Romania – A Strategic Choice
Fukuoka, 12 December 2016
Minami-Azabu,Tokyo 13 Dec. 2016

Romania – a strategic investment destination

Area:
238,391km2

USD
NOMINAL GDP

200bn

Capital:Bucharest

Forecast
growth in2017

5.0%

Currency: RON
Inflation
forecast 2017
1.7%
Population:
19.5 mn
Bridgebetween Eastand West

2016 The Government of Romania

NATO member since2004

EU member since 2007
GDP in2016 vs.
2000

FDI stock in
Romania

5x70bnStrategic US-Romanianpartnership2

Why invest in Romania?
Highly qualified workforce
Total number of university students enrolled

600,000

Global ranking in Math, Science, IT Olympiads

Top 10

Human Capital Index Rank among
middle-income countries
Number of IT graduates by 2018

Participation of women in scienceand engineering compared to EU-27 avg.

3100,000
53% vs 38%
30% vs 25%“Romania’s workforce improved alongside our business. We
started manufacturing simple items, now we are designingthem” – German automotive investor
Source: The current situation of gender equality in Romania – Country Profile 20122016 The Government of Romania

3Why invest in Romania?
There are over 100 universities in Romania, with approximately 100.000 graduates every
year in a wide variety of subjects
University centers in Romania

Share of graduates by subject of degree [2015]

Suceava
Baia Mare

10%

Iasi

2%
28%

11%
Bacau

Cluj-Napoca
OradeaAradGalati

Alba Iulia
Sibiu

Brasov

Timisoara
Targoviste

Ploiesti

23%
26%

Constanta

Bucuresti
Craiova

Science and humanities *Economics

MedicalTechnicalLaw

Arts

433

Number of students by subject of degree [‘000, 2014]
112

134

80

4357

* Includes: mathematics, physics, biology, chemistry, geography, journalism, history, political and administrative science, philosophy
2016 The Government of Romania

Source: NIS, Eurostat, InvestRomania

84Why invest in Romania?
9 out of 10 university students are proficient in English, as a result of the fact that almost allstudents study 2 languages in high school
Languages studied by Romanian students [2014]

97%•

97% of Romanian high school students study 2 or more foreign languages while in secondary education•The predominant languages are English, French, German and Spanish, yet initiatives for teaching Japanese, Nordiclanguages or the entire Latin language family (Spanish, Italian, French) exist

University students in Romania are proficient in [% of total]:

90%

2016 The Government of Romania

26%

17%

8%

5%

Source: ABSL, NIS, Eurostat, InvestRomania

5Why invest in Romania?
Highly competitive labor cost
National minimum wages in the EU (EUR/ month, 2016)*
1,923
1,467 1,473 1,502 1,508 1,529 1,546

215

266

350

353

366

370

405

408

430

431

BG

ROLTHUCZ

LV

SK

HREE

PL618

684

728

764

791

PTGRMTESSLFRDEBENL

UKIE

LU

National minimum wage

Estimated average hourly labor costs (EUR/ h, 2014)**40 39 37
36 35

DKBESE

LU

Other labor costs

FR34 32 32 3130

NLFIATDEIE28

IT22 21UK

ES

16 16 15 1312CYSLGRPT

MT

10 1099877654EECZ

HRPLHULVLTROBG

SKWages and salaries* Denmark, Italy, Cyprus, Austria and Finland have not implemented a national minimum wage; ** Enterprises with 10 or more employees
2016 The Government of Romania

Source: Eurostat

6Why invest in Romania?
Employees in Romania can have the same standard of living as abroad for less than 1/3 rd of the pay
BUCHAREST vs. BERLIN

BUCHAREST vs. LONDON

Consumer Prices• 41% lower in Bucharest• 57% lower in Bucharest

Rent Prices• 56% lower in Bucharest• 86% lower in Bucharest

Restaurant Prices• 38% lower in Bucharest• 64% lower in Bucharest

Groceries Prices• 44% lower in Bucharest• 55% lower in Bucharest

Standard of living
equivalency(EUR 1,700 net
salary inBucharest)• EUR 3,100 net salary in
Berlin ensures the same
standard of living• EUR 5,707 net salary inLondon ensures the same
standard of living2016 The Government of Romania

Source: Numbeo; InvestRomania

7Why invest in Romania?
Highly competitive internet infrastructure
Top 10 EMEA countries by avg. speed (Q2 2015, Mbps)
16.1 15.6 15.2
14.3 14.0 13.9 12.9 12.8

