KPMG Romania As The Destination For SSCs and BPO

Romania as the
destination for
SSCs and BPO
KPMG in Romania
kpmg.com/ro
Contents
Introduction 3
Chapter 1: Key facts on Romania for Investors 4
Chapter 2: Romania: an attractive SSC and BPO destination 13
Chapter 3: Main cities in Romania 16
Bucharest 16
Cluj-Napoca 18
Timisoara 20
Brasov 22
Iasi 24
Constanta 26
Targu-Mures 28
Arad 30
Oradea 31
Chapter 4: Key facts on the Republic of Moldova 32
Chisinau 36
KPMG: Multidisciplinary teams with in-depth industry expertise 38

Romania as the destination for SSC and BPO | 3
Introduction
Romania is one of the largest countries among those which have joined the
European Union (EU) over the last decade, with a population of around 21 million.
EU accession in January 2007 acted as a stimulus to investment and the economy
showed strong growth before the recession hit. Since the second half of 2008,
investment has declined and the effects of the recession have been felt, with
significant falls in consumer demand. Moreover the Government has implemented
austerity measures, as part of an agreement with the IMF, with some positive
results. In July 2011, Fitch improved Romania’s long-term debt rating for both
local currency (RON) and foreign currency. Romania continues to present many
opportunities for investors and some investments are still underway.
This publication presents a basic overview of Romania and its main cities to support
new investors which want to enter the Romanian market and existing investors
which want to undertake additional activities and expand their scope. In particular,
this brochure gives relevant information related to Shared Service Centers (SSC)
and Business Process Outsourcing (BPO) activities in Romania, as this has been
a particularly dynamic sector for investors over the past decade. This has been
Richard Perrin, recently reflected by a significant increase in the number of SSC/ BPO set-ups,
Partner, Head of Markets while a surge in these activities is expected to occur in 2011 and 2012, in the light of
expected government incentives to IT-related sectors.
KPMG in Romania
While this publication addresses relevant areas, it does not provide the in-depth
information needed to make investment decisions. As matters in Romania
are still subject to frequent and rapid change, we recommend that you obtain
comprehensive advice before taking any investment decision.
4 | Romania as the destination for SSC and BPO
1.Key facts on Romania

for investors
Country Snapshot
Country area 237,500 sq.Km
Population 21 million
Official language Romanian
Capital Bucharest
Currency Romanian Leu (RON)
Average RON/EUR (2011) 4.2
Average RON/USD (2011) 3.0
Inflation rate (2011) 6.5%
Unemployment rate (2011) 6.5 %
GDP per capita (2010) EUR 5,700
Time zone GMT + 2 (GMT + 3 in summer)
Climate Temperate-continental climate, with four
distinct seasons
Brief overview of Romania’s economic environment

The recent development of the Romanian economy has followed the trend of the
Central and East European region, registering a 7.1% fall in GDP in 2009, followed
by a 1.3% decline in 2010. This was accompanied by a significant increase in the
budget deficit and a depreciation of the domestic currency. As a consequence,
fiscal consolidation measures were needed, the main objective being to reduce
public expenditure and achieve greater efficiency.
Against this background, in April 2009, the Romanian authorities signed a loan
agreement with the European Union, the International Monetary Fund and other
international financial institutions, worth EUR 20 billion. At the end of 2009,
Romania’s macroeconomic position improved, as the current account deficit had
narrowed, from 11.6% of GDP in 2008 to 4.5% of GDP in December 2009.
Nevertheless, this adjustment was made entirely by the private sector, which
recorded a 3.8% GDP surplus, while the public sector increased its deficit by 3
percentage points.
Although the contraction of the Romanian economy was severe, the inflation rate
fluctuated, declining gradually by the end of 2009, but picking up in the third quarter
of 2010, as a consequence of an increase in the VAT rate from 19% to 24% in July
2010. The local currency has also been relatively stable, from an annual average of
RON 4.23/ EUR in 2009 to an average of RON 4.20/EUR in 2010, reaching RON
4.22/EUR at end of August 2011.
The macroeconomic environment in Romania for the period 2011-2013 is expected
to be more stable, and the recession is predicted to become less severe by the end
of 2011. Growth of 1.5% in GDP is estimated for the current year, while 2012 growth
is expected to be 4% (National Commission for Prognosis).
Growth in internal demand is considered to be the main factor that will determine
economic recovery, along with the expected improvement in absorption of EU
funds, which can be used to finance eligible investment from the state budget.
Both exports and imports are expected to have an annual growth rate of 10%. In
2011 inflation is expected to stay relatively flat compared to the previous year, at
6.5%, while gradually decreasing and meeting its target of 3.5% for 2012.
The main expected government priorities for 2011-2013 are:
• A revamping of the IT sector by introducing state incentives to boost
employment
• Co-financing projects benefiting from European funds
• Environmental infrastructure and road rehabilitation
• An investment program for the rural economy, particularly aiming to develop
rural SMEs
Romania is a member of the European Union, the United Nations, the World Trade
Organisation (WTO), NATO, the Regional Cooperation Council (RCC), the European
Bank for Reconstruction and Development (EBRD), the International Monetary
Fund (IMF), as well as the Organisation for Security and Cooperation in Europe
(OSCE).It is also a party to the Central European Free Trade Agreement (CEFTA) and
the United Nations Conference on Trade and Development (UNCTAD).
Key Economic Data
Key Indicators 2008 2009 2010 2011 2012

(estimated) (forecast)
Nominal GDP (EUR m) 139,753 119,734 127,034 129,673 141,207
Real GDP Growth (%) 7.3 -7.1 -1.3 1.5 4.0
Total public sector debt (%GDP) 13.6 23.7 30.8 39.5 38.8
Government deficit (EUR m) -24,655 -36,401 -33,305 -5,706 -4,236
Trade balance (EUR m) -6,694 -8,752 -8,237 -5,370 -4,891
Inflation rate 7.85 5.59 6.09 6.5 3.5
Unemployment rate 5.8 6.9 7.3 6.4 6.2
Source: National Bank of Romania, The Economist Intelligence Unit, National Commission for Prognosis, Ministry of Finance
FDI and Key investors in Romania

Romania has become a very popular FDI destination, reflecting large-scale privatizations, the country’s
macroeconomic stabilization and the benefits of European Union membership. However, the amount
of Foreign Direct Investment has declined steadily since 2008 as a result of both external and internal
economic pressures, in the context of overall economic decline in Central and Eastern Europe. Total foreign
investment in 2010 was EUR 2.6 bn.
Year 2006 2007 2008 2009 2010 5 months 2011
FDI Value (EUR m) 9,059 7,250 9,496 3,488 2,596 799
Source: National Bank of Romania, The Economist Intelligence Unit, Romanian Agency for Foreign Investment
The local currency has also been relatively stable since 2009, with an annual average of RON 4.24/ EUR in
2009, an average of RON 4.21/EUR in 2010, reaching RON 4.22/EUR at end of August 2011.
Year 2006 2007 2008 2009 2010 2011 2012

(estimated) (estimated)
Average F/X rate 3.53 3.30 3.68 4.24 4.21 4.18 4.18
(RON / EUR)
Source: National Commission for Prognosis
Top 10 FDI in Romania by country of origin

The top three countries of origin in terms of Foreign Direct Investment* are: the
Netherlands, Austria and Germany.
FDI by activity (2009) Top countries that have invested in Romania
19%
42% 6% 4%
6%
7%
7% 6% 32%
1%
8%
8%
13%
13% 10%
5%
12% 1%
Greece Holland
The Netherlands Austria Germany Cyprus
Industry Support services
France Italy Spain Great Britain Switzerland
Agriculture, Forestry and Fisheries Trade
Real Estate & Construction Hotels and restaurants
IT&C Financial Sevices
Transport Others Source: O.N.R.C
* Analysis based O.N.R.C
Source: on paid-in capital figures.
* Analysis based on paid-in capital figures.
2.5. Human Capital and legal aspects of employment in Romania
One of the largest markets in Central and Eastern Europe (ranking 7th), Romania has over 21 million
inhabitants and a highly skilled workforce with low costs. In February 2010, the gross nominal average
wage was EUR 472, while the net nominal average wage was EUR 343. The highest net nominal average
Human Capital and legal aspects of employment in Romania

One of the largest markets in Central and Eastern Europe (ranking 7th), Romania
has over 21 million inhabitants and a highly skilled workforce with low costs. In
2010, the average gross salary was EUR 454, while the net average salary was EUR
331. The highest net average earnings were registered in the aviation sector (EUR
771), while the lowest were in hotels and restaurants (EUR 188).
Until 2008, employers were under strong pressure to increase salaries, while
competing for talent with other local companies, but also at the regional level, as
an increasing number of graduates were seeking employment overseas. However,
as the economy began experiencing the effects of the global recession, the upward
trend for wages has come to a halt. Although financial remuneration is still decisive,
professionals are also interested in non-monetary benefits and rewards, such as
career development opportunities, relocation options, medical packages and
sponsorship of recreational activities.
The National Institute of Statistics releases a report each month presenting the
level of gross and net average salary by activity.
In addition to the cost aspects, investors are attracted by the availability and
qualifications of the Romanian labor force. These factors have been perceived as
key advantages of investment in Romania, particularly in labor-intensive sectors.
The good quality of the Romanian education system and sound knowledge of
foreign languages have allowed Romanian professionals to meet the growing
expectations of companies both locally and abroad.
Top 10 University centers (2009/10) (graduates per year)
Source: INS (National Institute for Statistics)
Key human capital facts
Salary 2009 2010 2011 (est.) 2012 (forecast)

