Made in Romania Foreign Investors Guide 2016 InvestRomania

Made in Romania
the foreign investors guide 2016

152 Calea Victoriei
Bucharest, Romania
+4 (0) 21 318 5052
office@investromania.gov.ro
investromania.gov.ro
Investment Climate Financing Availability Dear Reader,
3 Why invest in Romania 49 Local banking products
It gives me great pleasure to welcome you to Roma-
3 Ease of doing business 47 Financing through EU Funds nia. Some of you have been present here, active and
5 FDI stock evolution 48 Financing through the Min- prosperous for so many years, that you form an integral
istry of Economy
Table of Contents
part of my country and its success story. Others might be
5 FDI by country of origin and
sector 49 State Aid Schemes yet unfamiliar with Romania's value proposition. Our goal is
51 Investment plan for Europe to create a guide that both old-timers and newcomers
6 Attractive regions for FDI
would find informative and which would convince you of
6 FDI stock by activity sectors our dedication to Romania's ongoing economic transfor-
7 Success stories Employment and Labor mation.
Law
Economy In the past 16 years, Romania's USD GDP quintupled, and its
53 Labor Law Regulation output grew significantly in sophistication and quality. This success story was written by the
54 Types of contracts highly qualified Romanian workforce, women and men who contributed to the design of the
9 Macroeconomic outlook
56 Employment cost structure Mars Rover, created one of the leading cybersecurity firms worldwide, manufactured critical
10 Business cycle evolution
components for a leading aircraft brand to be found in every newly produced jet, built tires for
11 Public finance Formula One cars, designed technologies for EVs and autonomous vehicles, built high tech 3D
12 Labor force Fiscal Policy printers, employed their creativity to win film festivals or to develop innovative software solu-
13 Education tions, to name but a few.
15 Energy and resources 57 Fiscal policy overview

17 Infrastructure 57 Direct taxes This guide will help you understand Romania's competitive advantages and how to best lever-
19 Regional development 58 Corporate income tax age them. We know that every investor story is different and are committed to providing our
21 Key facts and figures by full support in making your journey a success.
61 Personal income tax
region
63 Indirect taxes - VAT
65 Fiscal incentives Every year Romania adds another USD 8 billion to its economy. Visit us to understand how. Be-
Business Ecosystem come part of our success story.
Living in Romania
37 Ways of doing business Sincerely,
38 Legal structures 67 Cost of living
39 Starting a company 68 Expat community Manuel Costescu
41 Setting up a branch office 69 Living in Romania Head of InvestRomania
42 A branch vs a subsidiary 70 International Schools
43 Competition law regulation
Why invest in Romania 3 Why invest in Romania 4
Zoom in on Romania
According to the World Banks Doing Business

Report 2015-2016, Romania is ranked 37th
worldwide on the aggregate ease of doing
business index, climbing 13 positions since
2014. The ranking regarding tax payments is in
fact the second best among regional peer
countries, such as Poland (#25), Hungary (#42),
Bulgaria (#38) or Ukraine (#83).
Figure 1. Doing Business rankings
In order to support entrepreneurs, the Romani-

an government has also simplified the process
of opening up a business, reducing the neces-
sary time from 29 days in 2004 to a little over a
week in 2016. Moreover, the government is
committed to aiding emerging entrepreneurs
through more and more incentives .
Figure 2. Number of days required to start a business
The pro-growth policy has further implications

for the Romanian business environment, with
the necessary paid-in minimum capital de-
creasing by 2.3 percentage points since 2004,
reaching a minimum historical value of 0.6% of
income per capita.
Figure 3. Paid-in minimum capital (% of income per capita)
The number of payments per year required to

fulfil fiscal obligations has dropped dramatical-
ly, from 113 in 2012 (historic maximum) to just
14 in 2016. Coupled with a fiscal pressure that
is one of the friendliest in the EU (CIT: 16%, divi-
dend tax: 5%, VAT: 20%), a more accessible tax
system is the next step for growth.
Figure 4. Number of payments for fiscal compliance
Source: World Bank, Doing Business Report 2015-2016

A Foreign Investors Story At the end of 2014, the most attractive region for
FDI was Bucharest-Ilfov more than EUR 35.6 bil-
lion, with a share of 59.2% of total FDI stock, fol-
lowed by the Center Region with EUR 5.83 bil-
lion (9.7% of total FDI) and the West Region with
The Romanian FDI stock has towards manufacturing, en- the Romanian economy is the
EUR 4.64 billion (7.7% of total FDI). There is a
increased constantly during ergy, utilities, financial ser- automotive one. The sector
strong relation between FDI and the number of
the last 16 years, especially vices, construction, real es- FDI stock increased to EUR
employees within every region, especially in the
after 2000 when it grew by a tate and trade. 3.24 billion in 2014, up from
Bucharest-Ilfov or Center regions, where foreign
factor of 6, from EUR 9.7 bil- EUR 1.3 billion in 2004. Ford
New champions are also investment has an important contribution.
lion to EUR 63 billion at the and Dacia have built and
emerging, with IT&C rising FDI Stock (EUR bn)
end of 2015. continuously updated their The value adding industries are concentrated in
above the EUR 2.5 billion Figure 7. Relation between FDI stock and number of employees
production facilities, ramping more attractive regions for FDI, i.e. regions that
By activity sectors, the high- mark in 2014 .
up a supplier ecosystem of include IT&C clusters, including BPO/SSC, most of them being located in Bucharest-Ilfov (Oracle,
est share of FDI was directed
Another important sector of more than 600 companies. HP, Microsoft, IBM), the North-West region and the West region (Dell, Alcatel Lucent, Autoliv, Con-
tinental), where foreign investors are focused on well-prepared workforce. Furthermore, sectors
such as the automotive and aerospace ones are located in the Center region and the North-
West, where there is a high availability for exporting to the Western countries. On the other hand,
the North-East region is more labor-intensive, with a bigger volume of FDI in sectors such as textile
production or agribusiness.
31.12.2014 Share in Textiles, wearing ap-

EUR million total FDI (%) 983 1.6
parel, leather goods
Total, of which: 60 198 100.0 Other manufacturing
536 0.9
Industry, of which: 29 324 48.7 sub-sectors
Mining 3 345 5.6 Electricity, natural gas,
6 704 11.1
Manufacturing, of water
19 275 32.0
which:
Professional, scientific,
Food, beverages technical and adminis-
Figure 5. Evolution of FDI stock and flow 2 430 4.0 3 074 5.1
and tobacco trative activities and
Cement, glass- support services
By country of origin, the larg- total FDI). The second place total FDI), followed by Germa- 1 579 2.6
ware, ceramics
est share of FDI stock comes is occupied by Austria, with ny (EUR 7.4 billion), Cyprus Agriculture, forestry
from the Netherlands, with a total investment stock of (EUR 4.27 billion) and France Wood products, 1 504 2.5
1 519 2.5 and fishing
EUR 14.2 billion in 2014 (23% of EUR 9.7 billion (or 16.1% of (EUR 4.1 billion). including furniture
Trade 7 058 11.7
Manufacture of
computer, elec- Construction and real
1 421 2.4 5 917 9.8
tronic, optical and estate transactions
electrical products Hotels and restaurants 541 0.9
Machinery and
1 432 2.4 Financial intermedia-
equipment 7 798 13.0
tion and insurance
Metallurgy 2 711 4.5
Transport means 3 244 5.4 Information technolo-
gy and communica- 3 598 6.0
Oil processing, tions
chemicals, rubber
3 420 5.7 Transportation 1 029 1.7
and plastic prod-
ucts Other 355 0.6
Figure 6. FDI stock by country of origin (EUR m) Table 1. FDI stock by activity sector
Source: National Bank of Romania, 2015
Success Stories
Renault Group - With almost EUR 2.3 billion invested by the end of 2014 and
17 000 employees in the Romanian facilities, the Renault Group, one of the
most significant players worldwide, is the countrys largest company and ex-
porter. The company enjoys the highest turnover in the country, with its main
operations being held at: Dacia plant in Mioveni, Moulds Dacia (Pitesti), Re-
nault Design Central Europe (design center), and Renault Credit Internation-
al and Renault Technologie Roumanie (encompassing Titu Technical Cen-
ter).
The objective is to make Mioveni reach top 5 largest and most im-
portant industrial platforms of the Renault Group in the world by
2020. Nicolas Maure, President & CEO of Automobile Dacia SA
Cotinental is the largest manufacturer of components for the automotive

