Romania A Strategic Choice. December 2017, Bucharest

Transcription

1 Romania A Strategic Choice December 207, Bucharest

2 Romania - Country overview Area: 238,39 km2 Capital: Bucharest Currency: RON EUR/ RON: 4.5 Population: apox: 20 mill Bucharest Metropolitan Area: 3mill S & P Moody s Fitch BBB- Stable Baa3- Stable BBB- Stable GDP Growth Jan Sep 207 Best performance in EU FDI stock 7% 70bn Bridge between East and West for 500 mill consumers market NATO membership EU membership EU Presidency Strategic US-Romanian partnership

3 At a glance 2 nd largest country in CEE and the largest in SEE in terms of size (the 9 th in EU28) and population (the 7 th in EU28) At the crossroads of 3 great markets: the European Union, the CIS (Commonwealth of Independent States) and the Middle East 2 nd in EU for average peak connection speeds and 6th for 4 Mbps broadband adoption in Q 207* Source: *Akamai Q 207 State of the internet report

4 Potential for Growth 4,2 8, 6,9 8,5-0,8, 0,6 3,5 3, 3,9 4,8 7,0 GDP growth (%) Q3-207: 8.8% Jan Sep 207: 7.0 % (Source: National Institute of Statistics) (Source: Eurostat) -7, Forecast 207: 6.% 208: 5.5% (Source: National Commission of Prognosis) 5,2 9, 7,3 9,5 3,4 2,3,7 2,5 2,7 2,4 3,5 4,5 FDI Inflows (bn EUR) FDI 207 (9 months) bn 3.4 EUR (Source: National Bank of Romania)

5 Inflation 9, 6,6 4,9 7,9 5,6 6, 5,8 3,3 4, ,6 -,5 Deflation due to:, Inflation rate (%) (Source: National Institute of Statistics) Target December 207: 2.7% December 208: 3.2% (Source: National Bank of Romania) reducing the standard VAT rate from 24% to 20%; the disinflationary influence exerted by the external environment; the dynamics of commodity prices on international markets (eg: oil, agri-food products). Inflation started to be on a positive trend at the beginning of 207 due to the persistence of the internal inflationary pressures associated with the increase of aggregate demand and the rise in wage costs.

6 Minimum Wage in EU Minimum Monthly Gross Wage in EU January 207 (EUR) Source: EUROSTAT *Starting February st 207 Government program target 2020: 450 EUR/month

7 Unemployment Unemployment rate (%) (Source: National Institute of Statistics) 7,2 7,3 6,4 5,6 6,5 7,0 7,2 6,8 7, 6,8 6,8 5,9 Forecast 207: 5.0% (Source: National Commission for Prognosis)

8 Skilled labor force Languages studied by Romanian students 97% 97% of Romanian high school students study 2 or more foreign languages The predominant languages are English, French, German and Spanish, yet initiatives for teaching Japanese, Nordic languages or the entire Latin language family (Spanish, Italian, French) exist University students in Romania are proficient in [% of total]: 90% 26% 7% 8% 5% Source: ABSL, NIS, Eurostat

9 Skilled labor force

10 Romania Largest Market in the SEE Maximum broadband speed Hourly labor costs Second in EU for average peak connection speeds UKR 2 One of the most competitive labor force in the CEE Gas prices ranking HU RO MD World Bank ease of doing business 4 4 th lowest gas prices 4 th lowest electricity price in Europe SRB BG 36 Ahead of Bulgaria, Croatia, Hungary, Italy, Turkey, Serbia or Greece Source: World Bank, Doing Business Report 206; Akamai Q 207 Report; Eurostat 207

11 VALUE FOR MONEY BUCHAREST BERLIN LONDON Consumer Prices Rent Prices Restaurant Prices Groceries Prices Standard of living equivalency net salary,767 3,228 5,058 Source: Numbeo, October, 207

12 Overview of the Romanian tax system VAT 24% 20% 9% 8% /8 209 Social Security Employee Employer 45% 2.25% Food products: 9% Starting January st 208 Corporate & Income Tax Rate Reinvested profit tax Tax System Dividend Tax Rate 0% 0% Starting January st 208 IT&C - 0 % income tax for employees BA -4 technical specializations available Employee is hired on a software engineer/ programmer/ software analyst position Annual revenue per exempted employee must be over USD % 207 R&D - 0 % corporate tax for R&D companies 0 % income tax for employees Deduction of R&D eligible expenses: depreciation of R&D equipment, salaries for R&D personnel; 50% of these expenses can be deducted from the taxable income

13 Investment Support STATE AID Total Budget EUR.5 billion STATE AID - GD 807/ 204 Minimum EUR 0 mil. investment Construction of new buildings Renting costs for existing buildings CAPEX aimed at technical installations and tools Acquisition of intellectual property STATE AID - GD 332 / 204 Minimum 0 new jobs/ per location Salary costs registered for a 2 consecutive year period resulted as a direct consequence of the investment Salary costs are comprised of gross average annual salary plus benefits FISCAL INCENTIVES Investors that set up manufacturing locations or offices in an industrial, scientific or technological park benefit from : Exemption on land, building and urban planning tax Taxes charged for changing land destination