Average gross salary EUR 472 EUR 454 EUR 485 EUR 508
Average net salary EUR 343 EUR 331 EUR 354 EUR 370
Source: National Commission for Prognosis, National Institute for Statistics
Immigration Literacy rate 98%

Generally, the Romanian immigration
rules for non-Romanian nationals depend University graduates
on the nationality of the individual. Long- (yearly average) 215,000
term visas are valid for stays of up to 90
days within a 6-month period and can be used to apply for Romanian residence
permits. Romanian residence permits are generally issued for 1 year and can
be extended for successive one-year periods. EU nationals can obtain five year
permits. Work permits are generally required for non-Romanian individuals who are
employed by Romanian employers or who are seconded by their non-Romanian
employers to perform work on Romanian territory.
Income tax and Social Contributions

Net taxable income is taxed at a flat rate of 16% for residents and non-residents.
A deduction is generally available for compulsory employee social security
contributions. The basis for applying the social security contribution (31.3%)
is capped at 5 times the average gross salary (i.e. 2,022 RON for 2011) for the
employee and at the number of insured persons multiplied by 5 times the average
national salary, for the employer.
The main Romanian social contributions are:
Contribution Employer Employee
Social security 20.80% 10.50%
Health Fund 5.20% 5.50%
Unemployment fund 0.50% 0.50%
Risk fund 0.15%-0.85% -
Salary guarantee fund 0.25% -
Medical leave and allowances 0.85% (capped) -
Source: Romanian legislation

Romania’s Infrastructure
Romania’s infrastructure is relatively undeveloped compared to the CEE peer
countries, with significant improvements in the road and rail networks needed to
bring them up to European standards, and so far modernization has been slow.
Despite being the ninth largest country in the EU, Romania has only 313 km of
motorways, which is less than three percent of the German motorway network.
There are large amounts available in EU funding to support infrastructure
projects, and, with the right approach by the government, a national infrastructure
development program could bring opportunities for the private sector. However,
one of the main problems that Romania faces is its degree of absorption of funds
for developing its infrastructure. According to a World Economic Forum report,
Romania is eligible for EU funding worth EUR 4.4 billion for transport infrastructure
by 2013, but so far only a small proportion of this has been absorbed.
There are 313 completed km of motorways and another 276 under construction,
according to the Ministry of Transportation. The key motorway projects include
Medgidia-Constanta and the Trans European Corridor IV Nadlac-Constanta
(Transylvania motorway). The Transylvania motorway will be 415 km long, but so far
only 10% has been completed.
The main Romanian cities are also connected to large European cities by direct
flights, as many regional and global airlines have expanded their reach to the
country’s main economic hubs:
Direct flights from main Romanian cities

• UK
• Italy
• Spain
• France
• Germany
•Austria
•Italy
•Turkey
Oradea Iasi
• Austria
• Germany
•Hungary
Cluj- Napoca
Targu Mures
Arad
Sibiu
Timisoara Brasov
• Italy
• Turkey
Constanta
Bucharest
• Italy
• Germany
• Austria
• Greece
• France • Spain • Europe
• Austria • Middle East
• Germany • North Africa
Source: Airline companies’ websites

Source: Airline companies’ websites
Incentives for investors
The government offers a number of investment incentives to attract FDI, including
real estate tax exemptions, as well as preferential tax deductions for the purchase
of new technology and R&D centres. Grants are also available, from both national
and EU sources, which can support new investment and job creation.
Nevertheless, investors need to be aware of a number of challenges that are
common to most transition economies in the region, including Romania.
Government incentives to support economic growth
The main conditions upon which state aid is granted are: initial investment volume
(EUR million) and number of new jobs created:
Initial investment ranges (EUR million) Number of new jobs created

5-10 50
10-20 100
20-30 200
Over 30 300
The government grant scheme is available for five years (2009-2013) and consists
of grants of up to 50% of the eligible costs of the investment. The maximum level
of the grant an economic operator can receive is the RON equivalent of EUR 28
million (for investments outside the Bucharest – Ilfov region) or EUR 22.5 million
(for investments in the Bucharest – Ilfov region).
Government incentives supporting investments over EUR 100 million
Large enterprises can be granted financial support for initial investment exceeding
the RON equivalent of EUR 100 million, with eligible costs of over EUR 50 million
(RON equivalent) if they create at least 500 new jobs. All fields of activity are
eligible, except the primary production of agricultural products, fisheries, the
coal industry, the steel industry, transport, maritime shipbuilding and synthetic
fibers. The level of aid is calculated by adjusting the regional ceiling to the eligible
expenses.
In this respect, there were a few large investments that amounted to EUR 712 m
in 2010 and employed cca 5,000 people, qualifying for total state aid of EUR 215 m.
Renault, Pirelli, Lufkin and Remar are just a few of the investors that benefited from
these incentive schemes in 2010.
Incentives related to European Union funding

Following accession to the EU, Romania has gained access to a significant pool
of EU funded grants, available at national and public level as well as at private
level. The most attractive and accessible funds for SSC/ BPO entities relate to
investments in human capital development, total funds available for Romania
amounting to EUR 4.25 bn for the period 2007 – 2013.
A multitude of private and public institutions have benefited from such funds,
beneficiaries including HP Global E-Business Operations, the BPO arm of HP in
Romania, which has been granted EUR 360,000 via such programs.
Employment incentives
Employers who hire recent graduates may apply for a monthly grant. This is
calculated by multiplying the reference social indicator (currently RON 500) by 1.2 -
1.5 for each new graduate (depending on the education level of the employees), for
a period of 12 months. Employers are also exempt for the same period from paying
the unemployment contribution due for the amounts paid to these graduates.
The Romanian authorities recognize the importance of the IT sector and, in this
respect, IT specialists have been exempt from salary tax since 2001. This incentive
is available indefinitely and aims to retain workers with high level IT expertise in
Romania.
Additional incentives are granted for the employment of recent graduates with
disabilities. In this case, the monthly grants as well as the exemption from the
contribution to the unemployment fund are offered for 18 months. In addition,
companies hiring scholars and students during summer vacations, benefit from a
monthly incentive of 50% of the reference social indicator for each student/scholar.
The incentive is granted for a maximum of 60 days.
Employment incentives are also granted to companies which hire unemployed
persons aged over 45, as well as for employment of an individual who is the
sole supporter of their family. Employers receive a monthly grant equal to the
reference social indicator for each such person and are also exempt from paying the
unemployment contribution due for the amounts paid to them. The employment
relationship must be maintained for at least two years.
.
Tax incentives
Research and development
Romanian legislation provides for two main tax incentives for Research and
Development (R&D) costs:
• 20% additional tax deduction for all eligible R&D costs (e.g. salary expenses
in relation to staff involved in R&D activity, depreciation of intangible assets
used in R&D activity, operating expenses such as raw materials, consumables
incurred in R&D activity, etc.);
• Accelerated depreciation for equipment used in R&D activity.
For taxpayers to be able to take advantage of these incentives, they must conduct
R&D activities which generate an outcome that can be used by the taxpayer for its
own benefit in order to increase revenues.
Local tax exemptions
Buildings and land used within hydroelectric, thermoelectric and nuclear power
plants, as well as buildings and land related to transformation and connection posts
are exempt from local taxes. In addition, building and land used within industrial
parks are exempt from building and land tax.
Local councils may grant building or local tax exemptions to legal entities which
benefit from state aid schemes.
Tax incentives for reinvested dividends
Dividends reinvested for the purpose of creating new work places or for the
purpose of developing the activities of Romanian legal entities distributing their
dividends, are dividend tax exempt. In addition, dividends reinvested in the share
capital of another Romanian legal entity, for the same purposes as the above
mentioned ones, are also dividend tax exempt.
Other fiscal incentives are provided for renewable energy producers, such as
exemption from excise duties for energy produced from renewable sources.
Accelerated depreciation
According to Romanian fiscal legislation, accelerated depreciation can be used
by companies for machinery and equipment, computers and their peripherals.
Consequently, taxpayers may apply accelerated depreciation to fixed assets which
fall within the above mentioned categories, even if they do not qualify for the fiscal
incentive in relation to R&D costs. Under this depreciation method, a maximum
of 50% of the asset’s fiscal value may be deducted during the first year of usage,
while the rest of the asset’s value can be depreciated using the linear method over
the remaining useful life.
Investment in Romania | 13
2.Romania: an attractive SSC

