Why to invest in Romania

Invest in Romania

I wrote this article for those that invest in Romania. Romania is a country with immense potential that has yet to be fully tapped. The nation is actively pursuing direct investment and has recently implemented several measures to attract foreign investors. Starting a business in Romania is straightforward, with comprehensive support available from local experts. Foreign investors interested in Romania can reach out to us for assistance.

Strategic location

Romania became a member of the European Union in 2007 and is also part of NATO. Its strategic geographical position makes it ideal for transportation and trade, serving as a gateway to the Middle East and other European Union markets. The country is rich in natural resources, including various minerals, petroleum, natural gas, salt, coal, iron ore, copper, zinc, gold, and more. Additionally, Romania boasts abundant timber and fertile agricultural land. Investors looking to capitalize on these resources should contact our specialists.

Skilled workforce

Romania offers a skilled workforce at relatively low employment costs compared to other European nations. English is widely spoken, and many Romanians are bilingual or trilingual. The country has a large pool of highly educated young professionals. Numerous young entrepreneurs are investing their time, passion, and resources into Romania, often starting innovative businesses with the help of EU investments. They believe that investing in Romania is a worthwhile endeavor.

Why to invest in Romania: promising investment sectors

While Romania is making strides in overall development, certain sectors stand out as particularly lucrative and attractive for investment. These sectors include:

infrastructure
industry
agriculture and farming
education
information technology
tourism

Romania’s IT market is rapidly expanding, with continuous progress in the mobile phone and internet sectors. The population is open to the diverse offerings available. Tourism also presents opportunities. Investors can choose from a variety of locations to establish accommodations for both local and international tourists. Despite ongoing issues such as poor infrastructure, corruption, and a complex fiscal process, Romania is continually evolving.

Ease of company registration

Registering a company in Romania is not difficult. Recent simplifications in bureaucratic procedures have made it easier for both local and international entrepreneurs to quickly enter the market, especially in their chosen fields. Comprehensive support is available from our specialists in Romania, so be sure to direct your inquiries to our team, regardless of the industry in which you wish to develop your business.

Make sure you seek assistance and guidance if you plan to invest in Romania.

Invest in Romania and have an attractive tax system

The tax structure in Romania is quite appealing to foreign entrepreneurs. One significant advantage is the corporate income tax rate of 16%, one of the lowest in Europe. Additionally, a 8% income tax applies to dividend revenues. Fiscal incentives include tax exemptions for reinvested profits in technological equipment within the firm. Romania also boasts one of the lowest VAT rates in Europe at 19%, which is a significant benefit from a tax perspective. Our team in Romania can provide more details about the tax regime in Romania and assist you with tax registration.

Investments in major Romanian cities

Romania is a highly attractive destination for foreign investments. Although authorities are continually improving legislation and infrastructure, the business climate remains very appealing to international investors. Besides Bucharest, the capital, cities like Buzau,Cluj, Brasov, Timisoara, Oradea, Sibiu, Arad, and Targu Mures are popular business hubs. Many successful businesses have been established in these cities for years, continuing to generate profits and support the economy despite various challenges. Here are some factors to consider for future investments in Romania:

Logistics, employment costs, and workspace rentals are highly advantageous for foreigners.
Access to affordable business spaces is possible in any city, a benefit highly valued by foreign investors.
Retail and FMCG sectors are very profitable and attractive for business.
The construction sector is rapidly developing, with significant investment opportunities.

Protection Against Profit Taxation

Romania has signed numerous double taxation agreements to protect businesses and their profits from tax evasion. This means taxes are paid only once, in the country where the profits are recorded. If taxes are paid both in the country where the business operates and the country of origin, a loan can be provided to cover the double tax payment.

Find out from our team of Romanian accountants what the tax rules for local and foreign businesses are. We are at your disposal with complete details about the accounting services necessary for the business you have in Romania.

Trends and Figures in the Construction Sector in Romania

Even though 2020 was quite challenging, not only from a health perspective, the construction field continues to grow in 2021. The sector’s challenges have not halted its progress; in fact, many projects have recently come to life. In terms of numbers, the construction sector contributed about 7.8% to the country’s GDP, with a value exceeding EUR 20 billion in 2020. Residential and non-residential buildings, along with engineering constructions, were among the most developed projects in Romania. Thus, according to experts, confidence in the construction field remains high, a sector considered by specialists to be well-balanced and structured, despite difficulties in various formalities.

The IT Sector Continues to Impress Foreign Investors

A lesser-known fact is that the Romanian economy is largely supported by the IT industry, especially the software sector. Being a highly balanced industry, it is not surprising that investment specialists continue to support the idea of development in this crucial sector. Investors from Luxembourg, Germany, Great Britain, the Netherlands, and Cyprus are among the key players in the software field in Romania, accounting for around 53% of the positive equity of the major software companies in the country. According to surveys in this field, the IT sector has the best chances for future development, with increasing interest from those who want to work in this field.

Romania is certainly a highly popular destination for investments, and foreigners can benefit from numerous advantages for their operations and businesses. It is also important to get support in terms of taxes, registration, payments, and much more, help that can be provided by a team with experience in the field of accounting. If you are ready to invest in Romania, feel free to ask for guidance and assistance.

Investment Tips for Foreigners in Romania

The business climate in Romania is quite challenging and exciting, hence it is recommended to make some verifications in the first place and stay up to date for a better understanding of the commercial activities and related legislation. Here are some business tips for international entrepreneurs interested in making investments in Romania:

Romania is a great investment destination, and you should explore the possibilities in the first place. Even though the legislation changes quite frequently, this doesn’t mean you cannot align with the new rules.
You can always consult with a business expert.
Understand your customer and consumer to offer the best services and products available.
Know your collaborators and the business relationship before negotiating terms.

Top 5 reasons to invest in Romania

1. Easy company formation

Setting up a company in Romania is straightforward. For a smooth experience, international entrepreneurs are advised to seek the help of an experienced agent in business incorporation in Romania.

2. Appealing business sectors

Romania offers numerous business opportunities in developed sectors such as manufacturing, textile, real estate, tourism, and education. Many large companies are already thriving in Romania’s robust industries.

3. An attractive tax system

The tax structure in Romania is appealing to foreign investors looking to reduce their tax burden. The corporate income tax rate of 16% is one of the lowest in Europe, according to investromania.gov.ro.

4. Excellent incentives

Holding companies in Romania enjoy tax exemptions on capital gains, dividends, share sales, and more. You can consult our accountants in Romania for specific tax matters relevant to your business.

5. A skilled labor force

Although the workforce in Romania is more affordable compared to other countries, it is still highly skilled. Foreign entrepreneurs can benefit from an experienced and multilingual labor force in Romania. Consider these facts and figures about Romania’s economic and business landscape:

In 2019, Romania’s total FDI stock was about USD 97 billion.
Romania ranks 55th out of 190 economies globally, according to the 2020 Doing Business report.
Austria, Germany, the Netherlands, Cyprus, and Italy are the main investors in Romania.
The total value of greenfield investments in Romania in 2019 was around USD 6 billion.

If you want to start a business in Romania and need more information about Romanian legislation on foreign investments, our Romanian team can assist you with all your inquiries. Feel free to contact us if you wish to invest in Romania.

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