The FDI angle:

  • The CEE region is shifting from a source of emigrants to a target for immigrants.
  • Non-EU workers are needed to fill vacancies after strong foreign direct investment (FDI) flows amid falling populations and record low unemployment rates.
  • Why does this matter? Even anti-migratory governments in CEE have opened their doors to non-EU workers to support investing companies' growth plans.

Central and eastern Europe (CEE) is undergoing a major shift in its migration patterns. After decades of outward migration, the 10 EU member states of the CEE region are now actively recruiting and welcoming workers from outside the bloc to make up for the millions of mostly youngsters that left for western Europe. 

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More than 667,000 non-EU citizens were granted first-time residence permits for employment purposes in EU–CEE countries in 2022, according to the latest available Eurostat figures. This is more than three times the roughly 175,000 non-EU work permits granted a decade earlier. 

Contrary to common public perception, Poland has issued the highest number of residence permits to workers from outside the bloc since 2016. Record numbers of non-EU work permits in 2022 were also granted in countries like Croatia (53,471), Romania (31,079), Slovenia (22,517), Lithuania (22,346) and Bulgaria (4621).

Residence permits data shows any authorisation by EU member states to allow a third-country national to stay legally on their territory for at least three months. This provides useful insights into migration patterns, but differences in data collection and permit reporting systems between EU member states mean that country comparisons must be made with caution. 

Romania exemplifies the migratory shift in the CEE region. The country’s population shrank from 23 million people in 1990 to 19 million today, after Romanians sought opportunities abroad after the fall of communism. More than three million Romanians are residents in the rest of the EU, which the country joined in 2007. 

“[Given Romania’s] growing economy, which needs labour force but cannot attract the diaspora back home, you need to compensate with [non-EU] labour,” says Alexander Milcev, the head of tax and legal services for consultancy EY in Romania. After breaking records in 2022, Romanian authorities have made another 100,000 non-EU work permits available in both 2023 and 2024. 

More on the CEE region:

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The CEE region became a major source of emigrants after several waves of EU accession between 2004 and 2013 allowed free movement of people. Populations have declined by more than 10% in countries such as Croatia, Latvia and Lithuania since 2000, according to the World Bank.

Even countries viewed as anti-migratory, like Hungary, have recently opened their doors to thousands of non-EU workers. The country will need 500,000 additional workers to be able to achieve its industrial development goals by 2030, according to a 2023 Hungarian government analysis. Nonetheless, a hardline on immigration continues to be projected by the government. In January 2024, Hungarian authorities said they would limit the number of visas for temporary non-EU workers to 65,000 this year.

The flip in CEE migration dynamics is for several reasons. Robust economic growth and narrowing of wage differentials with the rest of the EU has made the CEE region more attractive to non-EU workers, as well as members of the diaspora willing to move back home. Historically low unemployment rates below the EU average are also forcing companies to actively recruit more workers. 

Significant foreign investment pledges, particularly into nearshoring of manufacturing in CEE, has created even more demand for workers. After the pandemic led to a sharp fall of non-EU work permits in 2020 across the EU–CEE region, levels recovered strongly in 2021. A fall in 2022 was largely due to the region’s largest economy Poland granting significantly less (–342,000) non-EU work permits in 2022 compared to 2021 after Russian aggression in Ukraine. 

A decision was made to open the Polish–Ukrainian border after Russia’s full-scale invasion in February 2022, leading to an estimated eight million Ukrainian citizens to cross into Poland by the end of 2022. The vast majority of these non-EU refugees were granted temporary protection status and are thus not included in work permits data. More than 4.2 million Ukrainians have been granted temporary protection status in the EU after they fled the war.

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