and BPO Destination
Shared Service Centers (SSC) and Business Process Outsourcing (BPO) are the
cornerstone of today’s strategies for corporations around the world. Locations
are no longer limited to the areas the organization resides in, as globalization and
new technologies have led to the proliferation of SSC/ BPO entities beyond their
traditional frontiers.
Studies show that early adopters of SSCs and BPO have already pocketed benefits
of 20 – 30% or more, as a result of increased efficiency, scale and lower operating
costs. Those which have not acted yet are increasingly contemplating intensifying
their cost cutting activities by moving operations off-shore or near-shore. A different
category is made up of companies which have initially set up SSC/ BPO entities in
well-established economies and are now considering moving them to lower cost
locations, which have the potential of offering comparative service quality and safe
business environments. Recent trends also show that single-function SSC/ BPO
entities are gradually shifting to multi-function organizations to increase scale, as
their SSC/ BPO organization matures.
SSC/ BPO activities have also gained in scope. In addition to the traditional
IT, finance and supply chain processes, SSC and BPO providers are expanding
and becoming more sophisticated in their approach, handling a more diverse
range of services: legal services, tele-sales, spare parts management, warranty
management, real estate management, marketing intelligence and knowledge
management. Furthermore, new industries are being added to the SSC/ BPO
universe, such as the public sector and the healthcare industry.
In terms of expectations, companies are not only looking to cut costs, although the
pressure of cost-cutting across functions and geographies is still on. They also push
for innovation and enhanced services, challenging their SSC/ BPO units to deliver
similar operational and financial performance to that of their mother companies.
As SSC/ BPO locations become more and more popular and competition for
skilled labor intensifies, new locations are getting a seat at the global services
table. Romania has emerged as a top European destination, with companies such
as Microsoft and Oracle entering the IT outsourcing market as early as 15 years
ago. Compared to other Central and Eastern European countries, Romania has
historically excelled in providing highly skilled IT and engineering specialists, while
the business culture is steadily aligning to the standards imposed by the well-
established economies.
Various studies place Romania among the top 5 European destinations for all
types of global services activities. The provision of global services continues to
be an attractive business proposition for companies investing in Romania, either
in the form of setting-up and expanding shared service centers, or by outsourcing
particular activities to local BPO entities. People skills, their availability, their
language proficiency, the cultural compatibility and the business environment are
backed up by financial attractiveness of Romania. These three characteristics are
decisive when choosing a location.
Rank* Country Financial People Business Total

2011 Attractiveness skills and environment score
availability
1 Baltic Countries** 2.45 0.94 2.07 5.47
2 Bulgaria 2.82 0.88 1.67 5.37
3 Poland 2.14 1.27 1.81 5.23
4 Romania 2.54 1.03 1.65 5.21
5 Germany 0.76 2.17 2.27 5.2
6 Hungary 2.05 1.24 1.82 5.11
7 Czech Republic 1.81 1.14 2.03 4.98
8 Ukraine 2.86 1.07 1.02 4.95
9 Spain 0.81 2.06 1.88 4.75
10 France 0.38 2.12 2.11 4.61
Notes: * Rank within European countries only, extracted from the Global Service List
Source: A.T. Kearney Global Services Location Index, 2011
The key factors that contributed to A.T.

Kearney’s assessment of Romania’s
attractiveness for the global services sector
include:
• Financial attractiveness: compensation,
infrastructure and tax & regulatory costs
• People skills and availability: SSC/ BPO
experience, ratings of main management
and IT institutes, languages, labor force
availability
Main SSC / BPO
• Business environment: investors/ analyst ratings of the business and
companies in Romania
political environment, government support for the IT/ BPO sector, quality of
Source: Companies’ websites, local media infrastructure and security of intellectual property
Romania is an ideal near-shore location, capitalizing on the solid education system,
providing a steady, inexpensive and qualitative flow of skilled resources to meet
the growing demand of SSC/ BPO entities. Cultural compatibility and a large scale
of foreign language skills, covering English, French, Hungarian, Spanish, Italian,
German and Russian, provide a competitive edge to the Romanian work force.
Romania is a member of the European Union and of NATO, resulting in increased
mobility for employees, as visas are not required within the EU, and increased
guarantees of political stability.
Despite a large range of SSC/ BPO entities active in Romania, there is still tremendous
potential for growth in this sector. Most companies that entered the market initially
have approached it with caution, limiting themselves to single-function units, with
the potential of adding new services as their Romanian entity matures. As SSCs and
BPO are continuously evolving, companies such as Continental, Renault, Siemens
and Alcatel are constantly expanding their scope of services in Romania, opening
new centers and taking on additional tasks. Early entrants have set up their SSC/
BPO units mostly as greenfield investments, but there are a few companies that
entered the Romanian market through acquisition of local companies.
A study conducted by the Central and Eastern European Outsourcing Association
shows that Romania has consistently been the fastest growing market within the
CEE Region, with a +44% increase in IT Outsourcing services provided in 2009
compared to 2008. The overall Romanian IT market has continued to show signs
of growth, despite tough economic conditions. Therefore, the Software and IT
services volume in 2010 reached EUR 704 million, an increase of cca 7% compared
to the 2009 level (www.wall-street.ro). The key trend that has contributed to this
accelerated evolution is the growth of both IT services and IT infrastructure support,
accompanied by increased deployment of Quality Management systems. There is a
general opinion that the hottest areas are the financial sector and the public sector.
(Source: www.ceeoa.org). Romania’s outsourcing focus is reinforced by the share
of IT outsourcing services within the total IT market, which is as high as 97%.
(Source: www.anis.ro)
3. Main cities in Romania

Bucharest
SSC/BPO setting
Among main Romanian cities, Bucharest has consistently been the preferred City introduction
SSC destination in Romania, capitalizing on the wide availability of highly
qualified workers and proximity to already established headquarters of Bucharest, the capital of Romania,
many companies. It is also a more attractive choice for the expat community accounts for around 23% of the
(international schools, wide range of private healthcare services, access to country’s GDP and about one-quarter
international flights etc). of its industrial production, while
being inhabited by only 10% of the
Numerous companies have set up headquarters in Bucharest, offering a full country’s population. In 2010, at
range of SSC/BPO services, attracted by the highly skilled labor force and low purchasing power parity, Bucharest
operating costs. The list includes multinationals such as Microsoft, IBM, P&G, had a per-capita GDP of EUR 14,300,
HP, Oracle, Wipro, S&T, as well as national companies such as UTI Systems, or 45% that of the European Union
Petrom etc. average and more than twice the
For the past 6 years, Romania has been one of the fastest growing IT Romanian average.
markets in Europe. Bucharest’s services industry has attracted most of the Bucharest’s economy is mainly
multinational companies operating in the area. The capital is used as a national focused on industry and services,
operations center by some, and in some cases as the home of a broader with an important IT services
management, which often includes the Republic of Moldova, Bulgaria and market segment. It houses 186,000
other countries in the CEE region. companies, including a significant
number of headquarters of companies
Company name Main services offered
operating at a CEE level (Bucharest
HP (Global E-Business SSC and BPO for EMEA region, providing serves as a hub for the Balkans
Operations Center) a wide range of financial, logistic and operations for many international
administrative business processes companies, such as Michelin, Procter
IBM GDC/ GPSG SSC for procurement, BPO for financial, & Gamble, Roche, GE, etc).
customer relationship and human capital
management
Microsoft (GTSC) SSC and BPO for customer support and IT
services for EMEA Location Situated in the
south of the
Procter & Gamble GBS SSC for procurement covering EMEA country, on the
Global Procurement Center region banks of the
Petrom (part of OMV SSC for Finance & Accounting, IT Dambovita River.
Group) Population 2,200,000
Siemens IT Solutions and SSC for Research & Development and IT Major industries Food and
Services PSE RO beverage
Huawei SSC for Finance & Accounting production,
commerce,
Source: www.romaniatourism.co, www.cnp.ro (National Commission for Prognosis) services, IT,
logistics.
In addition, some of world’s most reputable BPO companies carry out Source: www.romaniatourism.co, www.cnp.ro (National
activities in Romania, aimed at both local customers as well as regional ones: Commission for Prognosis)
Genpact (financial services, collections, procurement and delivery services),
Oracle EMEA (IT services and customer support), S&T (Customer support
and IT related services), WIPRO (Finance & Accounting and IT Services
covering the Eastern European market), WNS Global Services (Finance &
Accounting and customer support services; delivery center for global clients),
Business Ideas Provider Group (merchandising, promotion and sampling
activities), Accenture (outsourcing of various process).
Human resources
Institutes of Higher Education: largest Romanian
academic center and one of the most important Key drivers for the city to emerge as a
centers in Eastern Europe, with 16 public and 18 private favourable SSC/BPO destination
institutes. • Bucharest is the main university center of the
Number of students: 300,000 country, offering a large talent pool.
Employees: 890,000 • The city offers an inexpensive labor force

and lower administration costs than in other
Unemployment rate: 2.3%. European countries.
Average net wage: EUR 450 • Bucharest is the economic center of the
Languages spoken: Romanian, English, French, German, country, registering 30 billion EUR in foreign
Italian, Spanish. investment up to 2010 and representing
cca two thirds of national direct foreign
Source: www.insse.ro (National Institute of Statistics), www.cnp.ro (National
investment.
Commission for Prognosis)
• Steps are being taken to improve the city’s
Infrastructure
infrastructure.
Office space Source: http://arisinvest.ro/files/whyromania/ISD%202008.pdf
There is a high availability of office space, with vacancy rates

