before starting my Business in Romania:
analyse the country's business climate
The World Bank has just updated its Ease of Doing Business Index, lowering the overall Romanian business environment quality perception to the 55th position. It has become easier to start a business in Romania: the position has increased from 111 to 91. It is slowly starting to be even more difficult, though, to deal with construction permits (now at position 147 of 190) and to get electricity (now at position 157 of 190). Romania maintains its leading position at global level for trading across borders.
2019-10-24
The National Bank of Romania has just published its annual Foreign Direct Investment Report, where I can see the main countries which invest in Romania - and the key sectors they invest in. Below, these numbers are correlated with additional information from the World Bank and from the rating agencies.
According to the National Bank, the total value of FDI increased with almost 10% compared to last year. Almost a quarter of the total FDI came from the Netherlands, almost as large as Germany & Austria together, which are the second and third place-holders. The following places, in order, went to Italy, Cyprus, France, Switzerland, Luxembourg, Belgium, and the UK. More than 40% percent of total FDI went to industry, mainly to manufacturing. The rest went mainly to construction & real estate, as well as trade. When we look at net flows, the order reverses and trade is on the first place, followed by manufacturing. In terms of geographical location, Bucharest-Ilfov absorbed more than 60% of FDI, with each of the other 7 development regions having 1-digit only absorption percentages.
According to the World Bank Ease of Doing Business Index, which ranks 190 economies on their easiness to do business in, Romania is on the 52nd position with a score of 7.2, just below Italy. For starting a business, the World Bank classifies Romania (position 111) in the vicinity of Germany (position 114). Starting a business is actually being perceived by the World Bank as becoming more difficult in Romania in 2019 as it was in 2018, with a 5% decrease in score. Dealing with construction permits (position 146) and getting electricity (position 154) can be difficult, but things are much easier for getting credit (position 22) and for enforcing contracts (position 17). In the World Bank Index, Romania enjoys a very comfortable first place at global level for trading across borders.
All the three major rating agencies, Standard&Poor’s, Moody’s and Fitch, classify the Romanian environment in the second-tier category, with stable outlook.
2019-10-01
Before starting up, I need to thoroughly analyse the suitability of the Romanian market for my business:
How many companies in the target area have the same object of activity?
What is their profit rate?
Can I obtain higher profit than competition? If not, I might want to reconsider doing business in another country. Business Guides below: