Four best practices and tactics to attract new FDI in Romania

Romania is launching a new agency for investment and foreign trade, which should become operational within the next few months and which is expected to provide valuable and tangible tools to improve the country’s investment policy. We take a look at four best practices that should be prioritised in this area: online selfassessment tools, soft-landing programmes, long-term cooperation with other countries, and partnerships with firms to attract global investors.

By Claudiu Vrinceanu

Attracting investors to Romania is a complex undertaking. It is time-consuming and will constantly require handling refusal without being aggrieved. This means it necessary to have an investment magnet strategy in place. Investment attraction is based on the power of the various characteristics of our country to persuade interested players. One good practice Romania could implement comes from IDA Ireland, the foreign direct investment (FDI) agency of the Irish government, which launched two online self-assessment tools to help new investors assess current activities that enable advanced manufacturing or the digitalization of services.

The first tool launched by the Irish FDI body is the Advanced Manufacturing Diagnostic, which assesses the organisational maturity of disruptive digital and sustainable technologies of manufacturing organisations. The second is the Digitalization Diagnostic for Services, which evaluates services firms' digitalization maturity. These tools could also help new foreign investors in Romania define and prioritise the activities they should carry out to build future capacity and the capabilities they need to achieve successful transformation and growth.

SOFT-LANDING PROGRAMMES FOR COMPANIES

Key decision drivers largely depend on each foreign investor’s industry and priorities, with some aspects being more attractive than others. To maximise the benefits of its investment attraction strategy, Romania should draw attention to the needs of potential investors and local communities. This means targeting investors whose objectives are aligned with the attractive aspects of certain regional communities in Romania. In this regard, one interesting case study comes from Germany, where Invest Region Leipzig (IRL) supports companies that are considering an expansion of their business to the Leipzig region. IRL provides essential decisionmaking data and services that are individual, confidential, and free of charge to ensure a “soft landing” for companies.

LONG-TERM PARTNERSHIPS AND COOPERATION WITH OTHER COUNTRIES

Businesses in Romania and other countries are set to forge even closer ties than the ones they have today. In this sense, a way to connect and attract foreign investors to Romania is to create partnerships with organisations from other countries. For example, Hamburg's Chamber of Commerce, Hamburg Invest, and the Israeli-German Chamber of Commerce signed a partnership this year, emphasising tech scouting. The agreement signed in Tel Aviv gives Hamburg-based companies an overview of new technologies and digital solutions in Israel and should facilitate contacts with potential partner companies. The agreement will also likely boost the settlement of Israeli startups and scaleups. What is also essential for Romanian authori- ties is the long-time commitment. The deal has been signed for an initial two-year period. As part of their economic development strategy, titled "Hamburg 2040: How do we want to live in the future—and from what?", the Germans want to promote international networking through innovation centres.

Public And Private Partnerships To Attract Global Investors

In recent years, Romania has been experiencing a paradox in attracting foreign investments. On the one hand, public-private partnerships have not become a habit. On the other, a large share of marketing initiatives, such as studies, research reports, and events to attract investors, have been carried out with private support through the involvement of recruitment, Big 4, and real estate consulting companies. Romania’s new foreign investment promotion agency should boost mixed endeavours in partnership with private companies. One recent example comes from Qatar, where IPA Qatar and Knight Frank partnered up to attract global investors. Through this bilateral cooperation, Knight Frank's global network of clients and investors will showcase Qatar's liberalised property ownership reforms, sustainable residential developments, and lucrative commercial real estate. During the international real estate event, MIPIM 2023, in France, the two parties signed a Memorandum of Understanding (MoU) to promote Qatar's real estate sector on a global scale and attract foreign investment.