Study KeysFin: What happens with the Romanian businesses?

Romania is close to the end of the post-crisis growth cycle, according to the latest data received from the Trade Register and interpreted by the analysts from KeysFin in the study.

Trending Business: Thus, in 2019, Romania has reached the performance of having the smallest number of insolvencies in history (6,5 thousand) respectively 27% lower than in 2018 and 67% than în 2009. Similarly, another record figure is that of active economic entities (companies and PFA) which means 1.36 million entities in Romania in 2019.

The evolution of the number of newly-created companies and those closed in 2019 in 2019, in Romania there were set up 134.2 thousand economic entities, while the number of businesses which closed is 135.7 thousand, the natural evolution being slightly negative.

As dynamics of the last 10 years, the number of set up companies grew by 16% while the number of the closed down ones increased by 117.5%. The gap between the two indicators may be explained through the fact that the number of write-offs and  dissolution is strongly influenced by administrative measures.(for example in 2010 there were almost 127,294 write-offs for the non-exertion of the right for option in one of the forms included by OUG 44/2008 – sanction with writing-off from the Trade Register).

Even so, the trend of consolidation, even cleaning of the economy is obvious after the advance of over 117.5% against 2009 to 135.7 thousand of businesses closed down in 2019. As share of the total of active entities, the rate of closed-down companies was 9.9% and it is almost equal to that of the newly-set up in 2019 and represents a clear signal of the end of the post-crisis growth.

The number of active economic entities has grown by 3% against 2018 with 16.5% against 2015, and 32% over the level of 2009, to 1.36 million professionals at the end of 2019, the maximum of the last ten years.

At the end of 2019 there were 378.7 thousand active PFA (28% of the total) versus 985 thousand companies (72% of the total). As dynamics over the last five years there is a growing preference for companies (advance of 27%) against PFA (drop of 4%).

The most popular domains in Romania 2019

In the last five years the domain of constructions, transport and storage and the manufacturing industry drew most investors, being created 5.4 thousand and 3.4 thousand respectively more economic entities in 2019 than in 2015.

The biggest percentage growth in the last five years, of over 88% is felt in Health and social services. If in 2015 there were approximately 1,800 newly-set up businesses in this sector, in 2019 there were set up over 3,300. On the other hand, discussing from the point of view of number of companies and PFA registered, most popular domains in Romania – 2019 are those connected to commerce – 29.3 thousand economic entities set up in 2019, constructions – 14,8 thousand and professional activities –12.9 thousand economic entities.

Business geography

Over the last ten years, the most dynamic county from the point of view of number of economic entities was Ilfov, which had a growth of 138% so that in 2019 there were approximately 50 thousand businesses. At the top of percentage growth is Dambovita which has 57% more active entities than in 2009 and Giurgiu with 56%.

At the other end, the smallest growth as regards set up companies was recorded in Harghita, with a growth of only 2.1% over the last ten years, as well as Botosani – 4.8% and Bacau – 5%.

At nominal level, Bucharest is the leader with over 247 thousand entities (18% of the total), followed by Cluj and Timis, with 73 thousand (5.3% of the total) 58.5 thousand respectively (4.3% of the total). The ranking is completed by Constanta – 50.3 thousand newly-set up businesses and Bihor – 50.2 thousand.

Start –Up Nation programme

The Start-Up Nation programme has become a phenomenon among the local entrepreneurs, due to the facilities offered, so that it contributed not only to the growth of the number of set-up companies, but to the kind of activities of the latter, as well as the county of origin.

According to the data offered by the ministry for commerce, entrepreneurship and business environment, the Start-Up Nation program was accessed by 33,514 business plans, most of them in the domain of production, commerce and services.

(Photo credits: Start Up Nation programme)