12.4 12.1

SEBE

CH

NLNO

FICZ

DKRO

IL

Top 10 EMEA countries by top speed (Q2 2015, Mbps)
72.1 71.4

ROIL

62.8 60.9 59.4 57.3
54.2 53.2 51.7 50.9

SE

NL

CH

BERU

FIHU

UK

Top 10 EMEA countries by Mbps Broadband adoption (Q2 2015, % > 4 Mbps)
95.0

95.094.093.0

93.0

92.0

91.0

60.0

47.0

57.0

49.0

60.0

53.0

53.0

35.0

48.0

37.0

44.0

33.0

39.0

38.0

NLIL

RO

DKCHSEBE

Share above 10 Mbps
•90.0

90.0

88.0

31.0

48.0

35.0

59.0

42.0

53.0

AUFI

HU

Share between 4 - 10 Mbps

The internet infrastructure has developed along with the developers, who are leveraging the network to offer high quality outsourcing services, although thefocus is now shifting towards product design and, consequently, startups

2016 The Government of Romania

Source: Akamai Technologies; InvestRomania

8Why invest in Romania?
70 industrial parks offer good infrastructure for growth industries
Industrial parks in Romania

Status at regional level
1

North West Region: 15 parks

1
31

91
1
1

West Region: 3 parks

1

1

1

South West Region: 6 parks
1South Region: 22 parks

2
3

1

10

South East Region: 2 parks

1

North East Region: 4 parks

1
2

1

1442

•
•
•

2

1
2Center: 16 parks

11

Bucharest: 2 parks

There are 70 industrial parks spread across Romania, placed under both private and public ownership
All offer access to utilities, particular benefits packages according to their focus and potential for synergies
Also, investors are exempted from land, building and urban planning taxes as well as for land destination changing

2016 The Government of Romania

9Why invest in Romania?
We are well connected to Europe and beyond

SUCEAVASATU MARE

ORADEAIASIBAIA MARE

CLUJ-NAPOCABACAUTARGU MURESGALATIARADSIBIUBRASOVBRAILATIMISOARATULCEA

M. KOGALNICEANUCONSTANTA

BUCURESTI OTOPENIDROBETA TR. SEVERIN

GIURGIU

International Fligths
Domestic Fligths

MANGALIACRAIOVA

2016 The Government of Romania

SULINA

Under construction

Ports

10Why invest in Romania?
Low taxation compared to European peers
Overview of the Romanian tax system

VATSocial Security•

20%•The government is committed toreducing the tax burden – 2016
marked the drop in VAT to 20%,
which will be followed byanother drop to 19% in 2017
VAT on food products is 9%

Employee

Employer

16%

23%

Tax System of Romania•

16%•The individual tax rate does nothave any planned cuts for thenear future
However, the new fiscal code has
introduced a reduction of thedividend tax from 16% to 5%Individual Tax Rate2016 The Government of Romania•

The government’s
commitment to lower thetax burden covers thecorporate tax rate as well,with a reduction to 14%
planned for 201916%
Corporate Tax Rate
Source: InvestRomania

11

The taxes are some of the lowest in the EU, with planned policies
aiming to reduce them even further in the favor of businesses (1)VAT in the EU [2015, %]
2725

25

25

24

23

23

23

23

22

22

21

21

21

21

21

21

20

20

20

20

20

20

20

19

19

18

17

HUDKHRSEFIGRIE

PLPTITSIBECZESLTLVNLATBG

EE

FR

RO

SK

UK

CY

DEMT

LU

25242222212020202019191917161515131310CZ

SI

ROLT

LV

IE

CY

BG

25232220

16161510

LV

CZ

EE

HU

RO

LTBG

Corporate tax rate in the EU [2015, %]
35

MT

34

BE

33

FR

31

IT

30

DE29

LU

29

GR

28

ES

25

NL

AT

DK

SE

SK

PT

HRFI

EE

UK

HU

PL

47

45

45

45

44

43

42

40

35

35

32

Individual tax rate in the EU [2015, %]
57

SE

55

DK

52

FI

52

NL

50

BE50

AT

2016 The Government of Romania

50

SI

48

PT

48

IE

ES

FRDEUKLU

ITGRHRMTCYPL

SK

Source: KPMG

12

The taxes are some of the lowest in the EU, with planned policies
aiming to reduce them even further in the favor of businesses (2)Employee social security in the EU [2015, %]
28
22

