Romania Infobusiness 2011aprilie

8/13/2019 Romania Infobusiness 2011aprilie

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ROMANIAInfoBusiness

2011


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Romania InfoBusiness is based on data and information produced by relevant andauthorizedsourcesastheyhavebeenavailableatthemomentofitscompilation,anditwill

beperiodicallyrevisedforeditingtwiceayearupdatedversions.

The designations employed and the presentation ofmaterial in this publication do not

imply theexpressionofanyopinionwhatsoeveron thepartof theRomanianCenter for

TradeandInvestment(CRPCIS).

Whilsteveryefforthasbeenmade toensuretheaccuracyof the informationcontained in

thispublication, theRomanianCenter forTradeand Investment (CRPCIS)cannotaccept

any responsibility for the data changes that may occur after its compilation or for the

outcomesofusingthispublication.

Anypiece

of

information

or

data

does

not

imply

the

endorsement

of

the

Romanian

Center

forTradeandInvestment(CRPCIS).

RomanianCenterforTradeandInvestmentCentrulRomnpentruPromovareaComeruluiiInvestiiilorStrine CRPCIS

DepartmentforMarketResearchandTradePublications

17

Apolodor

Street,

Bucharest

5,

Romania

Phone:+40213185050Fax:+40213111491

[email protected] www.traderom.ro www.arisinvest.ro

April,2011

ROMANIAInfoBusiness


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Romania InfoBusiness

Contents

1.CountryOverview 1

2.EconomicOutlook 2

3.International

Trade

3

ForeignTrade2008 2010 3

CustomsLegislation 5

4.ForeignInvestments 8

ForeignInvestmentFlows2008 2010 8

MajorStateAidSchemesforInvestments 12

IndustrialParksandFreeZones 17

OECD RomanianNationalContactPoint 27

5.Setting

up

aBusiness

28

6.Taxation 30

7.UsefulLinks 36

RomanianCenterforTradeandInvestment


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1

1.CountryOverview

Location

IntheSoutheasternpartofCentralEurope,oneithersideoftheCarpathians,onthelowercourseofthe

Danube(1,075km),withexittotheBlackSea(coastline:245km);

Boundaries:3,150km;

Neighboringcountries:Bulgaria,Hungary,

RepublicofMoldova,SerbiaandUkraine.

Area

238,391sq.km(ranking12

th

inEurope); Landuse:farmland61.7%(ofwhich39.5%

arableland),forest28.4%,other9.9%.

Population

21.5millioninhabitantsasofJanuary1st,2009

(ranking9thinEurope);

Density:90inhabitants/sq.km;

Urban:54.9%;

Ethnicbreakdown:Romanians89.5%,Hungarians6.6%,others3.9%;

Administrativeorganization:42counties,includingBucharestMunicipality(enjoyingcountystatus);320towns(103municipalities)and2,860communes;

Capitalcity:Bucharest(1.9millioninhabitants);

NationalDay:December1st;

Officiallanguage:Romanian.

Government

Republic;

ThePresidentiselectedbyuniversalvoteforafiveyearmandate;

Legislativebody:Parliament(SenateandChamberofDeputies);

Executivebody:governmentheadedbyPrimeMinister(appointedbythePresident).

Status

NATOandEuropeanUnionmembership.

Currency

Romanianleu(RON);fractionalcoin:ban;

Fullconvertibility;

Exchangerateissetintheinterbankforexmarketonadailybasis;

Referencecurrency:EUR(EUR);

RON/EUR=4.2099;RON/USD=3.1779(averageexchangerate,2010).


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2

Macroeconomicdata2010

GDP:EUR121.9billion(currentprices,provisionalannualdata,unadjustedseries);

GDPannualrealgrowthrate:1.3%(currentprices,provisionalannualdata,unadjustedseries);

GDPstructurebysector:agriculture6.0%;industry26.4%;construction8.9%;trade,hotels&restaurants,transport&telecoms21.1%;services26.4%;andnettaxesonproduct11.2%;

Inflationrate(CPI,averagerate):6.09%;

Unemploymentrate(endoftheyear):6.87%;

Currentaccountbalance:EUR4,969million;

Tradebalance(goods&services,FOBFOB):EUR5,905million;

Tradebalance(goods,FOBCIF):EUR9,508million;

Export(goods,FOB):EUR37,294million;

Import(goods,CIF):EUR46,802million;

Directinvestment(netvalue):EUR2,437million;

Externaldebtbalance:EUR90,765million;

Internationalreserves:EUR35,950.7million.

2.EconomicOutlook

Afteramajorslumpineconomicgrowthin2009(7.1%),theRomanianeconomyremainsmiredbyweak

domesticdemand in 2010 (EuropeanCommission,EuropeanEconomicForecast autumn2010).The long

duration of the recessionary period ismainlydue to the unsustainabledevelopments in the economy

before the international crisis. The economic boom in the precrisis period with real GDP growth

averaging6.8%in200408 wasunderpinnedbystrongdomesticdemand.Romaniaenteredtherecessionwith abudgetdeficit of 5.4% ofGDP and a currentaccountdeficit of 12.7%.This vulnerableposition

createdadditionalstressinlocalfinancialmarketsandlimitedthescopeforanygovernmentstimulusto

propuptheeconomy.

With the onset of the crisis, Romania received mediumterm financial assistance in the form of a

multilateral loanpackage totallingEUR20billion from theEuropeanUnion, the InternationalMonetary

Fund, theWorldBank, theEuropean InvestmentBank and theEuropeanBank forReconstruction and

Development.Thisassistanceisstillongoingandloandisbursementsareconditionalonimplementingan

adjustment programmewhich aims tobringdown thebudgetdeficit, promote structural reforms and

restorestabilityinfinancialmarkets.Thekeyeconomicreformsincludeanewpensionsystem,aunified

wage lawfortheemployees inthebudgetarysectorandafiscalresponsibility lawtoensuringthe long

termsustainabilityofpublicfinances.Thankstotheprogramme,pressuresontheexchangeratehavebeen

reduced,financialstresshaseased,andtheinternationalreservespositionhasimproved.

Despitetheseimprovements,therecoverywasdelayedduetocontinuedweaknessindomesticdemand.

Economicgrowthwasof1.3%in2010,buttheeconomyisexpectedtoturnaroundin2011,withrealGDP

forecastedtoincreaseby1.5%.

Thecontraction ineconomicactivity led toan increaseof theunemployment rate from4.4% in2008 to

7.8%in2009.However,theregisteredunemploymentratecontinuedtopostadecreasein2010to6.87%by

theendoftheyear.

Thedecliningtrendininflationsincemid2008washaltedbythe5%increaseinthemainVATrateinJuly

2010.VATandhigherfoodpricespushedCPIinflationtowards7.96%byyearend,comparedto4.74%inDecember2009.TheannualaverageCPIinflationwasof5.59%and6.09%for2009and2010,respectively

ratesrelativelyhighcomparedtoregionalpeers.Inviewoftheseinflationarypressures,theNationalBank

ofRomaniamaintaineditspolicyrateat6.25%sinceJune2010.Annualinflationisprojectedtobewithin


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thecentralbankstargetedtolerancebandof3%+/1pp.inend2011andthroughout2012.Forend2011,

thebaselinescenarioof thecurrentprojectionplaces theannualCPI inflationrateat3.6%.The inflation

rateisforeseentoreenterthevariationbandaroundthe3%centraltargetinthesecondhalfof2011,after

thefirst

round

effect

of

the

VAT

rate

hike

on

the

annual

inflation

is

expected

to

have

entirely

faded.

The

inflationforecastforend2012standsat3.2%.

Thecurrentaccountdeficitimprovedfrom13.5%GDPin2007to5percentofGDP(ona12monthbasis)

by September2010, driven by strongly shrinking trade deficit. Exports are gaining momentum with

recoveryinmajortradingpartners(drivenbymanufacturingsector)whiledepresseddomesticdemandis

limitingimportgrowth.Thecurrentaccountdeficitwasestimatedataround5.5%ofGDPin2010,risingto

near6%by2012.

Themacroeconomic scenario is subject toboth positive and negative risks.A positive risk is that the

recovery in theEU economywillbe stronger than expected.Thiswould lead to a stronger increase in

externaldemandwhich canhavepositive spilloversondomesticdemand.Anegative risk is that fiscal

consolidationwillbeweakerthanplanned.Thiscouldhaveanegativeimpactonhouseholdandbusiness

confidenceandfurtherdelaytherecoveryofdomesticdemand.

3.InternationalTrade

ForeignTrade2008 2010

Exportsofgoodsrecordedahugerecoveryin2010followingthesharpdeclineduringthepreviousyear(an

annualdecreaseof13.8%versus2008).ExportscameinatEUR37,294million,up28.2%against2009,asa

resultofhigherexternalprices,largerexportvolumeandtheshiftinstructureinfavorofcapitalgoods,as

wellasthedepreciationofthedomesticcurrencyagainsttheEURandtheUSdollarinthesecondpartof

theyear.Basedonprovisionaldata,theshareofexportsinGDPwasestimatedtorisefrom25.1%in2009

to30.6%in2010.

ImportsofgoodsstoodatEUR46,802millionCIF(orEUR43,199millionFOB),up20.1%versus2009.The

shareofimportsofgoodsinGDPwaspreliminaryestimatedtoincreasefrom31.0%to35.4%yearonyear.

InternationalTrade,2008 2010

Annualchanges2008 2009 2010*

2009/2008 2010/2009

EURmillions %

Exports(FOB) 33,725 29,084 37,294 13.8 28.2Imports(CIF) 57,240 38,953 46,802 31.9 20.1

Tradebalance(FOBCIF) 23,515 9,869 9,508 58.0 3.7

%

ShareofexportsinGDP 24.1 25.1 30.6 1.0 5.5

Shareofimports*inGDP 37.8 31.0 35.4 6.8 4.4

Shareoftradebalance*inGDP 13.7 5.9 4.8 7.8 1.1

Shareoftradebalance*incurrentaccountbalance 118.3 139.9 118.8 21.6 21.1

Coverageofimports*throughexports 63.8 80.9 86.3 17.1 5.4

Economyopenness* 61.9 56.1 65.9 5.8 9.8Note: *provisionaldata

**BalanceofPaymentsdata

Source:NationalBankofRomania;NationalInstituteofStatistics;RomanianCenterforTradeandInvestmentcalculations.


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TradebalancewasofEUR 9,508millionFOBCIF (orEUR 5,905millionFOBFOB),down3.7%yearon

year.Theannualgrowthrateofexportsoutpacedthatofimportsby8.1%,whiletheshareoftradedeficit

inGDPdecreasedby1.1%to4.8%.

Thecoverageof imports throughexportsandtheopennessof theRomanianeconomy increased in2010overthepreviousyearby5.4%and9.8%,to86.3%and65.9%,respectively.

