Employing in Romania

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Expanding into
Romania

Global expansion is a step to make for any business, regardless of what you wish to achieve. The opportunities that can come with an expansion can be both incredibly exciting as well as intimidating and confusing, especially when you consider all of the registration procedures that needs to be done and documentation required.

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Expanding to countries such as Romania – which is characterized by a productive and skilled workforce, complex employment and tax laws, a developing infrastructure network linking to the rest of Europe, as well as leading sectors in agriculture, mining, manufacturing, and services – can bring both excitement to the possibilities, but also significant stress to ensuring the entity with the country’s rigorous legal structures and laws.

Ensuring compliance without the sufficient knowledge of the country’s laws also adds to the stress of getting your new entity off the ground and ready to test new markets. Going at it without the proper support can increase the costs, time and risks involved.

Each new markets bring new challenges, and these can be worked through more efficiently and cost-effectively with the support of an International Professional Employer Organization (PEO) such as Bradford Jacobs, especially through our Employer of Record (EOR) framework.

This can be best utilized when businesses are just beginning their expansion process and require more information before committing to incorporating an entity and fully establishing themselves in that market.

Country EOR Guide - Bradford Jacobs

Download our Guide to Romania

Learn all about expanding into Romania and see what we can do to make your expansion easier.

Download our Guide to Romania

Learn all about expanding into Romania and see what we can do to make your expansion easier.

Country EOR Guide - Bradford Jacobs

Hiring Staff
in Romania

Hiring Staff
in Romania

The Main Sectors of the Romanian Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

The service industry in Romania contributed 60.9% of the GDP in 2020 and employed 46% of the country’s labor force. Some of the main sub-sectors in the service industry include business activities, renting, financial services, transports, restaurants, and trade.

The retail sector is the largest employer in the industry employing about 12% of the population. The retail sector is primarily concentrated in many small retail stores which are found mainly in the shopping malls. In the past few years, there has been a rise in the number of big stores like the hypermarkets and Carrefour which is a subsidiary of the French retail store.

Agriculture in Romania plays a significant role and employs approximately 21.28% of the country’s labor force which is one of the highest in Europe. Agriculture in the country contributes about 3.9% of the GDP. The country has an agricultural capacity of about 14.7 million acres, and only 10 million are arable.

Mechanization of agriculture in the country is still relatively low compared to other European Union countries. Romania has one tractor for every 54 acres of land, while the average for the European Union is one tractor for every 13 acres of land. There are about 170,000 tractors in the country, and 80% are either obsolete or aging and many farmers in the country use horse-drawn agriculture and other animal power.

The primary challenge facing agriculture in Romania is the lack of significant investment because of difficulty to access available funds, severe soil erosion, and obsolete technology.

Beef production is mainly concentrated in the central part of Romania, while other commodities like fruit, wine, and vegetables are primarily concentrated in the central and southern part of Romania. The country is a major producer of several agricultural products and is presently expanding on fisheries and forestry industries.

Manufacturing in Romania experienced massive growth in 2017 compared to 2016 when it grew by 11.5%, and the new orders in the industry went up by 12.9% over the same period. Romania is now an emerging center in Europe, and the automotive market has been growing on an average of 18% annually. The sector contributed 16% of GDP and 30.15 % of employment in 2020.

The country is now the 4th largest manufacturer of automotive in the CEE, and some of the automotive companies in the country include the two big manufacturers based in Mioveni and Craiova, and they are Dacia and Ford. More than 600 OEMs manufacturers for automotive supplies established plants in Romania which meets the local market as well as for the export market.

Other large manufacturing companies in Romania include Petrom, Bitdefender, Mobexpert, and Romstal.

There are numerous other small and medium scale manufacturing companies which form the largest part of Romania’s manufacturing industry.

Romania ranks tenth in the world in terms of the diversity of minerals produced in the country. Around 60 different minerals are currently produced in Romania. The richest mineral deposits in the country are halite (sodium chloride).

Romania is an oil producer, but the level of production is not enough to make the country self-sufficient. As a result, it is a net oil and gas importer.

Other natural resources include coal, iron ore, copper, chromium, uranium, antimony, mercury, gold, barite, borate, celestine (strontium), emery, feldspar, limestone, magnesite, marble, perlite, pumice, pyrites (sulfur), clay, arable land, hydropower. In Roșia Montană area is the largest gold deposit in continental Europe, estimated at over 300 tons of gold and 1,600 tons of silver, having a value of $3 billion.

