6,207 dollars. This is what a foreign investor had to spend either in terms of cash or time to start a business in Romania until not so long ago. Which is more than enough to make anyone give up. These expenses have probably not decreased too much in the meantime.
It was not until recently that the authorities decided to introduce the “tacit approval” institution in Romania, as pressured from every direction. This should be a powerful blow dealt to the bureaucratic jungle made up of dozens of procedures, permits and certificates.
One thing is for sure, though. A survey conducted by the World Bank last year was rating Romania as number three in terms of costs imposed by administrative barriers in 31 developing countries.
Total unofficial administrative costs entailed by a specific procedure in Romania could reach $6,207 for a foreign investor and $2,530 for a domestic investor.
The costliest obstacles for starting a business were found in Mozambique ($6,695) and Turkey ($6,480).
Romania was followed by Bulgaria, where entry costs amounted to $6,023. The results of the survey showed it was much cheaper to start a business in Zambia, where the costs to overcome the red tape barriers were of only $417. The same costs totalled $869 in the Czech Republic, for instance.
The fact that Romania has been registering some of the lowest foreign direct investments can be largely explained by the disheartening administrative barriers. In addition, the administrative procedures were taking 634 days to complete.
The World Bank over the last few years has constantly stressed on how much the red tape is harming the business environment in Romania.
At present, talks are being held for a loan to finance new steps in view of eliminating the administrative barriers, through the public administration reform inclusive. razvan.voican@zf.ro