1. Romania – Top Destination for Investment
romanian agency for foreign investment
Romania – Top Destination for Investment
by Sorin VASILESCU
Director
Luxembourg, February 27, 2008

2. Structure of the Presentation
Geo-strategic position
Macroeconomic outlook
Valuable human potential
FDI performance
Infrastructure development
Investment legal framework
Potential sectors for development
ARIS – one stop shop

3. 1. Geo-strategic position

4. Romania’s Geo-strategic Position
Area
238,391 km2
92,043 sq mi.
the 9th in EU
Population
21.6 mill inhabitants
the 7th in EU
Capital city
Bucharest
1.9 mill inh
Member of
EU, WTO, IMF, WB, NATO
Our friend the wind

5. Romania’s Strategic Location
Helsinki – Kiev - Bucharest –
Odessa/Alexandropoulos IX
The Danube river
2,300 km long
VII
Dresden/Nuremberg - Bucharest
Constanta/Thessaloniki/
Istanbul IV
Pan European
Transport Corridors
The Eastern border of the inland European Union
Strategic position at the turning point where EU meets the Balkans and CIS countries

6. 2. Macroeconomic outlook

7. Significant Potential for Growth
Q3 2007
GDP Growth Rate
Slovakia
9.4%
Slovenia
6.3%
Czech Republic*
6.1%
Poland
5.8%
Romania
5.7%
Bulgaria
4.5%
Hungary
1.1%
Source: EUROSTAT, *forecast
Source: National Institute of Statistics
Rapid & sustainable GDP growth; 6.5% forecast for 2008;
5.7% in Q3 2007, based on increases in final consumption by 7.7% and decrease in net export by 8.6%;
EU27 GDP growth rate of 3% in Q

8. Source: National Bank of Romania
Inflation Rate
Annual Inflation Rate
Dec'07/Dec'06
Bulgaria
11.6%
Hungary
7.4%
Romania
6.7%
Slovenia
5.7%
Czech Rep
5.5%
Poland
4.2%
Slovakia
2.5%
Inflation Rate
Source: EUROSTAT
Devierea s-a produs în principal „ca urmare a unor şocuri exogene acţionând asupra ofertei agregate performanţa nefavorabilă a sectorului agricol datorată secetei severe, dar şi creşterea preţurilor produselor alimentare şi ale combustibililor la nivel mondial. Presiunile inflaţioniste astfel generate au fost amplificate de persistenţa excesului de cerere agregată în condiţiile majorării puternice a veniturilor şi ale dinamicii înalte a creditului acordat sectorului privat”, se spune într-un comunicat al BNR.
Source: National Bank of Romania
EU annual inflation was 3.2% in December 2007;
Sustainable disinflation since 2000 to continue in the following years;
Higher rate in 2007 due to drought, wage raising and significant increased of oil, technical plants and cereals prices.

9. 3. Valuable Human Potential

10. Availability of Human Capital
Demographics
Young population (more than 55% is under the age of 40 and 37% is between 25 and 49 years old)
Almost 21.7 million people
Talent pool
104 higher education institutions
112 thou university graduates
Availability of technical engineers
High industrial experience
Flexibility
Cities with more than 100,000 inhabitants
more than 1,000,000 inhabitants
300,000 – 400,000 inhabitants
200,000 – 300,000 inhabitants
100,000 – 200,000 inhabitants
Source: National Institute of Statistics

11. University graduates in Romania
Valuable Human Potential
high performances in international competitions
high percentage of technically competent professionals (23% are engineering graduates out of 720 students enrolled)
highest growth rate of IT specialists in the region (Annually 7000 university graduates in the software field & More then students in 105 local Cisco academies)
University graduates in Romania
(by education field)
Source: National Institute of Statistics
strong language skills (English, French, German, Italian, Spanish, Russian, etc.)
large skilled labor force at comparatively low wage rates

12. Labor Cost – A debated topic
Regional Comparison
EUR
Gross monthly wages
EUR
Source: Vienna Institute of International Economic Studies; National Institutes of Statistics
Significant discrepancies in terms of sectors (1120 euro in banking and 186 euro in wood processing) and different regions of Romania
It was expected to grow by 12.3% in 2008, and to reach 580 by 2010
Productivity in industrial sector increased by more than 10%