local market, with an annual turnover of over 2 billion and over 16 500 em-
ployees. Reported activity in Romania reached 5.9% of the overall turnover
of group (39.2 billion euros). With 16 500 employees as in 2015, Romania ac- Daimler AG - is one of the biggest manufacturer of premium auto vehicles
tivity accounted for almost 8% of the German group. in the world.
With more than 1 800 employees in its Romanian subsidiaries, Star Assembly
and Star Transmission Daimler was one of the first Romanian companies to
support a dual education system model, following the German state of Ba-
Premium AEROTEC - is the biggest European producer of civil and military den-Wuerttemberg.
aerostructures as well as Europes leading aircraft supplier, manufactures
for the entire Airbus Family using aluminum, titanium and carbon fiber com- In Romania we have a positive experience due to the gearbox
posites (CFC). In 2010, the German company, Premium AEROTEC has ex- factory, which is very good. Dieter Zetsche, Chairman of Daimler
panded its production capacity by building the plant in Brasov. AG board of directors
Main reasons for choosing Brasov were aeronautic history and well Microsoft - is the largest producer of software in the world and is present on
skilled employees available in the area, the strong German com- the domestic market since 1992 with two centers: one in Bucharest and one
munity presence and logistic strategic location. From the begin- support development center in Timisoara. Currently the US based company
ning Premium AEROTEC was continuously involved in supporting has 760 employees and plans to expand to over 1 000 over the next two
and developing a long time tradition, becoming the heart of Ro- years. Young people and education are among Microsofts priorities in Ro-
manias aeronautics industry. Jochen von Wurmb, CEO Premium mania.
AEROTEC
Huawei - is a leading global solutions provider in the ICT field and began
their story in Romania in 2003, three years after the company officially en-
Procter & Gamble - is one of the leading producers of fast moving consum- tered the European market. The company created more than 2,500 tempo-
er goods (FMCG) worldwide. The US based company is present in Romania rary jobs and have over 1 200 employees in Romania, 75% of them being lo-
since early 1992. The company is present on the domestic market through cal employees.
three entities covering a wide range of activities, from production to mar- Here, in Romania, our company managed to develop and to main-
keting and distribution: Procter & Gamble Marketing Romania (coordinating tain a beautiful relationship with the local Government. Romania is
the marketing activities for Romania and other 7 countries in the region),
a developing emergent market and it is one of our most important
Procter & Gamble Distribution SRL (coordinating distribution within Roma-
markets for Huawei in Central and Eastern European area. Huang
nia), and Detergenti SA.
Weiting, regional manager of Huawei Technologies SRL.
The Romanian Economy 9 The Romanian Economy 10
Macroeconomic Outlook Business Cycle Evolution
The recent growth pickup of the Romanian economy is based on private consumption and in-
vestment. Other factors that drove the boost include the increase in real wages, low interest
rates, low fuel prices and the VAT reduction for food products.
However, we are approaching a turning point with the output gap projected to close and be-
come positive in 2015, while remaining below 1% by 2017 with no reasons of concern about
overheating and over indebtness.
Average
2008 2009 2010 2011 2012 2013 2014 2015e 2016f 2017f
2003-2007
Real GDP
6.6 8.5 -7.1 -0.8 1.1 0.6 3.5 3 3.8 4.2 3.7
growth rate
Economic growth for 2015 is at 3.8%, up 0.8 percentage points from 2014. The main driver behind Private con-
14.1 7.1 -10.1 1 0.8 1.2 0.7 3.8 4.8 6.8 4.5
the growth is private consumption (6.1%), followed by investment (5.3%). The private consumption sumption
was boosted by the VAT rate cut for food products in June 2015, as well as by the increase in real
wages. Output gap 4.4 7.4 -1.9 -3.9 -3.8 -4.8 -3 -2 -1.1 0 0.4
GFCF 21.3 17.6 -36.6 -2.4 2.9 0.1 -5.4 2.5 8.8 5.5 6.1
Table 2. GDP growth and macroeconomic information
3.8% 6.1% 5.3% The labor market is stable market dynamic is influ- However, the employment is
and forecast to improve. enced by the continuous projected to increase both in
Unemployment remained decline in the working-age 2016 and 2017 along with sus-
stable at 6.7 % in 2015, but population, mainly due to tained economic growth
is expected to decrease ageing and net outward mi- based mainly on internal de-
below 6.5 % in 2016 and gration. mand expansion.
Economic Growth Private
Investment 2017. The low unemploy-
Rate Consumption ment rate is to be seen in a
wider context and as a
measure of two main ef-
fects:
Furthermore, investment dis- ed a significant expansion import growth surpassed
played an important re- (approximatively 12% year- export growth in 2015
bound, amid the absorption on-year) and has become (5.5% vs. 9.1% year-on- (i) a large share of the oc-
of EU funds and improve- one of the most dynamic in year). This leads to a wid- cupied population works in
ments in the real estate and the EU. ening current account agriculture, at subsistence
construction market (the con- deficit, from 0.5% of GDP levels (non-employees)
Given the increase of do-
struction sector increased by in 2014 to 1.1% of GDP in (ii) the Romanian labor
mestic demand (private
8.8% in 2015). 2015 .
and governmental con-
Also, the IT&C sector record- sumption and investment),
Source: European Commission, Spring Forecasts, 2016
Public finance Labor Force
Fiscal balance and public debt

According to international financial institutions
(IMF, WB, EBRD, etc.), Romanias public financ-
es were stable in 2015, but for 2016 they are
expected to deteriorate as the VAT standard
rate was reduced from 24% to 20% starting
with 1 January 2016, while some public ex-
penditures will be increased.
The Inflation Rate

In Romania and in many EU countries, the in-
In the last five years, according to Eurostat, In terms of female participation in the labor
flation rate turned negative in recent years.
both the active population and the employ- force, some activities are dominated by fe-
Consumer prices were on a downward trajec-
ment shares in the total population (15 - 64 males in Romania, even comparatively with
tory as a consequence of abundant harvests
years) increased amid the revival of the inter- the EU28 average. Usually, women are pre-
(in 2013 and 2014), falling oil prices and fiscal
nal and external demand. Employment dominantly engaged in Education, Healthcare
measures (reductions in VAT rate for food
growth was concentrated mainly in high value and Humanities.
products starting with June 2015 and standard
Figure 8. Fiscal deficit evolution -added sectors (ICT and professional, scientific More importantly, Romanian women are
VAT rate starting with January 2016). In 2015,
and technical activities) as well in industry and strongly engaged in sectors typically dominat-
inflation become negative at -0.7%.
Since the height of the crisis, fiscal imbalanc- construction. However, the share of employed by men, such as Science, Engineering or
es have gradually moderated. In 2009, the ment in total population was well below EU av- Constructions. For these fields, Romania ob-
In the medium term, the National Bank of Ro-
budget deficit hit 9% of GDP as the economy erage at the end of 2015 (61.4% vs. 66.5%). tains the highest values among all EU28 states.
manias target-inflation is 2.5% (+/- 1 p.p. vari-
plunged into recession. With the support of ation band). According to NBR, the inflation It is important to note that more than 2.5 million Partially, this reflects the education strategy of
the measures implemented by the Romanian rate CPI is projected to stay negative until the Romanians were estimated to be living the centralized, planned system before 1990,
government, the budget deficit was reduced end of the first semester of 2016. It is expected abroad, representing a potentially huge talent which relied to a large extent on the industrial
amid a combination of expenditure reduc- to re-enter the variation band at the begin- pool of labor force (blue-collar and white- sector, but also the Romanian womens pro-
tion and revenues increase. ning of 2017. collar workers) for Romanian and foreign com- pensity towards technical and scientific fields.
panies in the future.
At the end of 2015, the general government
deficit was 1.2% of GDP (in ESA terms), as rev-
enues increased with 1% of GDP compared
with 2014, while the expenditures were 0.8%
of GDP higher than in 2014. In 2015, strong
economic growth and better tax compliance
contributed to high revenues. At the same
time, the public debt is expected to be
around 40% of GDP in 2016-2018.
Figure 9. Inflation evolution Figure 10. Evolution of employment and active population Figure 11. Female labor force participation by sector, RO vs. EU28
Source: National Bank of Romania Source: Eurostat

Education The quality of education in Romania is recognized internationally, local students consistently rank-
ing in the top 10 in International Olympiad competitions in math and informatics, better than any
other country in the EU.
The focus on technical subjects is significant, the number of engineers per capita being higher
than in the US, India, China or Russia. With 5 polytechnic universities, 59 domain specific universi-
ties and 174 private colleges, the most successful students tend to pick high tech industries, such
as IT, while the local education system supplies over 7,000 IT&C engineers every year.
Furthermore, 99% of Romanian students learn two or more languages in upper secondary educa-
tion.
*Includes: mathematics, physics, biology, chemistry, geography,

journalism, history, political & administrative science, philosophy
Figure 13. Percentage of university graduates by subject of de- Figure 14. Number of students by subject of degree [000, 2014]
gree (2014)
Top 3 University Centers Age Group Rankings

97% of Romanian high school students study two or more foreign languages while in secondary
Bucharest - 33 Universities education.
15 24 25 54 55 64
Cluj - 10 Universities The predominant languages are English, French, German and Spanish, yet initiatives for teaching
Rank 45 Rank 36 Rank 29 Japanese, Nordic languages or the entire Latin language family (Spanish, Italian, French) exist.
Iasi - 10 Universities
Human Capital Index Number of Graduates
90% 26% 17% 8%

Human Capital Upper-middle
Index 2015 Income Country
of university students in of university students in of university students in of university students in
Rank 39 Rank 3 Romania are proficient in Romania are proficient in Romania are proficient in Romania are proficient in
Figure 12. Number of graduates/university center (000, 2014)
Source: World Economic Forum Source: ABSL, InvestRomania

Energy and Resources
Gas prices and availability Electricity prices and availability
The price and reliability of energy sup- - alongside Estonia and Denmark
plies, electricity in particular, are key (the only Member States with de-
elements in a countrys energy supply pendency rates below 20%).
strategy. Gas prices are of particular
importance for international competi-
tiveness, as gas might represent a sig- In the European Union more than
nificant proportion of total energy 53% of the member states energy
costs for industrial and service- consumption comes from coun-
providing businesses. In contrast to the tries outside the EU, especially
price of other fossil fuels, which are usu- Figure 15. Gas prices Figure 16. Electricity prices
from Russia (solid fuels, crude oil
ally traded on global markets with rela- and natural gas), Norway (crude
tively uniform prices, there is a wider range of prices within the EU Member States for natural gas. oil and natural gas) and Colum-
For industrial consumers, the analysis is based on prices for
bia (for solid fuels).
the medium standard industrial consumption band, with an-
Gas tariffs or price schemes vary from one supplier to another. They may result from negotiated
nual electricity consumption between 500 and 2 000 MWh.
contracts, especially for large industrial users. In figure 8, you can find the final prices (all taxes
Prices are presented as average final prices with all taxes
and levies included) for industrial consumers of natural gas as an average of the second semes-
and levies included during the second semester of 2015.
ter of 2015. Industrial consumers include companies with an annual consumption between 10 000
Currently, Romania has the lowest energy dependency rates
and 100 000 Gj.
Source: Eurostat, June 2016
Road Transportation
Infrastructure Currently the road infrastructure in Romania has ap-
proximately 80000 km out of
which 711,6 km are motor-
Romania benefits from a ways.
wide range of transportation
options, form road and rail to Railway Transportation
air and naval. There are a
vast number of options to The railway network of Roma-
choose from when consider- nia has approximately 20 000
km in total, out of which 8000
ing moving cargo from point
km are of electrified lines, be-
to point. ing the 7th largest network in
the EU.
European Infrastructure
Programs Maritime Transportation
With the TEN-T infrastructure With 25 ports at the Black

