The statistical survey regarding foreign direct investment (FDI) was conducted by the National Bank of Romania and the National Institute of Statistics. The major goal of the statistical survey was to determine the FDI stock in Romania as at 31 December 2013 and the FDI flows into the resident direct investment enterprises during the 2013 financial year.
The FDI Survey was conducted for the first time according to the methodological framework of the International Monetary Fund (IMF) Balance of Payments and International Investment Position Manual, Sixth Edition (BPM6), which replaced the former BPM5 compilation methodology. More details are shown in the METHODOLOGICAL NOTES.
1. FDI net flow in 2013 stood at:
EUR 2,712 million , of which:
- EUR 2,427 million – equity* (89.5 percent);
- EUR 285 million – net credit from foreign investors (10.5 percent).
2. FDI stock as at 31 December 2013 amounted to:
EUR 59,958 million , of which:
- EUR 40,700 million – equity, including reinvested earnings (67.8 percent);
- EUR 19,258 million – net credit from foreign investors (32.2 percent).
2.1. FDI stock by main economic activity
By economic activity (according to NACE Rev. 2), the bulk of FDI went to manufacturing (31.1 percent of total), out of which the largest recipients were: oil processing, chemicals, rubber and plastic products (5.9 percent of total), transport means (5.7 percent), metallurgy (4.1 percent), food, beverages and tobacco (4.0 percent) and cement, glassware, ceramics (2.7 percent).
Foreign direct investment stocks in Romania as at 31 December 2013
Breakdown by main economic activity
| |
Total |
| EUR million |
% of total FDI |
| TOTAL, of which:
| 59,958
| 100.0
|
| Industry
| 28,810
| 48.1
|
| Mining
| 3,519
| 5.9
|
| Manufacturing, of which:
| 18,648
| 31.1
|
| - food, beverages and tobacco
| 2,373
| 4.0
|
| - cement, glassware, ceramics
| 1,619
| 2.7
|
| - wood items, including furniture
| 1,255
| 2.1
|
| - manufacture of computer, electronic, optical and electrical products
| 1,250
| 2.1
|
| - machinery and equipment
| 1,309
| 2.2
|
| - metallurgy
| 2,481
| 4.1
|
| - transport means
| 3,439
| 5.7
|
| - oil processing, chemicals, rubber and plastic products
| 3,533
| 5.9
|
| - textiles, wearing apparel, leather goods
| 891
| 1.5
|
| - other manufacturing
| 498
| 0.8
|
| Electricity, natural gas, water
| 6,643
| 11.1
|
| Professional, scientific, technical and administrative activities and support services
| 3,034
| 5.0
|
| Agriculture, forestry and fishing
| 1,278
| 2.1
|
| Trade
| 6,723
| 11.2
|
| Construction and real estate transactions
| 5,887
| 9.8
|
| Hotels and restaurants
| 370
| 0.6
|
| Financial intermediation and insurance
| 8,496
| 14.2
|
| Information technology and communications
| 4,129
| 6.9
|
| Transportation
| 944
| 1.6
|
| Other
| 287
| 0.5 |
Apart from industry, activities that also attracted significant FDI were financial intermediation and insurance (14.2 percent of total FDI stock), trade (11.2 percent), construction and real estate transactions (9.8 percent), and information technology and communications (6.9 percent).
Tangible and intangible fixed assets stood at EUR 29,431 million at end-2013 and held 49.0 percent of total FDI, thus leading to considerable foreign direct investment stability.
2.2. FDI stock by development region
From a territorial point of view, FDI went mainly to BUCHAREST-ILFOV region (61.4 percent). Other development regions benefiting from significant FDI inflows were: the CENTRE region (8.6 percent), the SOUTH-MUNTENIA region (7.7 percent), the WEST region (7.6 percent), and the NORTH-WEST region (4.5 percent).
The statistical survey located FDI by registered office, which is not always the same as their business place.
| |
EUR million |
% of total FDI |
| TOTAL, of which:
| 59,958
| 100.0 |
| BUCHAREST-ILFOV
| 36,808
| 61.4
|
| CENTRE
| 5,179
| 8.6
|
| SOUTH-MUNTENIA
| 4,599
| 7.7
|
| WEST
| 4,581
| 7.6
|
| NORTH-WEST
| 2,665
| 4.5
|
| SOUTH-EAST
| 2,529
| 4.2
|
| SOUTH-WEST-OLTENIA
| 1,912
| 3.2
|
| NORTH-EAST
| 1,685
| 2.8 |
2.3. FDI stock by country of origin
The breakdown of FDI stock by country of origin took into account the country of origin of the direct holder of at least 10 percent in the share capital of resident FDI enterprises in Romania.
