Romania Essay

Decent Essays

Romania is strategically located at the crossroads of the European Union (EU). It is the seventh largest country making up the EU. The country provides both opportunities and challenges to foreign companies and individuals who are interested in investing in its market. Based on the market analysis information, Romania has a lot of opportunities for foreign investors willing to explore its market. However, the investors are likely to encounter a few challenges such as political instability and corruption. Romania is strategically located for doing business. It is located in Southeast Europe in the Black Sea region. As a result, it enables businesses to easily access many European markets. Hence, a business in Romania, can access other …show more content…

Constant rivalry between Social Democratic Party and Alliance for Liberal and Democrats party is the cause of the political instability (Baldan, 2015). At the same time, bureaucracy and lack of transparency characterize the political system. Corruption is another political-related issue that makes it hard to operate a business in Romania. Both the private and public-sector experience high-levels of corruption. These factors affect the ease of doing business. Nevertheless, the country has favorable business laws and policies. For instance, it passed an ambitious Tax Law in 2005. This Law requires the state to use a standard corporate income tax rate of 16%; the lowest in the EU. This is a good legal incentive to businesses (Receanu, 2010). The Company Law also allows foreign investors to fully participate in the Romanian companies without any form of restriction. At the same time, foreign investments are not subjected to nationalization and requisitions unless it becomes public interest. Therefore, despite political instability, Romania has business laws that favor foreign investments. According to the latest report released by IMF, Romania is the 41st largest economy in the world. It has an average annual output of $435,454 billion (Receanu, 2010). The company had a total GDP of $186.7 billion as per the end of 2016, making it the 41st country with the largest GDP globally. Besides, the country is expected to have an economic growth of 6% in 2017, which is higher

Get Access