at 19% as of 2010, following the delivery of newly built space
and shrinking demand.
Therefore, prime office rents in 2011 have ranged from EUR
11.5/sqm (suburban) to EUR 18.5/sqm (center). The local administration has introduced multi-annual planning
to ease traffic, create new subway lines and improve the
Source: http://realestate.doingbusiness.ro/en/market-overview/article.
telecommunications, transit and business infrastructure.
php?articleid=479
New projects include flyovers, expansion of the main train
Telecom Infrastructure station, modernization of the airport and the construction of
a new one nearby Bucharest, ecological waste depots and
Full scale telecommunication services are available in
waste water treatment stations.
Bucharest, ranging from fixed lines to cellular phones and
high speed Internet lines. The main telecom operators in There are plans to create a Bucharest Metropolitan Area,
the region are Orange, Vodafone and Cosmote for mobile which would include 94 cities and villages spread across a
services and Romtelecom for landline telephony. Several 5,000 square kilometer area, extending to the Danube river,
companies offer Internet services. Romtelecom, the former further expanding opportunities.
national telecom company, has a strong presence covering
Source: http://www4.pmb.ro/wwwt/l52/docs/31_01_2008.pdf
telecommunication services, mobile (through Cosmote),
fixed (via its own lines) and Internet. Mobile telephony and Quality of life
Internet services are relatively inexpensive and of higher
Cost of living
quality compared to other CEE countries.
Bucharest has the highest cost of living indicators in Romania,
People mobility
still lower than its peer CEE cities. The net average salary is
Bucharest has two international airports: Henri Coanda EUR 450, the highest of all Romanian cities.
(close to the city) and Aurel Vlaicu (within the city) . The city
is linked to the rest of the country mostly by main roads, as Ease of commuting
well as a limited motorway network, which is currently being
The city has a reasonably developed transportation network
extended. Romania has a fairly extensive railway system.
including trams, buses, trolleybuses and a subway network.
Plans are under way to upgrade the country’s road and rail
Traffic congestion occurs, particularly during rush hours, but
networks to bring them up to European standards.
various projects are under way to ease this.
Source: http://www4.pmb.ro/wwwt/l52/docs/31_01_2008.pdf
Upcoming projects
At the heart of the national economy, Bucharest has been
in a state of constant change in recent years. EU accession
prompted more investment in the capital city, speeding its
development. Several projects are under way to improve
the city’s infrastructure, for example various road building
projects. Plans have been made for an extension of the city’s
metro system over the next few years.
Cluj-Napoca
SSC/BPO setting
City introduction
Cluj Napoca has historically been a preferred location for SSC/ BPO entities,
due to its highly skilled workforce, excellent living conditions and good Cluj-Napoca, the capital city of the
connections with the rest of the country and to main European cities. Cluj Cluj county, has historically been
Napoca is viewed as the best Transylvanian city to live in, as it is a highly one of Romania’s major academic,
appreciated economic, academic, social and cultural center for the area. cultural and commercial hubs. It is the
largest and most important city in the
The SSC/BPO services offered include research and data analytics, order
Transylvania region, with a dynamic
management, finance and accounting, engineering services, software
social and cultural life and a large
development and IT services.
number of investors.
Company name Main services offered Location Situated in

North Western
HP Global SSC and BPO for EMEA region, for a wide range Transylvania in
E-Business of financial, logistic and administrative business the valley of the
Operations Center processes Somesul Mic river,
Genpact BPO for Finance & Accounting, collections, approximately 50
procurement and delivery services minutes by air
from Bucharest.
Evalueserve BPO for IT services
Population 330,000.
Office Depot SSC for Finance & Accounting
Major industries IT, financial
services, food
Bombardier SSC for Administrative Services processing,
Transportation textiles, wood
processing,
Emerson SSC for Engineering services pharmaceuticals.
Source: Company websites, Ziarul Financiar
Source: National Institute of Statistics – Romania,
Eurostat
Human resources
Institutes of Higher Education: 50 public and private Key drivers for the city to emerge as a
institutes. favourable SSC/BPO destination
Number of students: 60,000 • Cluj-Napoca is an important IT and financial
Employees: 180,000 hub in Romania. The city is being considered
as an alternative outsourcing location to
Unemployment rate: 3.7 % Bucharest, due to increasing competition for
Average net wage: EUR 350 talent in Bucharest.
Languages spoken: Romanian, English, German, • Average salaries are lower than in Bucharest,
Hungarian, Italian, Spanish, French. but higher than the country average (EUR 340
net).
Infrastructure
• The talent pool is skilled in many languages,
Office space especially English, German, French and Italian,
There has been a recent excess supply of office space. and suited to provide multi-lingual services.
Average rent is cca EUR 9 per sqm. Source: http://arisinvest.ro/files/whyromania/ISD%202008.pdf
Source: http://www.manager.ro/articole/analize/analiza:-piata-de-spatii-comerciale-
si-birouri-din-romania--10469.html
Telecom Infrastructure
Full scale telecommunication services are available in Cluj- Upcoming projects
Napoca, ranging from fixed lines to cellular phones and
The city is to be linked with Bucharest and the Hungarian
high speed Internet lines. The main telecom operators in
border by Autostrada Transilvania (Romanian Motorway
the region are Orange, Vodafone and Cosmote for mobile
A3). The 415 km highway is estimated to be completed in
services and Romtelecom for landline telephony. Several
2013. Several real estate projects are being developed in
companies offer Internet services. Romtelecom, the former
Cluj-Napoca, including a construction of a 10,000 sq meters
national telecom company, has a strong presence covering
business center in the city center.
telecommunication services, mobile (through Cosmote),
fixed (via its own lines) and Internet. Mobile telephony and Quality of life
Internet services are relatively inexpensive and of higher
Cost of living
High salaries and low prices mean that Cluj takes third place
People mobility
in the league table of the best cities to live in Romania. This is
The city has a well developed rail and road network and it is the result of a large amount of foreign investment which has
crossed by the E60 European Road. Cluj-Napoca International led to higher than the average monthly salary levels (EUR 350
airport, which is the third largest airport in Romania, offers net) and GDP per capita (EUR 7,625).
direct flights to Timisoara and Bucharest in Romania as well Source: INS (National Institute for Statistics)http://www.sfin.ro/articol_23256/
unde_e_bine_sa_traiesti_in_romania__harta_nivelului_de_trai.html?action=print
as various destinations across Europe including France,
Germany, the UK, Italy, Austria and Spain.
Ease of commuting
The city has a transportation network including tram lines,
buses and trolleybuses. However roads are congested during
rush hours. There is no underground public transport.
Timisoara
SSC/BPO setting
City introduction
Many leading companies are currently active in Timisoara, including some of
the most important global players on the SSC/BPO market. Services offered Timisoara is the fourth largest
on the local market include process outsourcing, software production, Romanian city and the main economic
database management, software integration and consultancy, while clients and cultural center of the Banat
range from the automotive industry to services. region in the west of the country. It
is a multicultural city with influential
The IT&C sector is one of the most dynamic in Timisoara, registering
minorities, primarily Hungarians,
substantial growth in the last 10 years. In the regional IT business
Germans, and Serbs.
environment, there have been major investments in new software and
hardware solutions that could allow companies cut costs. The major interest In recent years, Timisoara has
is in data security, business continuity and system back-up. IT solutions registered a significant economic
for end users have also attracted important international IT players. A new boom, based mainly on foreign
IT&C center is planned, which will host a series of IT companies, based on investment, especially in high-tech
a project managed by the City of Timisoara in cooperation with the Regional sectors. Some of the most substantial
Development Agency. investments have been from the
Source: http://www.primariatm.ro/monitorul/index.php?meniuId=1&viewCat=12&viewItem=3747 , http://
European Union, especially from
www.itcongress.ro/index.php?option=com_content&task=view&id=3&lang=romanian Germany and Italy, as well as from the
USA.
Company name Main services offered

HP Romania - SSC and BPO for EMEA region, for a wide range of Location Located in the
Timisoara financial, logistic and administrative business processes west of the
WIPRO Timisoara BPO for IT, Finance & Accounting, Procurement country, near
Services covering the Eastern European market the border
with Hungary
Bosch BPO for telemarketing services and Serbia.
Communications
Center Population 322,000
Siemens VDO SSC for engineering services Major industries IT, agriculture,
Automotive textiles,
machinery.
Alcatel Lucent SSC for Human Resources, Research and
Development
Eurostat- http://www.primariatm.ro/uploads/files/
S&T Romania BPO for customer support and IT related services concept/starea_economica.pdf
Continental SSC for Finance & Accounting, Research and

