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January 19, 2022

Loredana Van de WAART, Partner, GRUIA DUFAUT LAW OFFICE: Investors Expect Predictability and Coherent Policies from Romania

How do foreign investors see the economic developments and the business climate in Romania, from your experience as a business attorney?

Romania remains an attractive destination for foreign investors specializing in emerging markets, in the context of a strong economic growth of 6.9% in 2017, which is, unfortunately, based mainly on consumption. In order to become a privileged destination in the region for medium and long-term investments – the only ones able to reduce the gap between Romania and the rest of the European countries – we must come up with concrete projects to present to investors. One solution would be to stop adopting so many strategies and instead to implement those already approved. It is a pity that, although Romania has recorded an important economic growth, this growth is not reflected in the living standard of the population. Why? Because Romania still lacks investments and stakeholders have shown that they are not able to ensure a competitive framework.

When deciding whether to enter a market or not, investors analyze several indicators, which concern: economic performance, political and legislative stability, market size, supply of logistics spaces, infrastructure status, labor costs, productivity. Or, the net foreign direct investment (FDI) flow recorded by Romania in 2016, according to the National Bank of Romania, was 4.5 billion euros (compared to 9.5 billion euros in 2008, before the crisis), significantly lower than the volume of investments attracted by countries in the region, such as Poland, the Czech Republic or Hungary. Unfortunately, last year’s fiscal and legal changes, poor infrastructure and even the accelerated rise in labor costs in some sectors are important challenges for foreign investors and local entrepreneurs alike. But the battle is not lost, the regional competition is undergoing, and Romania should take advantage of its business opportunities in various sectors and capitalize its strengths. Significant M&A transactions, as well as state investments are still expected in Romania. As far as the investment framework is concerned, Romania must abandon fiscal instability and diversify its fiscal incentives, in particular to attract investment in innovative technologies, research and development centers.

You have recently been elected as a member of the board of directors of the Dutch Chamber of Commerce in Romania. How can Romania attract more Dutch investments? What can be done?

Indeed, in March, I have received the NRCC members’ vote for a membership in the Board. This vote honors me and also represents a challenge for me. The expectations of the business community reunited under the NRCC concern both the improvement of the business environment and the promotion and enforcement of the economic Dutch business model, which is particularly performant in terms of innovation and development, education policies, health. The Dutch economy is one of the most dynamic poles of the EU, both in terms of trade and industry. But, besides the reputation of the Dutch to excel in the art of trade, they are champions of innovation in many economic sectors. According to the “European Innovation Scoreboard” for 2017, published by the European Commission, the Netherlands is among the “innovation champions”, alongside Germany, Denmark, the UK and Sweden, which means that the results of these countries in innovation are well above the European Union average.

In comparison, Romania is not even among “moderate innovators”, unlike other countries from our region, such as Croatia, Hungary, Poland, the Czech Republic or Slovakia; Romania is only part of the group of countries with “modest innovation”.

Or, this is paradoxical, because Romania has a skilled labor force and it should create the economic and social conditions to keep this labor force in the country, while helping it grow (for example, by attracting more European funds). The EU offers significant funding to innovation, research and development projects, but Romania does not seem to realize their importance. Romania should take the Dutch example, as the Netherlands is a reservoir of research and development centers. Its key sectors are agro-food, high-tech systems and materials, chemicals and health, high tech and innovative technology, creative industry – exactly the sectors where Romania lacks development.

On the other hand, in order to attract new Dutch investments, Romania must prove legislative predictability and, more importantly, come up with coherent projects and demonstrate a firm attachment to European values. The Dutch are pragmatic and direct people, who value fairness and rigor.

How does the GRUIA DUFAUT Law Office support investors wishing to enter or develop their business on the local market? What distinguishes you from other law firms?

Entering a market implies a global approach from investors. They need to understand the business environment and local market specificities and this is where we come in. We assist them from the very beginning, we try to have the best understanding of their business, of their objectives, to provide them with “tailor-made” solutions, compliant with the laws of Romania.

Our law firm has accumulated over 25 years of experience in the field of foreign investments. This allows us to come up with a double perspective – on Romanian and European law in general -, which enables us to successfully handle the matters entrusted to us by our clients, who are mainly French, Dutch, Italian, Belgian and Swiss investors.

We frequently advise and assist our clients in complex matters, corresponding to our main areas of expertise: M&A (company, asset sales/acquisitions, business transfers, greenfield investments), real-estate transactions (real-estate due diligence, transaction structuring, assistance during negotiations and document drafting), public procurement and PPP, labor law, fiscal law, competition law and European law. We also represent our clients in court, in litigations and commercial arbitration procedures.

This double perspective we offer to our clients is an important differentiating feature because it comes along with a thorough knowledge of case law. Then, although in law practice we can not talk about spectacular innovations, our vision of law enforcement and initiatives for the implementation of European models into Romanian practice are key elements that differentiate us.


Loredana Van de WAART is a partner of the GRUIA DUFAUT Law Office and heads the Consulting Department, with over 18 years of comprehensive experience in investments activity, M&A, Public Procurement and PPP, Real Estate and Infrastructure. She advises a broad range of international and local clients from sectors such as: infrastructure, industry, energy, pharma, telecom, automotive, agriculture.

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