Top 4 countries by share of FDI stock as at 31 December 2013 were the Netherlands (24.4 percent of the FDI stock at end-2013), Austria (19.1 percent), Germany (11.2 percent) and France (7.6 percent), the same ranking since 2009.
| |
EUR million |
% of total FDI |
| TOTAL, of which:
| 59,958
| 100.0 |
| The Netherlands
| 14,624
| 24.4
|
| Austria
| 11,438
| 19.1
|
| Germany
| 6,744
| 11.2
|
| France
| 4,568
| 7.6
|
| Italy
| 2,816
| 4.7
|
| Cyprus
| 2,677
| 4.5
|
| Switzerland
| 1,942
| 3.2
|
| Greece
| 1,935
| 3.2
|
| Luxembourg
| 1,694
| 2.8
|
| Belgium
| 1,493
| 2.5
|
| United Kingdom
| 1,475
| 2.5
|
| Spain
| 1,110
| 1.9
|
| USA
| 1,086
| 1.8
|
| Czech Republic
| 1,082
| 1.8
|
| Hungary
| 747
| 1.2
|
| Other *
| 4,527
| 7.6 |
* Countries which invested less than EUR 500 million.
3. Types of FDI
The flow of equity into FDI enterprises amounting to EUR 2,764 million is divided into greenfield, mergers and acquisitions, corporate development and corporate restructuring.
In 2013, greenfield investment and mergers and acquisitions stood at a low level of EUR 112 million and EUR 152 million, respectively. The most important two components of the FDI flows were corporate development in amount of EUR 1,391 million (50.3 percent) and corporate restructuring worth of EUR 1,109 million (40.1 percent).
The accumulation of foreign direct investment (stocks) in enterprises established as greenfield investment companies, referred to as greenfield enterprises, was highlighted in order to assess the lasting impact of greenfield investment on the economy.
The breakdown of FDI stock in greenfield enterprises by main economic activity at end‑2013 was as follows:
| |
Total FDI
EUR million |
of which: |
Foreign direct investment
in greenfield enterprises |
| EUR million |
% in FDI
by economic activity |
| |
1 |
2 |
3=2/1*100 |
| TOTAL, of which:
| 59,958
| 28,801
| 48.0 |
| Industry, of which:
| 28,810
| 11,211
| 38.9
|
| Mining
| 3,519
| 334
| 9.5
|
| Manufacturing
| 18,648
| 9,682
| 51.9
|
| Electricity, heating, natural gas, water
| 6,643
| 1,195
| 18.0
|
| Financial intermediation and insurance
| 8,496
| 3,228
| 38.0
|
| Trade
| 6,723
| 5,245
| 78.0
|
| Construction and real estate transactions
| 5,887
| 3,726
| 63.3
|
| Information technology and communications
| 4,129
| 1,182
| 28.6
|
| Other
| 5,913
| 4,209
| 71.2 |
4. Exports and imports of FDI enterprises
The activity of direct investment enterprises as a whole had a positive impact on Romania’s foreign trade, its contribution to total exports and total imports of goods standing at 70.9 percent and 64.5 percent respectively.
- EUR million-
| |
Exports (FOB) |
Imports (CIF) |
| FDI enterprises |
% of total exports |
FDI enterprises |
% of total imports |
| TOTAL, of which:
| 33,623
| 70.9
| 34,292
| 64.5
|
| Industry, of which:
| 30,162
| 63.6
| 23,808
| 44.8
|
| - Manufacturing
| 28,857
| 60.8
| 22,911
| 43.1
|
| Trade
| 3,114
| 6.6
| 9,525
| 17.9
|
| Other
| 347
| 0.7
| 959
| 1.8 |
NOTE: Exports and imports are aggregated by the main activity of companies, according to NACE Rev. 2, excluding exports and imports of NACE divisions: 84 Public administration, 97/98 Activities of households as employers and 99 Activities of extra-territorial organisations and bodies.
