Blog 2 nearshorig Header

The untapped potential of Romania

Timea Szarvashegyi - Profile
written by Timea Szarvashegyi
Published on:
Future logistics
Build-to-suitRent a warehouse

Interview: with Gijs Klomp, Business Development Manager WDP Romania.

Within CEE, Romania offers a compelling blend of affordability and competitiveness, making it an attractive hub for businesses seeking untapped potential in nearshoring. We spoke to Gijs Klomp, Business Development Manager at WDP Romania, to discover more. Gijs has over 20 years of experience in the real estate industry, holding various management positions. Since January 2022, he works for WDP in Romania, which is WDP’s third largest market. 

What’s Romania’s current position in the nearshoring market?

Romania is the place to be for nearshoring in Europe. It’s showing significant promise to capitalise on the nearshoring trend, which makes it a strong candidate for global companies to establish their facilities. The main advantage of Romania is that it is an EU and NATO member state. Nearshoring has great potential because companies once focused on offshoring to Asia are now reconsidering.

In terms of products intended for the European market, particularly within the EU, Romania ranks as the second most cost-effective country after Bulgaria when considering labour costs, which has traditionally been a primary factor driving companies to choose Asia.

What factors contribute to Romania’s emergence as a prime destination for nearshoring ventures?

Romania is currently one of the most promising countries in CEE for the industrial real estate sector, which includes both warehouses for logistics, but also light manufacturing. 

It has been a NATO member since 2004 and an EU member since 2007 and is very much a politically stable country that values its relationship with the EU and the US. The recently emerging trend of friendshoring rather than offshoring makes it a very attractive destination for new warehouses and production facilities.

How does the potential of Romania differ from other comparable countries in CEE like, for instance, Bulgaria?

Size and location are key factors. Romania is the second largest country in the region (after Poland) and is located more centrally, compared to Bulgaria. Romania has a better-developed ecosystem both for manufacturing as for complementary services. The country has joined the EU’s visa-free travel area (Schengen) for ports and airports since April 2024. Companies can now enjoy direct shipment to Western Europe through Hungary (whilst from Bulgaria goods would have to pass non-EU member state Serbia or would have to make, ironically, a detour through Romania).

Companies seeking to nearshore operations often find natural resource-rich locations attractive. Bulgaria has fewer natural resources than Romania, whereas Romania has its own oil and gas resources, and it is therefore less dependent on imports.

In terms of identifying any barriers to Romania becoming a more prominent nearshoring destination, how does its infrastructure development plan address current challenges?

Romania’s overall road infrastructure remains relatively underdeveloped within the EU, characterised by a limited motorway network of approximately 1,000 kilometres with numerous missing links. However, the country is currently undergoing significant developments in its road infrastructure, particularly with the acceleration of highway construction. 

What initiatives are in place to counteract Romania’s demographic decline?

Romania faces a significant demographic challenge with a steady population decline, largely driven by emigration, where a quarter of its population has migrated to Western Europe since 1989. Over 5 million Romanians have left in search of better opportunities. 

However, there’s a glimmer of hope as the resident population is showing slight growth after two decades of decline. This growth is attributed to Romania’s transformation into a consumer market, leading to increased affluence and potentially curbing emigration and boosting the fertility rate. While demographics remain an issue, there are signs of improvement, especially compared to other CEE countries like Bulgaria and the Baltic states.

How does WDP assist companies in overcoming regulatory hurdles when establishing operations in Romania?

Although public sector taxes in Romania are low, the corresponding public services often fall short of international standards, creating challenges in navigating the system. That’s why it’s not always easy for companies setting foot in Romania to find their way around. At WDP we not only offer tailor made accommodation solutions for both logistics and industrial companies but also support clients with the permitting process of for instance new sites.

What role does Romania’s changing image play in attracting foreign investment and business interest?

Romania’s negative image in the past was largely due to a lack of knowledge about the country, its culture, and its people. However, as businesses increasingly explore Romania and uncover its untapped potential, the country’s image is improving gradually. Word-of-mouth is proving to be a powerful force in reshaping perceptions as more often than not, companies with presence in Romania value the country and its people. 

Report Nearshoring Mockup

Download our Whitepaper

Our white paper provides valuable insights into how nearshoring to Romania can boost your business’s environmental sustainability, operational efficiency, and cost-effectiveness.

Get your free copy

You might also be interested in

View all articles