Several major new pipelines are planned, especially the Nabucco Pipeline for Caspian oilfields, the longest one in the world.

In 2020, construction represented 6.3% of GDP (6.4% in 2019). The number of companies in the broad construction sector in Romania experienced an increase between 2010 and 2020, with the growth was mainly driven by the increase in the number of enterprises in the architectural and engineering activities (+47.3%), followed by the real estate activities (+38.1%), and the narrow construction sub‑sector (+26.2%) sub‑sectors.

The Main Sectors of the Romanian Economy

The country focuses on the following key sectors, which all have a significant impact on the country’s economy:

Peles castle in autumn season, Sinaia, Romania
The service industry in Romania contributed 60.9% of the GDP in 2020 and employed 46% of the country’s labor force. Some of the main sub-sectors in the service industry include business activities, renting, financial services, transports, restaurants, and trade.

The retail sector is the largest employer in the industry employing about 12% of the population. The retail sector is primarily concentrated in many small retail stores which are found mainly in the shopping malls. In the past few years, there has been a rise in the number of big stores like the hypermarkets and Carrefour which is a subsidiary of the French retail store.

Agriculture in Romania plays a significant role and employs approximately 21.28% of the country’s labor force which is one of the highest in Europe. Agriculture in the country contributes about 3.9% of the GDP. The country has an agricultural capacity of about 14.7 million acres, and only 10 million are arable.

Mechanization of agriculture in the country is still relatively low compared to other European Union countries. Romania has one tractor for every 54 acres of land, while the average for the European Union is one tractor for every 13 acres of land. There are about 170,000 tractors in the country, and 80% are either obsolete or aging and many farmers in the country use horse-drawn agriculture and other animal power.

The primary challenge facing agriculture in Romania is the lack of significant investment because of difficulty to access available funds, severe soil erosion, and obsolete technology.

Beef production is mainly concentrated in the central part of Romania, while other commodities like fruit, wine, and vegetables are primarily concentrated in the central and southern part of Romania. The country is a major producer of several agricultural products and is presently expanding on fisheries and forestry industries.

Manufacturing in Romania experienced massive growth in 2017 compared to 2016 when it grew by 11.5%, and the new orders in the industry went up by 12.9% over the same period. Romania is now an emerging center in Europe, and the automotive market has been growing on an average of 18% annually. The sector contributed 16% of GDP and 30.15 % of employment in 2020.

The country is now the 4th largest manufacturer of automotive in the CEE, and some of the automotive companies in the country include the two big manufacturers based in Mioveni and Craiova, and they are Dacia and Ford. More than 600 OEMs manufacturers for automotive supplies established plants in Romania which meets the local market as well as for the export market.

Other large manufacturing companies in Romania include Petrom, Bitdefender, Mobexpert, and Romstal.

There are numerous other small and medium scale manufacturing companies which form the largest part of Romania’s manufacturing industry.

Romania ranks tenth in the world in terms of the diversity of minerals produced in the country. Around 60 different minerals are currently produced in Romania. The richest mineral deposits in the country are halite (sodium chloride).

Romania is an oil producer, but the level of production is not enough to make the country self-sufficient. As a result, it is a net oil and gas importer.

Other natural resources include coal, iron ore, copper, chromium, uranium, antimony, mercury, gold, barite, borate, celestine (strontium), emery, feldspar, limestone, magnesite, marble, perlite, pumice, pyrites (sulfur), clay, arable land, hydropower. In Roșia Montană area is the largest gold deposit in continental Europe, estimated at over 300 tons of gold and 1,600 tons of silver, having a value of $3 billion.

Several major new pipelines are planned, especially the Nabucco Pipeline for Caspian oilfields, the longest one in the world.

In 2020, construction represented 6.3% of GDP (6.4% in 2019). The number of companies in the broad construction sector in Romania experienced an increase between 2010 and 2020, with the growth was mainly driven by the increase in the number of enterprises in the architectural and engineering activities (+47.3%), followed by the real estate activities (+38.1%), and the narrow construction sub‑sector (+26.2%) sub‑sectors.