TradeStructurebyProducts

Theoutstandingexportdevelopment in2010(an increase invalueofEUR8,210millionversus2009)was

mainlycoveredbyexternaldeliveriesofmachinery,equipmentandtransportmeans(EUR3,336million,

or a share of 40.6% of total increase in export value),metal products (EUR 1,533million, or 18.7%),

chemicals,rubberandplasticproducts(EUR1,039million,or12.7%),andagrifoodstuffs,beveragesand

tobaccoproducts(EUR882million,or10.7%).

Thebreakdowndata on exports during 2008 2010 indicated an expansion in the share of exports of

machinery,andequipmentand (up3.3% to27.2%), transportmeans (up3.1% to15.4%),agrifoodstuffs,beverages and tobaccoproducts (up 2.0% to 8.4%), chemicals, rubber andplasticproducts (up0.2% to

9.5%)andpaperandwoodproducts(up0.6%to3.9%),alongwithadeclineintheshareofmetalproducts

(down2.7% to11.9%),textiles,apparel, footwearand leathergoods (down 2.7% to 11.5%), andmineral

products(down3.8%to5.5%).

ExportProductStructure,2008 2010


2009/2008 2010/2009

EURmillions %

Exportstotal

33,725

29,084

37,294

13.8

28.2

Agrifoodstuffs,beveragesandtobaccoproducts 2,165 2,242 3,124 3.6 39.3

Mineralproducts 3,142 1,784 2,060 43.2 15.4

Chemicals,rubberandplasticproducts 3,139 2,506 3,545 20.2 41.4

Paperandwoodproducts 1,112 1,084 1,458 2.5 34.6

Textiles,apparel,footwearandleathergoods 4,782 3,924 4,304 17.9 9.7

Basemetalsandproductsthereof 4,941 2,922 4,455 40.9 52.5

Machinery,equipmentandtransportmeans 12,200 12,553 15,890 2.9 26.6

Others 2,244 2,069 2,458 7.8 18.8

Note: *provisionaldata

Source:NationalInstituteofStatistics;RomanianCenterforTradeandInvestmentcalculations.

During 2008 2010, thedemand for importswasupheld in aweight of about 83%by five commodity

groups,asfollows:machinery,equipmentandtransportmeans(ashareof35.9%oftotalimportsin2010),

chemicals, rubber and plastic products (16.9%),mineral products (11.0%),metal products (10.9%), and

agrofoodproducts(8.4%).

ImportProductStructure,2008 2010


2009/2008 2010/2009

EURmillions %

Imports total 57,240 38,953 46,802 31.9 20.1

Agrifoodstuffs,beveragesandtobaccoproducts 4,347 3,823 3,915 12.0 2.4

Mineralproducts 7,850 3,883 5,169 50.5 33.1


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2009/2008 2010/2009

EURmillions %

Chemicals,rubberandplasticproducts 8,040 6,842 7,917 14.9 15.7Paperandwoodproducts 1,566 1,274 1,360 18.7 6.8

Textiles,apparel,footwearandleathergoods 4,027 3,180 3,560 21.0 11.9

Basemetalsandproductsthereof 6,501 3,794 5,116 41.6 34.9

Machinery,equipmentandtransportmeans 20,846 13,429 16,792 35.6 25.0

Others 4,063 2,728 2,973 32.8 9.0

Note: *provisionaldata

Source:NationalInstituteofStatistics;RomanianCenterforTradeandInvestmentcalculations.

In 2010 trade balance structurebymain groups of goods registered surpluses under textiles, apparel,

footwearandleathergoods(EUR745million)andpaperandwoodproducts(EUR99million),anddeficits

underchemicals,rubberandplasticproducts(EUR4,372million),mineralproducts(EUR3,109million),

machinery, equipment and transportmeans (EUR 902million), agrifoodstuffs,beverages and tobacco

products(EUR791million),andmetalproducts(EUR661million).

TradeStructurebyCountryPartners

Thegeographicalorientationof theRomanian trade in2010wasprimarily focusedonEurope (87.9%of

totalexportsand84.1%oftotal imports),followedbyAsia (14.2%and12.8%,respectively),Africa(2.7%

and0.6%,respectively),andAmerica(2.4%oftotalexportsandimports,aswell).

Within theEuropeanUnion (EU), trade ingoodsamounted toEUR26,914million forexports (intraEU

dispatches)andtoEUR33,924millionforimports(intraEUarrivals),representing72.2%oftotalexports

and72.5%oftotalimports.

Themainmarketsfor theRomaniangoods (representingacumulativeshareof67.5%of totalexports in

2010)were as follows:Germany (18.1% of total exports), Italy (13.8%), France (8.3%), Turkey (6.9%),

Hungary (4.8%), United Kingdom (3.6%), Bulgaria (3.6%), Spain (3.0%), the Netherlands (2.8%), and

Poland (2.6%). In the same time, the greatest part of the foreign supplies of goods into Romania

(representing 67.7% of total imports in 2010)was coveredby:Germany (16.7% of total imports), Italy

(11.6%),Hungary (8.7%),France (5.9%),China (5.5%),RussianFederation (4.4%),Austria (4.1%),Poland

(3.7%),Turkey(3.7%),andtheNetherlands(3.5%).

Therecoveryintheeconomiesofmajortradepartnershadapositiveimpactonexternaldemandforthe

Romaniandeliveriesofgoods: the exportsvolume saw renewedgrowthquarteronquarter, taking the

annualdynamicsbackintopositivetrendandaprospectivedevelopment

CustomsLegislation

AsanEuropeanUnion(EU)memberstate,RomaniaappliestheCommunityCustomsCode(CCC)andthe

EuropeanCommission provisions for implementation ofCCC from the accession date (i.e., 1January

2007).Also,RomaniaadoptedtheEUCommonTradePolicyandacceptedtheEuropeanCommissionasa

collective negotiatingbody for important international traderelatedmatters, particularly negotiations

withintheWorldTradeOrganization.

Themainprovisionsrelated to theRomaniancustomsmattersareas follows (Ernst&YoungRomania,

RomaniaBusinessPassport2011edition excerpts):

Communitycustomslegislation

Asof1July2009,thepersonswhoperformactivitieswhichareregulatedbythecustomslegislationmust

register for customspurposes.Also, the statuteof authorized economicoperatormaybegrantedupon


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requestundercertainconditions.The respectivestatuteconcedescertainadministrative incentives to its

holder.

Commoncustomstariff

Thespecificcustomsdutiespayableuponreleasingthegoodsintofreecirculation,areestablishedbasedon theCommunityCustomsTariff (adopted foreachyearby theCommission)and relatedpreferential

tariffmeasures.ThereisanonlineEUcustomstariffdatabase(TARIC)whichcomprisesthefollowing:

Thecombinednomenclatureofgoods;

The rates and other items of charge normally applicable to goods covered by the combined

nomenclature,asregardscustomsdutiesandimportchargeslaiddownunderthecommonagricultural

policy,orunderthespecificarrangementsapplicabletocertaingoodsresultingfromtheprocessingof

agriculturalproducts;

The preferential tariff measures contained in agreements which the European Community has

concluded with certain countries or groups of countries and which provide for the granting of

preferentialtarifftreatment;

Preferential tariffmeasures adopted unilaterallyby the EuropeanCommunity in respect of certain

countries,groupsofcountries,orterritories;

Autonomous suspensive measures providing for a reduction in, or relief from, import duties

chargeableoncertaingoods;

OthertariffmeasuresprovidedforbyotherCommunitylegislation.

Customsdutiesareexpressedasapercentageofthecustomsvalueofgoods.Othertaxes,dutiesandlevies

mayberequiredtobepaiduponimportinadditiontocustomsduties,suchasexciseduty,VAT,etc.

TheCCCand its ImplementingRegulations include rulesandprovisions in respectof the statusof the

goods,customsvaluation,amendmentofcustomsdeclarations,bindingorigin informationandbinding

tariffinformation,quotaadministrationsystem,etc.

Establishingthecustomsvalueofgoods

Where thegoods tobe imported intoRomaniaas from theAccessiondatewillbe subject toa sale, the

customsvalueshouldbebasedgenerallyonthesalepriceincreasedwithcertainothercoststhatmayhave

been incurredwith purchasing the goods (e.g., insurance, transport, commissions, royalty and license

fees).

The cost of (i) transport and insurance of the imported goods, and (ii) loading and handling charges

associatedwiththetransportoftheimportedgoodstotheplaceofenteringintothecustomsterritoryof

theCommunityshallbeaddedtothepriceactuallypaidorpayablebythe importerwhendeclaringthe

customsvalueofthegoods,totheextentthattheyareincurredbythebuyerbutarenotincludedinthe

priceactuallypaidorpayableforthegoods.

Customsprocedures

AsprovidedbytheCommunityCustomsregulations,thegoodsmaybeplacedunderoneofthecustoms

procedures,asfollows:

Releaseofgoodsforfreecirculation;

Transit;

Customswarehousing;

Inwardprocessing;

Processingundercustomscontrol;

Temporaryadmission;

Outwardprocessing;

Exportation;

Freewarehouse;

Freezone.


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ThereleaseforfreecirculationconfersnonCommunitygoodsthestatusofCommunitygoods.Thismeans

thatthecustomsdutiesandchargeshavebeenpaidand,asaresult,thegoodsmayfreelymovewithinthe

territoryoftheEuropeanCommunityfromacustomsperspective.

The specific customsprocedures suspending thepaymentof the importdutiesaregenerally subject toauthorizationfromthecustomsauthorities.

The transitprocedureallows themovementofnonCommunitygoods fromonepoint toanotherwithin

thecustomsCommunityterritory,withoutsuchgoodsbeingsubjecttoimportdutiesandotherchargesor

tocommercialpolicymeasuresforacertainperiodoftime.

Acustomswarehouseisanyplaceapprovedby,andunderthesupervisionof,thecustomsauthoritieswhere

goodsmaybestoredundercertainconditions.Thecustomswarehousingprocedureallowsthestorageina

customswarehouseofthefollowing:

NonCommunitygoods,without suchgoodsbeing subject to importdutiesorcommercialpolicy

measures;

Community goods, where Community legislation governing specific fields provides that theirplacementinacustomswarehouseattractstheapplicationofmeasuresnormallyusedforexportof

suchgoods.

TheinwardprocessingprocedureprovidesnonCommunitygoodsintendedforreexportfromtheterritory

of the Community in the form of compensating products, without application of import duties or

commercialpolicymeasures.

This specific procedure is also applicable to goods released for free circulation with repayment or

remission of import duties chargeable on such goods if they are exported from the territory of the

Communityascompensatoryproducts.

ProcessingundercustomscontrolprocedureallowsnonCommunitygoodstobeusedintheterritoryofthe

Community in operations which alter their nature or state, without application of import duties or

commercialpolicymeasures,andshallallow theproductsresulting fromsuchoperations tobereleased

forfreecirculationattherateofimportdutyappropriatetothem.

ThetemporaryadmissionprocedureallowstheuseinthecustomsterritoryoftheCommunity,withtotalor

partialrelieffromimportdutiesandwithoutthembeingsubjecttocommercialpolicymeasures,ofnon

Community goods intended for reexport without having undergone any change except normal

depreciationduetotheiruse.

