PROJECT BLACK SEA TRADENET
RODICA BELTEU – CONSTANTA CHAMBER OF COMMERCE, INDUSTRY, SHIPPING AND AGRICULTURE WORKSHOP DOBRICH, BULGARIA, 13-14 MARCH 2012
COUNTRY PROFILE
Official name: ROMANIA
Flag and coat of arms:
Legal system: Romania is a parliamentary republic. The Parliament represents the legislative power in the state. It is a bicameral 471-seat Parliament composed of the Senate (137 seats) and the Chamber of Deputies (334 seats). The Government, led by a prime-minister appointed by the president of the country, is the executive power.
Geographical location: Romania is located in the geographical center of Europe (southeastern of Central Europe), on the Black Sea coast. It lies on north of the Balkanic peninsula, inside and outside the Carpathian arch, on the lower Danube (1075 km) and by the Black Sea.
Frontiers: The length of Romania’s frontiers is of 3150 km, of which 1085.5 km are terrestrial frontiers, and 2064.5 km water frontiers. Romania shares a border with Hungary and Serbia to the west, Ukraine and Moldova to the northeast and east, and Bulgaria to the south.
Area: With a surface area of 238,391 km², Romania is the largest country in southeastern Europe and the twelfth-largest in Europe.
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COUNTRY PROFILE
Relief: Romania’s relief is composed of three main levels, namely the high level of the Carpathian Mountains, the middle level of the Sub-Carpathians, hills and plateaus, and the lowlands of plains, meadows and Danube Delta. These major relief forms are disposed in balanced concentric areas: 31% mountains, 36% hills and 33% lowlands.
Waters : The running waters are radial, most of them springing in the Carpathian Mountains. Danube is their main collector and it runs the southern part of Romania on a 1075 m length. Danube flows into Black Sea and forms Danube Delta, the second largest and best preserved delta in Europe, and also a biosphere reserve and a biodiversity World Heritage Site. The main rivers are Mures - 761 km, Prut – 742 km, Olt - 615 km, and Siret – 559 km. Of great economic importance, Black Sea – Danube Canal is a 64.2 km manmade canal linking Black Sea (Constanta) and Danube (Cernavoda), reducing the navigation way between Constanta Port and Cernavoda with 400 km. Lakes are mainly natural, spread on all major relief forms, from glacial lakes in the upper relief level, to river-maritime lakes.
Climate: Due to its position between open sea and in the edge of the European continent, Romania has a climate that is transitional between temperate and continental, with four distinct seasons. The average annual temperature is 11 °C in the south and 8 °C in the north.
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Natural resources: Romania enjoys important natural resources ranging from oil and natural gas, coal – mainly coal, brown coal, and lignite, large resources of salt, metal and non-metal minerals, gold, silver and primary aluminium (bauxite), wood and timber, important arable areas. Over 2,000 mineral springs for consumption and health treatment are also considered an important natural resource. Renewable sources for energy are also important, the wind potential of sea coastal territories being considered to be one of the highest in Europe, while the water energy is important on numerous rivers.
Oficial language: Romanian is the official language of Romania.
Time zone: Eastern European Time (UTC+02), Eastern European Summer Time (UTC+03)
Religion: 86.7% of the inhabitants are Orthodox Christian, followed by other Christian churches:Roman Catholic, Protestant, Pentecostal. Muslim church represents 0.3% of the total population.
Currency: Romanian currency is „leu” – „lei” in plural, wiht „ban” as subdivision. 1 leu = 100 bani.
Measuring system : The standard metric system has been adopted into 1884.
COUNTRY PROFILE
Administrative organisation : Romania is organised into several types of units that correspond to the European classification systems – Nomenclature of territorial units for statistics (NUTS). Thus, Romania is organised into 42 counties, including Bucharest, the capital town. They have legal identity and correspond to NUTS3 level. Counties have in average between 300,000 and over 700,000 inhabitants. At local level, the organisation is based on towns and municipalities (municipii) – 320 units, and communes and villages – 2861 communes encompassing 12,956 villages. Towns varies between 5,000 and over 1,000,000 inhabitants, most of them having 20,000 – 50,000 inhabitants, while communes varies between 1,000 and over 10,000 inhabitants, most of them 2,000 – 5,000 inhabitants. For development purpose, Romania has defined 8 development regions encompassing 2 – 8 counties (NUTS2 level) and macroregions encompassing 2 development regions each (NUTS1 level). They do not have legal identity. There are no autonomous regions in Romania.
