Romania FDI

Romania witnessed a whopping 214.79% surge in FDI


Foreign direct investment (FDI) in Romania totaled 5.279 billion euros in the first nine months of 2021, up by a whopping 214.79% compared to the same period a year ago, National Bank of Romania (BNR) data showed on Monday (Nov. 15).

“The direct investments by non-residents in Romania amounted to 5.279 billion euros (as against 1.677 billion euros over January – September 2020), of which equity (including the estimated net reinvestment of earnings) and intercompany lending recorded net values of 4.383 million euros and 896 million euros, respectively” BNR said in a statement.

The number of newly registered companies with foreign capital in Romania increased in the first nine months of 2021 by 43.49% compared to the same period last year, reaching 4,164, according to the National Trade Register Office (ONRC).

These new companies had a subscribed share capital of 33.072 million US dollars, up 80% year-on-year. Some 552 new companies with foreign capital were registered in September.

In terms of sectors of economic activities, most registrations were in wholesale and retail trade, car and motorcycle repair (27.54% of the total), followed by professional, administrative, scientific and technical activities (22.83%) and transport, warehousing and communications (14.57%).

At the end of September 2021 there were 235,140 companies in Romania running on foreign contributions to the share capital, with a subscribed capital worth a combined 64.227 billion US dollars.

FDI Romania
(Source: National Bank of Romania)

When analyzing the countries where the investment came from, the numbers show that
the largest number of companies with foreign contributions belonged to investors from Italy – 50,329 (subscribed capital of 3.906 billion dollars). However Dutch companies account for the highest value of the share capital, 12.706 billion US dollars in 5,633 companies.

Last year, FDI into Romania plunged 60% to 1.921 billion euro, compared to 2019. Foreign investors operating on the Romanian financial market injected around 42.3 million euro as capital into their local subsidiaries in 2020, 73% less than in 2019, ONRC data showed.

Romania’s economy contracted by 3.9% in 2020, one of the lowest contractions in the European Union (EU), and recovered strongly at 6.5% in the first half of 2021.

Available indicators suggest that the economy expanded at a solid annual pace in the third quarter.
Turning to the fourth quarter, the collapse of the coalition government on October 5 plunged the country into political crisis.

The fiscal deficit surged to 9.2% of GDP at the end of 2020 and will remain high in 2021.

Foreign firms continue to set up base in Romania despite challenges as its growing economy, vast natural resources, large consumption market and a favorable geographical location make it attractive.