The small amount of trade between Romania and the UK alongside the limited direct financial transactions between the two countries means that the local economy will not be hit hard after the British voted to get out of the European Union, according to Coface, the credit insurance firm.
Romanian exports to the UK amounted to EUR 2.4 billion, accounting for 4.4 percent of total exports in 2015. In the same time, the share of imports from the UK was 2.5 percent out of total imports, reaching EUR 1.6 billion last year.
According to the official records of the Ministry of Finance and the Trade Register, there were a total of 1,094 local companies that register shareholders with the head office in the UK and meet the above criteria. They represent only 0.3 percent of all active companies in Romania, but generate about 2.2 percent of the total turnover of all the companies registered in Romania, noted the consultancy.
Most of the companies with British capital are active in sectors such as services (17 percent), real estate (16 percent); construction (13 percent); wholesale and distribution (10 percent) and IT (8 percent).
“In the context of growing uncertainties caused by Brexit, investors coming from the UK, probably, will not be able to allocate additional funds to finance local companies, taking account of the fact that the latter registers losses. In this context, these companies will have to go through a restructuring process, and the sectors that register the highest losses and will be the most affected by this process are (we consider only companies owned by investors from the UK): construction (-38 percent), mining and quarrying (-30 percent), agriculture (-24 percent), food and beverages (-24 percent), real estate (-19 percent) and retail (-18 percent). The aforementioned sectors generate a total of about 6,300 jobs, concentrated on 406 companies,” said Coface.
The most profitable companies with British capital are in the transport, metallurgy and chemical products sectors.
Iancu Guda, services director at Coface Romania, said that some of the British investors might decide to enforce restructuring measures at their companies in Romania, if they will not be able to finance the local operations due to the uncertainty regarding the Brexit vote.
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