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Finance

Română  Banking  Investing  Exchange Rates  Notes & Coins

 

Banking

CursValutarBanking in Romania is much like any other European country.  With a solid central bank and the last publicly held bank sold off in late 2006, Romania has completely privatised it's banking sector since the 1989 revolution.

The Big Ten

Australia has roughly the same population (about 21 million) as Romania , yet the retail banking sector is dominated by only four major players (CommBank, NAB, ANZ and WestPac). 

Romanian however has yet to see such consolidation of the industry, largely due to the heavy and disparate foreign ownership of banks, along with regional divisions (the Bank of Transilvania is not as popular outside Transilvania).

 

The National Bank of Romania

Established in 1880, the NBR is the country's central bank, and an independent public institution with its headquarters in Bucharest. It is the sole institution vested with the power to issue notes and coins to be used as legal tender on the territory of Romania.

In addition to issuing currency, the bank ensures and maintains price stability in the economy.   The central bank formulates monetary policy and the exchange rate policy (until the Euro is adopted in Romania) in line with the general economic policy of the Government of the day.
Read about the National Bank History Here
The Old National Bank Building
With a great view of Lipscani Street , one of the most imposing and massive bank edifices in Romania.  The construction of the building in the eclectic style of the late 19th century, with some neo-classical elements, proceeded between 12th July 1884 (when the foundation stone was laid) and June 1890
The Old NBR Palace
Photo:  Government of Romania
Overseeing credit-issuing institutions, the NBR also oversees the payment systems, and manages the official cash reserves of the nation. 
By law, the National Bank of Romania is solely accountable to Parliament and is on no account subordinated to Government, although cooperation where possible exists. 
The National Bank of Romania is managed by a Board of Directors appointed by the Parliament of Romania on the recommendation of the standing committees of the two Chambers of the Parliament. Board members are appointed for a five-year tenure that can be subject to renewal.
The main tasks of the Board of Directors are to decide on the monetary and exchange rate policies, as well as on the measures for authorisation, regulation and prudential supervision of the credit institutions and oversight of the authorised payment systems.
The CEC Building
The CEC Building
The photo immediately preceding this notice is Copyright (c)2005 - 2008 Rest Romania SRL, All rights reserved. Photo: © REST ROMÂNIA

 

Investment

Top Investment by Nationality
Rank
Country
USD (m)
1.
Netherlands
1707
2.
France
1012
3.
Germany
926
4.
USA
696
5.
Italy
610
6.
Austria
590
7.
Netherlands Antilles
554
8.
Cyprus
492
9.
Turkey
409
10.
Switzerland
388

Investment

Even after EU Accession, Romania remains on the radar in boardrooms across Europe and the USA for it's abundant skilled labour force and low taxes.

Romania still comes up trumps with the availability of an educated labour force, low labour costs, and since January 2007, the existence of an approved European Union legal system.   With medium-term incentives offered to potential investors and, of course, stability of the political system, improving  infrastructure and favourable geography makes Romania a flexible and rich with complimentary functional nodalities.
Road infrastructure is probably one of the biggest challenges in the near to medium term, and the tax system cannot be said to be fully stable as yet, although certainly more favourable than most European country tax law for most corporations.
Top 10 Foreign Controlled Companies
Rank
Field of activity
Country origin
Foreign Investor
Romanian Company
1
Automotive
France  
Renault
Automobile Dacia S.A
2
Steel production
India-UK 
LMN  Holding
Ispat-Sidex S.A. 
3
Oil processing 
Netherlands
Rompetrol Group 
Rompetrol Rafinare S.A.
4
Telecommunication
Canada-UK 
Telesystem Int'l Wireless and Vodafone 
Mobifon S.A.    
5
Retail trade
France  
Bearbull SAS
Hiproma S.A. 
6
Banking services
Austria
Raiffeisen International Bank Holding AG
Raiffeisen Bank S.A.
7
Automotive
Korea
Daewoo Motor Company Ltd.
Daewoo Automobile Romania S.A.
8
Personal care
USA
Colgate-Palmolive Inc. Products
Colgate-Palmolive
9
Gasoline distribution
Hungary
Mol Hungarian Oil & Gas Company RT
Mol Romania Petroleum Products SRL
10
Telecommunication
Greece
OTE Int'l Investment Ltd.
Romtelecom