13. 4. FDI Performance

14. Source: National Bank of Romania
Inward FDI Flows
Q3 2007
Annual Inward FDI 1
Poland
5721 2
Romania
5138 3
Bulgaria
4117 4
Czech Republic
3547 5
Hungary
1828 6
Slovakia
1315 7
Slovenia
665
EUR million
Source: Vienna Institute of International Economic Studies
Source: National Bank of Romania
FDI Stock over EUR 41 bill (1990 –2007);
The forecast for 2008 refers to over 7 bill euro;

15. FDI by Field of Activity
( )
Main Activities – 21.9 bill EUR
Manufacturing – 8.2 bill EUR
Source: National Bank of Romania

16. Major Investing Countries Source: National Bank of Romania
( )
Austria
the Netherlands
Germany
France
Greece
7.94
bill EUR
5.89
3.47
2.77
2.68
Switzerland
Italy
Cyprus
Hungary
USA
2.37
2.32
1.67
0.66
0.63 1 2 3 4 5
Exista anumite diferente intre clasamentul pe tari in functie de tara de provenienta a capitalului social, si clasamentul in functie de valoarea investitie, dar in principal tarile europene sunt principalii investitori in Romania. Cele doua tari prezente in acest clasament fata de cel anterior sunt Elvetia si Ungaria, Elvetia detinand peste 1,5 mld de euro, iar Ungaria, a carei pozitie in top 10 ilustreaza interesul deosebit manifestat de tarile integrate in UE in anul 2004 de a investi in Romania, careia i se alatura Cehia si Polonia. 6 7 8 9 10
Source: National Bank of Romania

17. Luxembourg Investment in Romania
Nr of companies
521
% of the total no. of companies
0.35%
Ranking by no. of companies 31
Social capital subscribed in companies with German participation
251 mill EUR
% of the total value of capital
1.44%
Ranking 16
Source: National Trade Register Office; 1990 – November 2007

18. 5. Infrastructure Development

19. Highway Infrastructure Development - 2013
ORADEA
IASI
PIATRA NEAMT
BORS
MIHAILESTI
SABAOANI
SOVATA
BICAZ
CAMPIA
TURZII
TARGU
MURES
ALBITA
CLUJ NAPOCA
GHEORGHIENI
PRAID
NADLAC
SIGHISOARA
ARAD
DEVA
SEBES
FAGARAS
SIBIU
TIMISOARA
ORASTIE
FOCSANI
CRISTIAN
GHIMBAV
BRASOV
LUGOJ
PREDEAL
COMARNIC
BUZAU
PLOIESTI
DROBETA TR. SEVERIN
PITESTI
DRAJNA
CERNAVODA
BUCURESTI
CONSTANTA
CRAIOVA
FETESTI
GIURGIU
CALAFAT

20. Ports and Airports International flights Domestic SATU MARE BAIA MARE
SUCEAVA
IASI
ORADEA
CLUJ NAPOCA
TARGU MURES
BACAU
ARAD
TIMISOARA
SIBIU
GALATI
BRAILA
CARAS-SEVERIN
SULINA
TULCEA
ORSOVA
OTOPENI
BANEASA
M. KOGALNICEANU
DROBETA TR. SEVERIN
CRAIOVA
CONSTANTA
CORABIA
OLTENITA
CALARASI
MANGALIA
GIURGIU

21. Map of Industrial Parks
More than 40 Industrial Parks
Both private & public
Greenfield & Brownfield
Access to utilities
Package of services offered by the park administration
Wide variety of activities to be developed
Some created for high-tech activities

22. 6. Investment Legal Framework

23. Competitive Taxation
Corporate Tax
VAT
Social Contributions
Employee
Employer
Bulgaria
10%
20%
12.43% %
Romania
16%
19%
17%
29.34%
Hungary
13.5%
33.5%
Poland
22%
18.71% %
Slovakia
13.4%
34.4%
Czech Rep.
24%
12.5%
35%
Slovenia
25%
22.1%
16.10%
Source: CEE-CIS Tax Notes - PriceWaterhouseCoopers
Many Central and Eastern European countries reduced considerably their corporate tax in order to diminish the fiscal burden

24. Structural funds channeled by Operational Programmes
Managing Authority
Increasing
Competitiveness
Ministry of Economy and Finance
Regional
 Tourism
Ministry of Development,
Public Works and Dwellings
Ministry of SMEs, Trade,
Tourism and Self-Employed
Development of Human
Resources
Ministry of Labour, Family and Equal Opportunities
Transport
 Inter-modal transport
Ministry of Transport
Operational Programmes of interest to business

