Romania has become an attractive country for investors anxious to secure their place in a rapidly growing and increasingly stable economy, especially since the country jointed the European Union and NATO.

Why Romania?
Romania has become an attractive country for investors anxious to secure their place in a rapidly growing and increasingly stable economy, especially since it has been included in the European Union and NATO. With its ideal geographic location, well-educated and relatively inexpensive labour force, Romania is expected to continue its growth and to attract the highest FDI per capita in the region.

With a population of 22 million, Romania is the second largest consumer market in Central and Eastern Europe and has started attracting UK companies in increasing numbers. It is the UK’s fourth largest export market in Central and Eastern Europe. British investments have risen steadily since the early 1990s, reaching EUR 3.5 billion in 2005. The UK is currently one of the largest foreign investors in Romania, after Italy, Germany and France.

Successive recent governments have worked closely with international finance organizations to produce a country with more than respectable macro indicators: GDP increased steadily from EUR 37.7bn in 2000 to EUR 79.3bn in 2005, with an estimated increase of 7.2% in 2006. The inflation rate sharply decreased from 45.7% in 2000 to 7% in 2005, while unemployment rate decreased from 10.5% to 5.7% in the last five years. Prompted by continuing economic improvements, Moody's Investors Service upgraded the Romanian government's long-term and short-term foreign and local currency ratings to Baa3/P-3 with a stable outlook, the foreign currency country ceiling for long-term bonds to A1 and the short-term foreign currency country ceiling to P-1, with stable outlook. Accession to the EU should anchor these improvements and provide impetus for a continuation of reforms.


Keys to your success in Romania
- Romania is not Great Britain! Understanding the local culture and business environment is crucial
- Have local staff amongst your team
- Choose the right location for your future business: account for incentives, economics, infrastructure, market segmentation, targeted population, market forecasting, current and expected development of the region
- Make use of EU funding if possible
- Prepare a good business plan, accounting for the Romanian particularities
- Get the optimum financing structure in place
- Hire good managers (consider providing management training in the UK)
- Adjust your offering to account for the local market needs
- Choose the right sector


Romania’s major sectors
The Romanian economy has been significantly developing during the past years. The main sectors that have recorded strong growth are:

- Industry. The output of the industrial sector amounted to EUR 23.4bn in 2006 and is expected to double by 2010. Relatively cheap, trained and experienced labour, together with good infrastructure and right geographical position, attracted FDI in all industrial sectors. Furniture manufacturing, automotive & transportation, fruits & beverages, and home appliances are the industries that have attracted the largest investments and which have registered the highest growth. Generally, the Romanian industry is still undeveloped. Most of the Romanian companies are not competitive at European level and do not comply with the EU environmental and safety standards. However, some companies have successfully upgraded their technologies and equipment.

- Services account for about half of the Romanian GDP. Tourism, transportation and banking are the most developed services. However, the market is generally undeveloped; and the demand exceeds the supply, both in value and in quality. A large variety of services to the population have not even been introduced into Romania, or have a low market penetration. Due to cheap labour, Romania is a good partner for outsourcing services. A trend is currently emerging for many Western companies to replace their outsourcing operations from India with facilities in Romania.

- Construction. Having sharply increased during the last year, the construction sector reached EUR 6.6bn in 2006 and is expected to double by 2010. Development is sustained by major demand for upgrading or replacing of the existing properties, and shortage of office buildings. The industrial growth requires investments in additional production facilities, logistical centres, and warehouses. The development of the Romanian tourism will draw many investments, especially room allotment and recreation area (capital renovations or new constructions). Moreover, infrastructure needs upgrading and enlargement.

- Agriculture, Forestry and Fishery accounts for about 7.5% of the GDP and employs more than 30% of the national working population. With a very diverse landscape, Romania offers a large range of activities, including fishery, land tilling, animal breeding, and forestry. Romanian farmland is of very good quality, partially irrigated and in a process of consolidation. The agricultural sector is in need of modernization and reconstruction in order to maintain competitiveness with other Eastern European countries.


EU Funding
After joining the EU on January 1st 2007, Romania has started to benefit from a huge funding injection from the European Union. The funds can be accessed both by private and public sector, on rural and urban areas, and are focused on: research and technological development, innovation, entrepreneurship, society information, transport, energy, environment protection & preventing environmental risks, support for the companies, access to stable jobs, social inclusion for under-privileged individuals, human resources development.

There are several issues which make the application to and accession of EU funding more difficult, including changes of legislation, bureaucracy (pile of documents, rigorous contracting process, lot of time and resources needed, and involvement of Government institutions). On the other hand the amount of money and programmes that will be available to Romania is very high and the access to information is not as transparent as it should be. There are many institutions involved in implementing different programmes, and an investor doesn’t always know that there are EU funds available for his projects, or when these funds are launched, and if there are still money on that programme. Moreover, there are also Romanian Government Funds available for financing investments, funds that can also be accessed. That is why using a consultancy company with experience on funding such projects is advisable, to help you in the application process, from selecting the right program and financing structure to drafting documentation and filing the application.


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Bridge Europe: A helping hand for Western investors
With a deep understanding of both Western and Eastern markets, Bridge Europe Consulting Ltd. is ready to help you invest in Romania. Bridge Europe www.bridgeeuropeconsulting.com is a British consulting firm which bridges the gap between organizations in Western and Eastern Europe. With Romanian and British nationals on the team, Bridge Europe has a deep understanding of the way in which business is conducted in both regions and is very familiar with the cultural and mentality differences between West and East.
Bridge Europe is the ideal first point of contact for any firm seeking to enter the East European markets, as well as for East European organizations that are expanding internationally. The company has a successful track record on cross-border deals, and has been covering these markets for a substantial period of time.
Bridge Europe places a high value on cooperation. Bridge Europe is committed to delivering the highest quality of service in a timely and cost-effective manner. The company offers a unique combination of skills and experience, including a pragmatic and commercial approach to complex legal, regulatory, technical, commercial and financial issues, a network of experienced professionals who have extensive business expertise, local language skills, project management skills, financial expertise and analytical skills, entrepreneurship and thorough understanding of business, in-depth knowledge of local markets and customs, all delivered at international standards.

What can Bridge Europe do for you?
Bridge Europe has an extensive business experience and network of contacts which enables the firm to offer a wide range of services to British companies that are already present in Romania and/or Bulgaria or intend to target those markets. The company can identify and assess opportunities, and help its clients establish and develop their presence in those countries.
Bridge Europe’s expertise includes opportunity assessment, operations set up, business planning, investment & corporate finance (including EU funding), trade assistance, corporate transformation & organizational design. Bridge Europe can help with drafting documentations (such as research, business plans), and can also provide hands on business development and execution. The corporate finance (fund raising and M&A advisory) services are being offered via the other group company, Catalyst Partners Ltd. Catalyst Partners assists public and private organizations in accessing funds (both debt and equity), and grants (especially via the EU programs available to Romania and Bulgaria), thus creating complex financing structures.
For more information on Bridge Europe, please visit www.bridgeeuropeconsulting.com.