Automotive Development, Technical services and Procurement
Oracle BPO for IT services and customer support
Source: Companies’ websites
Human resources
Key drivers for the city to emerge as a
Institutes of Higher Education: 45 public and private favourable SSC/BPO destination
institutes.
• Timisoara is one of Romania’s most important
Number of students: 42,000 university centers.
Employees: 195,000 • Proximity to Western Europe: Timisoara is
Unemployment rate: 2.6 % close to the border with Hungary, and this
presents several advantages: foreign language
Average net wage: EUR 340 literacy, quick access to a wide network of
Languages spoken: Due to the proximity to Western road and train transportation routes providing
Europe, there is high foreign language literacy: connections to most EU countries, and an
Languages spoken include Romanian, English, French, innovative culture, proven by its tradition of
German, Hungarian, Serbian, Italian and Spanish. being the first Romanian city to implement
several technological breakthroughs.
Infrastructure
• Local administration support for the IT&C
Office space market through “software companies’
In Timisoara, the office space market is still developing, due incubators”, offering start-up companies
to the increasing number of investors. Spaces with Class A incentives, etc.
facilities, situated within built-to-suit buildings, can be rented Source: http://arisinvest.ro/files/whyromania/ISD%202008.pdf
out at prices as low as 7 – 12 EUR/sqm/month.
Source: http://realestate.doingbusiness.ro/en/article.php?articleid=165&page=1
Upcoming projects
Timisoara’s local administration has initiated a development
Full scale telecommunication services are available in program to support companies in the software, telecom and
Timisoara, ranging from fixed lines to cellular phones and IT industries, at the same time encouraging new companies
high speed Internet lines. The main telecom operators in to take on more qualified workers.
the region are Orange, Vodafone and Cosmote for mobile
services and Romtelecom for landline telephony. Several Improving the transport infrastructure, services and
companies offer Internet services. Romtelecom, the former production industries are priorities for the local authorities
national telecom company, has a strong presence covering in an effort to promote Timisoara as an economic hub for the
telecommunication services, mobile (through Cosmote), region and the DKMT Euroregion. Industrial, technological
fixed (via its own lines) and Internet. Mobile telephony and and research parks were developed and supported by a
Internet services are relatively inexpensive and of higher financial incentive plan.
quality compared to other CEE countries. Quality of life
People mobility Cost of living
The Timisoara region is well connected to other important Timis is one of the counties where, in spite of the high prices
cities in Romania by national and express roads, railways for basic products, the cost of living is still lower that in the
and one of the largest airports in the country, Traian Vuia, rest of the country. Salaries are above country average and
which operates both international and domestic flights. The the number of employees exceeds the number of retired,
west side of the country benefits from the most significant while the unemployment rate is under control. The county is
investments in infrastructure being located on the Pan- considered to be one of the richest in Romania because of its
European 6th corridor (Timisoara- Arad highway was finished high GDP (EUR 8,218 per capita).
in December 2011). Source: http://www.ziare.com/Timis_pe_locul_doi_dupa_Capitala_la_nivelul_de_
trai-272180.html ; http://www.capital.ro/articol/cat-costa-viata-in-marile-orase-din-
Source: Statutul Municipiului Timisoara,
romania-23050.html
Ease of commuting
Timisoara has a reasonably developed public transportation
network including buses, trams and trolleybuses. There are
no major congestion issues in the city and a strategic plan for
public transportation improvement has been implemented by
local authorities. There is no underground public transport.
Source: http://www.primariatm.ro/uploads/files/concept/starea_economica.pdf
Brasov
SSC/BPO setting
City introduction
Brasov emerged as a favourable SSC/BPO destination as an alternative
location to Bucharest or as an additional location for companies that already Brasov lies in central part of Romania
have set headquarters in Bucharest. While continuing to be a highly industrial and it is the capital of Brasov County.
city, Brasov offers many advantages for new investors in the people intensive The economy of Brasov is complex,
industries, capitalizing on a strong education system with high emphasis on with a strong industrial character.
foreign languages. Heavy industry is abundant, including
the Roman truck factory, which
Source: http://www.primariatm.ro/monitorul/index.php?meniuId=1&viewCat=12&viewItem=3747 , http://
www.itcongress.ro/index.php?option=com_content&task=view&id=3&lang=romanian
manufactures MAN AG trucks under
license. Although the industrial base
has been in decline in recent years,
Company name Main services offered Brasov is still a site for industrial
IBM GDC SSC and BPO for EMEA region, for a wide range of activity. There are also chocolate
financial, logistic and administrative business processes factories and a large brewery. In
particular, the pharmaceutical industry
Siemens IT PSE SSC for Research & Development
Brasov has undergone further development
lately, with GlaxoSmithKline
DCI Database for BPO for IT services establishing a production site in
Commerce and
Industry Romania Brasov.
Wind Technologies BPO for IT services
Computer Generated BPO for IT services and call centers Location Located in the
Solutions, Inc. (CGS) central part of
Source: www.bursa.ro; www.curierulnational.ro, Mediafax, Companies’ websites Romania, 166 km
from Bucharest.
It is surrounded
by the Southern
Carpathians, and
it is part of the
Transylvania region.
Population 232,000.
Major industries Machinery,
textile, food,
pharmaceuticals.
Eurostat
Human resources
Number of students: 25,000 • The city is considered a good alternative
Employees: 140,000 location for multinational companies with
head offices in Bucharest.
Unemployment rate: 5.5 %
• Salaries are lower than in other large
Average net wage: EUR 330 Romanian cities, at an average of EUR 330
Languages spoken: Romanian,English, German, French, (net).
Hungarian, Serbian. • Brasov is an important university center.
In Brasov county there is high emphasis on bilingual teaching • The construction of an international airport
(English, French, Spanish, German). There are also high is underway thus making the city more
school classes allocated for German and Hungarian based accessible. Highways linking Bucharest
teaching. (connecting it to the port of Constanta) and the
Infrastructure Hungarian border are under construction.
Office space
Brasov’s office space market is relatively underdeveloped, as
there is a lack of class A office spaces and the vacancy rate is
low. Rent levels are in the range of 8-10 EUR/sqm. Upcoming projects
Source:http://www.sfin.ro/articol_19313/ce_chirii_platim_pentru_birouri_in_ A model for the planning of industrial estates is being
principalele_orase_din_tara, Eurisko – Doing Business devised, along with the development of the two national
roads that link Brasov with Ghimbav and Cristian.
The local authorities plan a project to improve the quality of
Full scale telecommunication services are available in Brasov,
life and the working conditions for the labor force. They are
ranging from fixed lines to cellular phones and high speed
contemplating setting up a Business Incubator to give advice
Internet lines. The main telecom operators in the region are
to new small and medium businesses.
Orange, Vodafone and Cosmote for mobile services and
Romtelecom for landline telephony. Several companies offer Quality of life
Internet services. Romtelecom, the former national telecom
Cost of living
company, has a strong presence covering telecommunication
services, mobile (through Cosmote), fixed (via its own lines), The National Institute of Statistics concludes that, due to the
and Internet. Mobile telephony and Internet services are lower than the average cost of living, the quality of life in
relatively inexpensive and of higher quality compared to other Brasov is above the national average.
CEE countries. Source: http://www.brasov.ro/articles/view/406
People mobility Ease of commuting

Brasov has well developed rail links for both national and Brasov has an integrated system of above-ground public
international transit. The lines connecting the northern transport, with 23 bus routes covering over 400 km, 6
regions to the southern regions and the western regions to trolleybus routes covering over 175 km and 12 minibus routes
the Eastern regions cross in Brasov’s rail hub. covering 115 km. There is no underground public transport.
Source: ratbv.ro
The city is crossed by European Road 60. The Transylvania
A3 highway is under construction- the Comarnic-Brasov
segment will be ready by 2014.
An airport is currently under construction and is due to open
in 2012.
Iasi
SSC/BPO setting
A significant number of leading companies perceive Iasi as a developing IT and
services market and the city has already become a business environment for City introduction
companies such as Siemens, Oracle, Pentalog and Synergy, confirming both Iasi is one of the largest Romanian city
its potential and the local workforce’s qualifications. according to its population, and it is
Source: http://www.primariatm.ro/monitorul/index.php?meniuId=1&viewCat=12&viewItem=3747 , http:// the economic, cultural and academic
www.itcongress.ro/index.php?option=com_content&task=view&id=3&lang=romanian centre of the Romanian region of
Moldavia, in the north-east of the
country.
Company name Main services offered Location Located in the

Ness Romania BPO for IT services north-east of
Romania, close to
XL World BPO for IT, customer services and telemarketing the border with
the Republic of
Continental SSC for Research & Development Moldova.
Automotive
Population 315,000.
Amazon Development SSC for software development
Center Major industries Pharmaceuticals,
petrochemicals,
E.On Servicii SSC for Finance & Accounting and Human textiles.
Resources
Source: National Institute of Statistics – Romania.
Source: http://www.ziaruldeiasi.ro/economic/industria-fara-fum-de-la-iasi~ni42sa
Eurostat
Human resources
Institutes of Higher Education: 10 public and private
institutes. Key drivers for the city to emerge as a
Number of students: 58,000 favourable SSC/BPO destination
Employees: 156,900 • Iasi is a major regional economic center and a

traditional university center.
Unemployment rate: 5.5 %
• Lower workforce costs than in Bucharest and
Average net wage: EUR 315 a high rate of qualified personnel.
Languages spoken: Romanian, English, French, German,
Russian.
Source:http://www.sfin.ro/articol_19313/ce_chirii_platim_pentru_birouri_in_
principalele_orase_din_tara, Eurisko – Doing Business
Infrastructure Upcoming projects

