As a Romanian law firm we have seen that the ongoing hostilities in the Ukraine have impacted on the business life of Romania. From the initial shock and surprise at the invasion of the Ukraine to an uneasy realisation that it is a front line country so Romania has had to look at its position in the business world again.
As a leader with Poland of the Bucharest Nine Romania has found itself in a position that it has not been before. It has become a leader and influencer in respect of what is happening, rather than being a follower. This has brought about a renewed interest in Romania and its potential. The untapped resources of the country both in minerals and people can be released.
The result of this is that as lawyers in Romania we now see it reflected in the way business is being conducted in Romania. This has resulted in a continued inflow of direct foreign investment, entrepreneurial companies seeking new markets as well as existing companies continuing to expand their current businesses in Romania.
We have seen an increase of interest both in the fields of the old industries – transport – manufacturing – agriculture as well as new industries such as computing – outsourcing – and production of high worth products. It is interesting how many unicorns Romania has been able to produce over the last two or three years. We have also seen a consolidation in the fields of computing and programming as more and more smaller companies are brought out. This is happening even though the major companies are in some cases reducing their head count.
The requirements for programmers does not seem to have diminished and indeed seems to have increased. To take advantage of these trends the Government has brought in in direct changes and in some cases small changes to the laws of taxation which may be reflected in the future in a greater tax income for the Government.
Attempts by the Government to make the business environment more user friendly have taken place. There have been improvements in dealing with Government organisations. Certain Government filings both in relation to taxation and corporate matters can now be done electronically rather than filing manually pieces of paper. Will this improve business administration – only time will tell. It certainly has improved the incorporation of companies from the legal perspective as the filings can now be done electronically.
A number of pieces of recent legislation have been introduced into the Romanian law. These legislative changes have been driven by Romania’s membership of the European Union. Some are belated acts which should have been in force some time ago but have only recently been introduced. Other are more up to date.
Where does this leave Romania as a potential business market. The War in the Ukraine will continue to have an effect on the Romanian business environment. The introduction into Romania of foreign armed forces, if only a limited number will attract arms suppliers who will see the business opportunities.
As numbers of foreign servicemen increase so will the demand for the local services to support them. Already a number of manufacturers and service companies are bringing in personnel from other countries to provide support for their businesses already here. They will be bringing in staff and support from other EU countries as well as non-EU countries. Local business will also benefit and the companies more interested in a long term future will also be able to take advantage of know-how from abroad.
There are also other advantages for companies investing in Romania. As at the same time as the effect of the War, the Romanian economy continues to expand on its own merits. A number of surveys have shown that Romania will continue to be an expanding market both at the personal and business level ahead of other EU countries for some time and is therefore a country which all businesses should look at again if they wish to expand. Employment opportunities are there and continue to grow. International companies are continuing to invest in human capital in Romania as well as opening new facilities.
The old adage of the 1880’s “go west young man” should now be replaced with the words “go east young man” especially if you wish to grow your business.