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CONSULATE GENERAL OF ROMANIAOffice for Commercial-Economic

Promotion

ROMANIA Member of the European Union

ECONOMIC DEVELOPMENTS AND OPPORTUNITIES IN ROMANIA

Gabriel DUTU Chicago, April 14 2010

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ROMANIAROMANIA

- Area: - Area: 238.391 sq. 238.391 sq. km.km. - Population: - Population: 21,700,00021,700,000 - Counties: 41- Counties: 41

CAPITAL: CAPITAL: BucharestBucharest

Basic Information

33

Benefits of E.U. Benefits of E.U. AccessionAccession

Removal of any obstacles in the trade with EU Removal of any obstacles in the trade with EU Member StatesMember States

Common Common TTrade rade PPolicy with third countriesolicy with third countries Harmonization of Harmonization of entire legislation, entire legislation, capital capital

market regulations, taxation, accounting rules market regulations, taxation, accounting rules => higher transparency and simplification=> higher transparency and simplification

Structural fundsStructural funds (31 billion euro for 2007-2013)(31 billion euro for 2007-2013) Open gate for EU towards CIS, Asia, Middle Open gate for EU towards CIS, Asia, Middle

East, Northern AfricaEast, Northern Africa Participation in major projects in the Black Sea Participation in major projects in the Black Sea

Extended Area and in the Central Extended Area and in the Central & & Eastern Eastern European RegionEuropean Region

Romania-important role in assuring the energy Romania-important role in assuring the energy security for Europe (major transit pipelines, security for Europe (major transit pipelines, energy production energy production & supply& supply))

FLATFLAT TAX TAX 16%16%VATVAT 19%19%

DIVIDEND DIVIDEND TAXTAX 10%10%

AVERAGE AVERAGE WAGE WAGE (2009)(2009) 625625 USDUSD

MINIMUM MINIMUM WAGE WAGE

207207 USDUSD

Competitive TaxationCompetitive TaxationCountrCountr

yyCorporatCorporat

e Taxe TaxRomanRomaniaia

16%16%

HungaHungaryry

16%16%

SlovakiSlovakiaa

19%19%

PolandPoland 19%19%EstoniEstoniaa

20 %20 %

SloveniSloveniaa

25%25%

Czech Czech Rep.Rep.

28%28%

55

Macroeconomic Macroeconomic Performance Performance

GDP real growthGDP real growth

4.9 4.9

8.3

4.2

7.9

6.27.1

-7.2

7.1

-6.1-5.4

-3.2

2.1

5.73.93.9

1.5

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

66

5.2%

40.7%

30.3%

14.1%

7.9%4.8%

6.6%9.0%9.3%

17.8%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Macroeconomic Macroeconomic Performance Performance Inflation rateInflation rate

77

Macroeconomic Macroeconomic Performance Performance

Unemployment rateUnemployment rate

9.56.6

8.910.411.810.5 8.8 8.1

7 6.2 5.95.2 4 4.4

7.6

0

5

10

15

%

1995 1997 1999 2001 2003 2005 2007 2009

88

COUNTRY COUNTRY RATINGSRATINGS ROMANIA ROMANIA

Fitch Fitch - - BBB-BBB- ((NovemberNovember 20020088))

CofaceCoface - A4 - A4 ((SeptemberSeptember 200 20099)) JCRJCR - BBB- BBB ((FebruaryFebruary 200 20099)) MoodyMoody’’ s s - B- Baa3aa3

((SeptemberSeptember 200 20099)) Standard & PoorStandard & Poorss - BB- BB+ + ((OctoberOctober

20020088))

99

Foreign direct investmentsForeign direct investments - million- million USD USD--

7567 7611

2841

7033

10585

1326313226

17701889

02000400060008000

100001200014000

2001 2002 2003 2004 2005 2006 2007 2008 2009

FOREIGN DIRECT FOREIGN DIRECT INVESTMENTINVESTMENT

Total Total FDI’s until 3FDI’s until 31.12.2009: 1.12.2009: 31.731.7 billion billion USDUSD

