10 Reasons Why You Should Invest in Siret, Romania

Siret is one of the oldest cities in Romania and has a history of over 6 centuries. It was the first capital city of Moldavia in the 14th century and an important crafts and commercial hub. Given its rich history, Siret is a community that knows what it means to be a commercial and manufacturing hub.

Siret is located in North-Eastern Romania, in Suceava County, next to the eastern border of the European Union. Very accessible both to Western Europe and Eastern Europe, it is also close to the Romanian border with Ukraine and the Republic of Moldova.

There are multiple reasons why you should invest in Siret. Take a look below at some of the remarkable business opportunities this city can provide, combined with favorable tax incentives, state support for key businesses, and the skilled multilingual talent pool. RISE Consortium is committed to ensure the best support for foreign investors, throughout all stages of the process.

1. Available Industrial Park near the EU’s Eastern Border

With an area of over 15 hectares and the possibility of expansion by an additional 25 hectares, the Industrial Park in Siret is ready to develop the following: industrial halls, goods’ warehouses, customs warehouses, temperature-controlled warehouses/storage, and office buildings. Beside this, there are some adjacent buildings to the Park, such as: a hotel, a fuel station, and the Siret Customs Office (main customs point to Ukraine). The properties benefit from the following utilities: natural gas, running water, sanitation, electricity (20 kVA), mobile cell coverage, and landline accessibility, mobile internet and optic fiber landlines.

2. Available Labor and low salary costs

The number of available jobs/1000 inhabitants is twice as low as compared to counties located in Western Romania*. There is also a possibility to attract Ukrainian workforce. Many Ukrainians living along the border also have Romanian citizenship, which allows them to work in the EU.

* Suceava County has 97,600 jobs for a population of 743,645. Cluj and Timiș Counties have similar populations, but the number of jobs are 209,100 and 223,500 respectively.

Population, active workforce and salaries in selected eastern and western Romanian counties

Source: National Commission for Strategy and Prognosis

3. Available education, human resources, and attracting workforce

Siret has always been a major economic hub, attracting workforce from a radius of 30-40 km around the city. In stark contrast to the communist period, when only local workforce was available, external recruitment from Ukraine is also possible.

On the Romanian side, Siret can attract workers from the adjacent cities of Rădăuți, Suceava, Botoșani, and Dorohoi. Population in this area is 312,916. On the Ukrainian side, the regions of Storojinets, Cernăuți, and Herța have over 271,000 inhabitants. In total, the potential work force is nearly 600,000 people.

As an example, the Siret “Lațcu Vodă” Technical School has implemented an EU-financed project in 2016 through the Erasmus+ Program. 29 students and 4 teachers took part in three training sessions at important auto companies in Germany and Italy: WBS Training AG Dresda, Wisamar Bildungsgesellchaft Gemeinnuetzige Gmbh Leipzig, European Grants International Academy Srsl Unipersonale Italy.

Siret has a technical school and a vocational school that can help qualify students for a wide range of industries: automotive, soft goods, IT, etc. Auto mechanic classes have a tradition of over 40 years in this region.

Number of graduates by specialization

Source: National Institute of Statistics

Secondary education facilities deployed within 60km radius of Siret: 35 High Schools and Technical Colleges, 26 National High Schools and Colleges, 8 Post-Secondary Schools, 4 Professional Schools, 2 Universities in Suceava City and Cernăuți (Ukraine).

LANGUAGES STUDIED BY ROMANIAN STUDENTS IN THE REGION:

• 95 % of young Romanians speak English;
• 47 % speak at least one other foreign language;
• 26 % speak at least 2 other foreign languages.

4. Affordable land with mobility plan

The net purchasing price of land for industrial development is 5€/sqm. Siret also allows investors the possibility to use the land through concession, at the price of 0.29€/sqm/year, along with an administration fee of 0.5€/sqm/year.

Siret Customs is the only customs checkpoint in North-Eastern Romania allowing freight cars to pass through. The nearest customs points are Halmeu, 400 km to the west, on the border with Hungary, and Albița, 250 km to the east, on the border with the Republic of Moldova.

Siret Customs has an average throughput of 250 cargo trucks per day.

The annual traffic through Siret Customs

Source: National Institute of Statistics

5. Accessibility and strategic positioning

Siret connects the European Union market with non-EU states and acts as a hub for production facilities and goods exchange between NORTH (Ukraine, Belarus, the Baltic States), SOUTH (Greece, Turkey, and the Middle East), EAST (Russia and former soviet countries), and WEST (Poland, Germany, France, and the Netherlands).