TheoutwardprocessingallowsCommunitygoodstobeexportedtemporarilyfromthecustomsterritoryof

the Community in order to undergo processing operations and the products resulting from those

operationstobereleasedforfreecirculation,withtotalorpartialrelieffromimportduties.

The export allowsCommunity goods to leave the customs territory and entails the application of exit

formalities,includingcommercialpolicymeasures.

FreezonesandfreewarehousesarepartsofthecustomsterritoryoftheCommunityorpremisessituatedin

that territoryand separated from the restof it inwhichnon Communitygoodsareconsidered, for the

purposeof importdutiesandcommercialpolicy importmeasures,asnotbeingonCommunitycustoms

territory,providedtheyarenotreleasedforfreecirculationorplacedunderanothercustomsprocedureor

usedorconsumedunderconditionsotherthanthoseprovidedforincustomsregulations.


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Value ShareoftotalFDI

2008 2009 2008 2009

EURmillions %

Administrativeandsupportserviceactivities 1,617 2,299 3.3 4.6

Agriculture,forestryandfishing 707 552 1.4 1.1

Trade 6,060 6,164 12.4 12.3

Constructionandrealestate 6,155 6,453 12.6 12.9

Hotelsandrestaurants 181 213 0.4 0.4

ITandcommunications 3,283 3,235 6.7 6.5

Financialintermediationandinsurance 10,026 9,510 20.5 19.0

Transports 500 684 1.0 1.4

Otheractivities 131 194 0.4 0.4

Source:NationalBankofRomania

Fromaterritorialspreadpointofview,FDIwent

mainly toBucharest Ilfov region (63.4%),other

development regionsbenefiting from significant

FDI inflows being Center region (7.4%), South

region(7.2%),Westregion(6.2%)andSouthEast

region(5.9%).

NorthEast region was the least attractive to

foreign investors,makingup forashareof1.9%offoreigndirectinvestment.

The analysis of regional FDI dispersion should

also take into consideration that statistical

researchlocatedFDIbyregisteredoffice,whichis

notalwaysthesameasthebusinessplace.

ForeignDirectInvestments,2008 2009

Stockdistributionbydevelopmentregions


2008

2009

2008

2009

EURmillions %

TotalFDIstock(asofendyear) 48,798 49,984 100.0 100.0

Bucharest 30,594 31,699 62.7 63.4

Center 4,146 3,703 8.5 7.4

South 3,411 3,576 7.0 7.2

West 2,626 3,095 5.4 6.2

SouthEast 3,551 2,938 7.3 5.9

SouthWest 1,226 2,058 2.5 4.1

NorthWest 2,108 1,940 4.3 3.9

NorthEast 1,136 975 2.3 1.9



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10

TopfivecountriesbytheshareoftotalFDIstockasatDecember31st,2009were:theNetherlands(21.8%of

totalstockat theendof2009,up from17.2% in2008),Austria (18.1%,down from18.8%ayearearlier),

Germany(13.4%,downfrom15.4%),France(8.5%,thesameasin2008),andGreece(6.6%,sameshareasa

yearago).

TheanalysisoftheFDIstockdistributionbycountryoforigintookintoaccountthecountryoforiginof

the direct holder of at least 10% in the resident direct investment enterprises share capital on an

immediatecountrybasis.

ForeignDirectInvestments,2008 2009

Stockdistributionbytop15countriesoforiginin2009


2008 2009 2008 2009

EURmillions %

TotalFDI

stock(asofendyear) 48,798 49,984

100.0

100.0

TheNetherlands 8,402 10,907 17.2 21.8

Austria 9,186 9,037 18.8 18.1

Germany 7,509 6,718 15.4 13.4

France 4,294 4,259 8.8 8.5

Greece 3,154 3,281 6.5 6.6

Italy 3,585 2,528 7.3 5.1

Cyprus 1,896 2,344 3.9 4.7

Switzerland 2,298 2,115 4.7 4.2

Belgium 233 1,115 0.5 2.2

USA 869 1,054 1.8 2.1

Spain 604 841 1.2 1.7

Hungary 878 810 1.8 1.6

Luxembourg 1,107 638 2.3 1.3

CzechRepublic 354 580 0.7 1.2

Turkey 578 569 1.2 1.1


The flowofequitycapital intoFDIenterprises isdivided intogreenfield,mergersandacquisitions,and

corporate development.During 2009, corporate development accounted for 98.3% of FDI equity (EUR

3,065million),mergersandacquisitions(M&A)madeup1.1%ofequity(EUR34million),whileonly0.6%

ofFDI,i.e.EUR19million,wentintogreenfieldinvestment.

The accumulation of foreign direct investment in enterprises established as greenfield investment

companies,calledgreenfieldenterprises,washighlightedinordertoassessthelastingimpactofgreenfield

investmentontheeconomy.


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11

ForeignDirectInvestmentsinGreenfieldEnterprises,2009

Stockdistributionbymaineconomicactivities

TotalFDIofwhich:FDIin

greenfieldenterprises

ValueShareof

totalFDIValue

Shareof

totalFDI

EUR

millions%

EUR

millions%

TotalFDIstock(asofendyear) 49,984 100.0 25,375 50.8

Industry,ofwhich: 20,680 41.4 6,565 13.1

Mining 2,221 4.5 224 0.4

Manufacturing,ofwhich: 15,555 31.1 6,067 12.1

Food,beveragesandtobacco 2,058 4.1 922 1.8

Cement,glasswareandceramics 1,629 3.3 355 0.7

Woodenproductsandfurniture 962 1.9 777 1.6

Computertechnology,electronicsandopticaldevices 690 1.4 371 0.7

Machineryandequipment 943 1.9 398 0.8

Basemetalsandproductsthereof 2,577 5.2 431 0.9

Transportmeansandequipment 2,373 4.7 1,036 2.1

Oilprocessing,chemicals,rubberandplasticproducts 3,132 6.3 916 1.8

Textiles,apparel,footwearandleathergoods 717 1.4 589 1.2

Othermanufacturing 474 0.9 272 0.5

Electricity,naturalgas,water 2,904 5.8 274 0.6

Administrativeandsupportserviceactivities 2,299 4.6 1,643 3.3

Agriculture,forestryandfishing 552 1.1 454 0.9

Trade 6,164 12.3 5,339 10.7

Constructionandrealestate 6,453 12.9 5,137 10.3

Hotelsandrestaurants 213 0.4 105 0.2

ITandcommunications 3,235 6.5 2,095 4.2

Financialintermediationandinsurance 9,510 19.0 3,342 6.7

Transports 684 1.4 522 1.0

Otheractivities 194 0.4 173 0.4


The overall activity of foreigndirect investment enterpriseshad a positive impact onRomanias trade

balance,contributing69.8%tototalexportsand60.1%tototalimports.


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12

InternationalTradeofForeignDirectInvestmentEnterprises,2009

Exports(FOB) Imports(CIF)

ValueShareof

totalsectorValue

Shareof

totalsector

EUR

millions%

EUR

millions%

TotalFDIenterprises(asofendyear) 19,643 69.8 22,525 60.1

Industry,ofwhich: 17,264 79.3 15,155 76.5

Manufacturing 16,440 79.7 14,423 78.8

Trade 1,827 51.7 6,214 45.4

Othereconomicsectors 552 19.3 1,156 29.0


The export/import activities of FDI enterprises refer to companies investigated exhaustively (over 20

employees).Export/importdataeconomywide,takenintoconsiderationindeterminingtherelativesize,

arereportedbyenterpriseshavingexceededthereportingthresholdsfor2009setforIntrastatdeclarations.

Exportsandimportswereaggregatedbycompaniescorebusinessaccordingtothestatisticalclassification

ofeconomicactivitiesNACERev.2,excludingexportsand importsofdivisionsunderheadingsPublic

administrationandHouseholdactivities.

In2010,netdirectinvestmenttotalledEUR2,437million,down31.4%,against2009.Nonresidentsdirect

investmentinRomaniaworthEUR2,695million(ascomparedwithEUR3,488millionover2009)covered

54.2%ofthecurrentaccountdeficitin2010.

MajorStateAidSchemesforInvestments

RomanianGovernment adopted a largenumber of state aid schemes stimulating economic growthby

meansofinvestmentfacilitiesgranting.Thegeneralframeworkinthefieldofstateaidwasestablishedby

meansofGovernmentEmergencyOrdinanceNo.85/2008regulatingtheprinciplesofinvestmentstimulation,

investment fields, types of incentives and subsidies available, general eligibility conditions for both

investorandinvestmentproject,etc.

State aid can be granted to large, small and mediumsized companies (including microenterprises),

dependingonthetypeofinvestment,thefieldinwhichtheinvestmentisimplementedandtheprovisions

ofthestateaidschemeappliedfor.

Majorstateaidschemessupportinginvestments(RomanianCenterforTradeandInvestment,Department

forForeignInvestmentsandInternationalRelations,www.arisinvest.ro)areasfollows:

Stateaidschemeensuringsustainableeconomicdevelopment(GovernmentDecisionno.1680/2008,

subsequentlyamended)

Thestateaidschemeappliestothefollowing4investmentcategories:

initialinvestmentsbetweenEUR5and10millionandcreating50jobsminimum;

initialinvestmentsexceedingEUR10millionandcreating100newjobsminimum;



Maximumaidceiling/economicoperator:

EUR 22.5 million (RON equivalent), for investments carried out and new jobs created in the

developmentregionBucharestIlfov;


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13

EUR28.125million(RONequivalent),forinvestmentscarriedoutandnewjobscreatedasaresultof

initialinvestmentinanyoftheotherdevelopmentregionsinRomania(exceptregionBucharestIlfov).

Beneficiarysfinancialcontribution: at least50%oftheeligibleexpenses;theformofthiscontributionmust

notfallunderanyotherstateaid.Maximumtotalbudget/scheme:EUR1billion(RONequivalent)/5years(2009 2013).

Annualaveragebudget:EUR200million,notexceedingannualbudgetceilingsapprovedfortheperiodof5

years(Art12(2)GovernmentDecisionno.1680/2008,subsequentlyamended).

Durationofthescheme:2009 2013.

Provider:MinistryofPublicFinanceofRomania.

Total number of companies estimated tobe granted state aidunder the scheme: 150; average number of

beneficiaries/year:30.

State aid scheme supporting regional development by means of investment stimulation

(GovernmentDecisionno.753/2008)Beneficiaries:largeenterprisesmeetingthefollowingthreeconditions:

initialinvestmentexceedingEUR100million(RONequivalent);

investmenteligiblecostsofoverEUR50million(RONequivalent);

minimum500newlycreatedjobsasaresultoftheinitialinvestment.