Sea, the Danube, and the
program Romania will bene- DanubeBlack Sea Canal,
fit form a modernization and Romania can easily be used
extension of its road, rail and as a connection for efficient-
naval capabilities. ly moving cargo to and from
There are 2 major projects the heart of Europe.
that pass through Romania:
Air Transportation
1. The Rhine-Danube Corri-
dor, with the Main and Dan- The 14 airports of Romania
ube waterway as its back- offer more than 130 direct
bone, connects the central flights to 76 destinations in 31
countries, while ensuring a
regions around Strasbourg strong internal connection
and Frankfurt via Southern providing easy access to
Germany to Vienna, Bratisla- every region.
va, Budapest, along the
Southern border of Romania Industrial Parks
and finally the Black Sea,
with an important branch Around 70 industrial parks,
from Munich to Prague, with a total available space
Zilina, Kosice and the Ukraini- of over 2900 hectares with
an border varying degrees of availabil-
ity across Romania, offer
companies access to utilities,
2. The Orient/East-Med Corri-
some particular benefits
dor the north west south packages according to their
eastern corridor that con- focus and potential for syner-
nects Central Europe with gies. Also, in these special
the North, Baltic, Black and Mediterranean seas. It runs from the German ports of Bremen, Ham- zones, investors are exempt from land, building and
burg and Rostock via the Czech Republic and Slovakia, with a branch through Austria, further urban planning taxes as well as for changing the land
via Hungary and through the south west of Romania (Arad, Timisoara, Craiova) to the Bulgari- purpose.
an port of Burgas, with a link to Turkey, to the Greek ports of Thessaloniki and Piraeus and a
"Motorway of the Sea" link to Cyprus. It comprises rail, road, airports, ports, rail-road terminals and
the Elbe river inland waterway.
Regional Development 20
20
Population
19 870 647
Unemployment Rate
6.6%
Regional Employees
5 152 118
Development Companies
507 440
Companies per/1000 people
25.5
Industrial Parks
70
Gross avg. earnings (EUR)
567
GDP/capita (EUR)
8 083
Output of Industrial Production (%GDP)

23.2%
Source: National Prognosis Commission, National Institute of Statistics, Ministry of Public Finance, InvestRomania
Regional Factsheet 22
Population
2 284 200
Unemployment Rate
4.6%
Bucharest- Employees
1 056 235
Ilfov Companies
126 554
55.4
Industrial Parks
2
792
GDP/capita (EUR)
19 063
State aid intensity

15% Bucharest / 35% Ilfov
Dragos Asaftei Source: National Prognosis Commission, National Institute of Statistics, Ministry of Public Finance, InvestRomania
Population
2 492 352
Unemployment Rate
9.2%
South- Employees
550 467
East Companies
57 888
23.2
Industrial Parks
2
488
GDP/capita (EUR)
6 657
State aid intensity

50%
Population
2 350 147
Unemployment Rate
6.2%
Center Employees
646 329
Companies
59 124
25.2
Industrial Parks
15
497
GDP/capita (EUR)
7 551
State aid intensity

50%
Population
2 585 543
Unemployment Rate
4.9%
North- Employees
688 353
West Companies
72 444
28
Industrial Parks
15
491
GDP/capita (EUR)
6 046
State aid intensity

50%
Population
3 269 598
Unemployment Rate
3.5%
North- Employees
689 024
East Companies
53 290
16.3
Industrial Parks
4
475
GDP/capita (EUR)
4 938
State aid intensity

50%
32
Population
2 015 766
Unemployment Rate
11%
South- Employees
395 841
West Companies
36 516
18.1
Industrial Parks
6
508
GDP/capita (EUR)
6 040
State aid intensity

50%
Population
3 061 286
Unemployment Rate
9.8%
South Employees
589 886
Companies
54 764
17.9
Industrial Parks
22
525
GDP/capita (EUR)
6 024
State aid intensity

50%
Population
1 811 755
Unemployment Rate
5.5%
West Employees
544 985
Companies
46 860
25.9
Industrial Parks
4
531
GDP/capita (EUR)
8 757
State aid intensity

35%
Business Ecosystem Business Ecosystem 38
Legal Structures
Characteristics Limited Liability companies (S.R.L.) Joint stock companies (S.A.)
Shareholder Rule - minimum 2 shareholders, maximum 50 Minimum 2 shareholders required. In case the
structure shareholders company has only one shareholder for a duration
Exception - 1 shareholder, with the ob- exceeding 9 months, then any interested person
servance of the following limitations: may claim the dissolution of that respective com-
An individual / legal entity cannot be a pany
sole shareholder in more than one limited The law does not impose a maximum limit regard-
Ways of Doing Business liability company
A limited liability company with a sole
ing the number of shareholders
shareholder cannot be a sole sharehold-

er in another limited liability company
The following main alternatives are available to foreign
Share capital Minimum share capital - lei 200 Minimum share capital - lei 90,000 (approximately
investors in order to invest in Romania: and shares Minimum value of a share - lei 10 Euro 20,000)
The shareholders must entirely pay the sub- Minimum value of a share 0.1 lei
Setting-up of a Roma- The Romanian law provides for a vari- scribed capital upon the moment of incorpo- At least 30% of the subscribed share capital must
nian company with its ety of vehicles that can be used by ration be paid at the moment of the incorporation
own legal personality foreign companies or individuals for Restrictions LLC cannot: Joint stock companies may issue:
be formed by public subscription bearer shares
investing in Romania. The most com- issue bonds nominative shares
mon forms used are the joint stock issue shares represented by negotiable preferential shares (cannot exceed of the
company (S.A.) and the limited liability financial instruments share capital)
company (S.R.L.). bonds (for increasing their funds)
The shares issued by a joint stock company may
be acquired by public subscription. In this case
Branch or representa- Neither alternative has its own legal the shareholders must pay in cash 50% of the sub-
tive office personality, meaning that their activity scribed capital at the incorporation date of the
company
and legal liability will at all times be
directly related to the parent compa- Transfer of Shares may be transferred between share- Shares may be freely transferred between the
shares holders without any restriction. shareholders or to a third party
ny of the foreign investor. Transfer of shares to third parties is subject to Restrictions may be established through the arti-
the approval of the shareholders holding of cles of association
Authorized Individual Performance of the activity directly by the share capital and also to a 30-day oppo- The transfer of the shares takes place at their regis-
(PFA) an individual after the registration as sition term granted to any interested person. tration in the shareholders registry, unless the arti-
The shareholders may not derogate from cles of association provides otherwise
PFA with the competent Romanian such restriction by inserting a contrary provi- The registration of the transfer of shares with the
Trade Registry Office. sion in the articles of association or by any Trade Registry is not mandatory
other agreement. A joint stock company cannot acquire its own
The transfer becomes effective at the expiry shares, excepting some limited cases expressly
of the 30-day opposition term.
Each of these forms of doing business in Romania offer Transfer of shares must be registered with the
provided by the law. For example, the JSC cannot
own its shares for a period longer than 18 months
different advantages that must be balanced against Trade Registry and with the shareholders reg- from the publication of the GMS decision approv-
istry of the LLC. ing their acquisition unless when the purpose of
the potential setbacks from a tax and legal stand- There is no possibility for the LLC to acquire its the acquisition was to distribute such shares to
point. own shares. company's staff, in which case such distribution
must occur within 12 months from acquisition. The
aggregate nominal value of own shares may not
exceed 10% of the subscribed share capital. Any
dividend or voting rights attached to the own
shares are suspended for the period when the
company holds such shares
Management The rules of management are more flexible The rules of management are more rigid; the or-
than for an S.A. company; it is more difficult ganization under the form of joint stock compa-
to implement the position of manager as it is nies is more suitable for large companies
not regulated by the applicable legislation
Limited liability companies are usually run by
the main shareholder (the so-called intuitu
personae character) the main shareholder
is the manager - and are suitable for smaller
types of companies
Business Ecosystem 39 Business Ecosystem 40
Starting a company
The companys name

1 The value of the share capital and method of contribution (e.g. in cash
or in kind)
6
DECIDING The shareholders and their participation quota to the share capital Obtaining bank letter of worthiness or certificate of good standing by OBTAINING
ON THE MAIN The address of the companys headquarters each shareholder legal entity LETTER OF
FEATURES The companys directors and their powers WORTHINESS
The companys main and ancillary objects of activity
2 7
The reservation of the name with the Trade Registry is valid for 3 months Where applicable, obtaining the prior permits and approvals issued by OBTAINING
RESERVING competent authorities PERMITS AND
THE NAME
APPROVALS
The companys articles of association; The registration file should include the documents mentioned above, as
3 Statements of each of the shareholders on their own responsibility and of
each of the directors; and Signature samples for the directors notarized
well as additional documents depending on the particularities of the sit-
uation such as documents with respect to the shareholders and the di- 8
PREPARING and apostilled form rectors (apostilled trade registry excerpts, identity documents), the
Decision of the statutory organ of the shareholder legal person regarding SUBMISSION OF
AND SIGNING headquarters (evidence of the owners right over the premises, other
the participation to the company documents depending on the characteristics of the location) etc. REGISTRATION
THE DRAFTS
Transfer by each shareholder of the contributed amount into such ac- Registration of the company with the Trade Registry and issuance by the
4 count Trade Registry of the registration certificate 9
Evidence of the capital transfer and bank account excerpt confirming 3 business days from the submission of all documents with the Trade Reg- ISSUING OF
OPENING BANK the crediting of the share capital account with the contribution in cash istry
must be provided REGISTRATION
ACCOUNT
CERTIFICATE
5
Execution of an agreement based on which the company in course of
incorporation is granted the right to use the location representing the
Fiscal registration of the company and shareholders shall be performed
simultaneously with the registration of the branch with the Trade Registry; 10
companys headquarters a standard form must be completed in this respect REGISTRATION
AGREEMENT FOR The execution of such agreement must be performed before the submis-
sion of the registration file to the Trade Registry
OF COMPANY &
HEADQUARTER
SHAREHOLDERS
* The VAT registration of the company is a complex and separate process which should be carried out with the assis- * The Trade Registry fees corresponding to the incorporation procedure are approx. 150 EUR. Additional fees shall be
tance of VAT specialists. incurred especially with respect to the authentication of various documents and translations into Romanian.
Setting up a branch office A branch vs. a subsidiary
The name of the branch (the name of the branch shall include the The branch is a dismemberment of a company, which does not have its own legal personality
1 name of the parent company, its legal form and the name of the place
where its headquarters is located, the name sucursala and the place
and is dependent on the parent company from an economical and a juridical point of view..
The main differences between a Romanian company and a branch are:
DECIDING where the branch will be registered)
The address of the branchs headquarters Branch Subsidiary
ON THE MAIN
The branchs representatives and their powers the national law of the foreign Romanian law
FEATURES The branchs object of activity the branch must have an object of ac- company which has estab-
tivity similar to the parent company lished the branch in Romania
the laws of Romania shall be
applicable to the formalities for
2 Decision of the parent company approving the incorporation of the
branch and the main features thereof (including appointment of the Governing law
the registration and the en-
forceability towards third parties
PREPARING branch representative) of the branch
Statements of the branch representative on their own responsibility and
AND SIGNING
signature samples notarized and apostilled form shall be registered with the shall be registered with the trade
THE DRAFTS
Trade Registry where its head- registry where its headquarters is
quarters is to be established to be established
the subsidiary will have to com-
ply with additional requirements,
depending on the chosen type
3 The execution of such agreement must be performed before the submis-
sion of the registration file to the Trade Registry
Registration
of company
AGREEMENT FOR
a branch may undertake only a subsidiary may perform any
HEADQUARTER what the parent company can activity, provided that all appli-
*Where applicable, obtaining the prior permits and approvals issued by
perform under its jurisdiction cable Romanian legal require-
competent authorities (certified copy)
Allowed activities ments are accordingly observed
The registration file should include the documents mentioned above, as all rights/assets and obligations/ all rights/assets and obligations/
well as additional documents depending on the particularities of the sit- liabilities belong to the parent liabilities belong to the respec-
4 uation, including documents with respect to the parent company and
the branch representative (apostilled trade registry excerpts, financial
company tive subsidiary liability limited to
Rights & liabilities the assets of the subsidiary.
SUBMISSION OF statements of the parent company, identity documents), the headquar-
REGISTRATION ters (evidence of the owners right over the premises, other documents any contractual relationship the subsidiary can enter into
depending on the characteristics of the location) etc. with third parties is performed in contracts in its own name
Issuing of the registration 3 business days from the submission of all docu- the name of the parent com-
ments with the Trade Registry
Contractual aspects pany
5 Shall be performed simultaneously with the registration of the branch