Siret is well linked to transportation infrastructure. Access to the major European Road – E85, railways, airports, and even sea ports (Galați and Giurgiu – Siret-București Express Road to be developed).

Siret offers the same accessibility to Western Europe as Transylvania does. It is as close to Amsterdam as Cluj and Brasov are, but it is a more cost-effective alternative. Costs related to salaries are lower and the available workforce is higher in number as compared to Romania’s central and western counties.

The nearest airport to Siret’s Industrial Park EEB is Suceava International Airport, 43 km away. It was recently modernized in 2016 and has direct flights to Bucharest, London, and Milan. More destinations are to be operated in the near future. Also, a cargo terminal is to be added to the airport infrastructure.

Iași International Airport is located 168 km away, a 2h30m drive. It has direct flights to Bucharest, Vienna, London, Paris, Madrid, Munich, Rome, Tel Aviv, Paris, Brussels, Koln, Milan, or Larnaca.
Otopeni International Airport in Bucharest can be reached by direct flight from Suceava and the flight takes only 1h. From here, any destination in the world is available.

Comparative road distances

Source: Google Maps

6. Fiscal Incentives

Property tax levels are considerably lower in Siret as compared to other larger towns or the capital city.  The 2018 fiscal coefficient for non-residential buildings is set at 1.4% of the property value. A 10% discount for individuals and a 5% discount for companies is offered on fiscal dues pertaining to property and vehicles for early payment during the first trimester. Siret Industrial Park EEB offers all tax amenities permitted by the Industrial Park Law.

The Romanian government offers a number of fiscal incentives that are aimed at leveraging the local technology and R&D capabilities by incentivizing investors and employers:

• IT&C: 0% income tax for employees;
• R&D: 0% income tax for employees and 0% income tax for R&D companies for 10 years;
• OTHER: 0% profit tax for the reinvested profit in new technological equipment used for business purposes.

7. Investors support

Siret City Hall offers information and logistical support to promptly obtain all permits, authorizations, and utility connections necessary to start your investment. Siret already has for some areas approved urban planning documentations.

Siret City Hall has established a dedicated department for helping future investors in fulfilling bureaucratic formalities, and has also developed clear and simple procedures for investment requests.

Siret City Hall has developed clear documentation regarding access to the industrial park and can release the authorization and all permits needed in a short time frame. If the documentation is complete and correct, the urban certificate and construction permit can be issued in 24 hours.

8. Landscape and culture in Siret

Siret lays in Bucovina. There are a lot of touristic sites to visit in and near Siret, such as world-famous churches, most of them part of the national heritage, landscapes, archeological sites. At 75km is the Voroneț Monastery, part of the UNESCO World Heritage, one of the most beautiful and important churches in Romania.

9. State aid programs

The State Aid Scheme 807/2014 has a budget of EUR 900 million for the 2014-2020 period. It aims at supporting major CAPEX investment.

ELIGIBLE COSTS: Construction of new buildings; Renting costs for existing buildings; CAPEX aimed at technical installations and tools; Acquisition of intellectual property.

ELIGIBILITY CRITERIA FOR INVESTMENTS: Minimum value: EUR 10 million investment; To be viable and determine the operational efficiency of the company; To prove the stimulating effect of the state aid; To generate contributions to regional development; To facilitate extra investments in the region.

ELIGIBILITY CRITERIA FOR COMPANIES: Net profitability for existing companies: > 0%; Equity for new companies: ≥ RON 100,000.

10. PRO-GROWTH Policy

The business environment’s trust level in Romania is at the highest in the last 4 years due to robust economic growth prospects and to the recovery of investment and consumption.

According to the World Bank’s Doing Business Report, Romania is ranked 37th worldwide on the aggregate ease of doing business index, having climbed 13 positions since 2014. The overall paying-taxes ranking of the country has improved and is the second-best among regional peer countries.

From a tax perspective, the number of payments/year required to fulfill financial obligations has dropped dramatically, from 113 in 2012 to only 14 in 2016.

In order to support entrepreneurs, the Romanian government has also simplified the process of opening up a business, reducing the required time from 29 days in 2004 to a little over a week in 2016.

For the short, medium, and long-term, the government is committed to aiding emerging entrepreneurs.

The pro-growth policy has further implications for the Romanian business environment, with the necessary paid-in minimum capital decreasing by 2.3 percentage points since 2004, reaching a minimum historical value of 0.6% of income per capita.

For more information please visit: http://www.siretromania.ro/