Aidintensity:calculatedbyadjustingtheregionalceilingtothelevelofeligibleexpenses,accordingtothe

followingformula

A=Rx(50+0.50B+0.34C),where:

Aisthemaximumstateaidamount;

R is theunadjustedregionalceiling, that is50% foralldevelopmentregions inRomania,except

regionBucharestIlfov,whereitreaches40%;B is the eligible expenses amountingbetweenEUR 50million (RON equivalent) andEUR 100

million(RONequivalent);

CistheeligibleexpensesexceedingEUR100million(RONequivalent).

Beneficiarysfinancialcontributiontotheinvestmentmustcoveratleast25%fromtheeligiblecosts;theform

ofthiscontributionmustnotfallunderanyotherstateaid.

Maximumtotalbudget/scheme:EUR575million(RONequivalent).

Annualaveragebudget:EUR115million,notexceedingannualbudgetceilingsapprovedforthe5years(Art

11(2),GovernmentDecisionno.753/2008).

Durationofthescheme:2008 2012,withthepossibilityofextendingthisperioduntil2013.

Provider:MinistryofPublicFinanceofRomania.

Regional state aid scheme for renewable energy resources harnessing (GovernmentDecision no.

750/2008,subsequentlyamended)

Investment supported: initial investments harnessing renewable energy resources for the production of

electric and thermal energy renewable energy sources: sun,wind,waves,microhydro (systemswith

installedpower


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14

Beneficiarysfinancial contribution: at least 30% of the investment eligible expenditure; this contribution

mustnotcomeunderanyformimplyingpublicaid.

Totalbudget/scheme: EUR200,000,000(RONequivalent);budget2011:EUR41.4million(Art17(1)Table2,

GovernmentDecisionno.750/2008,subsequentlyamended).TheschemedoesnotapplytoprojectswithatotalexpenditureexceedingEUR50million.

Durationofthescheme:2008 December31st,2013.

Provider:Ministry of Economy, Trade and Business Environment of Romania, through theManaging

AuthorityoftheSectoralOperationalProgrammeIncreaseofEconomicCompetitiveness.

Horizontal state aid scheme for regional sustainable development and reduction of emissions

(GovernmentDecisionno.718/2008,subsequentlyamended)

Investmentsupported:initialinvestmentsimplementedinallindustrialsectorsandtheenergeticsector(with

theexceptionsprovidedbythelaw),concerningactivitiesofelectricandthermalenergyproductionand

consumption.

Beneficiaries: large enterprises, SMEs (microenterprises included). Aid under present scheme is not

awardedforlargeinvestmentprojects(totalexpenditureexceedingEUR50million).

Maximumaidintensity:

40%ofthetotaleligibleexpenditure,fordevelopmentregionBucharestIlfov;

50%of the total eligibleexpenditure, foranyof theotherdevelopment regions inRomania (except

regionBucharestIlfov);

intensities increase by 20% in case of smallsized and microenterprises, and by 10% in case of

mediumsizedenterprises.


mustnotcomeunderanyformimplyingstateaid.

Total budget/scheme: EUR 318,800,000 (RON equivalent); budget 2011: EUR 65.9 million (Art 17(1),

GovernmentDecisionno.718/2008,subsequentlyamended).



AuthorityofSectoralOperationalProgrammeIncreaseofEconomicCompetitiveness.

RegionalstateaidschemeFinancing initial investment inresearchdevelopmentand innovation

(Orderno.1293/2008issuedbytheMinisterofEconomyandFinance,subsequentlyamended)

Theschemecorrespondstothefollowingoperations intheSectoralOperationalProgrammeIncreaseof

EconomicCompetitiveness, priorityAxis 2:Research,TechnologicalDevelopment and Innovation for

Competitiveness:2.3.2DevelopmentofbusinessR&D infrastructureandcreationofnewR&Djobs;2.3.3Promotinginnovationinenterprises.

Beneficiaries:

enterpriseswithR&DactivitiesmentionedintheirStatute,implementinginitialinvestmentsaccording

tooperation2.3.2DevelopmentofbusinessR&DinfrastructureandcreationofnewR&Djobs;

productiveenterprisesnothavingR&Dasmainactivity,implementinginitialinvestmentsaccording

tooperation2.3.3Promotinginnovationinenterprises.

Formoffinancialsupportawarded:grants.

Maximumaidintensity(%oftheeligibleexpensesoftheinitialinvestmentintangibleandintangibleassets):

40%forthedevelopmentregionBucharestIlfov;

50%foranyoftheotherdevelopmentregionsinRomania(exceptregionBucharestIlfov);

intensitiescanbeincreasedby20%incaseofsmallsizedenterprisesandby10%incaseofmedium

sizedenterprises(exceptforaidawardedinthetransportsector).


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15


mustnotcomeunderanyformimplyingpublicfunds.

Maximum allocated budget/scheme: EUR 180,000,000 (RON equivalent) the budget for operation 2.3.2

DevelopmentofbusinessR&DinfrastructureandcreationofnewR&Djobshasexpired.Budget2011:EUR30,000,000(Art15,Orderno.1293/2008issuedbytheMinisterofEconomyandFinance,

subsequentlyamended).



Authority of Sectoral Operational Programme Increase of Economic Competitiveness; intermediary

organismNationalAuthorityforScientificResearch(ANCS).

StateaidschemeFinancingRDIprojectsbymeansofSectoralOperationalProgrammeIncreaseof

EconomicCompetitiveness (Order no. 3388/2008 issuedby theMinister ofEconomy and Finance,

subsequentlyamended)

Theschemecorrespondstothefollowingoperations intheSectoralOperationalProgrammeIncreaseof

EconomicCompetitiveness, priorityAxis 2:Research,TechnologicalDevelopment and Innovation for

Competitiveness: 2.1.1 R&D projects in partnership between universities/ research institutes and

enterprises;2.1.2R&Dprojects(highscientificlevel)withforeignparticipation,2.3.3Promotinginnovation

inenterprises.

Beneficiaries: large enterprises andSMEs,havingornotR&D asmain activity.Specific category:young

innovativeenterprises(smallenterprises,lessthan6yearsoldatthemomentofaidbeingawarded,with

registeredR&Dexpensesamountingat least15%ofthetotaloperationcostsduringatleastoneofthe3

yearsprecedingaidgranting Orderno.3388/2008,art.8litl).

Formoffinancialsupportawarded:grants.

Aidintensity(%oftheeligibleexpenses):

industrialresearch:50%;

experimentaldevelopment:25%;

theseintensitiesincreaseby10%incaseofmediumsizedenterprisesandby20%incaseofsmallsized

enterprises(microenterprisesincluded);

activitieswithinprojectsdevelopedbyyounginnovativeenterprises:100%fortheperiodoftimethe

beneficiarymeetstheconditionsofyounginnovativeenterprise,butnotmorethanEUR1million.

Maximumaidquotas(briefpresentation):

Eligibleactivities/Typeoftheenterprise large medium small

Industrialresearch

50%

60%

70%

Experimentaldevelopment 25% 35% 45%

Feasibilitystudiespreparatorytoexperimentaldevelopment 40% 50% 50%

Obtainingandvalidationofindustrialpropertyrights

(forindustrialresearch) 60% 70%

Obtainingandvalidationofindustrialpropertyrights

(forexperimentaldevelopment) 35% 45%

Innovationsupportandconsultingservices max.EUR0.2million

per3years(1)

Leaseofhighlyqualifiedpersonnel 50%(2)

Activitiesforenterprises 100%(3)

Notes:(1)IftheserviceproviderdoesnothaveanationalorEuropeancertification,theaidcoversamaximumof75%

oftheeligibleexpensesmaximum.

(2)Foraperiodofmaximum3years/beneficiary/temporarilyhiredemployee.

(3)ButnomorethanEUR1million.


19/41


16

Typesofeligibleprojects:

Operation

SOPIEC(1)Projecttype Eligibleactivities

Maximumaid

perproject

EUR

Beneficiaries

2.1.1. Projectsdevelopedby

researchinstitutions on

behalfofanenterprise

Industrialresearch

Experimentaldevelopment

Obtainingandvalidatingthe

industrialpropertyrights

1,000,000Enterprisesnot

havingR&Das

mainactivity

2.1.2 R&Dprojects(high

scientificlevel)

Industrialresearch




2,000,000Enterpriseswith

R&Dactivities(2)

Innovativetechnology

projects




Technicalfeasibilitystudiespreceding

experimentaldevelopment

Contractinginnovationsupportand

consultingservices

3yearleaseofhighlyqualified

personalfromresearchorganizations

orlargeenterprises,forRDIactivities

5,000,000Enterprisesnot

havingR&Das

mainactivity

2.3.3.

Projectsforyoung

innovativeenterprises

Allactivitiesconcerningproducts/

servicesbeinginprocessof

production,manufacturingand

marketing.

1,000,000Younginnovative

enterprisesnot

havingR&Das

mainactivity

Notes:(1)SectoralOperationalProgrammeIncreaseofEconomicCompetitiveness.

(2)Thebudgetforoperation2.1.2R&Dprojects(highscientificlevel)withforeignparticipationhasexpired.

Regionalstateaidschemesupportinginvestmentinindustrialparks(Orderno.296/2007 issuedby

theMinisterofInteriorandAdministrativeReform)

Aidunderpresentschemeisnotawardedforlargeinvestmentprojects.

Aidintensityshallnotexceedtheregionalaidceilingof:

40%forthedevelopmentregionBucharestIlfov;

50%foranyoftheotherdevelopmentregionsinRomania(exceptregionBucharestIlfov);

intensities

can

be

increased

by

20%

in

case

of

small

sized

and

micro

enterprises,

and

by

10%

in

case

of

mediumsizedenterprises(exceptforaidawardedinthetransportsector).


mustnotcomeunderanyformimplyingstateaid.

Formoffinancialsupportawarded:fiscalincentives:

(a)buildingtaxexemption;

(b)landtaxexemption;

(c)exemptionfromthetaxespaymentonchangingthelanddestinationbelongingtoindustrialparks;

(d) exemption from the taxespayment on the landwithdrawal from agriculturalusebelonging to the

industrialpark.

Exemptions (a) andb) are grantedby the territorial administrative unitwhere the industrial park is

located,inthelimitofintensityceilingsinthescheme,forthoseinvestmentprojectsthatbeneficiariesare

interestedtoimplementaccordingtolegalconditionsinthescheme.

Maximumallocatedbudget/scheme: RON268,681,461.


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17

Budget2011(Art.20(1),Orderno.296/2007issuedbytheMinisterofInteriorandAdministrativeReform):

landtaxexemption:RON653,520.8;

buildingtaxexemption:RON47,872,000;

exemptionfromthepaymentoftaxesonmodifyingthedestinationofthelandbelongingtoindustrialparks / on thewithdrawal of the landbelonging the industrial park from agricultural use: RON

1,150,000.


IndustrialParksandFreeZones

IndustrialParks

TheGovernmentOrdinanceNo.65/2001concerning theestablishmentandworkof the industrialparks

andLawNo.490ofJuly11th,2002regulatestheestablishingandworkingregimeforindustrialparks.The

Ministry of Administration and Interior is the public authority entitled to establish the title of an

industrialparkforaperiodofnotlessthan15years,basedonrequestofinterestedparties.