Office space Iasi’s local administration plans to develop the IT&C industry
and services (placing IT&C companies in the center of
There is an adequate supply of modern
the city), emphasizing the importance of IT services in
office space. Currently, prime office rental
their mid and long term development strategy. Taking
rates range from EUR 7 to EUR 12 per sqm.
into consideration the city’s size and the economic role
Source: http://realestate.doingbusiness.ro/ro/article.php?articleid=187
it plays in the north-eastern part of Romania, there are
Telecom Infrastructure many opportunities for development and expansion.
Source: Municipality of Iasi, Socio-economic development strategy, Strategia de
Full scale telecommunication services are available in Iasi, dezvoltare economico-sociala durabila a Municipiului Iasi
ranging from fixed lines to cellular phones and high speed
Internet lines. The main telecom operators in the region are Quality of life
Orange, Vodafone and Cosmote for mobile services, and Cost of living
Romtelecom for landline telephony. Several companies offer
Internet services. Romtelecom, the former national telecom The average net salary in Iasi is EUR 315. For the past 3 years,
company, has a strong presence covering telecommunication the cost of living has increased consistently.
Source: Family Budget Inquiry, National Institute of Statistics, local media
services, mobile, through Cosmote, fixed - via its own lines,
and Internet. Mobile telephony and Internet services are
relatively inexpensive and of higher quality compared to other Ease of commuting
CEE countries. The Iasi region has an adequate road and railway network
People mobility which facilitates commuting. Buses and trams are available
for in-city transportation. There is no underground public
Iasi is linked with other parts of Romania and abroad transport.
through roads, railways and an airport. Highways are
not available in the region, but plans are in place for
development. A city belt is planned, which will ease
commuting and/or access to suburban facilities. Several
international bus companies offer daily road transportation
to major European capitals, while the airport has direct
flights to Bucharest, Timisoara, Budapest and Vienna
(which offer a wide range of onward connections).
Source: Municipality of Iasi, Socio-economic development strategy, Strategia de
dezvoltare economico-sociala durabila a Municipiului Iasi
Constanta
City introduction
Constanta is one of the major cities
in Romania and home to the fourth
largest port in Europe. Located on
the Black Sea coast, the city has a
beach length of 13 kilometers, while
the port spreads across 39.26 square
km. It is an important university
center and the administrative capital
of the southeast development region.
Traditionally a port city, Constanta now
presents opportunities rather than
a previously established market. A
transportation node with both national
and international destinations, hosting
strong economic activity, Constanta
can harbor an IT services market.
Location On the Black Sea

coast, southeast
Romania.
Population 298,000.
Major Agriculture,
industries tourism, chemicals
and petrochemicals,
food and beverage
processing.
Source:National Institute of Statistics – Romania,
Eurostat
Human resources
institutes.
Key drivers for the city to emerge as a
Employees: 181,000 • Constanta is one of largest cities in Romania,
Unemployment rate: 4.1% associated with an important university center.
Average net wage: EUR 360 • Growing economy and lower developing costs
than Bucharest
Languages spoken: Romanian, English, French, German,
Turkish.
Source: National Institute of Statistic, Ministry of Education
Infrastructure
Upcoming projects
Office space
The local administration has developed a long-
The office space market is yet to settle in Constanta, as the term strategy to increase the competitivity of the
availability of office space is limited. industrial production sector, build up the tourism
industry and improve the transport infrastructure.
In 2011, office building rent prices range between EUR 5 to Source: (http://transporturiferoviare.wordpress.com/2011/06/06/dezvoltarea-
EUR 10 per sqm. infrastructurii-ar-putea-plasa-portul-constanta-pe-locul-2-in-europa/, Constanta City
Hall (http://www.primaria-constanta.ro/PrimariaConstanta/Proiecte/AL21Rom.pdf)
Source: http://imobiliare.topestate.ro/
Telecom Infrastructure Quality of life
Full scale telecommunication services are available in Cost of living

Constanta, ranging from fixed lines to cellular phones The cost of living is lower than the average, but the inflow of
and high speed Internet lines. Main telecom operators in tourists over the summer may inflate prices temporarily.
the region are Orange, Vodafone and Cosmote for mobile Source: http://www.sfin.ro/articol_23256/unde_e_bine_sa_traiesti_in_romania__
services and Romtelecom for landline telephony. Several harta_nivelului_de_trai.html
companies offer Internet services. Romtelecom, the former
national telecom company, has a strong presence covering Ease of commuting
telecommunication services, mobile (through Cosmote), Local bus companies provide links to most of the near by area,
fixed (via its own lines), and Internet. Mobile telephony and in addition to railway services. Trams, buses and trolleybuses
Internet services are relatively inexpensive and of higher provide in-city transportation. There is no underground public
quality compared to other CEE countries. transport.
People mobility
Constanta is a major hub, linking road, railway, air, sea and
river transportation. There is a highway to Bucharest, major
roads (express and national) linking the county to other major
cities, rail infrastructure able to manage both passengers
and freight, sea connections to other world ports and a river
connection to Danube riverside countries. A commercial ferry
line was opened in 2011, linking Constanta to Istanbul, Turkey.
Targu - Mures
SSC/BPO setting City introduction

With a strong educational system, one of the most diverse in terms of foreign Targu Mures is the capital of Mures
language-based education (Romanian, Hungarian, German and English), Targu County and the city with the largest
Mures has enormous unexplored potential. ethnic Hungarian population in the
In April 2011 the Romanian Government and IBM announced their intention country.
to begin discussions on the establishment in Targu Mures of a research The wood processing and
collaboration center, the Transylvania Center of Excellence in Research. exploitation industry is one of the
(“Digital Mures”). most representative, favored by
the abundance of timber in Mures
Company name Main services offered County. The utilities industry, although
E.ON Servicii SSC for Finance & Accounting and Human represented by a small number of
Resources economic operators, accounts for a
Source:http://www.cciams.ro/topul_firmelor/clasamente_j.html#domtop2 third of the total local revenues, due to
the E.ON group.
Other prolific industries in the city
are: food (milk, dairy and cheese),
textiles, ready-made clothing,
leather and footwear, electrical,
electronics and optical equipment.
The pharmaceutical industry has
registered significant growth, as
pharma multinationals have set up
local production facilities in Targu
Mures (Gedeon Richter, Sandoz).
The chemical sector is also a key
contributor to the Targu Mures
economy, with Azomures SA as the
leading chemical fertilizer producer in
Romania.
Location Located in central

Romania, at
approximately
equal distances
from border
crossing points.
Population 231,000
Major industries Pharmaceuticals,
chemicals, food,
wood processing
Source:National Institute of Statistics – Romania www.
tirgumures.ro/index.php?option=com_content&view=arti
cle&id=102&Itemid=236&lang=en; http://www.mures.ro/
category.php/Local-Transport/111/1/
Human resources
institutes. Key drivers for the city to emerge as a
Employees: 200,000 • Targu-Mures is an important university center,

and its graduates have an excellent working
Unemployment rate: 6.3% knowledge of English, Hungarian and German,
Average net wage: EUR 290 as well as good grasp of technical knowledge.
Languages spoken: Romanian, Hungarian, English, • A project sponsored by the City of Targu
French, German. Mures, “Digital Mures”, is underway, with
the aim of setting up a modern infrastructure
Source: Local Statistics Institute (http://www.Iasi.insse.ro/main.php?id=388)
of private-public services and to foster
Infrastructure the construction and development of a
technological park specializing in research and
Office space medical information. The initiative follows
Low availability of Class A offices, however supply of office the municipality’s “Digital Mures” strategy,
space is adequate and rent levels are low. created to help the city to become a regional
axis of scientific research and progress.
People mobility
Situated in the center of Romania, at the junction of many
national and European roads, Targu-Mures represents a rail,
road and air hub. The transportation network assures multiple
connections to Road E60 that ties Western Europe to Eastern
Europe. Upcoming projects
Telecom Infrastructure The development of the Transylvania airport- a