NL

SI

20

DE

20

HR

19

HU

18

AT

18

FR

16

RO

16

GR

14

PL

13

SK

13

13

12

11

11

11

10

10

10

8

8

7

6

4

22

BE

BG

LU

PT

CZ

LV

IT

MTLTFICYSEESIE

UK

EE

24

24

23

23

22

21

19

18

18

17

16

15

14

1211100
DK

Employer social security in the EU [2015, %]4535

3534343131303029250FR

SK

BE

CZ

EE

SE

2016 The Government of Romania

LTIT

ES

HU

GR

PT

LV

RO

FI

AT

PL

DE

NL

BG

HR

SI

LU

UK

CYIE

MT

DKSource: KPMG

13

Why invest in Romania?
Romania has some of the lowest energy prices in the EU
Electricity prices in the EU [EUR / 1000 kWh, 2015]
156

MT

144 132

UK

CY

129

IE

112 108 104 99

ES

SK

EL

94

PT

IT

91

LV

90

BE

87

84

83

82

81

78

76

76

76

73

72

71

71

68

64

62

61

HR

LU

PLLTDE

HU

CZ

EE

FR

AT

NL

SI

RO

BG

FI

SE

DK

10999999988888CZLTDKBENL

Medium sized industry - electricity prices

Gas prices in the EU [EUR / gigajoule, 2015]
11PT

11LU

11HR

10

ES

10IE

10SE

10EL10DE

10

PL10HUFREEUK

SKLV

IT

SI

BG

9FI

8AT

6

RO

Medium sized industry - gas prices

2016 The Government of Romania

Source: Eurostat

14

Why invest in Romania?
Government support through state aid (1/2)
Fiscal incentive

Short description

Exemption fromprofit tax•16% profit tax exemption for the reinvested profit in new technological equipmentused for business purposes

Income tax exemption forIT&C employees•An exemption on the 16% income tax is available in Romania for employees
activating in IT, under conditions including:o Bachelor’s degree in one of the 14 technical specializations available
o Employee is hired on a software engineer/ programmer/ software analyst
positiono Annual revenue per exempted employee must be over USD 10 000

Deduction of R&D eligible
expenses•Eligible R&D expenses include: depreciation of R&D equipment, salaries for R&D
personnel
50% of these expenses can be deducted from the taxable income

Accelerated depreciationof machinery, equipment
and real estate used for
R&D purposes••••2016 The Government of Romania

A deduction of 50% from the fiscal value of the assets during the first year of use,
while the remaining value may be depreciated linearly along the expected remaining
lifespanAccelerated depreciation can be used also for equipment and/ or for research anddevelopment activities
If a company benefits from exemption of the income tax for reinvestment it will notbenefit from accelerated depreciation
Sources: Ministry of Public Finance, InvestRomania

15

Why invest in Romania?
Government support through state aid (2/2)
Fiscal incentive

Short description•

International income derived by Romanian residents is tax exempted under thefollowing conditions:o There is a valid tax treaty between Romania and the relevant jurisdiction(from where the income is derived by the Romanian resident)o The interested party (taxpayer) can demonstrate that income tax was paidabroad on the respective income
o The tax credit cannot exceed the Romanian tax applicable for the respectiveincome

Industrial parks
incentives•Investors that set up manufacturing locations or offices in an industrial, scientific ortechnological park benefit fromo Exemption on land, building and urban planning tax
o Taxes charged for changing land destination

Facilities for people withserious disabilities•Income received by people with serious disabilities can benefit from income tax
exemption (e.g., for salary income, income from freelancing activities)

Foreign tax credit

2016 The Government of Romania

Sources: Ministry of Public Finance, InvestRomania

16Government support was raised this year to EUR 145 million from
EUR 100 million

North-West50%

State aid intensity,according to development
region:• North West – 50%

North-East50%
Center50%

West35%South-East50%
South-West50%

35%
South50%

15%•

North East – 50%•

South East – 50%•

South – 50%•

South West – 50%•

West – 35%•

Ilfov County – 35%•

Bucharest – 15%• State aid intensity is established as per EU and national regulations and is subject to change according to EU law on the matter• Development regions of Romania represent a split of counties into larger regions in order to technically better target development programs and policies
2016 The Government of Romania

17Six priority sectors are expected to grow rapidly• IT – our enabler to Industry 4.0; the ‘feeder’ to all priority industries• Car manufacturing – 10% of GDP; 50% of exports; 600 factories• Aerospace – tradition based; every new Airbus has a piece made in Romania• Bio-industries - what IT is today, Bio-industries will be in 5 years; ingredients in place• Creative Industries – where Romania excels internationally; supporting them, we
support our identity• Agriculture – immense potential for productivity gains; once a European giant2016 The Government of Romania