According to legislation in force, industrial parks are welldefined areas where economic, scientific

research, industrialproduction activities and services, aswell as activities assessing scientific research

and/ortechnologicaldevelopmentarecarriedout,withinaregimeofspecificfacilities,byusinghuman

andmaterial potential available in the area. Industrial parks regime allows commercial companies to

develop their activitywithin relevant areas, to have access to infrastructure required for performing

economicactivities.

Establishmentofanindustrialparkisbasedontheassociationinparticipation,betweencentralandlocal

publicadministrationauthorities, economicagents, research institutesand/orother interestedpartners.

Purposesofsettingupindustrialparksaretostimulateeconomicandsocialdevelopment,toperformthe

transferoftechnology,toinduceinvestmentinflowsandturntobestaccountthehumanresourcesinthe

area.

Industrialparklicensemaybegrantedonlytocompaniesactingsolelyintheindustrialparksfield,called

themanagingcompanies.

Industrialparksetupandoperation

Theinitiativetosetupanindustrialparkmaycomefromlocalpublicauthorities,chambersofcommerce

and industry,employersassociations,professionalorganizations,aswellasjointstockcompanieswith

theirregisteredofficeinRomaniaandwhosesoleobjectistheadministrationofindustrialparks.

The landcoveredby industrialparkalongwith thebuildingsand infrastructure related to theexisting

utilitiesatthemomentofestablishmenthastocomplycumulativelywithallthefollowingconditions:

ToensureaccesstonationalorEuropeanroads;

Tohaveanareaofatleast10ha;

Tobeownedorusedforatleast30yearsbytheassociationrequestingtheindustrialparklicense;

Tolackanyencumbrance;

Nottomaketheobjectofanypendinglitigationinrespectofitslegalstatus;

Tofulfillallthetechnicalrequirementsinrespectoftheenvironmentalprotection;

Ifmore thanone incentive regime isapplicable toan investment, the companyperforming ithas to

explicitlychooseoneofthem.


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18

ThetitleofindustrialparkisgrantedthroughanorderoftheMinisterofAdministrationandInterior.In

order to obtain an industrialpark title, the association submits to theMinistryofAdministration and

Interioranapplicationaccompaniedbythefollowingdocuments:

proofoffulfillingtheconditionsstipulatedaboveconcerningthelanddesignatedtotheindustrialpark,includingbuildingsandinfrastructureofexistingutilities;

feasibilitystudyforindustrialparkbuildingup,includingdescriptionofinfrastructurewithinthepark

andofsystemsconnectedtoutilitiesexteriortothepark,required;

agreementof the localgovernmentonbuildingup the infrastructureafferent to industrialparkand

relatedutilities;

listwitheconomicagentsinitiallyproposedandeconomicactivitiesscheduledtobedevelopedwithin

theindustrialpark,incompliancewithprovisionsofart.1par.(2).

IncentivesforInvestmentinIndustrialParks

Companies operating in the industrial parksbenefit from the following incentives stipulatedby the

GovernmentOrdinanceNo.65/2001asfurtheramendedbytheLawNo.490/2002andreinforcedbytheFiscalCode:

exemption from the payment of the fees levied for themodification of the destination or for the

withdrawalof the land from theagriculturalcircuitrelated to the industrialpark, for theassociation

owningthetitleofindustrialpark;

deductionfromthetaxableprofitof20%fromthevalueoftheinvestmentsmadeintheindustrialpark,

after thedateof thecoming into forceof theLawNo.490/2002, for theassociation thatmakes such

investmentsinconstructionsorrehabilitationsofconstructionsandintheinternalinfrastructureorof

connection to thepublicnetwork regarding theutilities, taking into account the legalprovisions in

forceon the classification and the standardizeddurationof the fixturesoperation.Thededuction is

calculated in themonth inwhich the operation of the investment is performed, according to the

provisions of LawNo. 15/1994 on the depreciation of fixed capital in tangible or intangible assets,republishedwith furtheramendments,only from the fiscalpointofview, through itssubscriptionat

thedeductibleamountsstipulatedinthetaxreturn.Ifafiscallossismade,itshallberecoveredfrom

thetaxableprofitsobtainedinthefollowing5years;

postponementoftheperiodofthesettinguptherespectiveinvestment,untiltheindustrialparkisput

intooperation,accordingtotheregulationsinforce,respectivelyuntilthe25thofthemonthfollowing

thedateoftheputtingintooperationsoftheindustrialpark,ofthepaymentofthevalueaddedtaxfor

thematerialsandequipmentnecessaryforinstallingthesystemofutilitiesfrominsidethepark,aswell

asoftheconnectionsoftheparkatthemainlinesorattheexistingnetworksofpublicutilities,attheir

suppliers,andthepostponementoftherighttodeducttherespectivevalueaddedtaxuntilthesame

datethattheeconomicentitiesmaketheinvestment;

taxreductiongrantedbythelocalgovernmentbasedonthedecisionofthelocalordistrictcouncilsin

the administrative territorialjurisdiction inwhich the industrial park is located, for real estate and

landstransmittedfortheuseoftheindustrialpark;

otherfacilitiesthatmaybegranted,accordingtothelaw,bythelocalgovernment.

Ifaninvestmentdoesnotfulfilltheconditionsinordertobenefitfromthesamefacilitiesgrantedbymany

laws,theeconomicentitywillhavetochooseexplicitlyonlyoneregimeoffacilitiesstipulatedinonelaw.

Thetitleofindustrialparkshallnotbegrantedtothosecommercialcompaniesfallingunderoneofthe

followingcategories:

companiesthataresubjecttovoluntaryorcompulsoryliquidationorbankruptcyprocedures;

companies that did not fulfill their obligations, assumed previously, in the operation of another

industrialpark;

companiesthatarebehindwiththeirtaxesandothersumsduetothebudget,thelocalbudgetsandthe

specialfundsbudgets.


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Theholderofthetitleofindustrialparkhasthefollowingobligations:

todevelopandoperatetheindustrialparkinkeepingwiththefeasibilitystudyandthebusinessplan

presentedintheofferdocuments;

toproduce,byMarch31st

ofthefollowingyear,anannualreportontheactivityoftheindustrialpark; wherever its funding is granted, from budgetary and extrabudgetary funds, earmarked for the

developmentof industrialparks toproducea financial reportevery threemonths,by the25thof the

followingmonth,aswellasanannualauditreport,byMarch31stofthefollowingyear,regardingthe

waythefundshavebeenused.

Theholderofthetitleofindustrialparkhastherighttorepresenttheeconomicactorsoperatingwithin

the industrial park in obtaining the authorizations required for thedevelopment of specific activities.

Notwithstandingthelegalprovisionsinforce,theassets,eitherpublicorprivatepropertyofthestateor

of territorial and administrative divisions included within an industrial park, shall be subject to a

concessionorsubconcessioncontract,respectively,or leaseorsubleasecontract,respectively,bydirect

entrusting.Incaseofasubconcessionorsubleasecontract,notwithstandingthelegalprovisionsinforce,

noagreementoftheownerisrequired.

Industrial parks are operated by commercial contracts concluded between titleholders and the

beneficiariesofthespecificactivitiestobedevelopedtherein,Romanianorforeignlegalpersons,selected,

asthecasemaybe,bypublictenders.Theholderofthetitleofindustrialparkcanalsobethecontractorof

theconstructionanderectionworks,commissioning,repairandmaintenanceoftherelevantobjectivescan

supplyservicesandpublicutilities,aswellastheservicesrelatedtoparkoperation.

TechnologicalParks

Based on Government Ordinance No. 14/2002, as amended by Law No. 50/2003, scientific and

technological parks are seen as strictly delimited areas where education and research activities are

performed,aswellasthetechnologicalimplementationoftheresultsforthepurposeoftheirutilizationineconomy.Ascientificandtechnologicalparkmaybesetupbasedonapartnershipagreementbetweenan

accredited university and/or another research and development unit and a consortium of companies,

associationsorindividuals,Romanianorforeign.Uponsetup,ascientificandtechnologicalparkneedsto

beauthorizedbyTheMinistryofEducationandResearch,whoisfurtherentitledtomonitortheactivities

ofthescientificandtechnologicalpark.TheparkisadministeredbyaRomaniancompany,designatedby

theconsortium,calledtheadministratorcompany.

ComplianceConditions

Land related to scientific and technological park has to comply cumulatively with the following

conditions:

Tolackanyencumbrance;

Nottomaketheobjectofanypendinglitigationinrespectofitslegalstatus.

Facilitiesofscientificandtechnologicalparkhavetocomplycumulativelywiththefollowingconditions:

TohavelocationconditionsincompliancewithAuthorizationandSuspensionMethodology

Tohavetheadequatefacilitiesinordertoperformitsobjectofactivity.

IncentivesforInvestmentinTechnologicalParks

For their establishment and operation, scientific and technological parks benefit from the following

incentives:

Taxreductiongrantedbythelocalauthoritiesforthefixedassetsandlandgiventotheparkforitsuse,

aswellasotherincentives,whichmaybegrantedaccordingtothelaw,bythepubliclocalauthority;

Exemption frompayment of taxes formodifying the landdestination or landwithdrawal from the

agriculturaluseforthelandusedinthescientificandtechnologicalparks;


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20

DeferredpaymentofVAT formaterials,equipmentandconnecting to thepublicutilitiesduring the

investmentperioduntiltheopeningofthepark;

Developmentprogramsforinfrastructure,investmentandprovidingequipmentgrantedbythecentral

andlocalpublicadministration,privatecompaniesandforeignfinancialassistance; Donations,concessionsandstructuralfundsfordevelopment.

Companiesoperatingwithinscientificandtechnologicalparksbenefitfromthefollowingincentives:

Favorablelocationconditionsandinfrastructureandcommunicationuse,bypaymentoninstallment

basis,ensuredorfacilitatedbytheadministratorforadeterminedfunctioningperiod

Tariffreductionorfreeofchargeservicesofferedbytheadministrator.

FreeZones

FreeZones (FZs)arespecialareaswithin thecustoms territoryof theCommunity.Goodsplacedwithin

theseareasare freeof importduties,VATandother importcharges.FZ treatmentapplies tobothnonCommunityandCommunitygoods.NonCommunitygoodsstoredinthezoneareconsideredasnotyet

importedtotheCustomsterritoryoftheCommunitywhereascertainCommunitygoodsstoredinthefree

zonescanbeconsideredasalreadyexported.

Onimportation,freezonesaremainlyforstorageofnonCommunitygoodsuntiltheyarereleasedforfree

circulation.Noimportdeclarationhastobelodgedaslongasthegoodsarestoredinthefreezone.Import

andexportdeclarationshaveonlytobelodgedwhenthegoodsleavethefreezone.Inaddition,theremay

bespecialrelievesavailable infreezonesfromothertaxes,excisesor localduties.Thesewilldifferfrom

onezonetoanother.