1. Netherlands - 18.49%2. Austria - 12.23%3. Germany - 10.49%4. France - 8.18%5 . Cyprus - 5.06%6. Italy - 4.31%7. U.S.A - 3.34%8. Spain - 3.23%9. Great Britain - 3.04%

Source: National Trade Register Office

NNoo

Country of Country of originorigin

Number Number of of

companicompanieses

Share-capital Share-capital in Romanian in Romanian companiescompanies- - mil. USDmil. USD - -

11 NetherlanNetherlandsds 3,4563,456 5,8635,863

22 AustriaAustria 5,3755,375 3,8703,870

33 GermanyGermany 16,6616,6644 3,3263,326

44 FranceFrance 5,8735,873 2,5942,59455 CyprusCyprus 4,2554,255 1,6051,605

66 ItalyItaly 26,9826,9844 1,3671,367

77 U.S.A.U.S.A. 5,7555,755 1,0591,05988 SpainSpain 3,4513,451 1,0241,024

99 Great Great BritainBritain 2,8532,853 963963

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Value of Subscribed Capital Value of Subscribed Capital

by Field of Activityby Field of Activity

Source: Romanian Agency for Foreign Investment

Industry50.7%

Retailing5.3%

Wholesale6.4%

Transport6.2%

Construction1.3%

Tourism 1.4%Agriculture

0.9%

Services27.8%

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Foreign Investor Foreign Investor AdvantagesAdvantages

foreign investment allowed in all sectors of foreign investment allowed in all sectors of economyeconomy

possibility to freely manage the company with possibility to freely manage the company with full ownership rightsfull ownership rights

full repatriation of capital and profitsfull repatriation of capital and profits

protection against expropriation and protection against expropriation and nationalizationnationalization

national treatment for foreign investorsnational treatment for foreign investors

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FOREIGN TRADE 2001 – 2009

-40,000

-20,000

0

20,000

40,000

60,000

80,000

100,000

Exports 18,574 21,462 22,796 27,645 32,492 37,741 43,142 49,076 42,509Imports 25,379 27,566 30,953 38,370 43,889 54,909 69,162 75,632 56,789Balance -6,805 -6,140 -8,157 -10,725 -11,397 -17,168 -26,020 -26,571 -14,280

2001 2002 2003 2004 2005 2006 2007 2008 2009

USD mill.

Source: National Institute of Statistics (www.insse.ro)

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MAIN TRADE PARTNERSMAIN TRADE PARTNERSTop import partner countriesTop import partner countries

percentage percentage of total import of total import

GermanyGermany 16.3616.36

ItalyItaly 11.3811.38

HungaryHungary 7.397.39

Russian FederationRussian Federation 5.975.97

FranceFrance 5.715.71

TurkeyTurkey 4.924.92

AustriaAustria 4.884.88

KazakhstanKazakhstan 4.584.58

ChinaChina 4.224.22

HollandHolland 3.733.73

PolandPoland 3.433.43

Czech RepublicCzech Republic 2.502.50

BelgiumBelgium 1.991.99

SpainSpain 1.961.96

Great BritainGreat Britain 1.951.95

Top export partner countriesTop export partner countriesppercentageercentage of total export of total export

GermanyGermany 16.5016.50

ItalyItaly 15.4615.46

FranceFrance 7.387.38

TurkeyTurkey 6.616.61

HungaryHungary 5.115.11

BulgariaBulgaria 4.164.16

Great BritainGreat Britain 3.293.29

HollandHolland 2.892.89

UkraineUkraine 2.462.46

SpainSpain 2.312.31

AustriaAustria 2.272.27

PolandPoland 1.991.99

GreeceGreece 1.811.81

Russian FederationRussian Federation 1.811.81

U.S.A.U.S.A. 1.691.69

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FOREIGN TRADE IN 2009FOREIGN TRADE IN 2009 Total volumeTotal volume: 99,299.27 million USD : 99,299.27 million USD

