7. Do you feel there are barriers left for the foreign capital in Romania? Do you see any business barriers for the national capital in Romania?
According to the latest survey conducted by the Chambers of Commerce representing the German economy in Central and Eastern European countries, Romania remains a trustful investment destination for German companies. Foreign investors believe that the economic climate, the prospects for the Romanian economy and personal expectations regarding their own business have improved compared to last year. The efforts to access more European financing stand by the recent improvements in the absorption of EU funds. The Romanian government has engaged, as a priority objective, to absorb 80% of the EU funds allocated in the budget for 2007-2013. A business barrier that Romania is facing lately is the lack of workforce. We have companies investing in Romania, in the central and Western regions, which are seeking for workforce in neighboring countries.
Due to the multifaceted investment climate, potential investors in Romania are advised to perform careful due diligence before making any investment. However, significant progress has been made by the Romanian government in recent years, in an effort to enhance transparency, improve tax administration and collection, while supporting a legal framework favorable to foreign investment.
In order to increase the level of foreign direct investment attraction and retention, a higher progress must be made in eliminating heavy bureaucracy and in reaching economic stability, transparency and predictability.
8. What should we expect and what should we not expect from the new fiscal, accountancy and audit regulations in 2017?
Regarding accounting regulation, no significant changes are expected in 2017, but rather some adjustments intended to clarify certain accounting treatments that can lead to misinterpretation. The accounting policies and procedures have already been stabilized through the adoption of Order 1802/2014 of December 29, 2014 which provides the Accounting Regulations on the annual individual and consolidated financial statements, rules which aim to be compliant to the International financial reporting standards (IFRS).
In the audit sector, we foresee that the standards regarding the performance in financial audit applied by the Chamber of Financial Auditors of Romania (CAFR) will continue to be aligned with the changes that are carried out at European level in the next period. An important public interest project, which affects the audit profession in Romania, is the new audit reform based on the Directive 2014/56/EU of 16 April 2014 amending Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts. The audit reform has the role to strengthen the financial stability of the Public Interest Entities (PIE) and consolidate public trust in the audit profession. The Directive was under consultation until 7 November, 2016. Rödl & Partner is an active member of the CAFR working group and contributes to the development audit profession in Romania.
Some of fiscal changes expected in 2017 are already mentioned in the current Tax Code. We believe that upcoming elections will more likely influence the tax structure and bring new fiscal changes, depending on the tax measures adopted by the future government.
9. What is Rödl & Partner’s message for the Romanian business environment?
The country’s economy is developing, as proven by the latest positive macroeconomic indicators, which underline diversity, complexity, European and international standards and global connectivity in many sectors. Romania remains a successful destination for foreign investors due to its undeniable strengths, such as dynamic economic environment and skilled human resource, offered by various prestigious educational institutions, able to provide highly qualified workforce. Furthermore, measures are prepared by the government to support companies in order to develop vocational schools to solve training issues. As well, the current economic climate and the future prospects of the Romanian economy are above Central EU average, even if problems persist in certain poorer regions, in the transport infrastructure sector, as well as in health and education.
We believe that a predictable, level playing field and a stable business, political and legislative environment is the key to progress for Romania, guaranteeing stability and grow potential also for investors.