Romania FDI 2020-21

FDI flows into Romania more than triple


Foreign direct investment (FDI) into Romania more than tripled year-on-year in the first five months of 2021, to 2.432 billion euro, the Romanian National Bank (BNR) said.

Equity investment (including estimated net reinvestment of earnings) and intercompany lending (FDI companies borrowing from parent groups) recorded net values of 2.340 billion euro and 92 million euro, respectively. BNR did not provide annual comparison.

According to data from the National Trade Registry Office (ONRC) the number of newly founded companies in Romania, with foreign capital,  increased in the first five months of 2021 by 45% from the same period of 2020,  to 2,100.

The 2,100 new companies had a subscribed share capital of 21.595 million US dollars, almost nine times higher than that of the companies registered in January-May 2020, of 2.43 million dollars, ONRC data showed.

At the end of May, there were 233,076 companies in Romania with foreign participation in share capital. The value of the subscribed capital stood at 64.035 billion dollars.

The largest number of companies with foreign participation was with Italian investors, namely 49,978 (subscribed capital of 3.896 billion dollars), but the largest value of social capital belongs to Dutch companies, namely 12.564 billion dollars, with 5,578 companies

Meanwhile, the companies that are active on the Romanian financial market have received from foreign shareholders capital injections of over 5.4 million euro in April and May, compared to 493,300 euro in the same period of last year.

FDI Romania 2020-21
(Source: BNR)

In 2020, foreign direct investment into Romania plunged 60% year-on-year to 1.921 billion euro, less than 1% of GDP. The number of new companies with foreign capital established last year, dropped 26.5% compared to 2019 to 4,084, according ONRC data. The 4,084 new firms had a subscribed share capital in the total amount of 25.91 million dollars, up 20.5% compared to 2019.

Romania ranked 55th out of 190 economies in the 2020 Doing Business report, issued by the World Bank. The country has signed bilateral agreements on investments with 96 countries,  as per UNCTAD Investment Policy Hub.

In order to maintain its competitive position in the world economy, most of investors believe Romania should support small and medium sized enterprises, encourage environmental policies and attitudes and improve the quality of its products and services.  Access to credit, relaxion of competition rules are also some of the measure ranked high by investors, who are looking for strong fiscal systems to support their investments, according to EY Attractiveness Survey Romania 2021.

In the first three months of 2021, on a seasonally adjusted quarterly basis, the Romanian economy advanced 2.9%, faster than a preliminary estimate of a 2.8% growth, but easing from a 4.6% growth in the fourth quarter 2020.