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As the global market becomes more interconnected, companies are constantly on the lookout for opportunities to expand their business operations. Romania, with its strategic geographical location, talented workforce, and lower operational costs, presents itself as an attractive destination for international companies.
Romania is nestled in Southeast Europe, at the crossroads between the East and the West, offering easy access to both European and Asian markets. This strategic geographical location provides excellent logistical opportunities for companies looking to increase their footprint.
The country also boasts a highly talented and skilled workforce. A significant portion of the Romanian population is well-educated, with many speaking multiple languages. Moreover, Romania has made a name for itself in the IT and engineering sectors, known for its high-quality services and creative solutions.
Furthermore, the cost of living and labor in Romania is relatively lower compared to many Western countries. This factor enables companies to achieve considerable cost savings while maintaining high-quality output. In essence, Romania offers a perfect blend of affordability and quality.
To create successful working relationships in a new country, understanding the local culture is critical. Romania, with its unique Eastern European culture, is no different.
Romanians value respect for hierarchy and authority. Therefore, it’s crucial to acknowledge and incorporate this into your management and communication style. Decisions are often top-down, and employees expect clear instructions from their managers.
Romanians also put a premium on relationships. Hence, cultivating personal relationships with your Romanian employees can go a long way in ensuring smooth collaboration. Investing time in getting to know them personally will be appreciated and will often translate into loyalty and high productivity.
Furthermore, while Romanians are often open to new ideas and solutions, it’s important to be patient and allow them the time to adjust to new ways of doing things.
Expanding into Romania, like any other country, comes with its own set of legal considerations. Understanding these requirements is crucial to avoid potential legal issues.
It is important to consider what the best legal structure for your Romania expansion is. The most common options are establishing a Romania subsidiary, registering a branch there, and using an EOR or PEO solution.
The employment relationship in Romania is governed by the Labor Code. This code stipulates the minimum rights of employees, including working hours, vacation time, notice periods, and termination procedures. The standard work week in Romania is 40 hours, spread over five days, and employees are entitled to a minimum of 20 days of vacation annually.
Employment contracts must be drafted in writing and registered with the local labor inspectorate before the employee begins work. The contract should clearly outline the job description, salary, working hours, and other essential conditions of employment.
If you’re planning to hire non-EU citizens, additional steps will be required. The employer must obtain a work permit from the Romanian Office for Immigration. This can be a complex process, so it’s advisable to consult with a legal expert to ensure compliance with immigration laws.
The most common options for Romania expansion are:
The SRL is the most common vehicle for foreign investors in Romania. It requires at least one shareholder, who may be an individual or a company, and the minimum share capital is just RON 1 (around €0.20). Liability is limited to the shareholder’s contribution, and the structure is flexible, making it ideal for small to medium-sized enterprises.
The SA is better suited for larger businesses, capital-intensive projects, or regulated sectors. It requires at least two shareholders and a minimum share capital of RON 90,000 (about €18,000). This structure allows for the issuance of shares and is often used when a company intends to list or attract significant investment.
A branch is not a separate legal entity but an extension of the foreign parent company. It must be registered with the Romanian Trade Registry and can carry out commercial activities, though the parent company remains fully liable for its obligations.
This form is limited to non-commercial activities such as marketing, promotion, or liaison functions. It cannot generate revenue directly and requires an annual authorization fee, making it useful mainly for market research or building brand presence.
Romania also allows for partnerships, such as the General Partnership (SNC) or Limited Partnership (SCS). These are rarely chosen by foreign investors because they expose partners to unlimited liability and offer fewer advantages compared to SRLs or SAs.
For companies that want to test the Romanian market or hire quickly without setting up a local entity, an EOR or Romania PEO arrangement can be an efficient option. The Romania EOR legally employs staff on behalf of the foreign company, taking care of payroll, contracts, and compliance. This avoids the upfront costs and administrative burden of incorporation, making it a practical short- to medium-term solution for market entry or building a small local team.
In essence, the choice largely depends on your needs, resources, and long-term plans in Romania.
Expanding operations and hiring employees in Romania offer numerous benefits for international companies, including access to a skilled and multilingual workforce, lower operational costs, and a strategic location. However, understanding cultural nuances and legal obligations is crucial for successful hiring and integration. The choice between direct hiring, PEO, or EOR depends on your business’s unique needs and circumstances. By taking these considerations into account, you can make informed decisions and tap into the potential that Romania offers.
To learn more, get in touch with our Romania expansion experts.
The average salary in Romania varies widely depending on the sector, the level of experience, and the geographical location. The average salary in 2023 was $8,980 RON (Romanian leu) per month, or 108,000 RON per year. However, in sectors like IT and engineering, the salaries can be significantly higher. Always check the most recent statistics for an accurate figure.
Not necessarily. You can hire employees in Romania through a Professional Employer Organization (PEO) or an Employer of Record (EOR) without establishing a legal entity. However, if you plan to have a significant presence or want complete control over your operations, establishing a legal entity might be beneficial.