project worth EUR 41 million is underway.
Full scale telecommunication services are available, ranging
from fixed lines to cellular phones and high speed Internet Quality of life
lines. Main telecom operators in the region are Orange,
Vodafone and Cosmote for mobile services and Romtelecom Cost of living
for landline telephony. Several companies offer Internet Mures county has average living conditions, with a GDP per
services. Romtelecom, the former national telecom capita of EUR 4,135.
company, has a strong presence covering telecommunication Source: http://www.sfin.ro/articol_23256/unde_e_bine_sa_traiesti_in_romania__
services, mobile (through Cosmote), fixed (via its own lines), harta_nivelului_de_trai.html?action=print
and Internet. Mobile telephony and Internet services are
relatively inexpensive and of higher quality compared to other Ease of commuting
CEE countries. The city has a transportation network including tram lines and
buses.There is no underground public transport.
Arad
Location In the western part of Romania, with the Mures City introduction
River crossing it from east to west.
Population 173,000 Arad is an important economic hub for
the Western Romanian region, as the
Major industries Rail transportation equipment, Automotive, Food, geographical location of the city at the
Footwear and Textiles, Furniture
junction of major commercial roads
Source:National Institute of Statistics – Romania www.tirgumures.ro/index.php?option=com_content&vi
as well as its vicinity to the border has
ew=article&id=102&Itemid=236&lang=en; http://www.mures.ro/category.php/Local-Transport/111/1/
favored its economic development.
Human resources
The successful privatization of several
Institutes of Higher Education: 2 important factories (Astra Vagoane
-railcars- taken over by Trinity Industries
Number of students: 20,000
Inc., USA, Arbema -brewery, taken
Employees: 105,000 over by Brau Union AG, Austria) as
well as investment in new industrial
Unemployment rate: 3.8%
factories by attracting foreign and
Average net wage: EUR 324 domestic investors has contributed to
the economic development of the city.
Languages spoken: Romanian, English, Hungarian, French, German.
An important project is the setting
Source: Local Statistics Institute (http://www.Iasi.insse.ro/main.php?id=388)
up of the Arad Industrial Zone and
Infrastructure Logistic Centre. This comprises the
Cargo Terminal at Arad International
Office space
Airport, the Arad International Fair and
There is an adequate supply of modern office space. Currently, office rental Arad Free Zone - Curtici. A part of this
prices range from 6 to 10 EUR/sqm. project; the Arad Industrial Zone and
Free Zone Arad-Curtici has already
People mobility
been inaugurated, while the other
The road network in Arad county has national roads (405,378 km), county roads objectives are in an advanced stage of
(1078,327 km) and local roads (756,765 km). Arad will be connected to the completion.
future Nadlac – Arad – Timisoara – Lugoj –Deva highway.
Key drivers for the city to emerge as
Mobile telephony and Internet services are relatively inexpensive and of higher a favourable SSC/BPO destination
• The city has a strategic
geographical location as the main
gateway to Romania from the rest
of the European Union and the
most important trans- European
road and rail transportation
junction in western Romania.
• Tremendous unexplored
potential and proximity to already
established SSC/BPO areas such
as Timisoara and Cluj-Napoca.
• Growing economy and low
developing cost.
Oradea
Human resources
City introduction
Institutes of Higher Education: 4 public and private institutes.
Oradea, capital of Bihor county, is
Number of students: 19,000
one of the most important centers
Employees: 151,000 of economic, social and cultural
development in North West Romania.
Average net wage: EUR 260
Languages spoken: Romanian, English, Hungarian, French, German. Location Oradea is Romania’s
Infrastructure tenth city and is
located in the west of
Office space the country, around
10 km from the Bors
There is an adequate supply of modern office space. Currently, office rental frontier crossing.
prices range from 6 to 8 EUR/sqm. Population 270,000
People mobility Major Pharmaceuticals,
industries petrochemicals,
Bihor has 412 km of National roads ( E60, DN 19, DN 76 and DN textiles.
79). Oradea is served by Oradea International Airport, which has
Source: National Institute of Statistics – Romania.
flights from major Romanian cities as well as some cities in northern Eurostat
Italy. Oradea will also be connected to the Transylvania highway.
Source: The County Council of Bihor
Mobile telephony and Internet services are relatively inexpensive and of
higher quality compared to other CEE countries. Key drivers for the city to emerge as
a favourable SSC/BPO destination
• It is a large regional economic
center.
• The city is a traditional university
center, Future IT&C professionals
are catered for by two of its largest
institutions: The Automatics and
Computer & Informatics faculties.
• Lower workforce costs than
in Bucharest and a high rate of
qualified personnel.
4. Key facts on the

Republic of Moldova
Country Snapshot
Country area 33,843 sq.Km
Population 4.32 million
Official language Moldovan
Capital Chisinau
Currency Moldovan Leu (MDL)
Average MDL/EUR (2010) 16.40
Average MDL/USD (2010) 12.37
Inflation rate (2010) 7.4%
Unemployment rate (2010) 7.4%
GDP per capita (2010) USD 2,500
Time zone GMT + 2 (GMT + 3 in summer)
Climate Temperate-continental climate, with four
distinct seasons
Political structure
Moldova is a unitary parliamentary representative democratic republic. The
country’s central legislative body is the unicameral Moldovan Parliament, whose
members are elected by popular vote on party lists every four years. The head of
state is the President, who is elected by a closed Parliament vote. The President
appoints a prime minister who functions as the head of government, and who in
turn assembles a cabinet, both subject to parliamentary approval.
Business and investment climate
Key indicators 2008 2009 2010
Nominal GDP (EUR m) 3,768 3,810 3,941
Total public sector debt (%GDP) 18.5 28.9 31.9
Government deficit (EUR m) (741.4) (941.9) (1,150.6)
Trade balance (EUR m) (2,333.7) (1,457.6) (1,632.5)
Unemployment rate 4 6.4 7.4
Average Exchange Rate MLD/ EUR 15.29 15.52 16.40
Average Exchange Rate MLD/ USD 10.39 11.11 12.37
Source: The Economist Intelligent Unit, National Bureau of Statistics of the Republic of Moldova, Ministry of
Finance of the Republic of Moldova, National Bank of Moldova
Moldova has no major mineral deposits and must import almost all of its energy
supplies. It is dependent on Russian energy and trade, and Russia’s decision to ban
Moldovan wine and agricultural products, coupled with its decision to double the
price Moldova paid for Russian natural gas, contributed to a severe deterioration
of the economy. The onset of the global recession and poor economic conditions
in Moldova caused GDP to fall 6.5% in 2009. The coalition government is trying to
address the economic situation and has embarked on a series of strict economic
reforms following a $574m agreement with the IMF in January 2010. This is
designed to help reduce the budget deficit. This is also supported by €1.9bn in
grants and loans over the next four years proposed at an international donor co-
ordination meeting in March 2010.
However, a modest recovery in the world economy boosted GDP growth to
6.9% in 2010. The Moldovan economy continued to show signs of recovery
in the first half of 2011, registering GDP growth of 7.5%, compared to
the same period last year, while the forecast for the whole year is 5.5%.
Key indicators 2008 2009 2010 2011 2012

(estimated) (forecast)
Real GDP Growth (%) 7.2 (6.5) 6.9 5.5 4.5
Inflation rate (%) 12.8 (0.10) 7.4 7.7 6.2
Source: The Economist Intelligent Unit, National Bureau of Statistics of the Republic of Moldova, Ministry of
Finance of the Republic of Moldova, EBRD
Moldova is a member of the United Nations, the World Trade Organisation (WTO),
the Commonwealth of Independent States (CIS), a CIS sub-group entitled
GUAM (for Georgia, Ukraine, Azerbaijan and Moldova), the European Bank for
Reconstruction and Development (EBRD), the International Monetary Fund
(IMF), as well as the Organisation for Security and Cooperation in Europe (OSCE).
It is a party to the Central European Free Trade Agreement (CEFTA) and NATO’s
Partnership for Peace.
Russia, the US, France and Spain are the largest investors in Moldova.
Human capital
Moldova has been severely affected by the world economic crisis, with foreign
investment and exports down. The crisis is causing large numbers of immigrant
workers to return (particularly from Russia and other CIS countries) and this is
dramatically affecting the Moldovan economy, which is one of the most remittance-
dependent in the world. The average gross salary in June 2011 was EUR 222.
Two-thirds of Moldovans are of Romanian descent. The languages are virtually
identical and the two countries share a common cultural heritage. The ethnic
composition of the country is as follows: Moldovan/Romanian (65%), Ukrainian
(13.8%), Russian (13%), Gagauz (Christian Turks) (3.5%), Jewish (1.5%), Bulgarian
(2%), other (1.2%).
Fiscal considerations and incentives for investors
Once Romania joined the European Union, Moldova became a neighbor of the
EU, while also being a member of Commonwealth of Independent States (CSI).
This has increased the country’s attractiveness as a trade partner and investment
destination for foreign partners for the following reasons:
• Moldova is a member of the World Trade Organization, and in its capacity as
a CSI member and signatory of the Central European Free Trade Agreement
(CEFTA), benefits from Free Trade Agreements with all the countries which are
members of the CSI and CEFTA.
• From 21 January 2008, Moldova entered the Autonomous Trade Preferences
Agreement granted by the EU, which allows free access to European
markets for Moldovan goods. This has made the European Union Moldova’s
main trading partner, with more than 50% of Moldovan exports made to EU
destinations.
Value Added Tax

The standard VAT rate is 20%. Reduced tax rates apply as follows:
• 8% for bread and bakery products, milk dairy and agricultural products, and
selected pharmaceuticals
• 6% for natural and liquefied gas
• Zero for exports of goods (services), international freight and passenger
transportation, electric power, thermal energy and hot water supplied for the
population, goods and services supplied from Free Economic Zones outside
Republic of Moldova and in the Free Economic Zones either from Moldova or
outside it.
Tax incentives
Until the end of 2011, corporate income tax was 0%. Starting 2012, corporate
income tax was increased to 12%, being also cancelled the fiscal facilities in place
in 2011 for investments stimulation.
Free Economic Zone