no restrictions on hiring local or
foreign staff for a branch
no restrictions on hiring local or
foreign staff (except for the re-
REGISTRATION with the Trade Registry; a standard form must be completed in this re- (except for the restrictions pro- strictions provided by the immi-
OF BRANCH & spect Staff hiring vided by the immigration laws) gration laws)
REPRESENTATIVES
is made based on the decision the liquidation procedure for the
of the parent company, with- type of company in which is or-
*The Trade Registry fees corresponding to the incorporation procedure are of approximately 15O EUR. Additional fees out liquidation ganized will have to be followed
shall be incurred especially with respect to the authentication of various documents and translations into Romanian. Deregistration less time consuming procedure time consuming procedure
Competition law regulation B. Cases where the interdic-

tions above do not apply
ments entered into, the deci-
sions made by the associa-
Limiting production, distri-
bution or technological
to certain undertakings in tions of undertakings and the development to the detri-
consideration of their insig- concerted practices in ment of consumers
nificant market share (de which it is involved, in order Applying, as regards com-
The Romanian legal frame- similar conditions to equiva-
minimis agreements): to determine whether it ben- mercial partners, dissimilar
work in the competition field lent performances, thereby
efits from exemption from terms to equivalent perfor-
is mainly regulated by Com- causing to some of them, a mances, thereby causing
disadvantage in the com- The cumulative market the application of the provi-
petition Law no. 21/1996 (the share of all parties in- to some of them, a com-
Competition Law) and Law petitive position sions of article 5 in the Com-
volved in the anti- petitive disadvantage
no. 11/1991 on unfair compe- petition Law.
Conditioning the conclu- competitive practice Concluding contracts sub-
tition (the Unfair Competi- sion of certain contracts to and which are competi- ject to the acceptance,
Article 6 of Competition Law
tion Law). In addition to the partners acceptation tors does not exceed 10 by partners, of clauses stip-
(similar with art. 102 of the
those, there is significant sec- of clauses stipulating sup- % on any relevant mar- ulating supplementary per-
Treaty establishing the Euro-
ondary legislation issued by plementary performances ket affected by the re- formances, which, neither
pean Community) prohibits
the Romanian Competition which, neither by their na- spective practice by their nature, nor ac-
ture, nor according to the the abusive use of a domi- cording to commercial us-
Council. Also, pieces of EU
commercial usages, are The market share of nant position held by one or ages, are connected to
legislation are applied muta- each party involved in
connected to the scope of more undertakings on the the object of such con-
tis mutandis in Romania. the anti-competitive
such contracts Romanian market or a sub- tracts
practice does not ex- stantial part of it. Specific ex-
Article 5 paragraph 1 of the Competition Law also sets ceed 15 % on any rele- The Competition Law contains
amples listed under the law a relative presumption of
Competition Law (similar to forth certain situations where vant market affected by include: dominance in case of under-
art. 101 of the Treaty estab- the interdictions above do the respective practice,
Imposing, directly or indirect- takings holding a market
lishing the European Commu- not apply, as follows: if the involved parties are
ly, of selling or purchase pric- share of 40 % or above. This
nity) introduces the notion of not competitors presumption is rebuttable, the
anticompetitive practices A. Cases where the interdic- es or unequal other contrac-
Each undertaking has the tual trading conditions undertaking in question hav-
and prohibits any agree- tions above do not apply ing to prove contrary.
right to self-assess the agree-
ments between undertak- to certain anti-competitive
ings, decisions of associations agreement/practice
of undertakings or any con- which cumulatively met
certed practices which have the following conditions:
as object or effect the re-
Contribute to improving
striction, prevention, or distor- the production or distri-
The Competition Council, as tion of competition on the bution of goods or to
an autonomous administra- Romanian market or a part promoting technical or
tive authority in the compe- thereof, especially those aim- economic progress,
tition field, is mainly responsi- ing at: while allowing consum-
ble for the enforcement of ers a fair share of the re-
the competition legislation Fixing, directly or indirectly, sulting benefit
in Romania. The Competi- the purchase or selling
prices, or any other trading Impose on the undertak-
tion Council also has the
conditions ings concerned only
power to assess the cases
those restrictions which
brought before it and which Limiting or controlling pro- are indispensable to the
are capable of hindering duction, distribution, tech- attainment of these ob-
trade between Member nical development or in- jectives
States in accordance with vestments
the provisions of Article 101 Do not afford such un-
Sharing markets or supply dertakings the possibility
and 102 of the Treaty estab- sources
lishing the European Com- of eliminating competi-
munity. Applying, as regards the tion in respect of a sub-
commercial partners, dis- stantial part of the prod-
ucts in question
At least two undertakings unfair competition deeds. In by the Romanian state is rep-
Competition law regulation involved in the operation
achieved each in part, on
accordance with law no.
11/1991 on unfair competi-
resented by:
the Romanian territory, a Treaty of Functioning of Eu-
tion, the following acts are
turnover higher than the ropean Union and all the
considered unfair competi-
RON equivalent of EUR 4 mil- relevant Regulations adopt-
lion tion and are sanctioned with
fines: ed by the European Council
The breach of the provisions and/or the European Com-
under competition legislation, denigration of a competitor mission
for instance the conduct of or of its products/services,
The Guidelines, Notices and
anticompetitive practices, by means of communica-
Communications of the Eu-
the abuse of dominant position or distribution of untrue
ropean Commission and the
tion, lack of notifying the eco- information on the activity
jurisprudence of the Europe-
nomic concentration before of a competitor or its prod-
an Court of Justice
its implementation, constitute ucts, which is able to harm
minor offences and are sanc- its interests Beginning with the Accession
tioned with a fine ranging be- Date, the Competition Coun-
diversion of a corporate en- cil has no longer the compe-
tween 0.5 % and up to 10% of titys customers by a current
the total turnover achieved in tence to review, authorize or
or former employee/ repre- prohibit, monitor, or order the
the financial year prior to the sentative or any other per- recovery of any State aid pre-
application of such sanctions. son by using certain trade viously or subsequently grant-
In addition to the sanctions secrets, for which the cor- ed. Currently, the European
applied by the Competition porate entity has taken rea- Commission has exclusive ju-
Council, individuals and/or sonable measures in order risdiction to deal with State
legal entities that incurred a to ensure their protection aid matters throughout the
prejudice as a result of an anti and whose disclosure may European Union. The Compe-
-competitive practice prohib- harm the interests of the tition Council acts as the na-
ited by law are entitled to act said corporate entity tional contact authority be-
against those business entities any other commercial tween the European Commis-
According to Competition performing, on a lasting ba- grant a decisive influence on
at fault in order for the in- practices which breach the sion and Romanian authorities
Law, an economic concen- sis, all the functions of an au- the constitution, deliberations
curred prejudice to be reme- principles of fair dealing and public institutions.
tration is achieved when: tonomous economic entity. or decisions of the manage-
died. and good faith, and either
ment bodies of an undertak- Aid measures can only be im-
Two or more, previously inde- The key element to qualify a causes or may cause losses
ing. By way of exception, business plemented after approval by
pendent undertakings (or transaction as economic to any market participant
entities may obtain, by imple- the Commission. Moreover,
parts of them), merge concentration is to deter- Once it has concluded that a
menting the leniency policy, The Competition Council the Commission has the pow-
mine whether the purchaser transaction qualifies as eco-
One or more persons al- either a reduction or an ex- may sanction any breaches er to recover incompatible
acquires control over the nomic concentration, it
ready controlling at least emption from the sanctions of the said provisions with State aid from the beneficiar-
target company or not. Con- should be further investigated
one undertaking, or one or applicable by the Competi- fines of up to 50.000 lei (in ies.
trol is achieved when it de- whether it must be notified to
more undertakings acquire, tion Council. Within the case of a legal person) or up
rives from rights, contracts or the competition authority pri-
direct or indirect, control framework of the leniency to 5.000 lei (in case of a natu-
any other means which, sep- or to its implementation or
over one or several other un- policy, the Competition ral person), depending on
arately or together and con- not. The applicable legislation
dertakings or over some Council grants fine immunity the infringement.
sidering the factual or legal provides for a turnover thresh-
parts of them, either through or may apply a reduction of
circumstances, confer the old above which such opera- State aid is defined as an ad-
capital participations, acqui- such fine for those business
possibility to exercise a deci- tions must be notified, respec-
sition of assets, by contract entities that decide to coop- vantage in any form whatso-
sive influence over an under- tively: ever conferred on a selective
or by any other means erate for identifying and
taking, especially through: i) basis to undertakings by na-
The aggregate turnover of fighting against serious anti-
In addition, an economic con- ownership or usage rights
the entities involved ex- competitive arrangements. tional public authorities.
centration may be established over all or a part of the as- ceeds the RON equivalent
by the creation of a joint ven- sets of an undertaking and ii) of EUR 10 million The Competition Council also The legislation applicable to
ture, which is a legal entity rights or contracts which has the power to investigate state aid measures disposed
Financing Availability 47 Financing Availability 48
Local banking products Financing through the Ministry of Economy
Credit institutions have sent signals regarding a The Romanian banking system in- The Ministry of Economy finances and manages a total of 9 initiatives, with a total 2016 budget
slight relaxation of lending standards pertain- cludes 40 credit institutions. At the end valued at EUR 34 million through the following programs:
ing to corporate loans. of 2014, the structure of the banking START - supporting the development of start-ups founded by debutant entrepreneurs
Also, the Romanian economy has a great, un- system involved:
tapped potential for sustainable lending. Rural - supporting the development of SMEs in the rural areas
COMMERCE - strengthening the marketing capacity of companies and develop comm.
25
Banking Stats
Exploiting this potential can add significant banks with majority foreign
growth, as over 10 000 performing companies capital activity
are not levered and could sustain more debt
financing that would allow for the doubling of Microindustry supporting the development of the industrial and manufacturing sectors
the current stock of loans to non-financial cor-
porations.
9 branches of foreign banks
SRL-D supporting the development of start-ups founded by debutant entrepreneurs
In Romania, there are several financing solu- Women in Management improving the performance of businesses run by women
tions for start-up businesses in order to provide
working capital or to sustain professionals start-
2 state owned or majority
owned banks Business Incubators sustaining the development of incubators that facilitate start-ups
up. growth
3 institutions with majority

