The volume of foreign direct investment attracted by Romania this year could reach 10 billion euros, twice more than in 2005, Premier Calin Popescu-Tariceanu stated during the "How to make more profit" seminar organised by ZIARUL FINANCIAR.
"I wouldn't be surprised if we doubled the volume of foreign investment, compared with 2005," Premier Tariceanu stated, referring to the "major investors" with whom he comes into contact and show willingness to enter the Romanian market. "Anyway, this year will be an all-time record in terms of the volume of foreign investment," the Prime Minister added.
Foreign direct investment attracted by Romania last year amounted to 5.2 billion euros, an all-time high, even in the absence of major privatisations. The reinvested profit by the foreign companies that made significant profits on the domestic market accounted for 1.8 billion euros alone, that is over one third of the total investments attracted, the Premier said.
Foreign investments generate profits for companies and create better-paid jobs, he added.
The official forecast for foreign direct investment attracted in 2006 stands at approximately 7 billion euros for now. Foreign direct investment inflows were much higher than expected in the first four months of the year, 2.3 billion euros, an increase of almost 130% from the one billion euros in the first four months of 2005. The total of attracted foreign direct investment exceeded 600 million euros in April, compared with a volume of 246 million euros in April last year.
Finance Minister Sebastian Vladescu feels the same as Premier Tariceanu. He said attaining 10 billion euros in foreign investments was a possibility. "There is quite a large number of foreign companies that come to invest in Romania. As for the investment volume, if extrapolating the first four months in 2006 and adding the money to be received from the privatisation of Banca Comerciala Romana, we arrive at roughly this figure," Vladescu said.
Premier Tariceanu stated that a large part of the foreign investment inflows at the moment is due to the introduction of the flat tax at the beginning of last year, which cut the tax on corporate profits from 25% to 16%.
Therefore Romania has joined the ranks of those countries with the lowest profit tax in the world, he said.
"Many investors say the profit tax is not the most important criterion when they make the decision to invest in a country. I for one doubt the sincerity of such statements," the Premier commented.
He added that not only big companies were interested to invest in Romania, but also smaller businesses from abroad, though the latter showed a "certain reluctance" for the time being. After EU accession, many smaller investors will have the courage to invest in Romania.
"Whereas the big corporations can rely on the help of established law firms to untangle the legislative maze, small investors are still showing a certain reluctance, which will disappear after accession," Tariceanu said.
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