Why the above headline. During a recent trip to London the question of Greece and Ukraine were raised by a number of people on the basis of what was the impact of the problems in Greece and Ukraine on the Romanian economy and business environment.  It was an aspect that whilst in relation to Greece we had considered; Ukraine was another question.

Before I write anything further these comments are own views as a business lawyer in Romania.  As an International Romanian law firm based in Romania and particularly Bucharest we work everyday with foreign investors who are willing and able to put their investment into Romania and it’s economy.

Romania is still a good place to invest.  None of the uncertainty of the the Greek problems with the Troika.  Romania’s economy by most calculations will expand in 2015.  We can argue per centages but there is no doubt that the Romanain economy expanded in 2014 band will expand in 2015.  We are receiving calls from law firms and companies outside Romania whose clients wish to invest in Romania or they wish to invest direct.  If the time was right in 2014 it is even more so now.  International inverstors whether strategic investors or investment funds have funds and they wish to invest in Romania; for them it is a question of taking time to find the right investment for them.

So what is the impact of Greece and the Ukraine.

Greece.  There are many Greek investors in Romania from the small business to major banks.  It is true to say that in the past the Greek investments had a major impact on the development of a market economy in Romania.  As most of the investments were made into Romanian companies and businesses these investments in have become the capital of these companies and cannot be withdrawn.  Therefore any Greek investment will be as an investor into a Romanian company rather than a Greek direct investment.  There will be an impact in respect of Greek investors trying to realize their investments but this will be an indirect effect rather than a direct involvement in the Romanian business world.  Will the Greeks sell their investments cheaply – I doubt it?  The value of the assets will be valued in relation to the Romanian economy rather than the Greek economy.  There will be some Greek investors who will sell their Romanian assets because they need the capital quickly but they will in my opinion be in the minority.  If your business and assets in Romania are functioning well and producing profits and capital growth why dispose of them.

Ukraine. Romania shares a common border with the Ukraine.  True it is western Ukraine and all the troubles appear to be in the eastern part of Ukraine.  There is no reason though why the troubles should cross the border into Romania.  There are Romanains living in Ukraine one estimate puts the number as over 20,000. They do not appear to be in any danger and so they should not be.

Economic cooperation between Romania and Ukraine is very limited. The Ukrainian market accounts for only 1.9% of total Romanian exports (2013) and 0.8% of imports (2013). Romania has had a growing trade surplus with slowly increasing exports and imports with a downward trend. The composition of exports and imports is not very sophisticated, it contains mainly primary products.  (Please see http://rbd.doingbusiness.ro/contributors/the-vienna-institute-for-international-economic-studies-wiiw/5580 for further reading).

There are some Ukrainian investments in Romania but these are of limited amounts and the investments have in the most part been investments direct into Romanain companies.  Whether the Ukraine has in the past been used as a channel for Russian investments is unclear but again any impact will be limited as Romania is now a fullt integrated European Union country although outside the Euro zone.

The only question I have is why was the question raised in the first place?  The answer lies in the lack of knowledge shown in the United Kingdom in Romania, Romanian opportunities and Romania’s place in the European Union and Europe.  Romania is a good place to invest; where returns can be made safely and responsibly.  Any person thinking about doing business in Romania should not see the problems of Greece and the Ukraine as an impediment to doing business in Romania.