domestic private capital
Arts & Crafts strengthening the marketing capacity of companies and developing com-
mercial activity
Financing through 1 co-operative credit

institution
UNCTAD / EMPRETEC strengthening the marketing capacity of companies and de-
veloping commercial activity
EU Funds TIMM strengthening the marketing capacity of companies and developing commercial
activity
Human Capital Operational Program Regional Operational Competitiveness

Program Operational Program
Jobs for young people Jobs for everybody fi- Regional Operational Competitiveness Oper-
financing the following nancing the following Program financing the ational Program financ-
activities: activities: following activities: ing the following activi-
ties:
improving skills of providing grants to construction, modern-
investments projects
young people (16-24 create new jobs is ex- ization, expansion of
for R&D department
years old) isting SMEs the production / sup- of enterprises
providing active em- providing an adviso-
ply services
investment projects
ployment measures ry / extension, entre- providing tangible, that creates R&D syn-
which consist in coun- preneurial training and intangible assets ergies with Horizon
seling and guidance, other forms of support 2020
assistance for finding a Innovative projects,
job which will achieve an
basic skills of the per- innovative product
(both for goods and
sons concerned
services)
State Aid Scheme 2014/807 State Aid Scheme 2014/332
The State Aid Scheme 2014/807 has a budget of EURm The State Aid Scheme 2014/332 has a budget of EURm
600 foreseen for the next 6 years. It aims at supporting 600 foreseen for the next 6 years. It aims at supporting
major CAPEX investment. This year, the budget was ex- the creation of new jobs. Its annual budget is EURm 100.
panded by 45% to EURm 145.
Eligible costs Eligible costs
Construction of new buildings Salary costs registered for a 2 con-

Renting costs for existing buildings secutive year period resulted as a
CAPEX aimed at technical installa- direct consequence of the invest-
tions and tools ment
Acquisition of intellectual property *Salary costs are comprised of gross
annual salary plus benefits
Eligibility criteria for Eligibility criteria for

Investments Investments
Minimum value: EUR 10 million To lead to the creation of 10 new

To be viable and determine the op- jobs per investments location, out of
erational efficiency of the company which 3 positions to be covered by
To prove the stimulating effect of disadvantaged workers
state aid To be viable and determine the op-
To generate contributions to regional erational efficiency of the
development company
To facilitate extra investments in the
region
Eligibility criteria for companies Eligibility criteria for companies
Net profitability for existing companies: > 0% The intensity of state aid by region Net profitability for existing companies: > 1%
Equity for new companies: >= RON 100,000 *This applies to both state aid schemes Equity for new companies: >= RON 30,000
Investment plan for Europe European Fund for Strategic Investments ble growth and employment
Is essentially an EUR 21 billion risk manage- Mature enough to be bankable
ment tool designed to aid and facilitate in-
vestment from Priced in a manner commensurate with the
risk taken
Was put together by the European Commis-
sion and the European Investment Bank
Aims to mobilize at least EUR 315 billion in in- Application process
vestment
As financing operations will be on the EIBs
balance sheet, all applicants are subject to
standard EIB due diligence and approval by
Support through the EIAH and the EIPP its governing
The Investment Plan for Europe aims to help Project promoters should follow standard EIB
project promoters in the development of the loan application procedures
financing application through the European
Investment Advisory Hub SMEs and midcaps interested in EFSI transac-
tions should refer to information on EIF
Furthermore, as a means to connect projects
with investors, the IPE has also built an Euro- SMEs, however, do have a wider range of
pean Investment Project Portal possibilities to access EFSI funds; either
through a financial intermediary or through a
risk capital fund
Regulatory environment improvement
One of the current priorities of the Commis- Key Sectors
sion seems to be the identification and elimi-
nation of regulatory bottlenecks that slow Strategic infrastructure, including digital,
To foster growth and boost private investment into value adding projects, the European Commis- down investments transport and energy
sion (EC) and European Investment Bank (EIB) created the Investment Plan for Europe.
Expansion of renewable energy and re-
Vision Persona source efficiency
Eligible applicants
The EU plans to reverse the downward Firstly, the investment plan aims to boost Environmental, urban development and so-
trend of investment and put Europe back investment through private investors who Companies of all sizes, including small and cial projects
on the path of recovery have been more risk averse in the recov- medium enterprises (up to 250 employees)
and midcaps (up to 3000 employees) Education and training, research, develop-
Europes growth catalyzed through grow- ery of the post-crisis era
ment and innovation
ing investment is also a top priority for the Secondly, the plan is dedicated to com- Utilities
Juncker Commission panies and projects with a riskier profile Support for smaller businesses and midcap
but with potentially significant added Public sector entities companies
value
National promotional banks or other banks
INVESTMENT PLAN FOR EUROPE delivering intermediated lending
Instruments
Remove obstacles to investments by To accomplish its objectives, the EC and Bespoke investment platforms
deepening the single market EIB have established the European Fund Loans
Provide visibility and technical assistance for Strategic Investments (EFSI) within the
to investment projects EIB Guarantees
Eligible criteria
Make smarter use of existing financial re- EFSIs mission is to break the under- Credit enhancement products
sources and facilitate private investment confidence and make use of liquidity Commercially sound, economically and
in value adding projects held by private investors technically viable Equity type products
Contributing to EU objectives and to sustaina-