Commercial Laws in
Romania

  • The National Agency for Fiscal Administration (Agenția Națională de Administrare Fiscală, ANAF) – the revenue service of the Romanian government.It forms part of the Ministry of Public Finance, ANAF was established in 2003 and became operational the following year.
  • The Fair Work Ombudsman – The Ministry of Labor and Social Protection of Romania (Romanian: Ministerul Muncii și Protecției Sociale) is one of the eighteen ministries of the Government of Romania. The following institutions are under the authority of or subordinated by the Ministry of Labor and Social Protection:
    • National House of Public Pensions
    • National Agency for Employment
    • The National Authority for Disabled Persons
    • The National Authority for the Protection of the Rights of the Child and Adoption
    • National Agency for Payment and Social Inspection
    • National Agency for Equal Opportunities for Women and Men
    • Labor Inspection, including the Territorial Labor Inspectorates

Contracts must comply with regulations laid down by the Order of the Ministry of Employment. Once Bradford Jacobs’ Professional Employer Organization (PEO) recruitment networks have located the best talent for your company, we step in to handle this crucial element of recruitment.

General requirements from the Labor Code apply to all contracts. These include:

  • Employers are legally required to provide the new employee with a written contract at least one day before they begin work and presented to the employee.
  • Contracts must be electronically registered via the Revisal online system in the General Register of Employees.
  • Contracts must be concluded in Romanian. Bi-lingual contracts are permitted but must incorporate a Romanian version.
  • A pre-employment medical check is mandatory, carried out by the company’s occupational health department, or else paid for by the employer.
  • Contracts must be electronically registered via the Revisal online system in the General Register of Employees.
  • Minimum contract terms must include:
    • Full names and addresses of employer and employee
    • the duration (if fixed term)
    • any probation period or notice period
    • salary and paid vacation entitlements

Fore more information on labour contracts law in Romania Download our Romania Country Guide…

Income Tax: A flat personal income tax (PIT) rate of 10% is generally in place. Individuals residing for more than 183 days in 12 consecutive months and those domiciled or having their commercial center of interest in Romania are tax residents. Married couples submit returns independently as joint returns are not permitted under Romania’s tax laws.

Withheld taxes and social insurance contributions are remitted to the authorities by the 25th of the following month. Residents are generally taxed on their worldwide income.

For more information on tax contributions and benefits Download our Romania Country Guide…

Commercial Laws in
Romania

University Square, Bucharest, Romania
  • The National Agency for Fiscal Administration (Agenția Națională de Administrare Fiscală, ANAF) – the revenue service of the Romanian government.It forms part of the Ministry of Public Finance, ANAF was established in 2003 and became operational the following year.
  • The Fair Work Ombudsman – The Ministry of Labor and Social Protection of Romania (Romanian: Ministerul Muncii și Protecției Sociale) is one of the eighteen ministries of the Government of Romania. The following institutions are under the authority of or subordinated by the Ministry of Labor and Social Protection:
    • National House of Public Pensions
    • National Agency for Employment
    • The National Authority for Disabled Persons
    • The National Authority for the Protection of the Rights of the Child and Adoption
    • National Agency for Payment and Social Inspection
    • National Agency for Equal Opportunities for Women and Men
    • Labor Inspection, including the Territorial Labor Inspectorates

Contracts must comply with regulations laid down by the Order of the Ministry of Employment. Once Bradford Jacobs’ Professional Employer Organization (PEO) recruitment networks have located the best talent for your company, we step in to handle this crucial element of recruitment.

General requirements from the Labor Code apply to all contracts. These include:

  • Employers are legally required to provide the new employee with a written contract at least one day before they begin work and presented to the employee.
  • Contracts must be electronically registered via the Revisal online system in the General Register of Employees.
  • Contracts must be concluded in Romanian. Bi-lingual contracts are permitted but must incorporate a Romanian version.
  • A pre-employment medical check is mandatory, carried out by the company’s occupational health department, or else paid for by the employer.
  • Contracts must be electronically registered via the Revisal online system in the General Register of Employees.
  • Minimum contract terms must include:
    • Full names and addresses of employer and employee
    • the duration (if fixed term)
    • any probation period or notice period
    • salary and paid vacation entitlements

Fore more information on labour contracts law in Romania Download our Romania Country Guide…

Income Tax: A flat personal income tax (PIT) rate of 10% is generally in place. Individuals residing for more than 183 days in 12 consecutive months and those domiciled or having their commercial center of interest in Romania are tax residents. Married couples submit returns independently as joint returns are not permitted under Romania’s tax laws.

Withheld taxes and social insurance contributions are remitted to the authorities by the 25th of the following month. Residents are generally taxed on their worldwide income.

For more information on tax contributions and benefits Download our Romania Country Guide…

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