Food processing
Transport means
Chemicals
Construction materials
Wood processing
Textile
IT&C
Machinery
Others
17
FDI Regional Spreading
(1990-2005)
North East
North-West
5.8%
1.3 bill
6
8
1.6 bill
2
3
1.5 bill
4
5
8.4%
1.4 bill
6.3%
South West
Bucharest-Ilfov
60.6% 13.2 bill
1.8 bill
South Muntenia
West
6.8%
1.3%
South East
CENTRU
7.4%
0.2 bill
1
7
Source: National Bank of Romania
0.7 bill
3.4%
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5. Infrastructure Development
Highway Infrastructure Development - 2013
SUPLACU
DE BARCAU
IASI
PIATRA NEAMT
BORS
SABAOANI
MIHAILESTI
SOVATA
GILAU
CAMPIA
TURZII
BICAZ
TARGU
MURES
ALBITA
GHEORGHIENI
PRAID
NADLAC
SIGHISOARA
ARAD
DEVA
SEBES
ORASTIE
TIMISOARA
FAGARAS
SIBIU
CRISTIAN
GHIMBAV
LUGOJ
BRASOV
FOCSANI
PREDEAL
COMARNIC
BUZAU
PLOIESTI
PITESTI
DRAJNA
CERNAVODA
CRAIOVA
CALAFAT
BUCURESTI
ADUNATII COPACENI
FETESTI
CONSTANTA
GIURGIU
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Ports and Airports
SATU MARE
International
flights
BAIA MARE
SUCEAVA
IASI
ORADEA
Domestic
flights
CLUJ NAPOCA
TARGU MURES
BACAU
ARAD
SIBIU
TIMISOARA
GALATI
BRAILA
SULINA
TULCEA
OTOPENI
BANEASA
DROBETA TR. SEVERIN
M. KOGALNICEANU
CONSTANTA
CRAIOVA
CORABIA
OLTENITA
GIURGIU
MANGALIA
21
Mobile Communication Infrastructure
– coverage area -
Consolidated market;
Major international players;
More than 90% network coverage.
22
Map of Industrial Parks
More than 40 Industrial
Parks
Both private & public
Greenfield & Brownfield
Access to utilities
Package of services
offered by the park
administration
Wide variety of activities
to be developed
Some created for hightech activities
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6. Investment Legal Framework
Competitive Taxation
Corporate Tax
VAT
Bulgaria
10%
Romania
Social Contributions
Employee
Employer
20%
12.43%
24-24.7%
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%
Czech Rep.
24%
19%
12.5%
35%
Slovenia
25%
20%
22.1%
16.10%
Source: CEE-CIS Tax Notes - PriceWaterhouseCoopers
Many Central and Eastern European countries reduced considerably
their corporate tax in order to diminish the fiscal burden
25
New Investment Law
Incentives for investments in Romania in:
regional development (including infrastructure)
environment protection
research and development
human resources and social inclusion, including training
Directed according to economic status of each region
Law expected to be passed by Autumn 2007
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7. Potential Sectors for
Development
Potential Sectors for Investment
Manufacturing
Wood processing
Automotive components
Construction materials
IT & Communication
Textile industry
Energy (non-conventional)
Food processing
Electric & Electronics
Pharmaceuticals
Real Estate
Infrastructure
28
8. ARIS – one stop shop for
foreign investors
In is A.R.I.S?
WHO
Interfa
charge
Gove
rnme
ntal
body
unde
r the
auth
ority Search
and
of
advice
Prim on the
e
best
Minislocation
in
ter Romani
a to
fulfill
the
compan
y'
needs
includin
g site
with
attract
ing
and
retaini
ng
foreig
n
direct
SERVICES
invest
Value
added
ment
informatio
n on
incentives
and other
administra
tive
procedure
s
ce
betwe
en
invest
ors
and
centra
l&
local
author
ities
Providi
ng free
of
charge
SERVIC
ES for
foreign
invest
ors in
Roman
ia
Search
for
industria
l
and
service
suppliers
30
Thank you
for your attention!
tel: +40 21 233.91.03
fax: +40 21 233.91.04
email: [email protected]
website: www.arisinvest.ro