1. 1 MINISTRY FOR SMALL AND MEDIUM SIZED ENTERPRISES, COMMERCE, TOURISM AND LIBERAL PROFESSIONS MINISTRY FOR SMALL AND MEDIUM SIZED ENTERPRISES, COMMERCE, TOURISM AND LIBERAL PROFESSIONS ECONOMIC DEVELOPMENTS AND OPPORTUNITIES IN ROMANIA ECONOMIC DEVELOPMENTS AND OPPORTUNITIES IN ROMANIAROMANIA Luxembourg, 27 February 2008

2. 2 Romania - Area: 238.391 sq. km. - Area: 238.391 sq. km. - Population: 21,700,000 - Population: 21,700,000 - Counties: 41 - Counties: 41 Capital: Bucharest Capital: Bucharest Basic information

3. 3 Benefits of EU Accession Removal of any obstacles in the trade with EU Member States Removal of any obstacles in the trade with EU Member States Common trade policy with third countries Common trade policy with third countries Harmonization of entire legislation, capital market regulations, taxation, accounting rules => higher transparency and simplification Harmonization of entire legislation, capital market regulations, taxation, accounting rules => higher transparency and simplification Structural funds (31 billion euro till 2013) Structural funds (31 billion euro till 2013) Open gate for EU towards CIS, Asia, Middle East, Northern Africa Open gate for EU towards CIS, Asia, Middle East, Northern Africa Participation in major projects in the Black Sea Extended Area and in the Central & Eastern European Region Participation in major projects in the Black Sea Extended Area and in the Central & Eastern European Region Romania-important role in assuring the energy security for Europe (major transit pipelines, energy production & supply) Romania-important role in assuring the energy security for Europe (major transit pipelines, energy production & supply)

4. FLAT TAX 16% VAT19% SOCIAL SECURITY 43.5% 39.5% by the end of 2008 AVERAGE WAGE (2007) 380 euro MINIMUM WAGE 115 euro Competitive Taxation Country Corporate Tax Romania16% Hungary16% Slovakia19% Poland19% Estonia 20 % Croatia20.32% Slovenia25% Czech Rep. 28%

5. 5 Macroeconomic Performance GDP real growth Source: National Institute of Statistics

6. 6 Macroeconomic Performance Inflation rate Source: National Bank of Romania

7. 7 Macroeconomic Performance Unemployment rate

8. 8 COUNTRY RATINGS ROMANIA COUNTRY RATINGS ROMANIA Fitch - A- (August 2006) Fitch - A- (August 2006) Coface- A4 (January 2006) Coface- A4 (January 2006) JCR- BBB+ (November 2006) JCR- BBB+ (November 2006) Moody’ s - Baa3 (September 2006) Moody’ s - Baa3 (September 2006) Standard & Poors - BBB- (September 2006) Standard & Poors - BBB- (September 2006) World Bank Report 2006: Romania – the most reforming country in the business field

9. 9 Foreign direct investments - million Euro - Source: National Bank of Romania

10. FOREIGN DIRECT INVESTMENT FOREIGN DIRECT INVESTMENT Share capital in FDI’s at 30.11.2007: 17.4 billion euro 1. The Netherlands - 18,41% 2. Austria - 12,60% 3. Germany - 10,23% 4. France - 10,03% 5. Cyprus – 4,99% 6. Italy - 4,64% 7. U.S.A. - 3,80% 8. United Kingdom - 3,49% 9. Greece – 3,28% 16. Luxembourg – 1,44% Source: National Trade Register Office Country of origin Number of companies Share-capital in Romanian companies - mil. EURO - 1Netherlands30933.208 2 Austria 48472.194 3Germany15472 1.783 4France5340 1.747 5Cyprus3494870 6 Italy 24259808 7USA5377 662 8UK3499 608 9 Greece 4061 571 16Luxembourg629251

11. 11 Value of Subscribed Capital by Field of Activity Source: Romanian Agency for Foreign Investment

12. 12 Foreign Investors Advantages foreign investments allowed in all sectors of economy foreign investments allowed in all sectors of economy possibility to freely manage the company with full ownership rights possibility to freely manage the company with full ownership rights full repatriation of capital and profits full repatriation of capital and profits protection against expropriation and nationalization protection against expropriation and nationalization national treatment for foreign investors national treatment for foreign investors

13. New Investment Law - Draft under public debate- Objectives:  Determines the principles, terms and modalities of stimulating investments in Romania, aiming at contributing to the sustainable country development  Full compliance with the EU legislation  Legal/administrative documents will be issued by the Government in order to regulate the state aids schemes for each objective  The goals, objectives, timing, budgets, beneficiaries, eligibility and selection criteria, competent authorities responsible to grant incentives will be established  A responsible authority for implementing and monitoring the legal provisions will be set up

