Netherlands is the largest direct investor in Romania, with over one billion dollars in investment volume, that is 15% of the $6.8bn in foreign investments made by May this year. The number of Dutch-held companies in Romania at the time amounted to 1,250, that is only 1.6% of the total number of foreign-owned companies registered.
Dutch companies therefore come with a great investment power. What is it that brings Hollanders in Romania, anyway? Most of the Dutch companies in Romania (47% of the total in 1999) deal in trade, industry and services.
The total investments in foreign currency considered (direct investments and investments undertaken by privatisation contracts), Holland ranked third ($706 million) after France and Germany in 2000.
An explanation for the large Dutch investments in Romania is the fact that certain European companies choose to come here through Holland, due to the more lenient fiscal regime of this country.
"Some foreign investments in Romania are considered to be Dutch, although they are made by companies based in other European states," explains Violeta Cozianu, official with the Commercial Department of the Dutch Embassy in Bucharest.
Dutch companies, however, have identified both the problems and the advantages derived from investing in Romania.
SENTER, the agency of the Ministry of Economic Affairs of the Netherlands early last year drew up a survey about the business environment in Romania, the economic situation in the country and business opportunities for Dutch investors.
This survey is part of the PSO, the Netherlands programme for co-operation with CEE countries, Romania included. SENTER is in charge of the PSO programme.
Business opportunities for Dutch investors: the local market's big potential especially for consumer goods. According to analysts the economy is past its deepest point and is now on the way to a slow but sure recovery. Over time this will increase the purchasing power of the consumers.
Furthermore, the Romanian labour is highly trainable, hence business-to-business support through training, technical advice, marketing, management support, development of the business plan etc has proven to pay off.
What Dutch investors dislike about Romania is the fact that the domestic market is too small in general for various kind of (for example agricultural) machinery to be produced locally, due to the lack of financial resources and the inability of applying the economies of scale in agriculture (too many small-holdings).
They are also displeased with the time-consuming registration requirements to obtain licenses and start an enterprise, as well as with the unpredictability and instability of government regulations, such as measures on import taxes and tax holidays.
Considering the amount of capital invested, the top ten Dutch investors in Romania by 1999 include Marga BV, Petrotel Lukoil Holding BV, CC Beverages Holdings II BV, MSB Deelnemingen BV, Philip Morris Holland, Airtouch Europe BV etc.
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