Tables Source:  The Embassy of Romania in Canada, Ottawa

On Stamp Duty

Romania has a rather Eastern European tradition of bureaucratic stamping of documents, any document, including receipts.  A tradition not known in most English speaking countries, this stamp store in downtown Constanţa is actually registered with the government to be authorised to produce company stamps. 

Romania has a rather Eastern European tradition of bureaucratic stamping of documents, any document, including receipts.  A tradition not known in most English speaking countries, this stamp store in downtown Constanţa is actually registered with the government to be authorised to produce company stamps.

The photo immediately preceding this notice is Copyright (c)2005 - 2008 Rest Romania SRL, All rights reserved. Photo: © REST ROMÂNIA

Taxes and Insurance

Taxes in Romania are enjoyably low for any company wishing to invest. 

The simpler 16 per cent flat tax is not bad, although higher than in neighbouring Serbia for example.
Salaries are also taxed at a competitive 16 per cent, yet the social contributions made by the employer are so high that every Romanian socially insured should have access to state-of-the-art facilities.   This had led to rampant under-reporting of wages in a bid  for small businesses to save on their burden to the state for each employee.
The employer also has to provide for a private insurance (which, by the way, is not tax deductible) for its employees to make sure they are treated in the same way as in an EU-member state.

Labouring Away

The labour market in Romania is very competitive with other economies and one can find skilled labour force in abundance, making Romania shine amongst it's Eastern European neighbours.

Employees are well-protected in law against being fired, something foreign investors find slightly daunting sometimes.  Unlike in American, the employer does not have quite as much flexibility in ending an employment relationship, and employers in Romania must seriously consider candidates for positions prior to hiring.

The accession of Romania in 2007 has seen a drastic increase in domestic demand caused by the inflow of funds (both, from the EU budget and private investments) and an increase in the spending power of all Romanians.

This increase, coupled with the size of the market, has made the guarantee that investment in Romania continues to yield a return, that can easily indemnify for the downsides mentioned under points one to three above.
The national statistics service, the INS reports that in 2006, job in the agrarian sector fell by 2% to 31% of the total labour force, with construction and service sector jobs up 8.3% each.   The trends are expected to continue through 2007, with a slow decline in farm jobs as multinationals snap up land and the influx to the cities continues.   Disposable income has been on the rise (up 6.8% in 2006, corresponding to a drop in the underlying inflation from 8% to 4.3% at the end of 2006), thus further feeding the service industry cycle. 
The overall labour force participation rate in Romania constitutes 65.8% of the population aged 15 to 64, with unemployment in Q3 2006 at 7.8%, fairly steady for the Romanian economy.

The Stock Market

Already three times the size of the market in European Union neighbour Bulgaria to the south, the Bucharest exchange is pushing to grow to over a quarter million active investors and a market cap of 50E billion by 2010.

The Bucharest Stock Exchange (BSE)’s newly elected board is aiming for a capital boost and to increase the market capitalisation to 40 billion Euro from the current 15.3 billion Euro.
However this 40 billion Euro figure would only be half of the current market capitalisation of the Polish stock market.
The BSE’s market capitalisation is half that in Hungary and the Czech Republic, but three times the size of Bulgaria (4.3 million Euro).  The bourse also aims to reach a daily trade volume of 50 million Euro by 2010, up from the 8.7 million Euro last year.
“We want to organise a new market segment, dedicated entirely to companies active in the high-tech field,” said Septimiu Stoica, new president of the board of BSE. “We have already started consultancy talks with the main associations in the field, as we wanted to get the validation of our ideas in this respect and to go public with it.”
The new management of the BSE wants to get more people playing the markets. It wants to increase the number of active investors by 2010 to 300,000 from the current 12,000.
“We are also thinking about launching the idea of having a regional stock exchange up and running, mainly in the countries from the Balkans,” Stoica told The Diplomat.  “We’re talking about countries such as Bulgaria and Serbia-Montenegro, and if we can have the Athens Stock Exchange involved in the system it would be great.”
The BSE wants to improve its IT infrastructure to support new active accounts, although no details have been released as to when this will happen. This could give grounds for the BSE to complement the systems operated by other European stock exchanges.
Source:  The Diplomat
Rest Romania does not give investment advice and recommends that you contact your broker or other market professional prior to making any investment.  Rest Romania is in not  in any way responsible for the accuracy or suitability to any figures given in regard to economy, markets, pricing or other economic type activity.  Other terms and conditions apply