14. 14 FOREIGN TRADE OF ROMANIA 2001 – November 2007 Source: National Institute of Statistics (www.insse.ro)

15. 15 MAIN TRADE PARTNERS - November 2007 - Top import partner countries percentage of total import Germany 17,2 Italy 12,8 Hungary 7,0 France 6.3 Russian Federation 6,3 Turkey 5,5 Austria 4,8 Holland 3.6 Poland 3.4 China 3,3 Luxembourg 0,14 Top export partner countries percentage of total export Italy17.2 Germany17,1 France 7,7 Turkey7,0 Hungary5,6 Great Britain 4.2 Bulgaria 3,13,13,13,1 Austria2,6 Spain2.3 Poland2.2 Luxembourg0.10

16. 16 FOREIGN TRADE OF ROMANIA - 11 month 2007 - Total volume: 73.687 million euro Total volume: 73.687 million euro (21,6% growth compared to 11 month 2006) (21,6% growth compared to 11 month 2006) Total volume intrastate: 52.764 million euro Total volume intrastate: 52.764 million euro Total Export (FOB): 27.127 million euro Total Export (FOB): 27.127 million euro Intrastate export (FOB): 19.571 million euro, representing 72,1% in total export (+13,5% growth compared to 11 month 2006) Intrastate export (FOB): 19.571 million euro, representing 72,1% in total export (+13,5% growth compared to 11 month 2006) Total Import (CIF): 46.557 million euro Total Import (CIF): 46.557 million euro Intrastate import (CIF): 33.193 million euro, representing 71,3% in total import (+31,5% growth compared to 11 month 2006) Intrastate import (CIF): 33.193 million euro, representing 71,3% in total import (+31,5% growth compared to 11 month 2006)

17. 17 TRADE BETWEEN ROMANIA AND LUXEMBOURG 2001 – November 2007

18. 18 STRUCTURE OF ROMANIA- LUXEMBOURG BILATERAL TRADE Romanian Exports vehicles, transport equipment (35,05%) vehicles, transport equipment (35,05%) textiles and garments (27,7%); textiles and garments (27,7%); furniture, wood products (22,5%); furniture, wood products (22,5%); machinery, electrical equipment (2,9%); machinery, electrical equipment (2,9%); metals and articles thereof (4%) metals and articles thereof (4%) minerals (1,4%). minerals (1,4%). Romanian Imports metals and articles thereof (52,1%) metals and articles thereof (52,1%) machinery, electrical equipment (29,4%); machinery, electrical equipment (29,4%); plastics and rubber products (6,2%) plastics and rubber products (6,2%) stone products (3,4%); stone products (3,4%); vehicles, transport equipment (1,9%); vehicles, transport equipment (1,9%);

19. 19 LUXEMBURG FDI’s in Romania 200,73 million euro share-capital in Romanian companies; 200,73 million euro share-capital in Romanian companies; 636 companies with Luxembourg capital registered in Romania 636 companies with Luxembourg capital registered in Romania Sectors for Luxembourg investments: industry, services, retailing, wholesale, constructions, agriculture Sectors for Luxembourg investments: industry, services, retailing, wholesale, constructions, agriculture

20. 20 Market & Location Advantage : Second largest market in Central and Eastern Europe (over 21 million inhabitants) Easy access to the countries of the former CIS countries, Balkans, the Middle East and Northern Africa Junction of three prospective European transportation corridors nos. 4, 7 & 9 Resource Advantage: Skilled labor force, with solid knowledge in technology, IT and engineering Rich natural resources, including fertile agricultural land, oil and gas Important potential for tourism TOP REASONS TO INVEST IN ROMANIA (1)

21. 21 Economic Advantage Sustainable economic growth Functional Market Economy status Competitive tax policy Decreasing inflation Permanent financial assistance for SME's Development Structural funds Improving Infrastructure Advantage Well-developed networks of mobile telecommunications in GSM systems Highly developed industrial infrastructure, including oil and petrochemicals Branch offices and representatives of well-known international banks Newly developed highway infrastructure Commitment to improve the highway infrastructure to EU standards Extensive maritime and river navigation facilities TOP REASONS TO INVEST IN ROMANIA (2)

22. 22 Potential Sectors for Investment oManufacturing oAutomotive parts oIT & Communication oElectric & Electronics oWood processing oConstruction materials oTextile oFood processing oInfrastructure oOutsourcing and logistics

23. 23 MINISTRY FOR SMALL AND MEDIUM SIZED ENTERPRISES, COMMERCE, TOURISM AND LIBERAL PROFESSIONS Phone: +40 21 4010510 Fax: +40 21 3150086 E-mail: dgrbea@dce.gov.ro Website: www.dce.gov.ro THANK YOU !