Mission Solution
Employment and Labor Law 53 Employment and Labor Law 54
Labor Law Regulation Overview Type of contract Details
Individual labor Generally, the contracts should be concluded for an indefinite period of
contract time and by an exception, the agreement can also be concluded
In Romania, employment contracts are gener- with the competent labor authority for a fixed period of time, provided that certain conditions are ob-
ally regulated by the provisions of. Law no. (Government Decision no. 500/2011 regarding served. It should always be concluded in writing, in Romanian lan-
53/2003 the Labor Code, which provides for the general registry of employees). guage.
a set of minimum general principles to be ap- The minimum employment age is 15 years old
plied in the employment relations. and there are certain special rules applicable Generally, work time is 8 hours per day for full-time employees. The maxi-
Labor legislation has adapted in recent years to the employment of persons under the age mum work time cannot exceed 48 hours per week, including extra
to the special economic circumstances of 18 (who, for example, cannot work in jobs
hours. Overtime work is allowed only with the employees agreement,
through the approval of various laws, the most considered dangerous). Hiring persons under
significant being Law no. 62/2011 on social di- 15 is completely prohibited by law. except for force majeure cases or other urgent works intended to
prevent or to eliminate the consequences of an accident.
The overtime shall be compensated financially or through paid off hours.
All employees are guaranteed a paid annual rest leave of minimum 20
working days.
Employment contracts may be full-time or part-time.
A part-time contract Is defined as a contract in which a number of hours of work has been
agreed with the worker per day, week, month or year which is less
than the working hours of a comparable full-time worker, that is, a
full-time worker at the same company and workplace who performs
identical or similar work.
Part-time workers have the same rights as full-time workers, although at
times, according to their nature, such rights will be recognized pro-
portionally, according to the time worked.
Part-time workers cannot work overtime, except for force majeure cases
or other urgent works intended to prevent or to eliminate the conse-
quences of an accident.
alogue, Law no. 467/2006 regarding the estab- There are various different types of contracts, Fixed term contracts Are used for performing seasonal activities or in case where the employ-
lishment of the general framework for inform- including indefinite-term, temporary, fixed- ers activity is temporarily increased.
ing and consulting the employees, Emergency term, training, distance work and part-time
The maximum period for which a determined contract may be conclud-
Government Ordinance no. 56/2007 on the contracts.
ed is of 36 months.
employment and employment-related to relo- The collective negotiations are mandatory to
cation of foreign citizens on the territory of Ro- be initiated on an annual basis by any com- Also, between the same parties there may be concluded maximum 3 de-
mania, Law no. 108/1999 for establishing and pany with at least 21 employees. Following the termined agreements in a row.
organizing labor inspection. negotiations, collective labor agreements can Successive contracts may not exceed 12 months each. In addition, a
In general, discrimination in hiring or in the be concluded at sectorial level, group of em- home work arrangement may be reached provided it is formalized in
workplace on the grounds of gender, sexual ployers and employers level. The individual writing (whether in the initial contract or a subsequent agreement).
orientation, genetic characteristics, age, na- labor contracts may not include provisions es-
tionality, race, color, ethnics, religion, political tablishing rights of an inferior level or contrary
options, social origins, handicaps, family situa- to the one set by applicable laws and collec- The individual labor contract may be amended only through both parties consent. By excep-
tion, membership of a labor union or otherwise tive labor agreements. The collective labor tion, the contract may be unilaterally amended by the employer only with respect to the place
is prohibited. agreement is concluded for a determined pe- of work by delegating or temporarily transferring its employees to a work place other than the
Each employer must keep a general register of riod that may range between 12 and 24 one provided in the agreement.
its employees, in electronic form, and register it months.
Employment and Labor Law 55 Employment and Labor Law 56
The matter of hiring foreign citizens in Romania is dealt with under the Emergency Government
Labor Law Regulation Overview Ordinance no. 56/2007. Persons who do not have EU or EEA citizenship may work in Romania only
based on a work permit. The work permit is not necessary in limited circumstances such as for in-
dividuals who hold a right of permanent stay in Romania or for those who will temporary perform
activities requested by Romanian public authorities. Generally, the work permit is issued for the
Employers can assess a workers abilities by agreeing entire period of the work contract, except for seconded employees who obtain their authoriza-
on a trial period during which the employer or the tion for a one-year period only.
worker can freely terminate the contract without hav- GROSS MINIMUM WAGE
ing to allege or prove any cause, without prior notice Employment cost structure
and with no right to any indemnity in favor of the work-
er or the employer. The contract may foresee a single
276
trial period of a maximum 90 calendar days, in case of PER MONTH
executive positions, and maximum 120 calendar days, Employers Contributions
in case of management positions. For disabled persons, the trial period can reach a maximum
of 30 calendar days. In addition, either party, with a notice period of no less than 20 working 15.8% Social Security Contribution - between 15.8% and 25.8% (depending on the
days, may terminate the contract. work conditions, 15.8% for the normal working conditions) of the total salary
The official gross minimum wage is established by the Government and amounts to RON 1250 fund, capped at the level of five times the medium gross salary per economy
per month or RON 7,3 per hour. The minimum wages for each job category can be regulated and multiplied with the number of employees
in the collective labor agreements. Salaries cannot be paid at intervals of more than one 5.2% Health Fund Contribution applied to the gross salary fund; starting with Jan-
month. uary 2017 the health fund contribution will be capped
0.85% Medical Leaves Contribution applied to the gross salary fund, capped at
the level of twelve times the national minimum salary, multiplied by the num-
Termination of individual labor agreement ber of employees
0.5% Unemployment Fund Contribution applied to the gross salary fund
An employment contract may be terminated during the maternity leave
for a number of reasons which normally do not 0.25% Guarantee Fund for Salary Debts Contributions - applied to the gross salary
give rise to any dispute, such as mutual agree- during the leave for raising a child up to fund
ment, expiration of the contractual term, death the age of 2, or, in case of a disabled 0.15% Contribution to the Fund for work accidents and professional diseases ap-
or retirement of the employee or of the employ- child, up to the age of 3
- plied to the gross salary fund, depending on the core activity of the compa-
er, and so on. during the leave for looking after a sick 0.85% ny
In the event of termination by the employer, child aged up to 7, or, in case of a disa-
there are two main grounds for dismissal of an bled child, for illnesses, until the age of 18 Employees Contributions
employee: (i) for reasons pertaining to the em- during ones exercise of an elected posi-
ployee, or (ii) for reasons not pertaining to the 10.5% Pension Contributions applied to the monthly gross income earned by the
tion in a trade union body, except when
employee. The dismissal for reasons not pertain- individual, capped at the level of five times the medium gross salary
the dismissal is decided for a serious disci-
ing to the employee can be (i) individual or (ii) plinary departure, or for repeated discipli- 5.5% Health Fund Contribution applied to the salary income subject to income
collective. nary departures, by the employee tax
Further on, the Labor Code provides temporary during the rest leave 0.5% Unemployment Fund Contribution applied to the monthly gross income
interdictions for dismissal, respectively specific earned by the individual
Any dismissal ordered with the violation of the
cases in which, due to the special situation the
legal procedures is null and void. In case of
employee faces, his/her dismissal cannot be
labor disputes, the employer may not invoke,
Employees Income Tax
decided, namely:
before of a court of law, other factual or lawful
during a temporary work disability, ascer-
0.5% Income tax applied to the monthly taxable income earned by the individual
reasons than those provided in the dismissal
tained through medical certificate (gross income deducted with employees social charges)
decision. Should the dismissal have been per-
during a quarantine leave formed ungrounded or illegally, the court of
law shall order its cancellation and oblige the
during pregnancy, as long as the employer employer to pay for damages to the employ- *The medium gross salary per economy is RON 2.681 for 2016
became acquainted with this fact before ee. **The health insurance contribution will be capped at 5 times the medium salary established by law
the issuance of such dismissal decision ***The minimum gross salary per economy is RON 1,250 starting with May 2016
Fiscal Policy 57 Fiscal Policy 58
Fiscal Policy Overview Direct taxes Corporate Income Tax
The legislative framework in Romania has been cal Administration (ANAF), aiming for a Corporate income tax (CIT) is chargeable at a flat rate of 16%
subject to various amendments as a result of greater institutional autonomy and at becom- and is applicable on worldwide income, in the case of resident en-
the entering into force of the New Fiscal Code ing a real business partner for taxpayers. CORPORATE tities or on the earnings in Romania, in the case of non-resident
(i.e., Law no. 227/2015 regarding the Fiscal INCOME TAX companies. In this respect, in the category of taxpayers who are
As a European Union member state since 2007, required to declare and pay CIT according to Romanian law are
Code) and the related Application Norms (i.e.,
Romania offers many opportunities for foreign now included non-resident entities which have the place of effec-
Decision no. 1/2016 for approving the Applica-
investors, a matter of fact demonstrated by tive management in Romania.
tion Norms of Law no. 227/2015), as well as the
New Fiscal Procedure Code (i.e., Law no.
reports of international agencies such as Jones 16%
Lang LaSalle or Gartner. In an attempt to stimulate the business environment, the general
207/2015 regarding the Fiscal Procedure deductibility rule has been redefined as to cover a larger base. Thus, as of 1 January 2016, ex-
Code). penses are deductible for CIT purposes provided they are incurred with the purpose of conduct-
Furthermore, a reform process funded and su- ing economic activities.
pervised by the World Bank is being imple- Participation exemption rules are available. Dividends received from a Romanian legal entity,
mented at the level of the tax regulatory au- irrespective of the holding percentage and period, become non-taxable income.
thority, the Romanian National Agency for Fis- Income from dividends received from a company in an EU Member State or a country with
which a double tax treaty was concluded by Romania / gains from alienation of shares / in-
come from liquidation / income from revaluation of shares held in a Romanian company or a
Direct Taxes company located in a country with which Romania concluded a double tax treaty may be ex-
empt if the recipient holds at least 10% of the shares of the company distributing dividends / be-
ing sold / being liquidated / being subject to evaluation for at least one year.
The legislative framework of direct taxation has Non-residents obtaining income from the sale of shares in companies owning real estate in Ro-
been substantially reshaped as of 1 January mania are not subject to 16% tax if:
2016. With the objective of maintaining stability
Romania has a Double Taxation Treaty (DTT) concluded with the country of residency of
and transparency in the taxation field a new
the non-resident
principle was introduced, according to which
no further amendments are to be brought to The Company receiving the income holds more than 10% of the shares and if the operation
the legislative provisions for a period of one is performed after a period of minimum one year
year subsequent to the introduction of the new and transparency in the taxation field a new Still, if the conditions above are not met, the non-resident obtaining income from the sale of
legislative provisions. principle was introduced, according to which shares in companies owning real estate in Romania are not subject to 16% tax if:
no further amendments are to be brought to
New definitions of general terms/concepts A DTT is concluded between the country of residency of the non-resident and Romania
the legislative provisions for a period of one
have been introduced, among which the most The non-resident provides the buyer with a fiscal residency certificate
year subsequent to the introduction of the
important are: transparent fiscal entities, with/
new legislative provisions. According to the DTT, the taxation right does not belong to Romania
without legal personality, the place of effec-
tive management, stock option plan etc. New definitions of general terms/concepts
Moreover, new amendments have been have been introduced, among which the most
made to existing definitions of the terms important are: transparent fiscal entities, with/
dividend, royalty, the arms length princi- without legal personality, the place of effec-
ple, affiliation between two legal persons, tive management, stock option plan etc.
centre of vital interests. Moreover, new amendments have been
made to existing definitions of the terms
The fiscal year in Romania is the calendar year.
dividend, royalty, the arms length princi-
Under certain conditions, the fiscal year may
ple, affiliation between two legal persons,
be amended.
centre of vital interests.
The legislative framework of direct taxation has
The fiscal year in Romania is the calendar year.
been substantially reshaped as of 1 January
Under certain conditions, the fiscal year may
2016. With the objective of maintaining stability
be amended.
Large taxpayers Medium and small tax- Other considerations

