What Are the Investment and Trade Opportunities in Romania?

Romania is among the top 3 countries in Europe that have developed and grown the most in terms of growth rate in 2015. This growth has stemmed from industrial production, particularly in the automotive and subsidiary industries, as well as in the service sector, information technology, call services, and logistics. The lower cost of labor has also contributed to the development in these sectors. In 2015, budget discipline was achieved, and purchasing power in food and beverages increased with wage hikes.

Investing in Romania means not only access to the Romanian market but also to markets that the European Union has free trade agreements with. Romania's fertile and irrigated lands, being a natural gas producer and having excess electricity, well-trained and inexpensive labor, developed railway networks, and being connected to African and European countries via the Port of Constanta make Romania a significant country.

Currently, there are approximately 14,000 Turkish capital companies in Romania, with a total capital transfer of 712.4 million USD by these firms. Turkish capital companies rank third in terms of the number of firms among all foreign capital companies and fifteenth in terms of total capital invested.

Turkish investments in Romania generally consist of industries such as banking and finance, trade, tourism, agriculture, and transportation.

The tax policy being regulated in accordance with EU standards, laws determining working life being compatible with EU standards, trade restrictions being more easily traceable, no customs tax being applied to Turkish-origin industrial goods, low interest rates, stable exchange rates, foreign capital investments improving technology levels, the presence of vast and fertile agricultural lands, and the need for infrastructure to be updated are important reasons for investment. The possibility of benefiting from EU funds due to EU membership, the significant opportunities Romania offers Turkish investors are notable advantages.

Reasons to Invest in Romania

Easy and Safe Access to the European Market

● Romania joined the European Union (EU) in 2007.
● Romania has become a transit country for entering the EU market and benefiting from vast economic opportunities.
● Continuous support for internal and external investments is provided by the Romanian government and the EU to help Romania reach EU development standards. Among EU members, Romania is the country that benefits the most from per capita EU incentive funds.
● The Port of Constanta, which has become one of Europe’s largest ports, enables Turkish goods to enter both the Romanian market and the European Union markets. Its proximity to the Black Sea enhances Romania's commercial appeal.
● Bucharest, the capital, is 55 minutes by air and 680 km by road from Istanbul.

Favorable Tax Environment and Incentives for Investment in Romania

● The corporate tax in Romania was reduced to 16% with a law enacted in 2005. For businesses with annual revenues lower than 1 million EUR, this rate is 3%.
● There is a 50% tax reduction for companies providing R&D expenditures.
● Profits paid for technological equipment, computers, and related equipment, as well as software programs are exempt from taxes. Taxpayers engaged in innovation and R&D activities are exempt from corporate tax for the first 10 years.
● The income tax for personnel employed in the IT sector in positions such as software engineers and program analysts is 0%. Additionally, the income tax for employees engaged in R&D is also set at 0%. Income tax for construction workers is likewise 0%.

Economic Size and Infrastructure

● Romania has the highest population in the Balkans with 20 million inhabitants. This aspect makes the domestic economic market vibrant and dynamic, attracting significant interest from foreign investors.
● Romania is quite rich in natural resources and raw materials used in production.
● It has been designated as the 46th largest economy in the world. The per capita income is 15,000 USD. Unemployment and inflation rates are lower compared to other countries. Romania is among the world's steadily growing economies.
● Government projects aimed at developing infrastructure and the significant amount of EU funds offered to encourage investment in this sector make infrastructure development attractive.

Investment Climate

● Romania has a free market economy and currency regime.
● Romania has been a NATO country since 2004.
● As an EU country, it provides standards of law, stability, security, and predictability.
● Setting up a company quickly is quite feasible. Procedures are generally simple.
● Land prices in Romania are lower compared to the European average. Foreign individuals can purchase residential and commercial properties in Romania, but they cannot buy land. ● Living costs for individuals and input costs for companies are far below the EU average.
● It is easy to find qualified personnel with educational backgrounds and language skills. English is widely used as a language.
● Personnel costs are also significantly below the European average.
● The rights, laws, and securities of foreigners are guaranteed. Foreign entrepreneurs have equal status with Romanian citizens in their commercial activities.
● The respect for Turkish businesspeople investing in Romania is at a better level. Romanian authorities provide support and incentives to our entrepreneurs. Adapting to daily life in Romania is quite easy in this respect.

How to Establish a Company to Invest in Romania?

If you are a foreign citizen looking to obtain residency rights in Romania to conduct economic activities, you can provide residency rights by complying with the applicable laws in Romania for the purpose of conducting commercial activities. To obtain a residence visa for commercial activities, you need approval from the Romanian Center for the Promotion of Foreign Investors and Trade. This approval is also needed if you are a shareholder or an administrative partner in a Romanian legal entity commercial company. The Romanian Center for the Promotion of Foreign Investors and Trade will grant the approval as long as you comply with all legal conditions.

The permit granted by the Romanian Center for the Promotion of Foreign Investors and Trade is valid for 6 months from the date it is issued, and its purpose is to verify the technical conditions for the investment to be made by a foreign citizen are fulfilled. If you comply with all these conditions, you can obtain a residence permit from the Romanian Immigration Office, which will allow you to continue your commercial activities, ultimately granting you the right to operate in Romania.