14 Intensity State Aid North-West 50% North-East 50% State aid intensity, according to development region: North West 50% North East 50% West 35% South-West 50% Center 50% South 50% 35% 0% South-East 50% South East 50% South 50% South West 50% West 35% Ilfov County 35% Bucharest 0% Source: Ministry of Public Finance

15 Investment Support 28 mill Eur 37.4 mill Eur Ploiesti West Park 6 mill Eur mill Eur Tetarom Jucu Park/ Cluj-Napoca Industrial Park Sebes 5 mill Eur Tetarom Jucu Park/ Cluj-Napoca Ploiesti West Park

16 Ports and Airports SATU MARE BAIA MARE SUCEAVA IASI 30 direct flights leading to 76 destinations in 3 countries worldwide ORADEA ARAD TIMISOARA CLUJ- NAPOCA SIBIU TARGU MURES BRASOV BACAU GALATI BRAILA TULCEA SULINA 4 international airports and 8 major ports Constanta Port - the deepest and largest port at the Black Sea. DROBETA TR. SEVERIN CRAIOVA BUCURESTI OTOPENI GIURGIU M.KOGALNICEANU CONSTANTA MANGALIA International Fligths Ports Under construction Aircraft trafic reached 6 mill. passengers in 206, up by 20% compared to 205

17 Industrial Parks Status at regional level (November, 207) North West Region: 8 parks West Region: 6 parks South West Region: 6 parks South Region: 22 parks South East Region: 2 parks North East Region: 6 parks Center: 7 parks Bucharest: 2 parks 79 industrial parks spread across Romania - both private and public ownership Access to utilities & benefits packages according to their focus Exemption on land, building and urban planning taxes Source: Ministry of Regional Development and Public Administration

18 Industrial Parks Industrial Park Ploiești Industrial Park Brașov Industrial Park Slatina

19 FDI Stock by Field of Activity at 3 December 206 Sectors EUR million % of total FDI TOTAL 70, Manufacturing 22, Construction and real estate transactions 9, Trade 8, Financial intermediation and insurance 8, Electricity, gas and water supply 6, Professional, scientific, technical and administrative activities and support services 3, IT&C 3, Mining, Agriculture, forestry and fishing, Other 2, By economic activity, FDI stock was channeled primarily to manufacturing, with the following largest recipients: transport equipment oil processing chemical rubber and plastic products metallurgy food beverages and tobacco manufacture of computer electronic optical and electrical products Source: National Bank of Romania

20 Key facts for top tech oriented industries in Romania INDUSTRY SIZE KEY PLAYERS KEY PROJECTS Source: Invest Romania AEROSPACE IT&C AUTOMOTIVE EUR 400M EUR 3.6B 4.0B estimated for 207 EUR 22B Premium Aerotec EUR 50m investment Sonaca EUR 2m investment Airbus Helicopters EUR 5m investment Siemens software dev. worked on the Mars Rover Deutsche Bank EUR 40m investment LiveRail was acquired by Facebook 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

21 InvestRomania In a nutshell Single point of contact for foreign investors, assisting and advising international companies for project implementation in the country Promoting and facilitating foreign investment in Romania Main interface between foreign companies and central/local authorities Assisting worldwide entrepreneurs in project implementation, including those financed through PPP Tailored and individually custom-made solutions for developing new or current units Consultancy and guidance during all stages of the decisional process (state aid & fiscal incentives)

22 Governance Program A visionary new Economic Code, encompassing all economic provisions currently into force in a sole package starting January 208 (2022) 0% taxes - for property purchasing under EUR % taxes - for the difference between EUR and the overall value The number of due taxes in Romania: maximum 50 Sovereign Investment and Development Fund with aprox. EUR 0 Bn state shareholdings - EUR 3 Bn in building highways and another EUR 3 Bn in building 8 national hospitals

23 Governance Program Romania Start Up Nation - RON /start-up for companies annually - 0 cost for setting up a new company for start-ups A better relationship between public authorities and companies Cutting red tape / debureaucratisation Tax reduction and simplification Developing alternative financial instruments Fostering the entrepreneurial initiative

24 Governance Program A better relationship between public authorities and companies The prevention law The Lobby Law 2. Cutting red tape / debureaucratisation Cutting 02 taxes in January 207 Offering the possibility to pay online any tax by the end of December st 208

25 Governance Program Tax reduction and simplification Corporate tax exemption for the companies specialized in innovative and R&D activities. Eliminating the tax on dividends beginning with January st 208. VAT reduction from 20% to 9%, and to 8% beginning with January st 209. Social contributions reduction from 39,25% to 35%, beginning with January st 208.

26 Governance Program Developing alternative financial instruments The Public Private Partnership, that is in an advanced stage Transforming CEC Bank into a Bank for SMEs and agriculture 5. Fostering the entrepreneurial initiative Creating the Entrepreneurial Ecosystem Internationalization program. A national program for developing Business Incubators. Creating Entrepreneurship High Schools. Other multiannual programs that the Ministry is implementing: microindustrialization, commerce and market services, craftsmanship.

27 Single point of contact for foreign investors