Reasons to Invest In Romania

Romania has the fastest growing economy in the EU with growth averaging approximately 6%

Romania is a high-upper-income EU member economy of Central Eastern Europe, the 18th largest in European Union by total nominal GDP and the 12th largest based on purchasing power parity. Romania is one of the fastest growing major nations in recent history, with consistent annual GDP growth rates above 6% (+7% for 2008). Romania is a member of the European Union and is the 7th largest Country and the EU is its most important trading partner. Its capital, Bucharest (with 2.5 million people - metropolitan area), is one of the largest financial centres in the region. Romania has experienced growth in foreign investment with a cumulative foreign direct investment totaling more than $115 billion since 1989.

Mortgage to GDP ratio in Romania is only 2% compared to EU average of 46%

The Romanian mortgage market is at a relevantly infant stage compared to the Irish and UK markets. The mortgage GDP ratio in Romania is only 2% compared to an EU average of 46%. The Irish ratio is 52.75% while the UK’s ratio is 72.5%. The Romanian banks anticipate considerable growth from the 2% ratio in the coming years. An additional note regarding the low mortgage ratio level in Romania is the fact that the majority of Romanians own their own properties. After Communism fell in the late 80’s most Romanians took up the opportunity to reclaim their properties from the state in the following years. This provides a great basis for people to upgrade to a modern apartment. With wages rising approximately 13% in 2007 and an average wage in the IT sector being €1,000 per month this is enabling those wanting to purchase to obtain mortgages.

€30 billion invested by EU to improve roads,
transport & amenities from 2007- 2013

With Romania joining the European Union in January 2007 they were granted €30 billion support for the period of 2007-2013. The subventions will be used for agriculture, food industry, transport infrastructure, infrastructure, environmental projects, energy projects, waste treatment and waste collection, water treatment, sewers, water gaining, consultancy, construction, roads, technical equipment, specialized service’s for SME’ s, modernization of industrial companies, purchase of machines and production lines, technology parks, scientific parks, incubation centers and logistical parks, tourism and renovation of existing buildings and infrastructure.

Multinational companies investing heavily in
headquarters and offices in Romania

Economically, Bucharest is the most prosperous in Romania and is one of the main industrial centres and transportation hubs of Eastern Europe. A host of Major International Companies have established and expanded operations to Romania some of these include:

Pharmaceutical Eli Lilly, GlaxoSmithKline, Novartis , Pfizer

I.T. Microsoft*, IBM, Oracle, FujitsuSiemens, Intel, HP,
**Electronic Arts (EA)

* In 2007, Bill Gates opened Microsoft’s Romanian Global Technical Support Centre in Bucharest where they currently employ 100 people.

** Entertainment brand Electronic Arts (EA) will start producing video games for Sony PS3 and Microsoft XBox 360 in Bucharest in a €3.5 million investment. The expansion will create an additional 150 jobs in the sector, taking EA's headcount to 350. To support the new project the US giant has rented 2,500 sq.m. of office space in the yet-to-be-completed Sema Parc complex in west Bucharest.

Telecoms Vodafone*, Nokia**, Cisco, Ericsson, Nortel***

* In 2005 Vodafone acquired MobiFon-Connex in one of the largest ever deals in Romania for a combined deal for approximately US$3.5 billion.

** Nokia have just opened their first production facility in Cluj, Romania 400 km from Bucharest. The overall investment is €60 million and will provide employment for approximately 15,000 people.

*** In late 2004 Nortel announced plans to employ 200 people developing software applications for computer and communications networks in Bucharest.

Banking Citibank, Erste Bank, Volksbank, ING*,
Unicredit Tiriac Bank**

* ING Bank will open 40 new branches in retail banking and six more branches for wholesale banking this year in Romania. The bank currently has 29 wholesale branches and 147 retail branches.

** Italian bank Unicredit Tiriac Bank plans to expand its network by 70 more branches and to employ a further 1,000 people this year.

Insurance AIG, Alliance

• Value of property is very modest and has risen
approximately 35% in two years and is
expected to increase 20% over the next 12 months.

Apartment prices in Bucharest rose by an average of 20% in 2006. The final figure for 2007 is likely to be in the 15% to 20% range. Some reports suggest increases of 30% in the coming year but a more realistic figure would be approximately 20%. The increase is dependant on the quality of the apartment with higher increases being determined by the standard and location.

• Romanian nationals who left over the past 10 years
are now returning causing an increase in population
and demand for housing.

With the slow down in the economies in Ireland and the UK, many Romanians who had moved away from Romania in search for jobs over the past 10 years are flooding back. The main reasons are that the economy in Romania is growing rapidly and there is a demand for workers. Some of the main shortages in the workforce is in the construction industry.

• Demand for 20,000 new homes in the coming year
to match the job creation

Demand for quality residential is extremely high in Bucharest with reports stating that there is a need for 20,000 new homes in the coming year to match the job creation in new office buildings.

• Majority of new jobs being created in Bucharest
will be situated in the North of the city.

According to Colliers International mid-year report 2007 on Romania the majority of the new jobs being created in Bucharest are in the Northern areas and reports suggest that it is North Bucharest that will witness the highest prices increase.

• Low entry level investment.

Romania property prices are still low compared to other EU countries with prices in Bucharest averaging €1,700 sq.m. per sq.m. With mortgage lending in Romania being offered to foreigners at approximately 75% LTV it makes Romania a very attractive option.

• Romania to introduce the Euro in approximately 5 years.

Romania is expected to introduce the Euro currency in 2012. The introduction of this will reduce interest rates, reduce currency fluctuations on transactions and make it easier to compare prices for foreign investors.