EXCLUSIVE: Romania and Austria, a continuing success story: Austrian companies bring 19 pc of total investments in Romania

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Interview with Mr. Rudolf LUKAVSKY, Commercial Counsellor at Austrian Embassy in Romania.

Lukavsky

 

–              Mr. Lukavsky, despite difficult economic conditions due to financial crisis in 2009, Austria remained a constant investor in Romania, one of the most active. And yet, what makes our country attractive for Austrian businessmen? What are Romania’s strengths compared to other countries in Europe?

Romania is recognized among Austrian investors as an attractive market with great potential. With growth rates constantly above the European average, Romania is also increasingly capitalizing on this potential and has exhibited a more sustainable approach to growth over the last couple of years. Austrian investors generally chose to produce in Romania to supply the domestic market as well as to export. They see competitive advantages for production in Romania due to comparatively lower factor costs. There is also an undoubtable cultural similarity between Austria and Romania that has deep historical roots. Such cultural components should not be underestimated. After all, it is people who do business, cultural discrepancies or similarities are a major factor when it comes to building a trusted and sincere business relationship.

              How many Austrian companies are active currently?

There are currently close to 7.000 companies with Austrian capital registered in Romania, 6.973 to be specific, which directly create more than 100,000 jobs in the country. These companies provide modern technology, keep high standards for sustainable and environmentally friendly projects and hold up social values.

–              From the data available now, how the economic relations (trade statistics) between the two countries look like? Which are the Romanian products Austrians prefer?

The economic relationship between Romania and Austria is a continued success story with our bilateral trade volume increasing rapidly over the past years. Romanian exports to Austria have gained considerable momentum and amounted to EUR 1.21 billion in 2014 – a plus of 9.5 percent year-on-year. It was also a good year for Austrian exports with a total volume of EUR 1.88 billion (+4.4 percent). The first half year of 2015 sees a continued positive trend, further intensifying our bilateral trade relations.

While Austria mainly exports machinery, electrical and mechanical equipment, iron and steel, vehicles, synthetics, pharmaceutical materials as well as food & drinks, Romania exports to Austria comprise electronic goods, aluminum, furniture, wood & pellets, agricultural products and shoes.

–              What is the value of Austrian investments in Romania so far in 2015 compared to 2014 and what are the domains of interest?

Austria is a major investor in Romania. According to the latest available official figures, the overall investment by Austrian companies reached EUR 11.4 billion, amounting to 19.1 percent of total investments in Romania, compared to EUR 10.9 billion and 18.5 percent by the end of 2012. According to surveys of the Romanian National Bank (BNR), Austria therefore remains a top investor. As investment capital flows are becoming more and more complex with statistics not fully reflecting actual origins of investments, we can constitute that Austria is the strongest investor in Romania and one of the major driving forces of economic development and progress in the country.

Austrian companies are particularly strong in banking and insurance, oil and gas, environmental technology and services, real estate, agriculture, construction material and services, wood processing, packaging, transport, logistics and retail.

–              As Commercial Counsellor at Austrian Embassy in Romania from many years already, you know very well the domestic business environment. Have you noticed any changes in all these years? In your opinion, what local authorities should make to open more its doors to foreign investors?

I joined the Austrian Embassy in Romania in 2009, at a time when the country struggled with the economic crisis that had it firmly in its grip. Since then, the country focuses on a more lasting approach to business which led Romania to produce extraordinary results and growth figures over the past years. Austrian investors have been steady and reliable partners in this process and are proud to help strengthen Romania’s economic stability.

However, there is room for improvement in certain sectors in order to increase the attractiveness of its investment location. Investments require long term planning and strategizing, which is particularly difficult if the economic framework is changed as frequently as in Romania. Trust in political stability as well as predictability of political decisions are of utmost importance for international investors. The changes in the renewable energy support system and the introduction of the building tax are clear examples of how Austrian and other foreign investors were affected negatively due to short term alterations by the Romanian Government.

–              What is your message to potential Austrian businessmen seeking to invest in Romania?

Come to Romania and use the vast opportunities Romania has to offer, an economy with high growth rates. Romania has an attractive tax system and close proximity to Western export markets and a dynamic domestic market after rising local consumption and an abundance of infrastructure projects in all parts of the country.

At the same time we recommend Austrian companies, wishing to invest in Romania to choose their Romanian partners carefully and only select trusted companies and use the support of experts for tax and legal issues to prepare their projects well.

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