( 25.2% down to 2008)( 25.2% down to 2008) ExportExport: 42,509.79 million USD (13.9% down to 2008) : 42,509.79 million USD (13.9% down to 2008) ImportImport: 56,789.47 million USD (32.1% down to 2008): 56,789.47 million USD (32.1% down to 2008)

Romanian – USA TradeRomanian – USA Trade: : TotalTotal: 1,415.95 million USD 34% down to 2008 : 1,415.95 million USD 34% down to 2008

(2,154.9 million USD) (2,154.9 million USD) Export : Export : 743.5 million USD 33% down to 2008743.5 million USD 33% down to 2008

(1,106.7 million USD)(1,106.7 million USD) Import : Import : 671.6 million USD 36% down to 2008671.6 million USD 36% down to 2008

(1,048.2 million USD)(1,048.2 million USD)

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AMERICAN SUCCES STORIES IN AMERICAN SUCCES STORIES IN ROMANIA: ROMANIA:

MAIN INVESTORSMAIN INVESTORS FORD MOTORFORD MOTOR GENERAL ELECTRICGENERAL ELECTRIC ORACLEORACLE QUALCOMM QUALCOMM MICROSOFTMICROSOFT HONEYWELL INTL.HONEYWELL INTL. PROCTER & GAMBLEPROCTER & GAMBLE COLGATE PALMOLIVECOLGATE PALMOLIVE SMITHFIELD FOODSSMITHFIELD FOODS KRAFT FOODS INTL.KRAFT FOODS INTL. UNITED GLOBAL COMUNITED GLOBAL COM DELPHIDELPHI JOHNSON CONTROLSJOHNSON CONTROLS EMERSON ELECTRICEMERSON ELECTRIC CITIBANKCITIBANK CAMERONCAMERON

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Market & Location Advantage : • Second largest market in Central and Eastern Europe (over 21

million inhabitants)                     • Easy access to the countries of the former CIS countries,

Balkans, the Middle East and Northern Africa • Junction of three prospective European transportation

corridors nos. 4, 7 & 9

Resource Advantage: • Skilled labor force with solid knowledge in technology, IT and engineering • Rich natural resources, including fertile agricultural land, oil and gas • Important potential for tourism

TOP TOP REASONS TO INVEST IN ROMANIAREASONS TO INVEST IN ROMANIA (1) (1)

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Economic Advantage• Sustainable economic growth • Functional Market Economy status • Competitive tax policy• Decreasing inflation • Permanent financial assistance for SME's Development • Structural funds

Improving Infrastructure Advantage• Well-developed networks of mobile telecommunications in GSM systems • Highly developed industrial infrastructure, including oil and petrochemicals • Branch offices and representatives of various well-known international banks • Newly developed highway infrastructure • Commitment to improve the highway infrastructure to EU standards • Extensive maritime and river navigation facilities

TOP TOP REASONS TO INVEST IN ROMANIAREASONS TO INVEST IN ROMANIA (2) (2)

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Potential Sectors for InvestmentPotential Sectors for Investment

• ManufacturingManufacturing • Automotive partsAutomotive parts• IT & IT &

CommunicationCommunication• Electric & Electric &

ElectronicsElectronics• Wood processingWood processing

Construction Construction materialsmaterials

TextileTextile Food processingFood processing InfrastructureInfrastructure Outsourcing and Outsourcing and

logisticslogistics

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CONSULATE GENERAL OF ROMANIACONSULATE GENERAL OF ROMANIAOffice for Commercial-Economic PromotionOffice for Commercial-Economic Promotion

Phone: 312.573.8150Phone: 312.573.8150Fax: 312.573.9771Fax: 312.573.9771

E-mail: E-mail: economic.office@roconschicago.org Website: Website: www.roconschicago.org

THANK YOU !THANK YOU !