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January 27, 2023

Globalisation supports Romanian economy

Foreign subsidiaries in Romania hold 6.1% of the total active companies

Most foreign subsidiaries in Romania are Italian

German companies make highest turnover

Despite the numerous suppositions and opinions claiming that Romanian economy is being ‘absorbed’ by foreigners, that multinational companies devour our economic structure, reality seems to be entirely different.
The National Statistics Institute (INS) makes a first evaluation of economic globalisation in Romania and shows us in detail which are the main investors in the various sectors of manufacturing and services.
Following European Union methodologies, INS has taken a ‘snap shot’ of the commercial presence of multinational companies or foreign company subsidiaries. Information is presented on the main economic results of subsidiaries in Romania controlled by non-resident companies (foreign, including individuals). The data refers to the year 2012 and the evaluation considered a number of indicators: the number of enterprises, registered share capital, average number of employees, turnover, and gross value added at factor cost.
A general view shows that the largest share of turnover came from subsidiaries of German companies. A foreign company subsidiary had 38 employees on average, reported a turnover of RON 18.9 M and a gross value added of RON 3.8 M. In the sector of ‘Services’ (does not include financial and insurance activities) the highest number of foreign company subsidiaries was recorded.
Out of the total number of active companies in 2012, foreign company subsidiaries totalled 26,147, standing for 6.1% of the total. The widest share of FATS companies is in the ‘services’ sector, with 9,875 companies, and the lowest number in the ‘Constructions’ sector – 2,521. As for the weight of FATS companies in the total sector, the highest was recorded in industry – 10.1% and the lowest in trade – 5.1%.
Regarding the distribution of foreign subsidiaries per location in 2012, the share of subsidiaries of companies based in EU member states was 70.9% of the total FATS (18,532 companies), compared to 29.1% which was the share of subsidiaries of companies registered in third countries.
In 2012, FATS companies with the core business in industry had a total of 552,806 employees, representing 40.0% of the total number of employees in the sector of industry. In services there were 225,569 employees representing 20.7% of total services, in trade – 174,803 employees representing 20.4% of total trade, and the lowest number of employees in constructions – 27,644 employees, standing for 6.9% of the total number of employees working in the constructions field.
The highest average number of employees is held by the subsidiaries of foreign companies controlled by EU member states – 77,570 employees, representing 79.3% of the total FATS. FATS companies controlled by non-EU states have a share of 20.7% of the total FATS, with an average number of employees of 203,252.
A notable fact is that, at the level of the entire country (Romanian equity companies and FATS), the highest share of the turnover comes from the sector of trade. Foreign company subsidiaries prefer manufacturing, most of the 2012 turnover being generated by industry – 46.5% of the total FATS turnover.
The industry also generated the highest gross value added at factor cost – 53.8% of the total posted by FATS companies.
In the case of the processing industry, in 2012 the highest turnover share (23.8%) was held by companies operating in the ‘manufacturing of motor vehicles, trailers and semi-trailers’, followed by those operating in the ‘metal industry’ (10.4%) and ‘food industry’ (7.9%).
The distribution of turnover per country of origin of the investor indicates that Germany holds the biggest share – 18.4% of intra-EU total, followed by Austria – 18.3%, and France – 15.1%. In the case of the gross value added at factor cost, the highest share is held by Austria – 21.7% of the total intra-EU, followed by Germany – 17.3% and France-13.9%.
The highest number of FATS companies have their capital of origin in Italy – 4,476. Next comes Germany – 2,651 FATS, Cyprus – 1,887, Hungary – 2,463, Austria: 1,305.

By   Constantin Radut

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