Italian businesses flock to Romania

The number of Italian businesses opening up in Romania is on the rise, with 282 registering in the first two months of 2014 alone, according to new figures from the Italian foreign ministry.

Italian businesses flock to Romania
Italian businesses made up around 30 percent of new foreign registrations in Romania last year. Bucharest photo: Shutterstock

A total of 136 Italian companies registered in Romania in January, rising to 146 in February, the foreign ministry said on Monday, citing Romanian statistics.

The figures continue the upward trend of trade between the two countries, with 2,000 Italian businesses making up around 30 percent of new foreign registrations in Romania last year. There are around 37,000 Italian firms operating in Romania, the foreign ministry said.

While the Italian economy continues to struggle, with the European Commission forecasting Italy’s growth domestic product (GDP) at just 0.6 percent this year, Romania remains an attractive location for investors.

GDP in the eastern European country grew by 3.5 percent last year, compared to Italy where the economy shrank by 1.9 percent, according to EU statistics.

Romania “offers 19 million consumers, a well-educated workforce at competitive cost, a strategic location, and abundant natural resources,” according to a US government report published in April 2013.

Italy was named in the report as the seventh-largest investor in Romania, as of September 2012, with $2.26 billion (€1.66 billion) channelled into a number of sectors including textiles, food and banking.

The Italian-language Invest in Romania (Investire in Romania) website lists a string of reasons to attract business from Italy, including the country’s strategic location, adherence to EU standards and a multilingual workforce.  

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Rent hikes force Italy’s shops out of business

Increasing rents are forcing shops in Italy out of business, a shop owner told The Local after it was revealed that one in four premises across the country are empty.

Rent hikes force Italy's shops out of business
Over 627,000 shops in Italy are vacant Photo: Eric Parker

Over 627,000 shops are vacant following the closure of the companies that rented them, according to new figures from Confesercenti, the association for small and medium-sizes businesses in the retail, tourism and services centre.

During the first eight months of this year, about 30 shops a day were shuttered.

Although Italy’s economy is starting to recover and people are slowly starting to spend more, the association said that “the retail crisis is not over”.

“It’s really been a struggle. If you walk down the street there are vacant shops everywhere,” Giovanni Tirri, a 51-year-old café owner in the San Lorenzo area of Rome, told The Local.

“The problem has been trying to remain affordable while the rent increases. We have been lucky that customers have remained loyal, but not everybody has been so fortunate.”

Confesercenti said the problem is more acute in suburban areas, with the number of vacant shops nearing 40 percent. The figures were based on findings from property companies.

The association is calling for the introduction of agreed rents and a flat-rate tax to encourage the creation of new businesses, as well as to revitalize towns and cities.

However, encouraging people to start a business could prove extremely difficult.

“Starting a business from scratch is always a risk, but when the situation is like this, it’s foolish,” warned Tirri.

By Ellie Bennett