The Foreign Investors Council (FIC), an organisation representing 90 foreign investors in Romania, has published the latest edition of its White Book, which reviews the investment climate and makes proposals for improvement. It is titled "An Investment Climate for European Union Membership", reflecting the FIC's support for Romania's accession to the EU and its belief that implementation of the proposals could contribute to a timely and successful entry into the EU.
The White Book recognises that a number of positive changes have taken place in the economic environment, notably GDP growth, lower inflation, the expansion of exports, and better relationships with the EU and with international financial institutions

It comments favourably on measures taken to improve the investment climate, including:
prior consultation regarding legislation that affects the business environment;
legislation to accelerate privatisation;
the establishment of the agency for the promotion of foreign investment;
new procedures to monitor the implementation of privatisation agreements, which the FIC hopes will enable the resolution of the backlog of post-privatisation disputes.

The White Book also welcomes the proposals by the Ministry of Development and Prognosis aimed at reducing administrative barriers to business. The FIC has contributed to these proposals and expresses the hope that they will be quickly implemented

The White Book identifies a number of areas which still need to be addressed. These include:
rectifying the continuing instability in fiscal legislation, illustrated by current plans to end the low tax rates on export profits and the special tax treatment of free trade zones;
ending the serious delays in paying VAT refunds to exporters; the FIC hopes that the new VAT legislation will be implemented in such a way as to resolve this issue;
significantly improving the quality and transparency of public administration;
streamlining and standardising of customs procedures;
finding the right balance between the interests of majority and minority shareholders; the FIC is concerned that legislation in this area could hamper the business development plans of strategic investors;
strengthening the legal framework for business, focussing on the resourcing, training remuneration and integrity of the Courts, prosecutors and the police;
developing capital markets and private pension funds, in order to provide new sources of funding for investment;
ensuring a level playing field for business, by ending the unfair competition that arises from lossmaking state enterprises and from the rescheduling of companies' indebtedness to the state.

The White Book welcomes the progress which Romania has recently made towards membership of the EU, but expresses concern that Romania's accession has been proceeding at a slower rate than that of other candidate countries, creating a risk of deterring potential investors. The White Book recommends determined action in those aspects of accession that still need to be tackled. It notes that members of the FIC are willing to assist in the process of adopting the acquis communautaire, making available their experience of similar processes in other countries and helping to ensure that EU Directives are introduced in a manner that takes account of Romania's needs and circumstances.

The FIC expresses its readiness to work with the Authorities in turning the White Book proposals into reality and has already begun a process of discussing the White Book with members of the Government and other interested parties.



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