Romania became part of the European Union (EU) on January 1, 2007, a fact that has opened new opportunities for foreign investment in this country. Since its integration into the EU, Romania has become an attractive place to foreign investitors. Investors are drawn by a number of economic and social factors, including:

• Romania represents the largest population in Central and Eastern Europe, having more than 21 milions inhabitants.
• The country's geographic position permits easy access to countries from the ex-Soviet block, the Balkans, the Middle East, and North Africa. Romania is also placed at the intersection of three future European transport routes, known as Corridors 4,7, and 9.
• Romania has at its disposal a highly qualified workforce with a solid knowledge of IT and engineering.
• The country's natural resources are another advantage, ranging from fertile agrarian lands to oil and natural gas--not to mention a huge potential for tourism that includes the Carpathian Mountains and Transylvania, the only Latin-based Orthodox culture in the world, and warm-water resorts on the Black Sea.
• From the political point-of-view, Romania today is a secure country with a stable executive branch and legislature, NATO membership, and its EU status.

Romania has also been a member of the World Trade Commission (WTC) since January 1995. It is of course a member of the United Nations, but also of other organizations such as the Organization for Security and Cooperation in Europe (OSCE), the Council of Europe, and the International Francophone Organization. It has free-trade pacts with EU countries through the European Association of Free Trade (EFTA) and the Central European Pact for Open Trade (CEFTA).

The European Commision (EC) established priorities for 2008 in four domains:

1. To engender economic increases and establish new workplaces
2. To establish durable (lasting) developement in the areas of climatic changes and energy security
3. To conduct a thorough review of immigration throughout EU-member countries
4. To focus on other problems of urgent interest to European citizens.

Romania is an eager participant in addressing these priorities. In 2007 in Romania received an investment of 1.6 bilion euro from the EU to address priorities, and also paid into the EU budget at a level of 1.1 billion euro. Foreign flat investment in "value markets" (eg, the stock exchange and money markets) grew in 2007 by 226 milion euro, an increase of 33 procent from 2006. This was a similar increase in growth from that of 2005 to 2006. To encourage and protect investment, Romania transacted bilateral conventions (or pacts) with other states regarding the reciprocal promotion of such investment.

Romania has a functional market economy, and the good news for investors is that inflation is in the decrease. Redominating its currency and establishing the New Lei in 2005 currency (at a rate of 10,000 to 1) bought Romania on a path that is expected to lead to the country moving to the euro by the year 2013. There is permanent assistance given to the purpose of developing SMM (NB: don't know what SMM means), which is a major reason why the interest of foreign investors continues to grow.

It is important to mention in this picture that the governement and workers' unions maintain a steady dialog to ensure stability. Markets and worker relations are governed by a Work Code. Financial practices are similar to those throughout the EU and ruled by a Fiscal Code.

One well-known aspect of modern Romanian fiscal policy is the highly popular 16% flat tax on personal income and business profits. This policy has made Romania very competitive and has helped the Romanian people achieve increasing financial success in a country that still maintains a very high purchasing power parity (PPP) relative to most EU countries.

And finally, the country's infrastructure has improved during the past few years in numerous areas, including mobile telephony; petroleum fields; chemical products; banking; river, maritime, and railway transport; and the commitment to develop a network of highways that truly meet European standards.

Email : sandrafocseneanu@yahoo.com