The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world. They analyze a variety of economies that are or could be markets for U.S. businesses. The Investment Climate Statements are also references for working with partner governments to create enabling business environments that are not only economically sound, but address issues of labor, human rights, responsible business conduct, and steps taken to combat corruption. The reports cover topics including Openness to Investment, Legal and Regulatory Systems, Protection of Real and Intellectual Property Rights, Financial Sector, State-Owned Enterprises, Responsible Business Conduct, and Corruption.
Romania welcomes all forms of foreign investment. The government provides national treatment for foreign investors and does not differentiate treatment due to source of capital. Romania’s strategic location, membership in the European Union (EU), relatively well-educated workforce, competitive wages, and abundant natural resources make it a desirable location for firms seeking to access European, Central Asian, and Near East markets. U.S. investors have found opportunities in the information technology, automotive, telecommunications, energy, defense, services, manufacturing, healthcare, consumer products, insurance, and banking sectors.
Since the 1989 revolution, Romania has embarked on an uneven, but ascending, economic growth path. Romania’s economy expressed resilience during the COVID-19 pandemic, declining by only -3.7 percent in 2020 and rebounding to 5.8 percent growth in 2021. On March 9, 2022 Romania lifted all COVID-19 restrictions. Minimal trade and investment ties have limited the direct effects of Russia’s war on Ukraine on the Romanian economy, which grew by an estimated 4.9 percent in 2022. Due to rising regional energy prices exacerbated by Russia’s war, Romania’s annual inflation averaged 13.8 percent in 2022 and rose to 16.4 percent by end-of-year. As of January 2023, Romania had facilitated the export of more than 12.7 million tons of Ukrainian grain.
Romania is eligible to receive up to $81 billion (€77 billion) in EU funding by 2030, including $31 billion (€29 billion) in grants and loans from “Next Generation EU” funding via the National Resilience and Recovery Plan (NRRP) between 2021-2026. NRRP funding aims to support Romania’s green transition, digitalization efforts, and health system resilience. However, a demonstrated lack of administrative capacity to absorb and implement projects using EU funding may impact Romania’s ability to absorb these funds and dampen the NRRP’s impact. The European Commission’s 2022 European Semester Country Report for Romania noted that administrative capacity at all government levels remains a challenge, coordination between institutions was poor, and already weak collaboration between the central government and local administrations was subject to heavy political interference.
In January 2022, the Organization for Economic Cooperation and Development (OECD) opened accession discussions with Romania. The OECD technical review process, a multi-year assessment of Romania’s candidacy against OECD standards and policies in areas such as the investment climate, governance, and environmental protection, began on December 15, 2022.
As an EU member state, Romania’s climate objectives align with EU strategies, including the 2030 Agenda and the European Green Deal. However, legacy environmental issues limit Romania’s ability to deliver on biodiversity and clean air goals. Environmental challenges include poor air quality, inadequate waste management practices, and insufficient protective measures for natural areas. Illegal logging remains a concern despite progress towards improved traceability of extracted wood.
The investment climate in Romania remains a mixed picture, and potential investors should undertake due diligence when considering any investment. The European Commission’s 2022 European Semester Country Report for Romania noted that excessive red tape, inefficient public administration, and an unpredictable legislative framework were detrimental to the business environment and limited investment opportunities.
Government sales of minority stakes in state-owned enterprises (SOEs) in key sectors, such as energy generation and exploitation, have stalled since 2014. Successive governments have weakened enforcement of the SOE corporate governance code by resorting to appointments of short-term interim managers to bypass the leadership requirements outlined in the corporate governance code. Management instability has hindered the abilities of SOEs to plan and invest.
Consultations with stakeholders and impact assessments are required before enacting legislation. However, these requirements have been unevenly followed, and public entities generally do not conduct impact assessments. The government’s shifting priorities often result in rapidly changing policies and legislation, leading to an unpredictable business climate. Romania has made significant strides to combat corruption, but it remains an ongoing challenge. Visit the U.S. Department of State’s Investment Climate Statement website at Romania - United States Department of State.