METHODOLOGICAL NOTES
The FDI Survey was conducted according to the methodological framework of the IMF Balance of Payments and International Investment Position Manual, Sixth Edition (BPM6), which replaced the former BPM5 compilation methodology. For details on the main methodological changes and comparability of data sets see Implementing the new Balance of Payments Manual (BPM6)
-
Foreign direct investment: long-term investment relationship between a resident and a non-resident entity; it usually involves a significant degree of influence exerted by the investor on the management of the direct investment enterprise in which he has invested.
Foreign direct investment includes the paid-up capital and the reserves related to a non-resident investor holding at least 10 percent of the voting power or the subscribed share capital of a resident enterprise, the loans between the investor or the group to which the investor belongs and the direct investment enterprise, as well as the reinvested earnings.
Equity in a resident enterprise on which a non-resident investor has indirect significant influence is also considered foreign direct investment. This includes equity in the resident subsidiaries and associates of a resident enterprise in which a non-resident investor holds at least 10 percent of subscribed share capital.
According to the new BPM6 compilation methodology, FDI also includes equity and loans from non-resident enterprises whose voting power or equity participation in the resident enterprise is less than 10 percent, but which belong to the same group as the direct investor in the resident company (fellow enterprises).
- Foreign direct investor : legal entity, individual or group of related entities holding at least 10 percent of the voting power or the subscribed share capital (or of the endowment capital in case of unincorporated entities) in an enterprise located outside their country of residence.
- Direct investment enterprise : an incorporated or unincorporated resident enterprise in which a non-resident investor holds at least 10 percent of the voting power or the subscribed share capital, or of the endowment capital in case of unincorporated entities (branches). Holding at least 10 percent of the voting power or the subscribed share capital, or of the endowment capital, is the prerequisite for the establishment of the direct investment relationship.
- Indirect direct investment enterprise : an incorporated resident enterprise in which a foreign direct investor holds, via a direct investment enterprise, at least 10 percent of the voting power or the subscribed share capital. Indirect direct investment enterprises are subsidiaries or associates of direct investment enterprises. A subsidiary is a resident enterprise in which FDI enterprises hold more than 50 percent of the voting power or the subscribed share capital. An associate is a resident enterprise in which FDI enterprises hold between 10 percent and 50 percent of the voting power or the subscribed share capital.
- Fellow enterprises: enterprises belonging to the same group, residing in different countries and not having a direct control or influence relationship (meaning that neither of them holds at least 10 percent of the voting power or the subscribed share capital of the other).
- Reverse direct investment : the investment relationship opposite to the foreign direct investment between a resident direct investment enterprise and a foreign direct investor, where the former holds less than 10 percent of the voting power or the share capital of the foreign direct investor.
- FDI components:
- Types of FDI (by contribution to the equity flow in direct investment enterprises):
- Greenfield : establishment of enterprises by or together with foreign investors (ex nihilo investment);
- Mergers and acquisitions : partial or full takeover of enterprises by foreign investors from residents;
- Corporate development : increase in equity holdings of foreign investors in direct investment enterprises.
- Corporate restructuring: equity investment in enterprises which incurred losses in order to turn them to profitability.
Out of the total number of 41,191 FDI enterprises, 7,183 entities were surveyed (either by comprehensive or random survey).
A number of 6,312 FDI enterprises were subject to a comprehensive survey, including enterprises with at least 20 employees (5,972 entities), all the credit institutions with foreign capital (35 entities), all the insurance companies with foreign capital (37 entities), as well as the enterprises referred to as atypical, namely all the direct investment enterprises whose turnover or share capital was of at least RON 30 million, irrespective of the number of employees (268 entities).
A sample of 871 companies out of the 14,674 FDI enterprises with 5 to 19 employees were subject to a random survey.
In addition, 586 indirect direct investment enterprises were also subject to a comprehensive survey.
The response rate of the FDI survey was 95.7 percent.
The final results of the FDI survey in Romania at end-2013 (flows and stocks) have an error margin of ±3 percent, a 95 percent confidence level being warranted for the main indicators.
A more detailed account of the 2013 FDI survey results will be available at http://www.bnr.ro/Investitiile-straine-directe-(ISD)-in-Romania-3174.aspx starting 15 October 2014.