Foreign direct investments represent an essential component of the Romanian economy, significantly impacting the country’s financial capital, state budget, balance of payments, and market structure. Simply put, a foreign direct investment is an investment made by a company or by an individual from one country, into a business located in another country. In Romania, the number of FDI projects peaked in the mid-2000s and dropped to 69 by 2022. Despite the drop in numbers, the FDI stock recorded its maximum value in 2022 at nearly 108 billion euros.
Apart from the impact on the national economy, foreign direct investments also influence the business environment regarding management skills, human resources development, and, most importantly, job creation and employment. In 2022, FDI projects created over six thousand new positions in the country.
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Greenfield ventures fuel the FDI market in Romania
The OECD divided foreign direct investments into the following categories: mergers and acquisitions, financial restructuring, extension of capital, and greenfield investments. The number of greenfield investments in Romania, specifically those of foreign companies creating a subsidiary in a different country by building its operations from the ground up, amounted to 190 projects in 2022, valued at approximately nine billion U.S. dollars. Since 2006, greenfield investments in Romania accounted for most of the FDI stock. Regarding the geographical distribution, it is no surprise that most greenfield enterprises opened in Romania were located in the Bucharest-Ilfov region, followed by the Central and Western regions.
Romania’s industry is a magnet for foreign investors
Romania is known for its industrial tradition, robust market, and labor costs, and it is one of the lowest in the European Union. These aspects led to the development of the industrial sector, which attracted a significant amount of foreign direct investments. In 2022, the value of tangible and intangible fixed assets of FDIs in the industry sector amounted to over 4.4 billion euros. Moreover, 39 percent of the FDI stock was directed towards the manufacturing industry. In this regard, some of the most appealing and profitable manufacturing sub-sectors for foreign investors were transport equipment, oil processing, food production, and metallurgy.