National holiday and other legal holidays: 1st of December – the national holiday of Romania, celebrating the union of Transilvania and Banat historical regions (west of Romania) with the existing Romania, and thus, the unification of all Romanian into one modern state (1918). Six other national holidays are declared by law.
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History and civilisation Romanian civilization is one of the oldest civilizations in Europe, as human fossils of about 42,000 years old were discovered in the country. The oldest written record of people living in the geographical area of the present-day Romania is highlighted in Herodotus's book, where he mentioned about the Getae tribes.The Dacians were a part of Thracians, the inhabitants of the area between Northern Carpathian chain and the Balkan mountains. In the 1st century BC, the Roman Empire expanded its border and the Dacian kingdom became a Roman province. During the 3rd century, the Roman troops and administrative body left Roman Dacia in the face of possible attacks by the Carpian and Goth tribes. In the middle ages, the Romanians mainly inhabited Wallachia, Moldavia and Transylvania. During the 10th and 11th centuries, Transylvania became an autonomous part of the Hungarian kingdom. Wallachia and Moldavia came under the control of Ottoman Empire. In the 18th century, the Ottoman Empire witnessed a gradual decline and lost its former power and glory. The rise of the Russian and Austrian empires affected the political scenario of Romania, and Transylvania was captured by the Austrians, while later on, Bukovina, a part of Moldavia, and Bassarabia also came under the rule of Austria. The desire of the Romanians to form an independent nation gave birth to many revolutions in the three principalities. On January 24, 1859, Wallachia and Moldavia were united under the rule of Alexandru Ioan Cuza.
COUNTRY PROFILE
History and civilisation (continuation) Romania during World War I: in 1916, Romania entered World War I as an ally of France, Russia and United Kingdom, on the condition that after the war it would regain its authority over Transylvania. By 1918 the Austrian and Russian empires had collapsed; and hence, Bassarabia, Bukovina and Transylvania united with the Romanian kingdom, that led to the formation of Greater Romania. Romania during World War II: Romania joined the world war as an ally of Germany, and played an important role in the war as a source of oil for Germany. During the war, it lost many regions under the pressure of Germany and the Soviet Union. The country lost southern Dobruja to Bulgaria, northern Transylvania to Hungary, Bessarabia and northern Bukovina to the Soviet Union. In 1947, Romania came under the direct control of Soviet Union, and as a result communism was established in Romania. The Russians controlled Romania till 1958. The communist regime changed its policy, and in the 1960s, in the first years of Nicolae Ceausescu’s rule, the country - the Socialist Republic of Romania - was recognised for its pro-western views and good relations, while challenging the authority of the Soviet Union. Between 1977 and 1981, Romania's economic condition started to deteriorate and its foreign debt increased to a large extent. As a result, Romanian revolution took place in 1989, which brought an end to the communist regime. Romanians have succeeded in restoring democracy, stability, peace and order in the country. Now a days Romania is rapidly integrating with Western Europe, becoming a member state of the European Union in 2007. Romania is a pluralistic, multi-party state and a parliamentary republic.
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Socio-economic profile
Population and structure of population Romania had 21,431,298 inhabitants by 2010, July the 1st. Like other countries in the region, the population is expected to gradually decline as a result of sub-replacement fertility rates. The average age of the Romanians was of 39.7 years in 2010. Roughly half of the population is living in towns, 11.8 mil. persons, while 51.3% of the population are women, and 48.7% men. Romanians make up 89.5% of the population. The largest ethnic minorities are the Hungarians (6.6% of the population) and Gypsies (2.46% of the population).
