BusinessMonday 06 March 2017

The Motru Municipality – An Opportunity for Investment?

Businessmen investing in Motru and implicitly creating jobs in the city are eligible for paying zero taxes on land and buildings for a period of maximum six years


When one talks about investment in Romania, one definitely thinks about Bucharest and its surroundings and potentially about the other major cities in the country. Of course, one could also think about certain touristic areas, and ... that would be about it.

However, an increasing number of investors seem to turn their attention to smaller cities, most of them situated in the vicinity of a larger town (which usually is around 60-80 kilometres away), especially due to the cheaper labour force and the existence of lower taxes. This trend seems to have been spotted by local authorities from such cities, who start to offer various benefits to investors in order to encourage them towards their own town. One such example is provided by Gigel Jianu, the mayor of Motru municipality. Just to clarify, the town of Motru is located in the Gorj County and has a population of roughly 20,000 inhabitants, while its touristic reputation is pretty low, if not inexistent.

In conclusion, it’s far from being an attractive destination for investors. However, the mayor's initiative to provide tax exemption on land and building leases may arouse the interest of businessmen, especially since authorities also showed openness to negotiations in terms of providing other benefits as well. The scheme of this initiative is based on two criteria: on the one hand investors receive a 10% discount for each job created, and on the other hand, they can benefit from the tax relief based on the amount invested, the maximum benefit being that of zero taxes on buildings and land if the amount exceeds EUR 80 000.

The project has already been approved by the Local Council of Motru and also has received consent from the Romanian Competition Council. Indeed, these measures do not guarantee anything and it's hard to believe that Motru will become a Mecca for investors in the near future. However, such initiatives are the best tactic by which such tiny cities can encourage investments. And once investors start pouring at least some money in, then the chances that new investment opportunities materialize grows exponentially.



Claudiu Bolcu




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