STATISTICAL DATA REGARDING FOREIGN INVESTMENT IN ROMANIA

    By courtesy of the Romanian Agency for Foreign Investment (ARIS)

Over the last years Romania has made significant progress towards macro-economic stabilization and has achieved high rates of economic growth. As a result of greater political and economic stability and of the implementation of economic reforms, the investment climate has started to improve and international investors are looking at the region with a much more positive attitude, seeing Romania as a real hub for the increase of their trade on the regional market.

It is a clear signal by The Romanian Government to the world community, and especially foreign investors, that transition and reform in our country is moving forward. This event shows that Romania is increasingly a welcoming and potentially profitable destination for foreign investment. While certain challenges remain and require continuing attention, measurable progress is being made in many areas and it is internationally acknowledged.

The National Bank of Romania's data from the Balance of Payments for 2005 indicate an inward FDI value of almost Euro 5.2, higher than the FDI inflows in Hungary with Euro 3.4 billion and Bulgaria with Euro 1.8 billion. The FDI inflow increase against 2004 led to Romania close the gap, and effectively compete with the high-performance country as concerns attracting foreign investment in Eastern Europe, considered to be the absolute leaders regarding the foreign investors interest.

FDI development in Romanian economy reflects the positive trend Romania is on, the improvement of Romanian business climate, as well as our country attractiveness to foreign investors. In addition, it's worth mentioning finalizing land restitution process supporting Greenfield projects development, solving utilities network legal situation, developing industrial parks, granting incentives to foreign investors, elaborating policies for local authorities aiming to attract and encouraging foreign investment, as well as developing domestic capital as a significant element in attracting new investment through economic relations development.

The annual average of FDI inflow during the last 5 years (1999-2004) amounted almost Euro 2 billion yearly. The total amount of inward FDI exceeded Euro 20 billion, reaching Euro 20,130.4 million by the end of 2005. Starting 2003, FDI flows and stock are determined based on the statistical compiled by NBR and NIS. Accordingly, data on FDI stock at the end of 2002 were revised.

Due to all favorable shifts, the foreign investors started to change their position towards Romania, perceiving it as a more friendly business environment and becoming more confident in the Government's investment policy. The increased interest of foreign partners towards Romania as a destination for foreign investments is viewed as well in the number of commercial companies registered during 2005 (11,719), according to the data provided by the National Trade Register Office - Ministry of Justice.

The structure upon sector of activity in the amount of subscribed capital in companies with foreign participation reveals that 52.0% of the total subscribed capital was invested in industry, 21.8% in services and 14.7% in trade (wholesales and retailing).

As regards the ranking by investing countries in commercial companies after foreign participation to social capital, having as reference the period 1991-2005, taking into account the subscribed social capital, among the first places are: Netherlands with 2291 commercial companies and Euro 2 bill subscribed capital, Austria with 3586 commercial companies and Euro 1.8 bill, France with 4061 commercial companies and Euro 1.2 bill, Germany with 12908 commercial companies and Euro 1.2 bill and Italy with 18774 commercial companies and Euro 0.7 bill, according to the data provided by the National Trade Register Office. 

	Investors’ country	Number of companies		Total amount of capital subscribed in currency equivalent
			%		Euro million	%
1.	Netherlands	2291	1.92%		2010.5	15.62%
2.	Austria	3586	3.01%		1766.9	13.73%
3.	France	4061	3.41%		1205.1	9.36%
4.	Germany	12908	10.84%		1171.5	9.10%
5.	Italy	18774	15.76%		708.4	5.51%
6.	USA	4414	3.71%		608.2	4.73%
7.	Netherlands Antilles	11	***		521,0	4.05%
8.	United Kingdom	2203	1.85%		493.7	3.84%
9.	Greece	3163	2.66%		472.3	3.67%
10.	Cyprus	1710	1.44%		450.5	3.50%

***less than0.01%
Source: National Office of Trade Register, Ministry of Justice

As a proof of the improvements in the Romanian business climate and of their positive effects produced on the international business environment, the table below shows the top 10 companies with foreign participation to the subscribed capital, according to the statistical data provided by the National Trade Register Office, at the end of 2005.

NR.	Romanian Company	Foreign Investor	Country Origin	Activity Field
1	PETROM SA	OMV AKTIENGESELLSHAFT	Austria	Oil Processing
2	AUTOMOBILE-DACIA SA	RENAULT SA	France	Automotive
3	MITTAL STEEL GALATI SA	MITTAL STEEL HOLDING	Netherlands Antilles	Steel Production
4	FORTE BUSINESS SERVICES SRL	SIEMENS BUSINESS SERVICES GMBH	Austria	IT
5	A&D PHARMA HOLDINGS SA	SOGRANO B.V.	Netherlands	Pharmaceuticals
6	ROMPETROL RAFINARE SA	THE ROMPETROL GROUP N.V.	Netherlands	Oil Processing
7	TELEMOBIL SA	INQUAM	British Virgin Islands	Telecommunications
8	COSMOTE ROMANIAN MOBILE TELECOMMUNICATIONS SA	COSMOTE MOBILE TELECOMMUNICATIONS SA	Greece	Telecommunications
9	MOBIFON SA	MOBIFON HOLDINGS B.V.	Netherlands	Telecommunications
10	HIPROMA SA	BEARBULL SAS	France	Retailing

The need and the potential for additional investment are clear and there is progress that can be built upon. The Romania’s performance can be improved, and improving competitiveness is a key factor.

Attracting Greenfield investments in the manufacturing, IT and service sectors is particularly important. Greenfield investments create new employment, and do not require the industry restructuring that accompanies most privatization investments. In addition, Greenfield investments tend to be linked to the sectors where a country enjoys its greatest comparative advantages like: energy, automotive, ITC, thereby helping to speed up the re-adjustment of the industrial structure. The development of the increase in Greenfield investments has been encouraged by the creation of the land market in Romania.

Measures directed at retaining and supporting existing investors are crucial. Our experience has shown that investors already in the country are key to generating new capital investment whether by their own companies, or by encouraging new investors.

Foreign Investment Flow in 2006