The free and the depressed zones will turn into assisted areas as agreed during negotiations with the European Union. The number of incentives in these areas will be visibly lower.
"The Government is concerned with matching the status of free zones with the status of depressed areas, so that the assisted area concept is being discussed more often," Mihai David, state secretary with the Development and Prognosis Ministry at the end of last week said.
David added the investors in the free zones would lose the granted incentives, due to Romania's EU accession in 2007.
"We must bear in mind that the Agreement between Romania and the EU should be ratified by the EU member states prior to accession, that is by 2005-2006, which means every negotiation chapter has to be closed by the end of 2004. The negotiation chapter dealing with competition cannot be closed unless the status of the free areas is decided. That is why we will hold talks with the investors in the free zones and see how we can make up for the loss of the incentives," David explains.
At present, there are six free zones in Romania, that is Constanta-Sud Basarab, Sulina, Galati, Braila and Giurgiu, Curtici-Arad.
"In 1978, the Free Harbour Administration Sulina was established, which was indeed something out of the ordinary, that is a socialist country establishing a free trade zone. In 1979, the Chinese sent a delegation to Sulina to see how this mechanism works. This was the model for the Special Administrative Regions, the drive of China's economic development. Meanwhile, our achievements in the free zones are far behind those of China, Vietnam, Uruguay or Kenya," Mihai Micu, Sulina and Giurgiu free areas representative said.
The investors in such areas get various customs, fiscal and commercial incentives, which include zero customs duties, zero VAT or profit tax cuts.
The investors in depressed areas benefit, among others, from zero customs duties for raw materials and parts imported for their own productive business or from other types of fiscal incentives.
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