Thefreezonesaremainlyaservicefortraderstofacilitatetradingproceduresbyallowingfewercustoms

formalities.TheMemberStatesdefinetheentryandexitpointsofeachfreezoneorfreewarehouse.Theconstructionof anybuilding in a free zone requires theprior approvalof the customs authorities.The

perimeterandtheentryandexitpointsoffreezones,exceptthefreezonesdesignatedinaccordancewith

Article 168a (Commission Regulation 2454/1993/EEC concerning the application of the Community

CustomsCode),andoffreewarehousesaresubjecttosupervisionbythecustomsauthorities.

Personsandmeansof transportenteringor leavinga freezoneor freewarehousecanbesubjected toa

customscheck.Accesstoafreezoneorfreewarehousecanbedeniedtopersonswhodonotprovideevery

guaranteenecessaryforcompliancewiththerulesprovidedforinthisCode.

Thecustomsauthoritiesmaycheckgoodsentering,leavingorremaininginafreezoneorfreewarehouse.

Toenablesuchcheckstobecarriedout,acopyofthetransportdocument,whichshallaccompanygoods

enteringorleaving,needstobehandledto,orkeptatthedisposalofthecustomsauthoritybyanyperson

designatedforthispurposebysuchauthorities.Wheresuchchecksarerequired,thegoodswillbemade

availabletothecustomsauthorities.

There isno limit to the lengthof timegoodsmay remain in freezonesor freewarehouses.For certain

goods referred to inArticle 166 (b) of Regulation 2454/1993/EECwhich are coveredby the common

agriculturalpolicy,specifictimelimitsmaybeimposedinaccordancewiththecommitteeprocedure.Any

industrial,commercialorserviceactivity,undertheconditionslaiddowninCommunityCustomsCode,is

authorizedinafreezoneorfreewarehouse.Thecarryingonofsuchactivitieswillbenotifiedthoughin

advancetothecustomsauthorities.

Thecustomsauthoritiescanimposecertainprohibitionsorrestrictionsontheseactivities,havingregardto

thenatureofthegoodsconcernedortherequirementsofcustomssupervision.

Withoutprejudicetospecialprovisionsadoptedundercustomslegislationgoverningspecificfields,goods

leavinga freezoneor freewarehousecanbe:exportedorreexported from thecustoms territoryof the

Community,orbroughtintoanotherpartofthecustomsterritoryoftheCommunity.


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21

Therearetwotypesoffreezones.ControltypeIfreezoneshaveaperimeterfencesothatgoodsplacedthere,

whichissupervisedbycustoms,areautomaticallyunderthisregime.TherulesforcontroltypeIIfreezones

areessentiallythesameasthosegoverningcustomswarehouses.Thismeansthat,unlikewithtraditional

stylefree

zones,

the

goods

are

subjected

to

a

declaration

in

order

to

be

able

to

benefit

from

the

arrangement.

RomaniahassixFZsofcontrolItype,namely:Sulina,Constana,Galai,Brila,GiurgiuandCurticiArad.

Thereareno transitionalrulesgoverning the free tradezonesandwarehouses inRomania.Thismeans

thatCustomsCodeandtheRulesofApplicationoftheCustomsCodearemandatoryforthenewmember

states (RomaniaandBulgaria)startingJanuary1st,2007.Anyother legalauthorizationorprovision that

doesntcomplywith theCommunityregulationswillnotbevalidfrom thisdayon.On theotherhand,

freezonesandfreewarehousesestablishedaccordingtotheCommunitylegislationinforcewillcontinue

tofunctionastheyarenow.

For theRomanianFZs therehasbeen establisheda fiveyearsperiodof transition,untilDecember31st,

2011,regardingtheexemptionfromroyaltypaymenttofreezonesadministrationforoperatorswithinthe

freezoneswhichhadalreadyclosedtradecontractswiththisadministrationbeforeJuly1st,2002.

Asfarasfreezonesareconcerned,RomaniancustomslegislationtookovertheCommunityprovisionstoa

greatextent.Also,provisionsreferringtofreezonesareincludedintheLawNo.84/1992regardingthefree

zonesregime.LawNo.84/1992hasbeencompletelyharmonizedwiththeCommunitycustomslegislation

CustomscontrolandisapplicableonlyatthebordersofFZs,whichhavetobestrictlydelimited.Goods

andothermerchandiseareadmittedintoFZswithoutcountryoforiginbasedrestrictions,providedthat

importofsuchgoods isnotprohibited.Explosives,drugs,arms,ammunitions,psychotropicsubstances,

radioactiveandtoxicsubstances,aswellasanyothersubstanceormaterialprohibitedbyRomanianand

Communitylawsareforbiddentoenterthefreetradezones.

The activitieswhichmaybe carried outwithin FZs are:handling, storing, sorting,measures,packing,

conditioning, processing, assembling, manufacturing, testing, auctioning, buying, selling, renting and

concessionoflandandbuildings(concessionmaybedoneforaperiodupto50years),quantitativeand

qualitativecontrolofgoods, surveying, repairing,dismantling,exhibitions, stocksexchangeoperations,

commercialfinancialoperations, inneror international transportsor forwarding,brokerage,agencyand

shiphandlingservices,aswellasotherFZsspecificactivities.Allmentionedactivitiesmaybecarriedout

by any natural or legal persons, foreign or Romanian,based on a license issuedby Free TradeZone

Administration.

OnJanuary1st,2007,RomaniasfreetradezoneswereincludedinAnnex108ofEECRegulation2454/1993

concerningtheapplicationoftheCommunityCustomsCode.

SulinaisthefirstfreetradezoneestablishedinRomania,having: Over340lmriverquay;

Over450lmmaritimetransitbasinquay;

Over70,000m2ofplatforms,fencedandequippedforopenstorage;

Morethan5,000m2coveredarea,inwarehouses,fittoaccommodateanygeneralcargo;

3floatingcranesof16ftcapacity,providedalsowithgrabs;

2floatingcranesof32ftcapacity,perfectlyfitfor20ftand40ftcontainers;

2riverpushers,of840HPeachandonesearivertugboatof630HPcapacity;

2coveredriverbargesEurope2Atypeof1500MTScapacityeach;

Several3.5 10ft forklifts,bobcats forbulkcargotrimming, tractorsand trailers,etc.,alldeserving5

operationalberths.


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WithinSulinaFZtheremaybecarriedoutthefollowingactivities:

Handling, storage, sorting, measuring, packing, conditioning, processing, assembling, fabrication,

marking, testing, auctioning, salepurchase, expertise and dismantling of merchandises, inner and

internationaltransportsforwarding; Organizingexhibitions;

Organizingstockexchangeandfinancialbankingoperations;

Organizingcanteensandrestaurants,aswellasretailorwholesaleshopswithinFZperimeter;

RentingorconcedinglandandbuildingswithinFZarea;

Quantitativeandqualitativemerchandisescontrol;

Ship chandlery of all vessels or any othermeans of transport operating in FZ or transiting Sulina

Channel;

Services,includinganyotherFZsspecificactivities

All theabovementionedactivitiesmaybecarriedoutbyanyeconomicagent, legalornaturalpersons,

Romanianor

foreigner,

with

the

acknowledgment

and

based

on

a

license

issued

by

Sulina

Free

Zone

Administration.

ConstanaSouth Free Zone is situated in SouthEastern area of Constana city, 24 km away from

downtown.Oneof thebiggestBlackSeaports,Constanaprovides the linkbetweenNorthernSeaand

BlackSea, throughRhineMainDanubeChannel.ConstanaSouth,a largeandcomplexport,represents

an oldConstanaport expanding.During 1997,ConstanaPorthasbeen extended toBasarabiHarbor,

becomingConstanaSouthandBasarabiFreeZone.

ConstanaSouthisaccessibleby:

RoadmodernaccessroadconnectedtoDN39;

RailthereisarailwaybranchofSouthConstanaharborenteringenclosure1;

Seafreezoneberths119,122,123,124,125,126,127,128,129,131,137withdepthsalongsidebetween 12.5mand16.5mfittedforseaandrivervessels;

RiverDanubeBlackSeaChannel;

AirMihailKoglniceanuInternationalAirport(about35kmfromFZ)andTuzlaHeliport(about10

kmfromFZ);

Descriptionofenclosures:

1A total area of 20.2 ha; oneberthwith 13.5m depth alongside; leased for storing activities on

coveredanduncoveredspaces,processinganddistribution;

1B totalareaof6.33ha;willbeendowedwithall infrastructure facilities in thenearfuture;willbe

leasedforstoringactivitiesoncoveredanduncoveredspaces,processinganddistribution;

2totalareaof10.55ha;partlyleasedforindustrialproduction,commercialandbankingactivities;

3 totalareaof97.55haandberthswith 14.5/ 16.5mdepthsalongside; leased forconstructionof

terminal for oil and chemicalbulk products, containers and suitable for industrial and commercial

activitiesperformance,too.

FollowingactivitiesmaybecarriedoutwithinConstanaSouthFZ:

Handling,storage,sorting,measuring,processing,assembling,manufacturingofgoods;

Testing,auctioning,sellingandpurchasing;

Stockexchange,financialanddomesticoperations;

Leasingorrentingbuildings,storageareas;

Chartering,brokerage

AlltheseactivitiesmaybeperformedbyRomanianorforeign,naturalorlegalpersons,subjecttoalicense

issuedbyConstanaSouthFreeZoneAdministration.Regarding investmentsopportunities, inorder to


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23

expand itsactivities,ConstanaSouthFreeZoneAdministrationsets forth severalstrategicproposals to

foreigninvestors:

Trafficofgoods:

-terminalforoilproducts enclosure3,wharfII;

- terminalforcontainers enclosure3,wharfII;

- terminalforcereals enclosure3,rootofwharfII;

- terminalforcarriageofgeneralgoods,automobilesandprocessingproductsenclosure3,wharfIII

andIV.

Bankingandfinancialactivities:bankingandbusinesscenters enclosure2;

Commercialactivities:distributionparkforgeneralmerchandise enclosure1Band2;

Industrial activities: processing raw materials originated from Romania and neighbor countries

(Ukraine,Serbia,Moldova) enclosure2.

GalaiFreeZonewasestablished in1994,beinglocatedinEasternareaofGalaicity,nearMoldovaand

Ukraineborders.GalaiFZisdelimitedbyBasarabiaRoadtoEast,byLuncachanneltoNorth,byDanubetoSouthandWest.FZcanbedirectlyaccessedby:

WatertransportaccesstoDanubeRiver,withmooringberthsfittedwithalltheloading/downloading

facilitiesincloseproximity;

RailwaytransportFZistheterminalpointofalargerailwaylinefromformerUSSRcountries,being

directlyconnectedtothenationalrailwaynetwork;

RoadtransportmodernaccessroadfromFZtoBasarabiaRoad,connectedtoformerUSSRcountries

viaGiurgiuletiCustoms.

AdministrationofGalaiFZmanagesa136.98haarea,dividedin2platforms:

PlatformI130haarea;

PlatformII6.98haarea,locatedintheharborperimeter,andincluding300lmofverticalwharfand120lmofbank).

