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Doing Business in Romania
  • By Travis Kliever
  • Updated March 8, 2024
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Travis Kliever
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Travis is a global business development advisor. He has spent the last 14 years supporting business establishment and development in North America, Southeast Asia, and throughout the world. With multiple degrees from the University of Oregon, Travis currently splits his time between the US, and Bali, Indonesia. At RemotePad, Travis writes about remote work, hiring internationally and PEO/EOR business models.
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Doing Business in Romania

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Key Takeaways

  • The strategic geographical location, talented and skilled workforce, and lower operational costs make Romania an attractive destination for international companies looking to expand or outsource.
  • Understanding Romanian culture, respect for hierarchy, and communication style are key cultural considerations for effective hiring and collaboration.
  • Legal considerations, including employment contracts, work permits for non-EU citizens, and compliance with local labor laws, are paramount when hiring in Romania.
  • The choice between direct hiring, PEO, or EOR depends on the size, resources, and needs of your organization.

Why Should International Companies Hire Employees in Romania?

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.

What Are the Important Cultural Considerations when Hiring Employees in Romania?

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.

Romania Business Guides

What are the Important Legal Considerations when Hiring in Romania?

Hiring in Romania, like any other country, comes with its own set of legal considerations. Understanding these requirements is crucial to avoid potential legal issues.

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.

What is the Best Method for Hiring Employees in Romania?

The choice between direct hiring, using a Professional Employer Organization (PEO), or an Employer of Record (EOR) largely depends on your organization’s size, resources, and specific needs.

Direct hiring involves managing the hiring process yourself, giving you complete control over the process. However, it requires a thorough understanding of the Romanian job market, labor laws, and cultural nuances.

PEO is a co-employment model where you share the employment responsibilities with a local entity. The PEO handles HR tasks like payroll, benefits, and compliance, allowing you to focus on your business. This model is suitable for small to medium-sized businesses looking to test the waters before fully committing.

An EOR, on the other hand, employs the staff on your behalf. They are responsible for all HR-related tasks, legal compliance, and employee liabilities. This model is particularly useful for companies that want to quickly establish a presence in the country without setting up a legal entity.

In essence, the choice largely depends on your needs, resources, and long-term plans in Romania.

Conclusion

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.

FAQs

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.

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