25. State Aid State Aid granted for stimulating investments;
granted to enterprises for achieving an initial investment of more than Euro 30 million,
creating at least 300 new jobs
Regional state aid schemes granted for investments in industrial parks;
“de minimis” state aid for developing and modernizing enterprises and developing activities in the SMS sector
I would like to call your attention on the two fastest growing sectors in Romania:
automotive sector
ITC sectors.
Over 30 years of experience in car manufacturing, along with the trend of huge car makers to cut costs determined the feeding frenzies of automotive manufacturers to benefit from Romanian opportunities.
The low cost and availability of the workforce, the highly trained specialists, the availability of suppliers and subcontractors and the R&D centers are the strengths that guarantied the success of these companies that represent strong examples.
The interest is doubled by the fact that they established more than one production facilities, as for example Lisa Draxlmeyer has 4 capacities, Michelin and Sumitomo has three and so on. 25

26. 7. Potential Sectors for Development

27. Potential Sectors for Investment
Manufacturing
Wood processing
Automotive components
Construction materials
IT & Communication
Textile industry
Energy (non-conventional)
Food processing
Electric & Electronics
Pharmaceuticals
Real Estate
Infrastructure
Recently, ARIS conducted an diagnosis inventorying investments resources and opportunities, and more important the potential sectors for investment- on a regional and county level of economic development - which will be promoted toward the identified target countries, and I am proud to let you know that Belgium is one of these countries. 27

28. Automotive Industry Opportunities
Experience in the field of car makers
Automotive component parts – rapidly growing sector: currently over 175 major manufacturers
Availability of labor force
Labor cost: monthly average salary approx. Euro 250;
Total number employed: ;
Trained work force
7 colleges in vehicle technology – 500 graduates each year;
25 colleges in mechanical engineering – graduates / year;
Availability of suppliers and subcontractors
Presence of R&D centers
Successful investment stories in the field
I would like to call your attention on the two fastest growing sectors in Romania:
automotive sector
ITC sectors.
Over 30 years of experience in car manufacturing, along with the trend of huge car makers to cut costs determined the feeding frenzies of automotive manufacturers to benefit from Romanian opportunities.
The low cost and availability of the workforce, the highly trained specialists, the availability of suppliers and subcontractors and the R&D centers are the strengths that guarantied the success of these companies that represent strong examples.
The interest is doubled by the fact that they established more than one production facilities, as for example Lisa Draxlmeyer has 4 capacities, Michelin and Sumitomo has three and so on. 28

29. Automotive top-tier investors
2006
1 bill € investment
1.6 bill € turnover
12 thou employees
2007
cars sold
New projects
A gear boxes facility 217 mill € of Renault-Nissan Alliance
A R&D Centre "Renault Tehnologie Roumanie" – 456 mill €
Ford took over the state-owned shares of Automobile Craiova (72.4 %) for €57 million, and pledged to invest €675 mill to modernize the factory and increase the number of employees
Ford is awaiting for the results of the EC investigation on the Romanian government helping the takeover
Automotive component parts sector
the fastest growing sector in Romania;
5.8 bill € investment inflows to increase up to 9-10 bill until 2010;
Huge presence of international top-tier players: TYRES (Michelin, Pirelli, Continental); WIRES (Yazaki, SEWS, Leoni, Lear, Valeo, Delphi); BEARINGS (SNR, Ina Schaeffler, Koyo), SOFTWARE (Siemens VDO); SEATS (Johnson Controls), etc.
I would like to call your attention on the two fastest growing sectors in Romania:
automotive sector
ITC sectors.
Over 30 years of experience in car manufacturing, along with the trend of huge car makers to cut costs determined the feeding frenzies of automotive manufacturers to benefit from Romanian opportunities.
The low cost and availability of the workforce, the highly trained specialists, the availability of suppliers and subcontractors and the R&D centers are the strengths that guarantied the success of these companies that represent strong examples.
The interest is doubled by the fact that they established more than one production facilities, as for example Lisa Draxlmeyer has 4 capacities, Michelin and Sumitomo has three and so on. 29