Corporate Income Tax payers
Taxpayers that carry EUR 200,000 for in- EUR 50,000 for interest re- Taxpayers carrying out
As regards reorganization processes, from a ity of interest expenses and net foreign ex- out intragroup trans- terest paid/ ceived/paid for financial intragroup transactions
corporate income tax perspective, mergers, change losses related to loans granted for actions with a total received for finan- services that do not meet any
spin-offs, transfer of business may be per- more than one year is further subject to the annual value higher cial services of the materiality
formed under tax neutrality provided that cer- debt-to-equity ratio test. than any of the fol- EUR 50,000 for services re- thresholds must docu-
tain conditions are met. Cross-border reorgan- If the debt-to-equity ratio is higher than 3:1 or lowing thresholds EUR 250,000 for the ceived/provided; or ment compliance with
ization processes may also be performed gen- the company has negative equity the interest must prepare a supply or receipt the arms length princi-
of services; or EUR 100,000 for acquisi-
erally under the same rules as provided by the expenses and net foreign exchange losses are transfer pricing file ple during a tax audit,
tions/sales of tangible
Merger EU Directive (as implemented in the fully non-deductible, but available to be car- please also observe according to the gen-
EUR 350,000 for pur- and intangible goods.
domestic legislation). ried forward until their full deductibility (i.e., the type of taxpay- eral rules provided by
chase/sale of tan-
Tax losses may be carried forward for 7 years. when debt-to-equity ratio is lower than or er indicated in the the financial account-
gible and intangi-
Thin cap rules apply. More specifically, the de- equal to 3:1 and the Company is in a positive table header ing and tax legislation
ble goods
ductibility of interest and net foreign ex- equity position).
change losses related to loans is limited under Transfer pricing rules apply. As of 1 January
Transfer pricing file Up to 10 days upon Between 30 and 60 days Not applicable
the two criterions detailed below. 2016 large taxpayers are required to prepare
submission dead- request of the Ro- upon request of the Ro-
Such limitations do not apply to interest and an annual transfer pricing file. Please see an
lines to be consid- manian tax authori- manian tax authorities.
net foreign exchange losses related to loans overview of the new transfer pricing provisions
ered ties after the sub- The deadline may be ex-
contracted from credit institutions, nonbank- applicable in Romania in the following table.
mission of the an- tended once, for a maxi-
ing financial institutions or other entities that Note: The thresholds are computed by adding
nual corporate in- mum of 30 days
grant credit according to the law. up the total annual values of transactions car-
come tax return
The law limits the level of interest deductibility ried out with related parties (excluding VAT).
for the loans at: Unilateral and multilateral advance pricing
The National Bank of Romania's (NBR) ref- agreements (APAs) are available as per Ro-
erence interest rate for the last month of manian law. An issuance fee between EUR
tion to apply the CIT regime. services).
the quarter for 10,000 EUR 20,000 depending on the cate-
In the case of microenterprises, an alternative As of 1 January 2016, a 5% WHT applies to divi-
RON denomi- gory of taxpayer or value of the transaction
minimum tax of 1%/2%/3% (depending on cer- dends paid by Romanian tax residents to-
nated loans covered needs to be paid to the Romanian
tain conditions) may be levied on the income wards non-residents.
4% annual tax authorities. The legal terms to issue an APA
of micro-companies, instead of corporate in- Parent Subsidiary EU Directive and Interest and
interest rate for is up to 12 months for unilateral APAs and up to
come tax (as long as they qualify as such). Royalties are applicable as implemented in
foreign curren- 18 months for multilateral APAs.
Moreover, for the first 24 months from the in- the domestic legislation. Also Romania has
cy denominat- For transactions covered by an APA, there is
corporation, Romanian legal entities which concluded more than 80 double tax treaties
ed loans. no need to prepare and submit the transfer
fulfil certain conditions, may apply a reduced with other countries. By applying the more fa-
Interest expens- pricing file.
tax rate of 1%. vorable provisions of such treaties, the WHT
es exceeding
may be decreased or exempt in Romania.
this limit are non Microenterprise tax
Withholding tax The tax rules previously applicable to associa-
-deductible According to the Romanian legislation, a new-
A general 16% withholding tax (WHT) is gen- tions and other entities without legal personali-
and cannot be ly incorporated Romanian entity is obliged to
erally applied for certain types of payments ty have been amended and a specific tax re-
carried forward apply the microenterprise tax as long as it
performed towards non-residents (e.g., inter- gime of associations/fiscal transparent entities
in future peri- does not have a share capital of more than
est, royalties, commissions, services rendered that perform activities /obtain income from
ods. the equivalent in RON of EUR 25,000, in which
in Romania, management and consultancy Romania was implemented.
The deductibil- case the newly incorporated entity has the op-
Personal Income Tax al basis, but there are also some types of in-
come for which the tax must withheld at
Local taxes
source (e.g., income from intellectual property Building tax
rights) or for which quarterly income tax pay- For buildings owned by a company, the tax
Tax Payers from a personal income tax per- based on the la- ments shall be performed (e.g., income from rate is established by the local authorities with-
spective are: bor contract, any independent activities derived by self- in the 0.08%-0.2% range for residential buildings
employment rela- PERSONAL employed individuals). and within 0.2% - 1.3% for non-residential build-
Resident individuals; ings. The local authorities may increase the
tionship, assign- INCOME TAX Individuals coming to/leaving Romania for
Non-resident individuals who are perform- ment letter or on more than 183 days within 12 consecutive rates by max. 50%. There are special rules to
ing independent activities through a per- any other similar months have the liability to assess their tax resi- determine the taxable value.
manent establishment in Romania legal statute. 16% dency with the Romanian authorities through In respect of the building tax declarative and
Non-resident individuals performing working The taxable base a standard tax residency questionnaire. payment obligations, starting 1 January 2016,
activities in Romania for the income tax is determined as the differ- Avoidance of double taxation such liabilities should be fulfilled for the entire
ence between the gross income and the fiscal year by the person who owned the build-
Non-resident individuals obtaining Romani- Where income tax was paid in the source
mandatory social contributions, personal de- ing as at December 31st of the previous year.
an sourced income country, in order to avoid the double taxation
duction, union charges and contributions to Land tax
The following types of income are taxable: on the same income, the provisions of the
private pension funds and voluntary health
Conventions for the avoidance of double tax- Owners of land are subject to land tax at a
Income from independent activities insurance schemes, as per law. The deduction
ation should be observed. fixed amount per square meter, depending on
for contributions to private pension funds and
Salary and salary assimilated income voluntary health insurance schemes is grant- Taxation of non-residents the location and the category of use, accord-
ed within the limit of 400 EUR/year/individual. ing to the specific classification of the local au-
Rental income The Romanian tax non-residents are liable to thorities. Starting 1 January 2016, land tax is
Investment income Tax deductions and exemptions pay income tax only on their Romanian due also for the land beneath a building.
sourced income, such as salary income re-
Pension income over RON 1,050 per month Starting with 2016, new rules for personal de- Construction tax
ceived for the activities performed in Romania,
duction levels were introduced, setting a
Income from agricultural activities, forestry dividends and interest paid by a Romanian A 1% construction tax is due for various types
range between RON 300 (for persons who do
and fisheries legal entity, rental income for properties locat- of constructions (e.g., parking, platforms, etc.).
not have dependents) and RON 800 (for per-
ed in Romania etc. As of 1 January 2017, the construction tax will
Income from prizes and gambling sons with four or more dependents).
Social security contributions no longer be applicable in Romania.
Income from real estate transactions and There is an income tax exemption for IT&C
other income employees. The tax relief on income from For certain types of income obtained by indi-
wages is applied to employers who have as viduals, social security contributions may be
The standard income tax rate is 16% for most of
object of activity the creation of computer due in Romania, assuming that the individuals
the types of income mentioned before - for
programs and have realized an income from are not already enrolled under the social secu-
the income derived from dividends a tax rate
selling software of at least $10,000 for each rity system of another EU member state coun-
of 5% applies starting with January 2016; also,
employee in the previous year. The same ex- try or another country with which Romania has
different tax rates may apply for income de-
emption is also applicable for employees a social security agreement in place.
rived from real estate transactions, depending
working in applied R&D projects, starting with
on the value and holding period. For the social security contributions due at the
August 2016. level of the employee and employer for salary
Salary income
Tax residency and other income income, please refer to the Labor law regula-
Salary income represents the remuneration in tions overview, Appendix 1 of this report. For
Romanian tax residents and foreign individu-
cash or in kind, obtained by an employee other types of income, mandatory health insur-
als who meet the tax residency criteria and
ance contribution (5,5%) and pension fund
become Romanian tax residents are liable to
contribution (10,5%) may also be due, only in
report their worldwide income in Romania
certain cases.
starting with the date when they become Ro-
manian tax residents, irrespective of the type Also, Romanian individuals who are domiciled
of income and source country. in Romania, and do not obtain other income
in Romania may be liable to pay health insur-
Generally, other types of income should be
ance contribution, and a special registration
subject to taxation and reported on an annu-
procedure should be applicable in their case.
Indirect taxes - VAT
Scope of VAT gular operations or call-off