18High tech companies have a significant footprint in Romania,
working on helicopters, airplanes, cars or even on the Mars Rover
Key facts for top tech oriented industries in Romania
INDUSTRY SIZEAEROSPACE

EUR
400M

IT&C

2016 The Government of Romania

KEY PROJECTS
••

•

•

EUR
3.6B
AUTOMOTIVEKEY PLAYERS

EUR18B•••••

Airbus Helicopters EUR
15m investment
Sonaca EUR 12m
investment
Premium Aerotec EUR 50minvestment
Siemens software dev.
worked on the Mars RoverDeutsche Bank EUR 40m
investment
LiveRail was acquired byFacebook for EUR 600m
Continental EUR 26m
investment in R&D center
Daimler EUR 300m
investment for gear boxes
Ford EUR 200m investment
for production of new model
Source: Invest Romania

19Why invest in Romania?
A home away from home
Select expats networks in Romania by home country and main
originating cities••••

TorontoVancouverMontreal
Ottawa••••LondonBirmingham
Glasgow
Liverpool••••Rome
MilanTurin
Genoa••••New Delhi
Mumbai
KolkataBangalore••••

WarsawKatowice
KrakowLodz••••New York
ChicagoHoustonLos Angeles••••BerlinHamburg
MunichCologne••••ParisMarseille
LyonLille••••

MadridBarcelona
Valencia
Seville•••Amsterdam
Rotterdam
The Hague

2016 The Government of Romania

Sources: InterNations, InvestRomania

20Romania – a stable business climate, great investment opportunities,
competitive workforce and outstanding lifestyle options
Investing in Romania

Potential market of over 20 million
consumers
One of the most dynamic
economies in Central and EasternEurope

One single corporate tax level of16%
43 billion EUR European funds
assigned before the end of 2020
Tax exemption for reinvested profit

An important domestic market andstable/safe country

A competitive tax policy and state
support for businesses

2016
More than 10 nationalities havedeveloped expat communities
High living standards and lifestyleRich experiences for expats

2016 The Government of Romania

Talented and skilled workforce
Few cultural and linguistic
barriers
University graduates are flexible,
innovative and future-oriented

High life standards, great lifestyleand rich personal experience

21Japanese Investment in Romania(December 1990 - November 2016)

No. of companies

308% of the total no. of companies

0.14

Subscribed share capital in company withJapanese interest

USD 255,3 mill.

% of the total value of capital

0.45

Ranking

24thSource: National Office of the Trade Register (ONRC)

The subscribed share capital accounts for only a part of the total FDI. According to ONRC, the country of origin of theinvestment is the country where the capital comes from and not the country of origin of the transnational company.

2016 The Government of Romania

22

Japanese firms operate from multiple production plants in Romania
11
Baia MareSatu Mare

Botosani

Suceava

Bistrita

12Zalau

Iasi

Oradea13Cluj-Napoca

16

Alba Iulia

Deva 171518
3 Timisoara
645197Resita

Targu Mures

14Arad1 2

Piatra Neamt

20

24
Sfantul Gheorghe

21
Sibiu

Focsani22

BrasovGalati

Ramnicu Valcea

826 2728 30
Targoviste 29

Hunedoara

Buzau

BrailaTulcea36

Ploiesti

Drobeta-Turnu Severin

9Vaslui

Bacau
Miercurea Ciuc

Pitesti

31 323335 34

10Bucuresti

Slatina
Craiova23

25

Slobozia

Calarasi

Giurgiu

Alexandria

Japanese FDI accounts for 0.45% of overall investment witha total number of 283 companies present on the market anda social stock of 247.7 mil $2016 The Government of Romania

Constanta

Takata(1, 6, 9, 12, 21)
Yazaki(2, 23, 27, 30,36)
Koyo
(25)
Flexitech(28)
Bordnetze(8,10)
Makita(34)
NTN-SNR Ballbearings
(22)
SEWS
(15, 16, 17, 18, 19, 20)
Anvis
(11)
Fujikura(13, 14)
Sumida(3, 4)
Technophar
Equipment and Service(24,26)
Plases(5)
TMD Friction(7)
Calsonic Kansei(29)
Nidec ASI
(31)
JT International
Manufacturing(32)
Qualicaps(33)
Alchimex(34)
Source: Jetro.go.jp

23

Thank you!
www.investromania.gov.ro
www.facebook.com/investro
www.linkedin.com/company/investromania

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