30. Major Foreign Investment In Automotive Industry
Germany
CONTINENTAL AUTOMOTIVE PRODUCTS – (Timisoara, Sibiu)
CONTINENTAL AUTOMOTIVE SYSTEM tyres, software
CONTI TECH
LISA DRAXLMAIER – (Pitesti, Satu-Mare, Timisoara) cable and wires
PHOENIX AG - (Carei) - rubber car parts
KROMBERG & SCHUBERT - (Timisoara)-car cables
DAIMLER-CHRYSLER – (Cugir) gear boxes
INA SCHEAFFER – (Brasov) – bearings;
LEONI WIRING SYSTEMS - (Arad, Bistrita) – wires&cables
BAUMEISTER & OSTLER - (Arad) – aluminium and plastic car parts
SIEMENS AUTOMOTIVE – (Timisoara, Iasi ) – software
SCHLEMMER – (Satu Mare)
MARQUARD SCHALTSYSTEME – (Sibiu)
HELLA – (Timisoara) electronics
-Continental Automotive = producing 7000 tyres per day in a plant in Timisoara. Total investment reached 75 million USD. They created 1000 new jobs and the total output will be 8 million units per year
-Lisa Draxlmayer is owning four manufacturing plats in Romania (Timisoara, Pitesti, Brasov, Satu Mare) producing mainly cable and wiring as well as interior items. They employing 800 workers and the total investment reached so far 50 million USD
- Thysse Krupp established two succesfully JV with Romanian spare parts producer COMPA Sibiu producing shock absorbers and springs. The total investment account 27 million USD
-Phoenix Automotive set up a rubber car parts plant in Carei- Satu Mare, in the North East part of Romania in order to produce automotive hoses, creating 400 new jobs and targeting a 50 million Usd export by 2001.
-Kromberg and Schubert has an investment of 3 millionUSD and employing 800 workers for the production of car cables for BMW, Mercedes and VW
-Leoni Wiring Systems- producing wires and cables for automotive industry with the main client Rover and MG, invested 8 million USD, employing 1400 workers
-Baumaister & Oustler started a 4 million investment for alluminium and plastic car parts. 30

31. Major Foreign Investment In Automotive Industry
FRANCE
MICHELIN - (Floresti, Zalau, Bucharest) - tires
VALEO - (Pitesti) - electric wiring systems
SNR ROULEMENTS - (Sibiu) - bearings
FAURECIA - (Sibiu) - seats covers
AUTO CHASSIS INTL. – (Mioveni) - auto chassis
RENAULT-NISSAN – (Pitesti) – gear boxes
JAPAN
SUMITOMO ELECTRIC WIRING SYST. - (Hunedoara, Deva, Orastie) - wiring systems
YAZAKI CORP. - (Ploiesti, Arad) - wiring systems
KOYO SEIKO - (Alexandria) - ball bearings
TAKATA CORP. - (Arad) - airbags and steering wheels
CALSONIC KANSEI – (Poiesti) - air condition and cooling units
-Continental Automotive = producing 7000 tyres per day in a plant in Timisoara. Total investment reached 75 million USD. They created 1000 new jobs and the total output will be 8 million units per year
-Lisa Draxlmayer is owning four manufacturing plats in Romania (Timisoara, Pitesti, Brasov, Satu Mare) producing mainly cable and wiring as well as interior items. They employing 800 workers and the total investment reached so far 50 million USD
- Thysse Krupp established two succesfully JV with Romanian spare parts producer COMPA Sibiu producing shock absorbers and springs. The total investment account 27 million USD
-Phoenix Automotive set up a rubber car parts plant in Carei- Satu Mare, in the North East part of Romania in order to produce automotive hoses, creating 400 new jobs and targeting a 50 million Usd export by 2001.
-Kromberg and Schubert has an investment of 3 millionUSD and employing 800 workers for the production of car cables for BMW, Mercedes and VW
-Leoni Wiring Systems- producing wires and cables for automotive industry with the main client Rover and MG, invested 8 million USD, employing 1400 workers
-Baumaister & Oustler started a 4 million investment for alluminium and plastic car parts. 31

