Why Invest in Romania
Why Invest in RomaniaUpdated on Friday 20th November 2020
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Beautiful, rich and with an enormous potential that is not yet exploited at its maximum capacity – that is what you could say about Romania at a first glance. Romania is currently actively seeking direct investment and has recently taken many proactive steps towards improving and encouraging foreign investment. You can easily start a business in Romania and benefit from complete support offered in terms of investments from our specialists. One of our accountants in Romania can provide in-depth assistance in matters of finances and accounting.
A good location
Romania joined the European Union in 2007 and it is also a member of NATO. Its geographical location can be considered strategic for transportation and import/export purposes. It is an easy gateway towards the Middle East and, of course, other European Union markets are also easily accessible. There are plenty of high quality natural resources including various mineral deposits, petroleum in particular, natural gas, salt, coal, iron ore, copper, zinc, gold and many others. Timber is also plentiful and the agricultural land is highly fertile.
Romania has a talented workforce and the costs for employment are relatively low in comparison to other European countries. English is widely spoken, the population is bilingual or trilingual and there are many high-educated young workers. A number of young and talented entrepreneurs are dedicated to investing their time, passion and resources into the country. With the help of various EU investments, they have chosen to start fresh, sometimes innovative businesses in the county because they believe that investing in Romania is worth it.
Key investment areas
Although Romania is developing and improving as a whole, there are certain sectors that prove to be more lucrative and appealing. Some of these sectors are:
- agriculture and farming;
- information technology;
Romania is a rapidly growing IT market. Progress is constant in the mobile phones and internet sector and the population, both young and old, is receptive to the diversified offer on the market. Tourism is also an interesting although more challenging sector. Investors can choose from a variety of picturesque and charming locations to establish different accommodation facilities for local and foreign tourists.
Although there are still some issues that Romania has failed to address up to this point, such as poor infrastructure, corruption and a complicated fiscal process, the country is constantly developing. Romania’s rural charm and natural beauty make up for its political instability and a wave of new investments in many sectors and the presence of young, enthusiastic entrepreneurs prove that the country has embarked on a strenuous yet definite journey towards improving itself.
Is it hard to register a company in Romania?
No, there are no harsh formalities for company registration in Romania. The bureaucratic procedures have been simplified in recent years, allowing both local and international entrepreneurs to enjoy a fast start on the market, particularly on the chosen field of interest. You can benefit from complete support offered by one of our specialists in Romania, so make sure you address your inquiries to our team, no matter the type of industry you wish to develop your business.
An appealing tax system
The tax structure in Romania is quite appealing to foreign entrepreneurs. A great benefit refers to the corporate income tax of 16% rate, one of the lowest among European countries. Plus, the 5% income tax applies to dividend revenues. In terms of fiscal incentives, the reinvested profits in technological equipment in the firm is exempt from taxation. Romania has one of the lowest VAT rates in Europe, set at 19%, representing a great plus from a tax point of view. Our accountants in Romania can tell you more about the tax regime in Romania and can also help you register for taxation.
Well-developed industrial parks in Romania
There are around 94 industrial parks across Romania that host a series of local and international companies. These are in public and private ownership, yet the same business rules apply. Among the benefits offered to foreigners with companies in Romania’s industrial parks, we mention the tax exemption for buildings and lands owned or rented. There are 19 industrial parks in the central region of Romania, 26 in the south region, while 21 industrial parks are developed in the north region of the country. Looking for investments in Romania? You might want to explore the advantages of the industrial parks available. In terms of accounting for your firm in Romania, you can rely on the support offered by our team of accountants in Romania.
Investment tips for foreigners in Romania
The business climate in Romania is quite challenging and exciting, hence it is recommended to make some verifications in the first place and stay up to date for a better understanding of the commercial activities and related legislation. Here are some business tips for international entrepreneurs interested in making investments in Romania:
- Romania is a great investment destination, and you should explore the possibilities in the first place.
- Even though the legislation changes quite frequently, this doesn’t mean you cannot align with the new rule. You can always discuss with a business expert.
- Try to know your customer and consumer to provide the optimal services and products on the market.
- Try to understand the collaborators and the business relationship before negotiating the business terms.
Top 5 reasons to invest in Romania
1. Easy company formation
The company registration in Romania is quite simple. For a good experience in this matter, international entrepreneurs are suggested to ask for the support of an experienced agent in business incorporation in Romania.
2. Appealing business sectors
Romania presents a series of business opportunities in developed sectors like manufacturing, textile, real estate, tourism, education, to give a few examples. Many large companies already thrive in Romania’s excellent industries.
3. An attractive tax system
The tax structure of a country is always in the attention of foreign investors who want to cut the amount of taxes in the firm. The corporate income tax of 16% rate in Romania is one of the lowest in Europe according to investromania.gov.ro.
4. Excellent incentives
Holding companies in Romania benefit from tax exemptions for acquired capital gains, dividends, share sales, etc. You can talk to our accountants in Romania for tax matters applicable to your firm.
5. A skilled labor force
Even if the workforce in Romania is cheap compared to other countries, this doesn’t mean is not well prepared. Foreign entrepreneurs can benefit from an experienced and multilingual labor force available in Romania. You might want to explore the following facts and figures about Romania’s economic and business direction:
- About USD 97 billion was the total FDI stock for Romania in 2019.
- Romania ranks 55th out of 190 economies in the world, according to the 2020 Doing Business report.
- Austria, Germany, the Netherlands, Cyprus, and Italy are the main investors of Romania.
- Around USD 6 billion was the total value of the greenfield investments in Romania in 2019.
If you wish to start a business in Romania and need more information about the Romanian legislation on foreign investments, our Romanian accountants can help you with all of your inquiries. Please feel free to contact us.