As Romania is speeding up the integration into Europe, its economy can be described by consolidation and continued growth. Romania became a member of NATO in 2004 and is set to join the EU in 2007. A sound macroeconomic development and the implementation of key structural reforms are improving the predictability and stability that foreign investors and companies seek. A functioning market economy status has been granted by the EU. Highly skilled labour and low wages are key features in the explanation of the steady increase in Foreign Direct Investment. Not to forget, with a population of 22.5 million, Romania is also the largest market in South-Eastern Europe. These conditions are also largely reflected in the business relationship with Norway.
There is a growing interest from Norwegian companies to trade and invest in Romania and business relations between Norway and Romania are very good. The trade figures show increased trade between Romania and Norway over the past few years. However, the figures for 2004 indicate a reduction in the total value of trade, down from EUR 170 M in 2003 to EUR 141 M in 2004. This is mainly due to a decline in Romanian exports of ships and ship hulls to Norway. Norwegian-owned shipyards in Romania are gradually serving more and more customers from other countries than Norway. This decline, together with increased Norwegian exports, contributed to a reduction in the Romanian trade surplus with Norway, which was EUR 58 M in 2004.
In 2004, there was a substantial increase of 40 % in Norwegian exports to Romania (up from EUR 30 M in 2003 to EUR 42 M in 2004). Main Norwegian exports continue to be machinery (29%), seafood including fish (23%), and electrical machinery (19%). In 2004 the total value of all imports from Romania was about EUR 100 M, and the value of the export was about EUR 42 M. From 2003 to 2004 Norwegian exports to Romania increased by 41% and imports from Romania decreased by 29%. The three most important sectors of import from Romania are, in ranking order; ships and boats (26%), woven apparel (26%) and furniture and bedding (13%).
So far the main Norwegian investments have been made by the Aker/Kvaerner group in shipbuilding yards (Tulcea and Braila), a steel plant/heavy equipment manufacturer (IMGB). This group now has 6000 employees in Romania. Another main investor is ORKLA Foods International in the food processing industry. ORKLA Foods is now in a period of expansion in Romania.
According to statistical figures 130 Romania-Norwegian joint-ventures were registered in Romania by the end of 2002. The shipping and maritime industry will continue to be an important sector for Norwegian investments and trade. In addition, we see a growing interest in sectors like energy, environment and IT. Another trend is that some small and medium sized enterprises (SMEs) move part of their production to Romania. Some new SMEs have also been set up by Norwegian capital with the aim of producing for the Norwegian market from Romania.
The trade exchange between Romania and Norway is unfolding mainly in the framework provided by the "Free trade agreement between Romania and EFTA member states", signed in 1993. As a founding member of EFTA, and based on the European Economic Area (EEA) cooperation and treaty, Norway has participated in the internal market since 1994. On entering the EU the candidate countries will also become members of the EEA. The EEA will form the basis for economic relations between the new EU member countries and Norway. In practical terms this will mean that the four freedoms will apply to the relations between Romania and Norway, when Romania joins the EU.
Please contact the Norwegian Embassy to Bucharest or the Innovation Norway website: http://www.invanor.no/ for more information about investing in Romania. The Romanian Embassy in Oslo can also provide information about business in Romania.
Read more about the agreement on the EFTA website.
Norway has also a tax convention with Romania. Click here to read the convention.