|  04.04.2013

Tactic for investments: a matter of coordination and discipline

There is no business without trust and trust goes both ways, involving stakeholders that should prove business integrity and confidence, says Marius Ghenea, business angel, member of the Board, VentureConnect

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Romania is an attractive market: it has a raw technical talent, smart and creative young professionals that are highly adaptable to diverse business environments. Romania is appealing in general, but it needs to better co-ordinate.


For instance, last year alone, the Romanian IT&C income reached new heights: more than 9.4 billion EUR, a figure similar to the boom of 2008. IT&C counts as more than 1.1% of the GDP and we should also mention the large investments in the online and retail industries that were announced last year. However, most of the IT&C income consisted of outsourced technical services. However, on a whole, we need to build on talent retention – providing a stable economy is a manner in which young people find the right job in their country; and on delivering educational business programs with a national outreach.


I believe that the IT&C industry, which can include a variety of sub-classes: IT, software, cloud, SaaS (software as a service distribution system), e-commerce is the market with the greatest possibilities of paving the way for international companies. International companies built by Romanian entrepreneurs with headquarters in Romania. IT&C and technology in general are verticals where we have proven our abilities and performance.


Nevertheless, in order to have a better fit Romania for large national and international investments, we need to implement a more elaborate sense of discipline. Romanians, government as well as the private sector, need to have a better understanding of the ways through which people can embrace entrepreneurship. Individual programs, such as Radu Georgescu’s “Jurnal de antreprenor” or mine are nice and valuable for the community, but highly insufficient. This means better national education programs, sustainable government grants for SMEs and smaller start-ups, a consistent and efficient legal system, a powerful lobby for national and international investments.



There is no business without trust. Trust goes both ways: internal stakeholders must have a structured and professional collaboration; external stakeholders should be the emblem of business integrity and confidence.


So yes, trust is a must-have principle of doing business. For smaller projects, I recommend to have a good understanding business trust from start. This includes having a transparent and objective communication on the website, in the company’s description or brochures, service presentations, business pitches.



The local fiscal environment is actually deceiving, because the corporate tax is still relatively low and attractive for investors at 16% and in fact, with the flat tax, all taxes are pegged at the same level of 16%, again very attractive for investors, foreign and Romanian. However, when we discuss the number of taxes, it becomes indeed a challenge (too many state and local taxes that should be compressed and unified into a smaller number, to ease the bureaucracy of tax administration for businesses, not necessarily the amounts. One tax that is excessive remains the payroll tax (the compounded taxes on the employee and employers side amounts to 80% or more of the total net values), one of the highest levels in Europe. This is a problem currently being addressed by recent governmental initiatives to reduce some of these taxes on labor (particularly the social contributions).


The currency was stable all along, I think it was only some bad press about Romania prophesying the doom of the Romanian currency, when in fact, even last year, with some volatility, the exchange rate against euro showed only a 2.5% spread from the first to the last day of the year. So this is not only a happening, I think most if not all investors who bet their placements on the local currency made nice gains time and time again, especially since the refinancing rates on RON are still quite high at 5.25% per year, so the yield on local currency can be very good if the currency is stable against euro, given the high interest differential.


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