Generally, taxable transac- stock / consignment stock ar-
tions fall within Romanian rangements.
VAT scope if they have the
place of supply in Romania VAT registration
and they are made by a tax-
able person, as part of its
The standard rate of VAT is
20%, with two reduced rates
5%
economic activity. Such of 9% and 5%.
transactions may be: The 9% reduced VAT rate ap-
Local supplies of goods and plies to certain supplies of
services for consideration in goods and services, such as
Romania prosthesis and orthopedic
Intra-Community acquisi- products, medicine, accom-
tions of goods and services modation services, food and
for consideration in Roma- non-alcoholic drinks, restau- tivities), supply of real estate, without VAT deduction right, may be cases where part of
nia rant and catering services. (with some exceptions), the and it cannot allocate the the amount requested for re-
Deemed acquisitions of The 5% reduced VAT rate ap- supplier having the option to inputs to one of the two cat- fund is denied, if the tax au-
goods and services in Ro- plies to certain supplies of apply VAT on them, financial- egories of supplies, it should thorities conclude that the
mania goods and services, such as banking services (with some deduct input VAT based on conditions governing VAT de-
Import of goods in Romania books and magazines, access exceptions), insurance ser- pro-rata. Pro-rata is deter- duction right are not met.
to museums, castles, zoo and vices. The above lists are not mined by dividing the total Companies that are not VAT
VAT registration botanical gardens, cinema, exhaustive. amount of supplies with VAT established in Romania, but
VAT registration is required for
persons carrying out opera-
expositions and cultural events
and buildings as part of the 9% VAT deduction right
deduction right per year, to
the total amount turnover
EU established, may recover
the VAT incurred in Romania
tions which are taxable, VAT social policy, including the A taxable person is entitled to per year, i.e. supplies with via the 9th Directive. Compa-
exempt with credit or having land on which they are built, deduct the input tax on its ac- VAT deduction right and nies that are not established in
the place of taxation under certain conditions. quisitions, as long as the ac- without VAT deduction right. the EU may recover input VAT
abroad, if the VAT would quired goods/services are in Romania via the 13th Di-
have been deductible in Ro- VAT exemptions used for the purposes of its VAT Refunds rective, provided that Roma-
mania. The Romanian legislation pro- taxable transactions, or VAT Romanian VAT registered en- nia has reciprocity agree-
Carrying out Intra- vides certain VAT exemptions exempt transactions with de- tities in a VAT refundable po- ments with their country of res-
Community with deduction right of the in- duction right, as described sition may request the reim- idence. Currently, Romania
acquisitions also triggers the put VAT, such as exports and above. bursement by ticking the re- has concluded such agree-
VAT registration obligation. intra-Community supplies, in- The VAT deduction right may fund box on the VAT return. ments with Switzerland, Nor-
Romanian established taxa- ternational transport of peo- be exercised within a The tax authorities should pro- way and Turkey (limited ap-
ble persons with annual turn- ple, VAT exemptions for goods timeframe of five years, if the cess the VAT refund claims plicability).
over of less than EUR 65,000 placed in special customs re- beneficiary holds a correct within 45 days from the day
are eligible for a special VAT gimes and financial and insur- invoice. In addition, in case of when the VAT refund claims Customs
exemption regime. However, ance services rendered to imports, the beneficiary must were submitted. In practice Since 1 May 2016, the new Eu-
hold the import customs dec- however, the VAT refund ropean customs legislation
there are specific cases in
which non-residents entities
non-EU customers.
There are also other types of 20% laration, which mentions the
taxable person as the importer
proves to be a lengthy pro-
cedure and significant delays
applies - Union Customs
Code. The customs simplifica-
performing certain transac- VAT exemptions, without de-
tions in Romania do not have duction right of input VAT, for VAT purposes. may result. Usually, the VAT tions and the customs special
the obligation to register for such as certain supplies of Where a taxable person car- refund is preceded by a VAT regimes are conditioned by
VAT purposes, such as in general interest (e.g. hospital ries out both supplies with VAT audit from the tax authorities. fulfilling the Authorized Eco-
case of non-transfers, trian- care, public post, cultural ac- deduction right and supplies Following such audit, there nomic Operators conditions.
Fiscal incentives
Fiscal facilities for research and development (R&D) activities VAT simplification measures VAT group
The simplifications measures consists in the ap- Two or several taxpayers established in Roma-
Romanian taxpayers that perform R&D activi- Among the expenses eligible for the R&D in-
plication of the reverse-charge mechanism at nia which have at least 50% common share-
ties can benefit from various incentives for CIT centives are the following:
the level of the beneficiary, by reporting in the holders may opt to be treated as a single tax
relief, including: Depreciation and rental expenses assets
VAT return the related VAT both as input and group. The benefit of being part of a VAT fiscal
An additional 50% deduction for the eligi- that are used by taxpayers in R&D activities
output VAT. As such, local supplies that are group is the centralization of the reporting obli-
ble research and development related ex- Salaries of personnel directly involved in
normal subject to VAT imply in this case no ac- gations and the possibility granted to offset the
penses; R&D activities and related expenses
tual cash payment of VAT to the state budget. deductible VAT with the related collected VAT
Accelerated depreciation for equipment Maintenance and repair costs for the as-
VAT simplification measures are available for: of the transactions performed by the whole
and devices used in R&D activities of up to sets used for the R&D activities
Supplies of waste and recyclable materials group for each fiscal period. However, trans-
50% of the fiscal value of the asset which Operating expenses, including expenses
(specific types) and materials resulting from actions between group members are still within
may be deducted during the first year in costs of consumables, materials, etc.
their manufacturing the scope of VAT.
usage. The remaining fiscal value of the as- Overhead expenses
Supplies of wood and wood materials The following conditions must be cumulatively
set would be depreciated over the remain-
Supplies of certain cereals and technical met to form a VAT group:
ing useful life.
plants (applicable until 31st December 2018) Each group member is part of only one single
Transfer of greenhouse gas emission certifi- tax group
cates (applicable until 31st December 2018) The option to form the single tax group refers
CIT exemption for reinvested profit Supplies of electricity to resellers, that are tax- to a period of at least 2 years
able persons established in Romania, under All tax group members apply the same tax
specific conditions (applicable until 31st De- period
Another key investment incentive is available
cember 2018)
to local and foreign investors, consisting in the
Transfer of green certificates (applicable until Others
CIT exemption for reinvested profit in equip-
31st December 2018)
ment and machinery acquired after 1 July Special exemption from the salary income
Buildings, building parts and lands of any
2014 and commissioned by 31 December tax, applicable for employees carrying out
type, for which VAT is applicable, either by
2016. Moreover, the new amendments to the software development activities and fulfilling
option of the seller or by law
tax legislation extend the list of eligible assets certain conditions
Supplies of investment gold for which VAT is
to computers, tax registers, software and the Government subsidies for employment of
applicable by option of the seller, under spe-
like. graduates and single parents (e.g. for gradu-
cific conditions
In order to apply such exemption, the amount ates and single parents employed for an un-
Supplies of mobile phones and devices man-
of the reinvested profit should be the balance determined period of time, an amount of up
ufactured or adapted for the use in connec-
of the profit/loss account for the relevant peri- to ~170 EUR / individual can be claimed from
tion with an authorized network (applicable
od, specifically the accounting profit accumu- the Romanian tax authorities for 12 months)
until 31st December 2018)
lated from the beginning of the year in which
Supplies of devices with integrated circuits,
the assets were put in use.
before their integration in the final products
The tax exemption shall be granted in the limit
(applicable until 31st December 2018)
of the CIT due for the period in which the profit
Supplies of gaming console, PC tablets and
was reinvested.
laptops (applicable until 31st December
2018)
Lifestyle in Romania 67 Lifestyle in Romania 68
Cost of Living Expat Community
The cost of living in Romania especially in Bucharest is approximately 50% lower when com- Largest expat communities
pared to other important western cities from EU Member States (Vienna, London, Berlin, Paris)
and at least 12% cheaper than other capitals from CEE countries (Prague, Warsaw or Budapest).
Republic of Moldova
Ukraine
Italy
Dragos Asaftei
United States of Permanent and temporary resi-
America dents classification by county
Maintaining the same in Bucharest, you need a

with a salary of Germany 1. Iasi 6. Dolj
standard of life from... monthly salary of
2. Bucharest & Ilfov 7. Galati
Vienna 3300 Euro 1700 Euro 3. Cluj 8. Brasov
Canada
4. Constanta 9. Arad
5. Timis 10. Sibiu
London 4500 Pounds 1365 Pounds
Hungary
Paris 4400 Euro 1738 Euro

France
Prague 57000 Czech Koruna 46580 Czech Koruna
Israel
Warsaw 8800 Zlots 7381 Zlots
Austria
Budapest 610000 Forints 538500 Forints
Source: Numbeo, InvestRomania Source: National Institute of Statistics

Lifestyle in Romania 69 Lifestyle in Romania 70
Living in Romania International Schools
There are a number of international schools for expats families in Romania. They generally offer a
People who come to work in high standard of education through a variety of curricula, extra-curricular activities and teaching
Romania often say that there styles. However, the standard and popularity of these schools also imply that places are limited
and prices are often higher than for other educational institutions.
are two awful moments in an
expats life: the moment when
Bucharest www.olgagudynn.ro
they find out they are being Curriculum: Romanian National Curriculum and
sent to Romania and the mo- American International School of Bucharest Cambridge ESOL Curriculum
www.aisb.ro Languages: Romanian and English
ment they are told they have to Curriculum: International Baccalaureate (IB) Age: 3 to 18
leave. Age: 3 to 18
Iasi
Bucharest Christian Academy
www.bcaromania.org Seven Hills International School
Curriculum: American www.sevenhills.ro
Ages: 3 to 18 Curriculum: British
Age: 3 to 14
Cambridge School of Bucharest
www.cambridgeschool.ro EuroEd International School
Curriculum: British www.euroed.ro
Age: 3 to 18 Curriculum: Romanian
Age: 3 to 10
International British School of Bucharest
www.ibsb.ro Paradise International School
Curriculum: National Curriculum of England and www.paradisul-copiilor.ro/en
Wales Curriculum: National Curriculum of Romania
Age: 3 to 18 and the United Kingdom
Age: 1 to 14
International School of Bucharest
www.isb.ro Cluj-Napoca
Curriculum: National Curriculum of England and
Wales Transylvania College, The Cambridge Interna-
Age: 3 to 18 tional School in Cluj
www.transylvania-college.ro
International School for Primary Education Curriculum: Romanian National Curriculum and
www.inspe.ro Cambridge CIE Curriculum
Curriculum: Scottish Curriculum for Excellence Age: 1 to 18
Age: 1 to 12
Royal School in Transylvania
Ioanid Preschool International Education (IPIE) www.transylvania-college.ro
www.internationalkindergarden.ro Curriculum: National Curriculum of England and
Thanks to the modern European Curriculum: British Wales
Age: 18 months to 3 years Age: 3 to 14
lifestyle, society, education, cui-
sine, nightlife, architecture, the Lycee Francais Anna de Noailles Timisoara
www.lyceefrancais.ro
mixture of traditional with modern Curriculum: French International House Timisoara
and, most importantly, the peo- Age: 6 to 18 www.ihtm.ro/en/home
Curriculum: British
ples hospitality, Romania is a truly Mark Twain International School Age: 5 to 14
exciting destination for both ex- www.marktwainschool.ro
Curriculum: International Baccalaureate (IB) William Shakespeare High School Timisoara
pats and travelers. Age: 3 to 18 www.ihtm.ro/en/home
Curriculum: Romanian National Curriculum
Olga Gudynn International School Age: 14 to 18

Made in Romania Foreign Investors Guide 2016 InvestRomania

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Made in Romania

the foreign investors guide 2016

15 Energy and resources 57 Fiscal policy overview

According to the World Banks Doing Business

Figure 1. Doing Business rankings

In order to support entrepreneurs, the Romani-

Figure 2. Number of days required to start a business

The pro-growth policy has further implications

Figure 3. Paid-in minimum capital (% of income per capita)

The number of payments per year required to

Source: World Bank, Doing Business Report 2015-2016

31.12.2014 Share in Textiles, wearing ap-

Cotinental is the largest manufacturer of components for the automotive

Macroeconomic Outlook Business Cycle Evolution

Table 2. GDP growth and macroeconomic information

Public finance Labor Force

Fiscal balance and public debt

The Inflation Rate

Source: National Bank of Romania Source: Eurostat

*Includes: mathematics, physics, biology, chemistry, geography,

Top 3 University Centers Age Group Rankings

Human Capital Index Number of Graduates

90% 26% 17% 8%

Figure 12. Number of graduates/university center (000, 2014)

Source: World Economic Forum Source: ABSL, InvestRomania

Energy and Resources

Gas prices and availability Electricity prices and availability

With the TEN-T infrastructure With 25 ports at the Black

Output of Industrial Production (%GDP)

State aid intensity

State aid intensity

State aid intensity

State aid intensity

State aid intensity

State aid intensity

State aid intensity

State aid intensity

shareholder cannot be a sole sharehold-

The companys name

Setting up a branch office A branch vs. a subsidiary

5 Shall be performed simultaneously with the registration of the branch

Competition law regulation B. Cases where the interdic-

Local banking products Financing through the Ministry of Economy

3 institutions with majority

Financing through 1 co-operative credit

Human Capital Operational Program Regional Operational Competitiveness

State Aid Scheme 2014/807 State Aid Scheme 2014/332

Eligible costs Eligible costs

Construction of new buildings Salary costs registered for a 2 con-

Eligibility criteria for Eligibility criteria for

Minimum value: EUR 10 million To lead to the creation of 10 new

Eligibility criteria for companies Eligibility criteria for companies

Contributing to EU objectives and to sustaina-

Labor Law Regulation Overview Type of contract Details

Fiscal Policy Overview Direct taxes Corporate Income Tax

Large taxpayers Medium and small tax- Other considerations

Indirect taxes - VAT

Scope of VAT gular operations or call-off

Cost of Living Expat Community

Maintaining the same in Bucharest, you need a

Paris 4400 Euro 1738 Euro

Prague 57000 Czech Koruna 46580 Czech Koruna

Source: Numbeo, InvestRomania Source: National Institute of Statistics

Living in Romania International Schools