While much of Europe and the United States struggles to cope with the fallout from the credit crunch and cooling domestic markets, Romania remains an attractive investment location for UK and other businesses.
This is the view of Ernst & Young’s employment tax specialist, director Thomas Standring, who is currently on a two-year secondment to Bucharest from Ernst & Young’s Colmore Square office in Birmingham.
Mr Standring said that Romania’s fast growth economy, relatively inexpensive workforce and sizeable domestic market made it an attractive place to do business, adding that in a generally slowing global economy, West Midlands’ corporates should be looking East for their next big investment and business opportunity.
“Nokia’s recent relocation of its manufacturing operation from Germany to Cluj in Romania earlier this year has brought the business opportunities offered by Romania’s fast growth economy in to sharp relief,” said Mr Standring.
“The West Midlands corporate community should be looking seriously at this emerging market if considering outsourcing part of their business or setting up a subsidiary operation as there are real opportunities to be had.”
The observations are supported by Ernst & Young’s own findings. In its latest European Investment Monitor report, Romania emerges as one of the most successful Eastern/Central European economies in 2007. Romania secured 150 Foreign Direct Investment projects, making it the sixth most attractive destination for inward investment in Europe.
“Romania offers much more than a low cost location for outsourcing. A population of around 23 million people provides a huge domestic market for corporates to target with their products and services,” said Mr Standring.
“Its geographical location also makes Romania an attractive location to set up subsidiary businesses, providing a gateway to access and trade with the rest of South Eastern Europe.
“Businesses benefit from the incentives associated with being part of the EU and the reduced overheads of a relatively low cost work force,” he added.
A number of energy companies, from Germany, Austria and Italy have also set up bases in the north of Romania for the same reasons.
Mr Standring said they were taking advantage of a growing domestic market while also setting up a base to supply Hungary and Eastern Europe.
Continuing, he said that his secondment to Bucharest was proving to be an invaluable experience and was providing him with first hand insights into this emerging economy.
“When you’re working with a global portfolio of clients is it vital to have a good understanding of the market they are operating in and the secondment programme is a great way of experiencing this first hand.
“The business and cultural insights I am gaining as a result of the secondment will undoubtedly enhance the skills and experience I am able to offer my clients,” he said.
“This is particularly relevant given that my area of expertise, within the employment tax team, is based around global mobility. I will be able to draw on my own personal experiences to help identify and solve the challenges my clients are seeking to overcome,” he added.
Ernst & Young’s senior partner in Birmingham, Ronnie Bowker said: “Globalisation is here to stay, and recognising that companies now operate in a global market place is an integral part of our business.
“But it goes beyond just understanding the changing business world, and requires our employees to have international experience and regular interaction with international locations, which the secondment programme provides.”