Romanias New Strategic and Business Outlook Relevance and Opportunities for the RomanianU.S. Relatio

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Romanias New Strategic and Business
OutlookRelevance and Opportunities for the
Romanian-U.S. Relations
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Area 238,391 sq km Population 21,680,000 Count
ies 41 Romania the second largest country in
Central- Eastern Europe and the seven largest in
the future Europe of 27
Capital Bucharest - Area 228 sq.km. - Po
pulation 1.9 million
- Districts6
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Main pillars of Romanias strategic profile

• concluding the EU accession process
• consolidating Romanias role within NATO
• strengthening the strategic relations with the
  United States
  
• promoting democracy, stability and security in
  the Black Sea region
  
• supporting actively the international efforts for
  the final resolution of the conflicts in the
  Western Balkans

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The Comprehensive Monitoring Report of the
European Commission on Romania (October, 2005)

• Acknowledges that Romania made overall good
  progress at the accession criteria political,
  economic and the commitments and requirements
  arising from accession negotiations
• Indicates that Romania is expected to be fully
  able of implementing the acquis by the time of
  accession at most acquis chapters
  
• 9 out of the 11 areas outlined by the previous
  Report as liable to trigger the safeguard clause
  (accession postponement by one year) were
  removed the two remaining areas are the fight
  against corruption and border management
• The Report on Romania is a predominantly positive
  assessment, which is appreciated by many as most
  likely the best Romania has had so far

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The Romanian Economy in Figures
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Imports and Exports
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Cumulative FDI
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Foreign Exchange Reserves
million
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Exchange Rates LEI- and LEI-Euro 2001-2005
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Investment Opportunities in Romania

• Energy sector Romgaz, Distrigaz, Electrica
• Banking privatization of Romanian Commercial
  Bank
  
• IT highly skilled labor force
• Tourism privatization and green-field
  investments
  

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• Main advantages of Romania
• One of the largest markets in Central Eastern
  Europe
  
• Attractive location at the conjunction of three
  important Pan-European corridors
  
• Direct access to the Black Sea (Constanta port -
  the largest gateway for imports and exports)
  
• Well-skilled and low cost labor force
• Experience in the automotive sector as well as
  tires production
  
• Low costs for utilities and land
• Status of member to WTO, CEFTA, IMF, World Bank
  as well as UN, NATO.
  
• Candidate member to EU (April 13 2005 signing
  of Accession Treaty 2007 target data
  for accession)
  
• Free trade agreements with EU, Israel, Turkey,
  Moldova, Lithuania, Macedonia
  
• MFN clause from USA on a permanent basis
• Well developed network of telecommunication
• Transport infrastructure on the process of
  rehabilitation and modernization

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• Guarantees and rights for foreign investors
• foreign investment allowed in all sectors of
  economy
  
• possibility to freely manage the company with
  full ownership rights
  
• full repatriation of capital and profits
• protection against expropriation and
  nationalization
  
• national treatment for foreign investors

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THE FISCAL REFORM IN ROMANIA Main provisions

• Introduction of the 16 flat tax on personal
  income to replace the previous taxes which were
  varying between 18 and 40
  
• Corporate tax reduced from 25 to 16
• Increase of the tax on micro-companies turnover
  from 1.5 to 3
  
• Fiscal deductions in favor of the less paid
  employees, set to decrease as wages increase.
  

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THE FISCAL REFORM IN ROMANIA Impact on foreign
investments

• Central-Eastern Europe has become a region of
  opportunity for foreign investors, out-performing
  the world economy and most of the emerging
  markets and attracting an increasing share of the
  global FDI.
• As the experience of other CEE countries shows,
  the fiscal relaxation will increase Romanias
  comparative advantages in the regional and global
  competition for attracting a larger amount of FDI
  in export oriented and high value-added sectors.
  
• FDI increase in Romania is essential for
  generating new jobs, technology transfer,
  increased competitiveness, increased exports and
  increased profits to be taxed.

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PAN EUROPEAN CORRIDORS CROSSING ROMANIA
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MAP of AIRPORTS and MARITIME PORTS IN ROMAN
IA
Giurgiu
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Internet users
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Evolution of number of PCs
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Number of .ro domains
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Number of IT companies
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Number of mobile telephony subscribers
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US Business Success Stories in Romania

• Qualcomm
• Solectron
• Oracle
• Smithfield
• Procter Gamble
• Washington Group International
• Timken
• AIG
• General Electric
• Precision Castparts Corporation

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Major US Investors in Romania
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Bilateral Trade with the United States
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Conclusions

• One of the most dynamic economies in Central
  Eastern Europe
  
• New frontier of business opportunities
• US ally with strategic relevance at the Black
  Sea, Central Asia and the Caucasus as well as the
  Greater Middle East
  
• NATOs eastern frontier with major role in the
  war against terrorism
  
• Regional Leader in fighting trans-border crime
  and trafficking in person
  
• Important role in strengthening the transatlantic
  relationship
  
• Strong pro-American feelings, strong European
  identity
  

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