Romania has recorded solid economic growth in recent years and is therefore becoming increasingly interesting for investors. Growth rates of over 6 % in recent years are tempting. However, there have been and still are challenges for the emerging country in south-eastern Europe. For example, Romania is still considered to be susceptible to corruption, although it has already made progress in the fight against corruption. As a member of the European Union (EU), Romania is nevertheless subject to a mechanism for monitoring and evaluating the rule of law, which provides a high degree of investment security. In addition, membership of the EU facilitates trade with other countries.
Another advantage of Romania is its geographical location, which connects Central Europe and Southeast Europe. With its ports on the Black Sea, Romania also has access to international waters. There are also several railroad stations that are part of the “New Silk Road” [Belt and Road Initiative (BRI)] trade route. Other advantages that increase the attractiveness of investing in Romania include the availability of skilled labor at comparatively low costs. Due to its numerous advantages, Romania is interesting for investments in a wide range of business areas. There is considerable potential in areas such as renewable energies, the automotive industry, tourism, agriculture and food processing, information technology (IT), healthcare and the real estate sector. Good economic and political framework conditions as well as its own gas reserves, which offer a secure gas and energy supply, make Romania a promising investment location that will change many people’s opinion of Romania in the coming years, provided that the responsible politicians act in the interests of the people and do not sell out the country to foreign investors.
Private or institutional investors
Whether you are planning to invest in Romania as a private or institutional investor, you should always do your research beforehand, regardless of the promising prospects. In addition, possible legal and regulatory challenges must be taken into account. Furthermore, investments should not contradict your ethical and moral principles. As a small investor, for example, I only invest in business areas, company shares or funds whose activities I can understand. I prefer to steer clear of convoluted investment products, even if they supposedly promise high returns.
Cities of Romania
Romania’s cities are buzzing with life, and at the same time they offer investment opportunities!
As a private investor, for example, you can invest in shares of Romanian companies, which gives you the opportunity to participate in the success of certain companies. When investing in equity funds, you leave the selection of appropriate shares to fund managers, who invest in a wide range of individual stocks in order to spread the risk. ETFs, which offer broad diversification across different asset classes, are also traded on stock exchanges. You can also participate in real estate funds that spread their investments across different types of property, regions and projects in order to minimize risk. With real estate crowdfunding, on the other hand, you invest directly in a specific real estate project. Crowdfunding enables small investors to invest in a wide variety of projects or start-ups. You can also benefit from the rise of the Eastern European country with Romanian government bonds, which are traded on numerous stock exchanges. You can buy or order all these investment products either via your online custody account or via your bank custody account.
Other investment opportunities in Romania include buying real estate directly on site or through real estate agents. Real estate prices in Romania are still on an upward trend. In the booming city of Brasov, for example, real estate prices are rising steadily. You can see real estate as an investment or use it privately. By the way, Romania is a really beautiful country with beautiful cities. Many foreign investors also buy large areas of farmland, which they then lease until the land is designated as building land for industrial estates.
Note: It can be helpful to use the services of experts, such as lawyers or business consultants, to ensure that investments and purchases are made in accordance with the law.
Not entirely unintentionally, I would like to end by mentioning Romanian wine. Romania has an extremely long wine tradition and produces excellent wines that can compete with top wines from other countries. Try a Constantin Brâncoveanu Reserva, a cuvée red wine made from local and international varieties, to get to know Romanian wine.
Stock exchange listed companies:
- Banca Transilvania (TLV): One of the largest banks in Romania.
- OMV Petrom (SNP): A company that focuses on the exploration, production and refining of crude oil and natural gas.
- Romgaz (SNG): A natural gas company specializing in exploration, production and distribution.
- BRD – Groupe Société Générale (BRD): One of the leading banks in Romania, part of the Société Générale Group.
- Nuclearelectrica (SNN): A company that focuses on the production of nuclear energy.
- Transgaz (TGN): A company that specializes in the transport of natural gas.