Developmentofnew industries in theareawillallow localeconomicprofilediversificationof twomain

industrialbranchesintheregion:ironandsteelindustry,andshipbuildingsector.

BrilaFreeZonecoversanareaof114.418haandconsistsof4distinctsites:

Site 1 located in downstreamberth area, in vicinity of the projected container terminal,between

Danube andprotection embankment. Site extents over 22.5ha and isborderedbyDanube toEast,

transshippingplatformshipyardtoSouth,railswitchyardportandaccessroadtothebuildingsto

WestandsuburbminorsewertoNorth.Berthoperatingcapacityis190,000tayearforgeneralgoods

and 350,000 t a year for bulk goods. A terminal for seagoing and river ships will be provided

downstream.Operatingsectorhastwotonshorecranes,whichprovideanannuallyworkingcapacity

of140,000 t containers.Storage andprocessingplatformhas a storage areaofmax. 100,000m2.Rail

accessisgrantedfromswitchyard,whichdeserveswholeportarea.Site1isdesignedforlightindustry

activities:foodprocessing,woodworks,textiles,footwear,buildingmaterials,finishingandpackaging

operationsforironandsteelproducts,etc.

Site 2 industrial estate in Vrstura area of 34.3 ha. Site limits are provided by access road to

productionbaseonNorthEast,accessroadtooperationbasetoSouthEast,BrilaSloboziaDN21on

NorthwestandaccessroadverticaltoDN21onSouthWest.Consideringtheaccessibility(road,river

andrailtransportmeans)andactivitiessuitabletobedevelopedinthearea,thissiteisalsoknownas

ExportProcessingZone.Closetomainroadnetwork,sitebenefitsfromshortjunctionsaccessiblefrom

DN21andDN26.Therangeofactivitiesproposed forSite2 includes: fruitandvegetableprocessing

andcanning,pastryandsweetsproduction,beverageandalcoholbottling,brewery,textiles,cosmetics

andotherconsumergoodsproduction.


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Site 3 locateddowntownBrila city,betweenHarbor Station andFishery. Sites area isof 8.3ha,

limitedbyaccessroadtoproductionbaseonNorth,accessroadtooperationbaseonSouthEast,Brila

Slobozia DN21 on SouthWest and access road vertical to BrilaSlobozia DN21 on SouthWest.

Platformhas

a

rail

network

disposed

between

the

Debarcader

Street

and

quay

which

deserves

berth

operationsfrontsfromdockbasin.Itboastswarehouses,buildingsthatcanbeusedasareaforstorage

andprocessinggoodsandproducts.Cargoworking iscarriedouteitherbyfloatingequipmentorby

mobileequipmentontheaccessplatformtoships.

Site4locatednearSite1,areaof4.018ha.SiteislimitedbyDanubetoEast,BrilaCustomstoNorth,

HerculesCompanytoSouthandWest.

Main goals for Brila FTZ is attracting foreign investments, promoting foreign trade and introducing

modernindustrialtechnology.SpecificinfrastructurefacilitiesforBrilaFTZcompriseaccessforvehicles

ofanytonnage;accesstorailways;accessforseagoingshipsorrivervessels;variouspossibilitiesofcargo

handling (loading,downloading, sorting, etc.); storage capacities on open platforms or inwarehouses;

customsandtechnicalassistance;waterandsewagesystems,energy.

GiurgiuFreeZonehasasmainobjectivesattracting foreign investmentsand stimulatingproduction for

export,alongwithitstraditionalgravitationalcentrefunctionforinternationaltradeflows.

Its location and existent industrial enterprises grant it a specific character and advantages.Giurgiu is

locatednearlyBucharest(61km),Romaniascapital,themostimportantindustrialandcommercialcenter

of the country.Also,Giurgiu is one of themost importantDanube ports, standing at somemain and

waterwayscrossingpointsthatensureconnectionbetweenallEuropeanregions,aswellasconnectionto

Middle East countries. Starting 1993, DanubeMainRhine Channel provides connection toNorth Sea

throughRotterdamport.

GiurgiuFZlieson153.56ha,borderedbywateronthreesides.GiurgiuFZbenefitsof:

Infrastructureworks(banks,platforms,roadsandrailwaysaccess)

Superstructureworks,bothforcommercialandindustrialproductionarea

Electricityconnection

Communicationinfrastructure

Twomachinebuildingproduction companies areworkingwithinGiurgiuFZ: antierulNavalSA and

ICMUGSA.antierulNavalSAisspecializedonbuildingandrepairsofriverandseacargoandpassenger

ships.Same time, ICMUGSA isspecializedon lowandmediumdepthdrillequipment,mining,oiland

chemicalequipmentand20/40 feetcontainersproduction.GiurgiuFZrunsanoilterminalwitha350m

landingberth.Terminalprovides50,000tonesstoragecapacityfordiverseoilproducts.

CurticiAradFree Zone, the newest free zone of Romania, hasbeen established inwestern region ofcountry,within oneof themost importantEuropean railway corridor (BerlinIstanbulSalonic, corridor

No.4).

CurticiAradFZconsistsof twosites: firstonehasanareaof75haright in the townofCurticiand the

secondonehasanareaofover15haareawithintheAradInternationalAirportpremises.CurticiAradFZ

isthefirstRomanianfreezoneplacedexclusivelyonaEuropeanoverlandtransportroute,anditsthefirst

freezoneplacedonaEuropeanmainline,nearbythreeroadtransportfrontierconnections,togetherwith

air ones.Therefore, carriage in and out the free zone isbasedon rail transportworks throughCurtici

marshallingyardforgoingoutandbyinternalmainlinesforgoinginsidethecountry.

Theroadtransportusesthefollowingmainlines:

NorthSouth highway (TransEuropean) on the BudapestSzegedAradDevaPitetiBucuretiConstanavariant

AirtransportshallbedoneusingAradInternationalAirport


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IndustrialParks(IP)andFreeZones(FZ)

IP with titlegranted byMinister Order

IP establishedby GovernmentDecisions

IP set up byGovernmentEmergencyOrdinanceno 115/2003

Applicationsfor granting IPtitle underevaluation

PHAREInfrastructureprojects

Other IP FZ

Bacau - - - - Hemeiusi PHARE 2000 - -

Neamt Ceahlau IP - - - - - -

Iasi - - - -

Iasi PHARE 2000

(Tehnopolis Science &Technology Park)

- -

Suceava - - - -

Siret PHARE 2000

(Bucovina EconomicCenter)

- -

Botosani Botosani IP - - - - - -

Covasna - - - - - - -

Harghita - - - - - - -

Brasov

Prejmer IP

Pro Roman IP

Brasov IP

Euro Sand Vladeni IP

Zarnesti IP

Fagaras IP

Victoria IP

Metrom IP

Carfil IP

- - - - -

Sibiu

Medias IP

Sibiu IP

Sibiu-Sura Mica IP

- - - - - -

Alba Cugir IP - - - - - -


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IP with title

granted byMinister Order

IP establishedby GovernmentDecisions

IP set up byGovernmentEmergencyOrdinanceno 115/2003

Applicationsfor granting IPtitle underevaluation

PHAREInfrastructureprojects

Other IP FZ

Mures Mures IP - - - - - -

Timis Aton 1 Sanandrei IP - - -Timisoara PHARE 2000

(Timisoara Technological& Industrial Park - PITT)

- -

Caras Severin - - - -Caransebes PHARE

2001 - 2002- -

Hunedoara Hunedoara IP - - - - - -

Arad UTA 2 IP - - - Arad OHARE 2000 -Curtici

Arad FZ

BucurestiMetav IP

Sema IP- Faur IP - - -

Dolj Craiova IP - - - - - -

Olt Corabia IP - - - - - -

Gorj Gorj IP - - - - - -

Arges Pitesti IP - - - - Campulung IP -

Dambovita

Moreni IP

Mija IP

Racari IP

- - Corbii Mari IP - - -

Prahova

Prahova IP

Ploiesti IP

Brazi IP

Plopeni IP - - - - -

Ialomita Fetesti IP - - - - - -

GiurgiuBucuresti IP

North Giurgiu IP- - - - -

GiurgiuFZ

Teleorman - - - -Turnu

MagurelePHARE 2001

-

Galati Galati IP - - - - -Galati

FZ

Braila - - - -Braila PHARE

2000Braila

FZ

Tulcea - - - - -Sulina

FZ

ConstantaRompetrol IP

Mangalia IP- - - - -

Source:RomaniaCenterforTradeandInvestment,DepartmentforForeignInvestmentsandInternationalRelations,www.arisinvest.ro


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OECD RomanianNationalContactPoint

National Contact Point for encouraging the observance of the OECD Guidelines for Multinational

EnterprisesproposedbyOrganizationforEconomicCooperationandDevelopment(OECD)isestablishedaccordingtoGovernmentDecisionNo.420/2005.

The attributions of the RomanianNationalContact Point (RNPC), presented inOECDGuidelines for

MultinationalEnterprisesreferto:

PromotionoftheOECDGuidelinesforMultinationalEnterprises;

AnalyzingthequestionsonaspectsregardingtheOECDGuidelinesforMultinationalEnterprisesand

contributestotheirsolving;

Disseminating the information regarding the experiences of the adhering countries to the OECD

DeclarationinapplyingtheOECDGuidelines;

PreparinganannualreportforOECDInvestmentCommitteeaboutitsactivities.

Inprovidingtheassistance,theRomanianNationalContactPoint:

Makesaninitialassessmentofwhethertheissuesraisedmeritfurtherexaminationandrespondstothe

partyorpartiesraisingthem.

Wheretheissuesraisedmeritfurtherexamination,providesgoodofficestohelpthepartiesinvolvedto

resolvetheissues. Forthispurpose,theRNCPconsultswiththesepartiesandwhererelevant:

- Seeksadvicefromrelevantauthorities,and/orrepresentativesofthebusinesscommunity,employee

organizations,othernongovernmentalorganizations,andrelevantexperts;

- ConsultstheNationalContactPointintheothercountryorcountriesconcerned;

- SeekstheguidanceoftheOECDInvestmentCommittee ifithasdoubtaboutthe interpretationof

theGuidelinesinparticularinstances;

- Offers, andwith the agreementof theparties involved, facilitates access to consensual andnon

adversarialmeans,suchasconciliationormediation,toassistindealingwiththeissues.

ThespecificinstancerequestmaybeaddressedtotheRomanianNationalContactPointbyanyindividual

or legalpersonand shouldcontain thedirect reference to theOECDGuideline that isconsidered tobe

infringedaswellas theargumentation/documentation for thisassumption.Within the specific instance

requestshouldbementionedifthecaseisorwaspresentedinacourtoflaw.

The Romanian National Contact Point provides a forum for discussion and assists the business

community, employees organizations andotherparties concerned todealwith the issues raised in an

efficientandtimelymannerandinaccordancewithapplicablelaw.