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Exchange Rates

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The New National Bank Building
Downtown on Str. Doamnei, the new wing of the NBR Palace was built during World War II, after having laid the foundation stone back in 1937.
The construction works carried on between 1942-44 under the direction of architect Ion Davidescu assisted by two other architects, Radu Dudescu and N. Cretoiu.
The building is emblematic of the neo-classical style with rationalist influences that prevailed in the inter-bellum period. It impresses by the monumental granite stairs, the huge Corinthian columns forming the façade, and the large, white marble-coated halls inside the building.
The New National Bank Building
Photo:  Government of Romania

Active Banks in Romania

 
 
ABN AMRO Bank (Romania) S.A. 
 
Address: Bucuresti, Piata Montreal nr.10, WTCB unit.2.23, sector 1
Phone: 0801 02 26 22
Site: http://www.abnamro.ro

 
ALPHA BANK ROMANIA S.A. 
 
Address: Bucuresti, Calea Dorobantilor 237 B, sector1
Phone: 2099999
Fax: 2316570
Email: pr@alphabank.ro
Site: http://www.abnamro.ro

 
BANC POST S.A.  
 
Address: Bucuresti, bd.Libertatii nr.18 - 20 - 22, bl. 102, 103 si 104, sector 5
Phone: +40 21 335 5897
Fax: (021) 336 0763
Email: sugestiiclienti@bancpost.ro
Site: http://www.bancpost.ro

 
Banca Comerciala "Ion Tiriac" SA 
 
Address: Bucuresti, str.Nerva Traian nr.3, bl.M101, sector 3
Phone: +40 21 3025 600
Email: bancatiriac@cbit.ro
Site: http://www.bancatiriac.ro

 
Banca Comerciala "ROBANK" S.A. 
 
Address: Bucuresti, bd.Unirii nr.59, sector 3
Phone: +40 21 322 57 00
Fax: +40 21 322 68 75/85
Email: office@robank.ro
Site: http://www.robank.ro

 
Banca Comerciala CARPATICA S.A. 
 
Address: Sibiu, str. Autogarii nr.1
Phone: 0040-269-23.39.85
Fax: 0040-269-23.33.71
Email: centrala@carpatica.ro
Site: http://www.carpatica.ro

 
Banca Comerciala Romana S.A. 
 
Address: Bucuresti, Bd.Regina Elisabeta nr.5, sector 3
Phone: 0801.0801.227
Email: bcr@bcr.ro
Site: http://www.bcr.ro

 
BANCA COMERCIALA SANPAOLO IMI BANK ROMANIA S.A. 
 
Address: Arad, str.Revolutiei nr.88
Phone: (0040)257 284888
Fax: (0040)257 285998
Email: headoffice@sanpaoloimi.ro
Site: http://www.sanpaoloimi.ro

 
Banca Daewoo (Romania) S.A. 
 
Address: Bucuresti, Bd. Unirii nr.55, bl.E4a, Tronson 1, sector 3
Phone: (021) 20.11.930
Fax: (021) 20.11.931
Email: office@daewoobank.ro
Site: http://www.daewoobank.ro

 
Banca de Export Import a Romaniei EXIMBANK S.A.  
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Address: Bucuresti, Spl. Independentei nr.15, sector 5