FDI on the Rise in Romania

The assets of companies with foreign stockholders grew by 7% during the first seven months of the year, when compared with the same period last year, according to data from the National Office of the Commercial Registry. (NOCR). The total assets of foreign companies in Romania reached 1.13 billion euros in the first seven months of 2005, as compared to 1.03 billion euros last year.

The total foreign capital investment by August was 292 million euros, which is 20% less than last year, when the total stood at 368.4 million euros.

The biggest capital investment, totaling 287 million euros, consisted in boosting the assets of existing companies, and only 1.06 million euros went into setting up 118 new companies, according to NOCR.

The Italians set up 18 companies, with over 110,000 euros; the Germans set up 16 start-up companies, with 65,000 euros, while the Turks and the Hungarians set up one company each, with capital investment worth 61,000 euros and 21,000 euros, respectively.

The biggest capital investment in July belonged to the cell phone operator Cosmorom, which has a Greek majority stockholder, and raised its assets with 202.1 million euros.

Other major capital influx in July went to Flexiplast, with an Argentinean majority stockholder, raising the assets with 10.6 million euros; Sterom, with a Dutch investor, raised assets with almost 10 million euros, and Euroholding, with an investor from Luxembourg, put 6.5 million euros more into its company’s assets.

The Romanian Agency for Foreign Investment (RAFI) forecast the direct foreign investment sFDIt will reach this year 3.2 to 3.8 billion euros. Ana-Maria Cristina, the Agency president, recently stated that the level of FDI will depend on the level of incoming money due for privatizations.

The Romanian National Bank reported the volume of total FDI reached 1.5 billion euros in the first six months of this year, which is 15% higher than the same time last year.

According to RAFI, the FDI which had a strong impact on the economy account for 750 million dollars and 56 of the projects, while during the same time last year they stood at 628 million dollars and 40 projects. According to Law 332/2001, investments deemed to have an impact on the economy must go beyond one million dollars and contribute to the development and modernization of the economic infrastructure, creating a snow-ball positive effect and creating new jobs.