32. Major Foreign Investment In Automotive Industry
USA
JOHNSON CONTROLS - (Mioveni, Ploiesti) - seats
HONEYWELL GARETT - (Bucharest)- spare parts for turbochargers
ALCOA FUJIKURA INC. - (Chisineu-Cris and Caransebes) - wire harnesses
DOW AUTOMOTIVE - (Pitesti) - chemical compounds
BORLA ROMCAT - (Curtea de Arges) - mufflers, catalizers
LEAR CORPORATION - (Pitesti) - wiring systems
DELPHI PACKARD - (Sannicolau) - wiring systems
TRW – (Timisoara) – steering wheels
DURA AUTOMOTIVE - (Timisoara)
ITALY
MAGNETTO GROUP - (Dragasani) - wheels
MOMO - (Brad) - steering wheels
PIRELLI - (Slatina) – steel cord and tires
-Continental Automotive = producing 7000 tyres per day in a plant in Timisoara. Total investment reached 75 million USD. They created 1000 new jobs and the total output will be 8 million units per year
-Lisa Draxlmayer is owning four manufacturing plats in Romania (Timisoara, Pitesti, Brasov, Satu Mare) producing mainly cable and wiring as well as interior items. They employing 800 workers and the total investment reached so far 50 million USD
- Thysse Krupp established two succesfully JV with Romanian spare parts producer COMPA Sibiu producing shock absorbers and springs. The total investment account 27 million USD
-Phoenix Automotive set up a rubber car parts plant in Carei- Satu Mare, in the North East part of Romania in order to produce automotive hoses, creating 400 new jobs and targeting a 50 million Usd export by 2001.
-Kromberg and Schubert has an investment of 3 millionUSD and employing 800 workers for the production of car cables for BMW, Mercedes and VW
-Leoni Wiring Systems- producing wires and cables for automotive industry with the main client Rover and MG, invested 8 million USD, employing 1400 workers
-Baumaister & Oustler started a 4 million investment for alluminium and plastic car parts. 32

33. Major Foreign Investment In Automotive Industry
OTHER COUNTRIES:
EYBL INTL. - Austria (Timisoara) - steering wheels
SOLVAY INERGI - Belgium (Pitesti) - plastic components
AUTOLIV INC. - Sweden (Brasov) - seat belts
COFICAB – Tunis (Arad) – wire harnesses
COINDU – Portugal (Arad)
CAUCHO METAL PRODUCTOS – Spain (Sibiu)
MANUFACTURA MODERNA DE METALES – Spain (Turda)
BAMESA-ARCELOR – Spain (Topoloveni)
-Continental Automotive = producing 7000 tyres per day in a plant in Timisoara. Total investment reached 75 million USD. They created 1000 new jobs and the total output will be 8 million units per year
-Lisa Draxlmayer is owning four manufacturing plats in Romania (Timisoara, Pitesti, Brasov, Satu Mare) producing mainly cable and wiring as well as interior items. They employing 800 workers and the total investment reached so far 50 million USD
- Thysse Krupp established two succesfully JV with Romanian spare parts producer COMPA Sibiu producing shock absorbers and springs. The total investment account 27 million USD
-Phoenix Automotive set up a rubber car parts plant in Carei- Satu Mare, in the North East part of Romania in order to produce automotive hoses, creating 400 new jobs and targeting a 50 million Usd export by 2001.
-Kromberg and Schubert has an investment of 3 millionUSD and employing 800 workers for the production of car cables for BMW, Mercedes and VW
-Leoni Wiring Systems- producing wires and cables for automotive industry with the main client Rover and MG, invested 8 million USD, employing 1400 workers
-Baumaister & Oustler started a 4 million investment for alluminium and plastic car parts. 33

34. Romanian ITC Industry Trends
High density of Romanian IT specialists (five times higher than in Russia, and seven times than in India).
Romanian Olympic students are usually placed in top 4 with China, US and Russia.
In Microsoft the second spoken language is Romanian;
Low brain drain phenomenon in Romania;
IT sector is constantly growing;
Major multinational IT companies such as Microsoft, HP, Oracle, Cisco, Intel and Motorola are present in Romania - many of them use Romania as regional headquarters.

35. A Top European Location for product R&D, outsourcing, customer service and BPO
In 2006 Microsoft opened a Global Technical Support Center creating around 700 jobs
One GE group companies established an IT outsourcing, financial services and supply chain BPO
HP set up a BPO in Bucharest for financial and administrative services, dedicated to EMEA region - up to 1200 employees
In 2006 WIPRO decided to set up a BPO center in Bucharest for IT services covering the East European market employees
Ericsson will open in Romania, in July this year, a New Global Service Delivery Center - 70% of the employees will be young graduates
BPO aiming to offer outsourcing services in HR, finance and procurement to work

36. 8. ARIS – one stop shop for foreign investors

37. Who is A.R.I.S?
Governmental body under the authority of Prime Minister
In charge with attracting and retaining foreign direct investment
Interface between investors and central & local authorities
Providing free
of charge SERVICES for foreign investors in Romania
SERVICES
Search and advice
on the best location in Romania to fulfill the company' needs including site search, analysis & touring around
Value added information on incentives
and other administrative procedures
Search for
industrial
and service suppliers

38. Thank you for your attention!
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fax:
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