There are 9 Free Economic Zones (FEZ) in Moldova granting investors both fiscal
and financial incentives. New FEZ residents (after January 1st, 2012) will be granted
a reduction of 50% of the corporate income tax for incomes generated by export
of goods and services and a reduction of 25% of the corporate income tax for the
other incomes. For the residents present before January 1st 2012, the authorities
are about to adopt a decision either to maintain the previous fiscal incentive (0%
corporate income tax) or to align their fiscal rule to the one applicable for the new
residents. VAT for FEZ residents is 0% in the above mentioned conditions and the
excisable goods acquired in the Free Economic Zones are excise exempted. The
9 FEZ are: Expo-Business-Chisinau, Giurgiulesti International Free Port, Free
International Airport Marculesti, Otaci-Business, Taraclia, Tvardita, Ungheni,
Valkanes and Balti.
SSC/BPO setting
The SSC/ BPO and IC&T sector are Moldova’s most dynamic sectors. Moldova
provides software development and engineering, business process outsourcing
and call center outsourcing to numerous national and international organizations.
The multilingual workforce enables the development of applications or supply of
support personnel speaking English, French, Russian, Romanian, Ukrainian, and
other languages. Also, the labor rates for highly skilled software engineers are
among the lowest in the region.
Source: http://www.miepo.md/ (Organization for promoting investments into and exports from Moldova)
Chisinau
SSC/BPO setting
Development of SSCs/ BPO is taking place in 4 main sectors – IT, Human
Resources, public relations and professional accountant services. The first
three develop on an international level, while accountancy services are
provided mostly to local companies. City introduction
The Moldovan government places a strong focus on the medium term Chisinau is the capital of Moldova. It is
development of the IT&C sector, as it is considered to be the main driver the largest city in the country and it is
behind Moldova’s economic growth, augmenting labor productivity and the political, administrative, economic
enhancing international competitiveness. and cultural centre. Chisinau is the
Company name Main services offered most economically developed and
industrialized city in Moldova.
Moldauditing S.R.L. BPO for Finance & Accounting
Ecofin-Audit-Service S.R.L. BPO for Finance & Accounting
I.M. Iricom Company BPO for call centre services
Location Chisinau is situated
GPG Group S.R.L. BPO for call centre services in the centre of the
Pentalog S.R.L. BPO for IT services country, on the Bic
river.
Endava S.R.L. BPO for IT services
Population 719,000.
Bridge Moldova S.R.L. BPO for IT services
Major industries Consumer goods,
Media Soft S.R.L. BPO for IT services electrical goods,
Source: AmCham.md, www.callcenterpro.md, www.global-phoning.com, www.compudavafoundation.
machinery, textiles.
org, www.bridge-moldova.md, www.mediasoft.md Source:http://www.moldova.md/md/home/; http://
statbank.statistica.md/pxweb/Dialog/Saveshow.asp
Human resources
Number of students:123,000 • Low operating costs: both salary and
maintenance costs.
Employees: 1,256,000
• Quality of talent: there is a relatively good
education system in Chisinau, supplemented
Average net wage: EUR 220 by the easy access of Moldovan nationals to
Romanian academic institutions.
Languages spoken: Moldovan/ Romanian, Russian,
English, French, German. • Linguistic and cultural similarities: as a former
USSR country, Moldova still has cultural
Source: www.statistica.md
links with most other CIS countries, which
Infrastructure facilitates communication; it also has strong
linguistic and cultural ties with Romania.
Office space
At the end of the first half of 2011, the average monthly rate
for an office space was 7-9 euro/sqm.
Upcoming projects
There are 16 providers of landline phone communication
Currently the development of the city’s infrastructure is
services, the major one being Moldtelecom S.A. which
limited due to harsh economic conditions. However the
dominates the market (app. 90% share) and offers a wide
General Plan for the Development of Chisinau includes
variety of services. The mobile communications sector is
measures for improvement of road communications and
divided between four companies, offering almost complete
traffic conditions.
coverage of the territory of the country (excluding the Trans-
Dniester region). There are internet providers in Moldova that The Development of Chisinau is a project whose key
offer both broadband and dial-up Internet connection. Internet objective is to assist Local Public Authorities of the Chisinau
connection is available also through providers of mobile Municipality in the process of strengthening its institutional
telephony services. There is a tendency towards a decrease and financial management capacity to support the
in prices and an increase in the quality of telecommunication achievement of long-term development goals and improve
services. service delivery.
People mobility Source: http://www.chisinau.md/libview.php?l=ro&idc=585&id=2701
Local travel is available by means of public transport within

the city area and by railway and regular bus routes within the Quality of life
rest of the country. Taxis and personal cars are also widely Cost of living
used. International travel is also available by rail, buses and
airplanes – these fly to all major European airport hubs. Low cost of living indicator as compared to Romania. Average
GDP per capita is 2,500 USD.
Source: http://www.moldova.org/page/chisinau-infrastructura-locala-144-rom.html
Source: www.internationalcostofliving.wordpress.com
Ease of commuting
Travelling in the city and suburban areas is easily possible
through regular bus routes, trolleybus routes, as well as taxis
and private cars. The quality of roads in the suburban area
is much poorer than in the city itself. Congestion problems
are limited to a few streets in the city centre. There is no
underground public transportation.
Contact us
Richard Perrin
Partner, Head of Markets
Tel: +40 (372) 377 792
E-mail: rperrin@kpmg.com Constanţa Office
Mamaia blv., no. 208,
Cristian Stoica 2nd Floor, Constanta,
Director, SSC/ BPO 900540, Romania
Tel: +40 (372) 377 800 T: +40 (756) 070 044
E-mail: cstoica@kpmg.com F: +40 (752) 710 044
E: kpmgro@kpmg.ro
Cristina Ionescu
Senior Manager, SSC/ BPO Iași Office
Tel: +40 (372) 377 794 Saulescu str., no. 29, 3rd Floor,
E-mail: cionescu@kpmg.com Iasi, 700010, Romania
T: +40 (756) 070 048
KPMG in Romania F: +40 (752) 710 048
Bucharest Office E: kpmgro@kpmg.ro
Victoria Business Park,
DN1, Soseaua Bucuresti - Ploiesti no. 69-71 Timișoara Office
Sector 1, Bucharest, 013685, Romania Mihai Viteazul blv., no. 30,
P.O. Box 18-191 300222, Timisoara
T: +40 (741) 800 800 Timis, Romania
+40 (372) 377 800 T: +40 (256) 221 365
F: +40 (741) 800 700 F: +40 (256) 499 361
+40 (372) 377 700 E: kpmgro@kpmg.ro
E: kpmgro@kpmg.ro
KPMG Moldova SRL
Cluj Napoca Office Chișinău Office
Power Business Center Stefan cel Mare str., no. 202, 9th Floor
Calea Dorobantilor no. 18-20 MD-2004, Chisinau
400117 Cluj-Napoca, Republic of Moldova
Cluj, Romania T: +373 (22) 580 580
T: +40 (740) 333 344 F: +373 (22) 540 499
F: +40 (753) 333 800 E: kpmg@kpmg.md
E: kpmgro@kpmg.ro www.kpmg.md
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although
we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that
it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination
of the particular situation.
KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity.
© 2011 KPMG Romania S.R.L., a Romanian limited liability company and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in Romania.

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Romania as the

Chapter 1: Key facts on Romania for Investors 4

Chapter 2: Romania: an attractive SSC and BPO destination 13

Chapter 3: Main cities in Romania 16

Chapter 4: Key facts on the Republic of Moldova 32

KPMG: Multidisciplinary teams with in-depth industry expertise 38

1.Key facts on Romania

Brief overview of Romania’s economic environment

Key Economic Data

Key Indicators 2008 2009 2010 2011 2012

FDI and Key investors in Romania

Year 2006 2007 2008 2009 2010 2011 2012

Top 10 FDI in Romania by country of origin

FDI by activity (2009) Top countries that have invested in Romania

Human Capital and legal aspects of employment in Romania

Top 10 University centers (2009/10) (graduates per year)

Source: INS (National Institute for Statistics)

Key human capital facts

Salary 2009 2010 2011 (est.) 2012 (forecast)

Immigration Literacy rate 98%

Income tax and Social Contributions

Source: Romanian legislation

Direct flights from main Romanian cities

Source: Airline companies’ websites

Initial investment ranges (EUR million) Number of new jobs created

Incentives related to European Union funding

2.Romania: an attractive SSC

Rank* Country Financial People Business Total

The key factors that contributed to A.T.

3. Main cities in Romania

 Employees: 890,000 • The city offers an inexpensive labor force

There is a high availability of office space, with vacancy rates

Company name Main services offered Location Situated in

Company name Main services offered

Continental SSC for Finance & Accounting, Research and

Wind Technologies BPO for IT services

 People mobility  Ease of commuting

Company name Main services offered Location Located in the

 Employees: 156,900 • Iasi is a major regional economic center and a

Infrastructure  Upcoming projects

Location On the Black Sea

 Telecom Infrastructure Quality of life

Full scale telecommunication services are available in  Cost of living

SSC/BPO setting City introduction

Location Located in central

 Employees: 200,000 • Targu-Mures is an important university center,

 Telecom Infrastructure The development of the Transylvania airport- a

4. Key facts on the

Key indicators 2008 2009 2010 2011 2012

 Value Added Tax

 Free Economic Zone

Local travel is available by means of public transport within

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Employees: 890,000 • The city offers an inexpensive labor force

People mobility Ease of commuting

Employees: 156,900 • Iasi is a major regional economic center and a

Infrastructure Upcoming projects

Telecom Infrastructure Quality of life

Full scale telecommunication services are available in Cost of living

Employees: 200,000 • Targu-Mures is an important university center,

Telecom Infrastructure The development of the Transylvania airport- a

Value Added Tax

Free Economic Zone