TechnicalSecretariatoftheOECDRomanianNationalContactPointislocatedwithin

RomanianCenterforTradeandInvestment

(CentrulRomnpentruPromovareaComeruluiiInvestiiilorStrine,CRPCIS)

Contactdetails:

Address: 17ApolodorStreet,District5,Bucharest050741,Romania

Phone:(+40)(21)318.50.50;Fax:(+40)(21)311.14.91;Email:[email protected]

OECDGuidelinesforMultinationalEnterprises

TheOECDGuidelines forMultinationalEnterprisesarerecommendationsaddressedbygovernments to

multinationalenterprises,voluntaryprinciplesandstandardsforresponsiblebusinessconductconsistent

with applicable laws. The OECD Guidelines for MultinationalEnterprises aim to ensure that the

operationsoftheseenterprisesareinharmonywithgovernmentpolicies,tostrengthenthebasisofmutual

confidencebetween enterprises and the societies inwhich they operate, to help improve the foreign


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investment climateand to enhance the contribution to sustainabledevelopmentmadebymultinational

enterprises.

TheOECDGuidelinesforMultinationalEnterprisescover issuessuchas:(1)Employmentand industrial

relations,(2)Environmentprotection,(3)Humanrights,(4)Combatingbribery,(5)Consumerinterests,(6)Competition,(7)Taxation,(8)Scienceandtechnology,and(9)Corporatedisclosure.

TheOECDGuidelinesforMultinationalEnterpriseswereadoptedin1976,beingrevisedlasttimein2000

inordertomakethemmorerelevanttomodernbusinesspractice.Theupdatedversionshavebeenmade

basedonanextensivedialoguewithbusinessenvironment,unionsandnongovernmentalorganizations

and covered the main elements of the sustainable development economic, social and environment

protectionareas.

ThelastupdatedversionoftheOECDGuidelinesforMultinationalEnterprisesisavailableat:

www.oecd.org/document/28/0,3343,en_2649_201185_2397532_1_1_1_1,00.html

Otherusefuldocuments:

PolicyframeworkforInvestment

www.oecd.org/dataoecd/1/31/36671400.pdf

OECDRiskAwarenessToolforMultinationalEnterprisesinWeakGovernanceZones

www.oecd.org/dataoecd/26/21/36885821.pdf

5.SettingupaBusiness

TherearenospecificinvestmentapprovalsrequiredforsettingupabusinessinRomania.Theprocedure

requiresfulfillingcertain legalformalitiessuchasregisteringwiththeRomanianTradeRegistryandthe

FiscalAdministration.

FormsofBusinessOrganization(Ernst&YoungRomania,RomaniaBusinessPassport,2011edition):

LimitedLiabilityCompany(SRL)

The shareholder liability is limited to the amount subscribed as participation to the companys share

capital.The share capitalofaSRLmustbeat leastRON200 (approximatelyEUR47, calculatedat the

exchangerateofRON4.2/EUR),dividedintoshareswithaminimumfacevalueofRON10each.ASRL

maybe formedby aminimum of one shareholder and amaximum of fifty. These shareholdersmay

includeindividualsand/orlegalentities.

Aperson,eithernaturalorlegal,cannotbethesoleshareholderofmorethanoneSRL.Ifapersonintends

to formseveralcompanies, it isnecessary foraminimumofoneshare tobeheldbyanotherpersonor

entity.Moreover,anSRLcannothave,assoleshareholder,another limited liabilitycompanythat isalso

ownedbyasingleshareholder.

Theshareholderliabilityisingenerallimitedtotheamountsubscribedinthecompanyssharecapital.

ASRLismanagedbyoneormoreadministratorswhomayhavefullorlimitedpowersandwhomaybe

Romanian or foreign nationals. There is no distinctionbetween companies operatingwith orwithout

foreignsharecapital.

ForUStaxpurposes,SRLisachecktheboxentity.

JointStockCompany(SA)

TheminimumstatutorycapitalforajointstockcompanyisRON90,000(approximately21,428,calculated

at the exchange rate of RON 4.2/EUR). Shares must be held by a minimum of two shareholders,


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individualsand/orlegalentities(thereisnomaximumlimit),andcanbeopentoeitherpublicorprivate

participation.TheminimumfacevalueofoneshareisRON0.1.Pursuanttorecentamendments,company

shareholders may empower the administrators to increase the share capital by a specified amount,

providedit

does

not

exceed

half

of

the

value

of

the

existing

share

capital.

Twooptionshavebeenprovidedforadministrationofjointstockcompanies:theunitarysystemandthe

dualistsystem.

Unitarysystem thecompanyismanagedbyoneorseveraladministrators,alwaysinanoddnumber,

organizedasaBoard.TheBoardcanassignmanagementof thecompanytooneorseveraldirectors.

For those companies whose financial statements are subject to auditing, such an assignment is

compulsoryandtheminimumnumberofadministratorsisthree.

Dualist (twotier) system the management of the company is ensured by a Directorate and a

SupervisoryBoardwiththefollowingduties:

The Directorate carries out the activities andmanagement of the company and reports to the

SupervisoryBoard;

TheSupervisoryBoardexertspermanentcontrolover theDirectorateandreports to theGeneralMeetingofShareholders.

AdministratorsandothermembersoftheDirectorateandtheSupervisoryBoardmaynotconcludealabor

agreementwiththecompany;amanagementagreementisrequiredinstead.

RepresentativeOffice

A representativeoffice isusuallysetupby foreigncompanies inRomania tocarryoutnoncommercial

activities,suchasadvertisingandmarketresearch,onbehalfoftheparentcompany.Representativeoffices

cannotcarryoutcommercialactivities inRomania. Inorder toregisterarepresentativeoffice,company

officials should apply to theMinistry of Economy,Commerce and Business Environment and pay an

annual feeof theRON equivalentofUSD 1,200 for the license.Upon authorization, the representative

officemust

be

also

registered

with

the

Ministry

of

Public

Finances,

and

with

the

Romanian

Chamber

of

CommerceandpayanannualincometaxoftheRONequivalentofEUR4,000.

Branchofaforeigncompany

Abranchofaforeigncompanydoesnothaveitsownlegalpersonalityorsharecapital.Beingaunitofthe

parentcompany,branchactivitiescannotexceedthescopeofactivityoftheparentcompany.

Partnership

PartnershipasalegalformisseldomusedinRomania.Thethreekindsofpartnershipsprovidedbylaw

thatleadtothecreationofanentitywithlegalpersonalityare:(1)Generalpartnership(societatennume

colectiv), (2)Limitedpartnership (societaten comandit simpl),and (3)Partnership limitedby shares

(societatencomandit peaciuni).

The partners in a generalpartnership and the active partners in a limitedpartnership have unlimitedliabilitywithrespectto theobligationsofthepartnership towardthirdparties.Amongthemselves,each

partner is individually and collectively responsible for these obligations. The minimum capital is

stipulatedonly forapartnership limitedby shares (i.e.,RON90,000, equivalentofapproximatelyEUR

21,428, calculated at the exchange rateofRON4.2/EUR).No capital requirements areprovided for the

otherformsofpartnerships.

Consortium

Domestic legislation allows for the conclusion of ajoint venture agreement (contractde asociaiunen

participaiune).Underthisagreement,partiesacttogetherfortheaccomplishmentofacommonbusiness

goal.This formofdoingbusiness inRomaniadoesnot createa legal entity.Generally,oneparty is in

chargeofthebookkeepingofthejointventure.

EconomicInterestGroup(EIG)

AnEIG isanassociationof twoormore individualsorcompaniessetup foradefiniteperiod. Itsmain

objective is the development of the activities of the members; the development of the EIG itself is


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Fiscalyear

InRomania,thefiscalyearisthecalendaryear.

Profitstax

ResidententitiesaswellaslegalentitieshavingtheirheadquartersinRomania,butincorporatedasperthe

European legislation (i.e., European companies) are subject to tax onworldwide income.An entity is

resident inRomania if it is incorporated according to theRomanian legislation, if it is a foreign legal

personhavingitsplaceofeffectivemanagementinRomaniaorifitisalegalentityhavingitsheadquarter

inRomaniaanditisincorporatedaccordingtotheEuropeanlegislation.

Associations or consortiabetweenRomanian legal entities,which do not qualify as legal persons, are

taxableinRomaniaseparatelyatthelevelofeachpartner.ForsuchassociationsbetweenaRomanianlegal

entityandindividualsorforeignentities,thetaxmustbecomputedandpaidbytheRomanianlegalentity

onbehalfoftheindividualsoritsforeignpartners.

NonresidentcompaniesaresubjecttotaxontheirRomaniansourcedincomeonly.Saleofsharesheldin

Romanian companiesby nonresident companies, and sale of real estate located in Romania, are also

subjecttoprofitstaxinRomania.

Apermanentestablishment inRomaniamaybeconstituted interaliaby:anoffice,abranch,afactory,a

mine,landforoilandgasextraction,orabuildingsitethatexistsforaperiodexceedingsixmonths.Also,

apermanentestablishmentincludestheplacewhereanactivitycontinuesusingtheassetsandliabilitiesof

aRomanianlegalentityundergoingarestructuringprocess(e.g.,merger,spinoff)involvingentity/entities

fromothermemberstateoftheEuropeanUnion(EU).

Romanian legalentitiesshouldregisterwith therelevant taxauthoritiesanycontractssignedwithnon

resident legal entities or individuals performing in Romania construction and assembly works,

surveillance,consultancy,technicalassistanceoranyotheractivityperformedinRomaniaifsuchactivities

couldgive rise to apermanent establishment of thenonresident inRomania.The contracts shouldbe

registeredbysubmittingadeclarationwithin30daysfromthedatetheywereconcluded.Theformand

contentoftherespectivedeclarationisapprovedbyorderoftheNationalAgencyofFiscalAdministration

(ANAF).

Ratesofprofitstax

Thestandardprofitstaxrateis16%.

Profitstaxpayablebycompaniesearningrevenuesfrombars,nightclubs,discos,casinosandsportsbets,

includingrevenuesfromanassociationagreement,iscomputedatthestandard16%rate,providedthetax

amount isnot less than 5% of the totaldeclared revenue. In case theprofits taxpayable isbelow thisthreshold, the taxpayer is liable topayprofits tax computed at 5% of thedeclared revenue from such

activities.Ifcertainconditionsaremet,companiesmayoptforthemicroenterpriseregime,underwhicha

3%incometaxrateisappliedtorevenuesderivedbythecompany(in2010thisregimewascancelledbut

reintroducedfrom2011).

Representativeofficesare taxedonayearlybasisata lump sumof theRON equivalentofEUR4,000,

payableintwoequalinstallments,until25thofJuneand25thofDecember.

Capitalgainstax

Noseparatecapitalgainstaxispayablebyresidententities.Capitalgainsofnonresidententitiesfromthe

saleofimmovablepropertyinRomania,orfromsale/transferofsharesheldinaRomanianlegalentity,are

taxedatthestandardcorporatetaxrateof16%.D

Romania Infobusiness 2011aprilie

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