Economic profile Before the global economic recession, Romania enjoyed almost a decade of steady economic growth, thanks to a strong demand in EU markets. From the 2008 great economic expansion, when a credit-fuelled consumption made Romania the EU’s fastest-growing economy, the country plunged into recession in 2009 when the GDP fell by more than 7%. This prompted the Government to seek multilateral support, including from the IMF, the European Commission and the World Bank Group. Austerity measures were implemented through 2010, yet the GDP contracted by another 1.9% in the same year. Analysts forecast a growth in GDP of 1.5% in 2011, followed by a growth of 4.4% in 2012.
COUNTRY PROFILE
Socio-economic profile (continuation)
Inflation: The inflation rate rose to 8 percent in December 2010, more than double the 3.4 percent forecast. IMF predicts that inflation will average 5.2% in 2011.
Budget Deficit: The administration plans to narrow the budget deficit to 4.4% GDP, in 2011, compared to the 7.8% in 2010, in line with its international borrowing agreements.
Structural Reform: The authorities are making progress on reforms of the labor market and of the social benefits system, which will improve its targeting and help mitigate the impact of the austerity package, approved in July 2010.
Unemployment: As key reforms in public sector are advancing and a unified wage law for the public sector was approved, the unemployment rate has begun to stabilize. At the same time, the creation of new jobs in the private sector is more difficult. Unemployment will be around 7% in 2011, according to the IMF’s forecast.
Exports: With consumer confidence and economic sentiment gradually improving and export- oriented industry continuing to grow, recent indicators suggest growth will turn positive early in 2011.
5 INSTITUTIONAL FRAMEWORK
Public institutions - The Romanian Public Administration is structured on two main levels: the central public administration and the local public administration.
Central institutions: Besides the Presidency, the central public administration consists in the Government of Romania that forms one half of the country's executive branch, the other half being the President. The Government is headed by the Prime-Minister, and consists of Ministries, various subordinated institutions and agencies, and 42 Prefectures. The Prime Minister leads the Government and coordinates the activity of its members, in compliance with their respective legal duties. Fifteen ministries form currently the Romania Government. Each ministry includes various entities under ministries’ subordination, coordination or their authority, such as national agencies, authorities, inspections, national companies, management authorities for operational programmes and national funding schemes, etc. All of them have very technical orientation, usually being of a great specialisation and playing regulatory and supervision roles in narrow sectors. International business relations and foreign investments are supported by several central administration agencies and authorities. The Government and a large number of ministries have decentralised and de-concentrated representatives, namely prefectures and directorate, in each of the 42 counties. Also, various national agencies and authorities have created local services, either in partnership with relevant entities, such as chambers of commerce and industries and business associations. The National Trade Register Office and Customs National Authority have local active services in each county.
INSTITUTIONAL FRAMEWORK
Local administration - consists in local councils, mayoralties, and county councils. According to the law, local and county councils are elected on the basis of the list system through direct suffrage, while mayors are elected on the basis of uninominal system in two rounds. Bucharest municipality is organized in 6 administrative-territorial subdivisions called sectors. Currently, there are 320 towns and 2860 communes in Romania, each of them with their own local council and mayor; also there are 41 counties and county councils.
Through their activity, companies and foreign investors come in contact with services provided by municipalities – the working unit of each mayor, and by county councils.
Private institutions and organisations: Private institutions and organisations relevant for companies and foreign investors are mainly dealing with supporting starting up and developing a company, interests representation at local and national level, as well as specialist services requiring a strong public involvement.
Thus, the Romanian chamber system is one of the most important support organisations for businesses. One local chamber of commerce and industry is located in each county, while the national chamber is located in Bucharest and has both a representation and mainstreaming role.
All economic sectors are organised into sectorial and sub-sectorial business organisations, united at national level into federations or national associations. Besides them, at local level, there are numerous smaller business associations, more or less active or involved in relevant actions.
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Legal base to register a business in Romania
A local business presence is essential to success in the Romanian market. This may take a variety of forms, joint ventures or companies registered in Romania, local agents or distributors that can contribute significantly by bringing knowledge of the market, industry experience, access to key contacts, and other resources.
Limited liability companies are the most popular businesses in Romania because of their simple administrative requirements, greater flexibility compared to other types of companies, and low capital requirement. However, joint stock companies remain an attractive option for investors which plan to list their companies on the stock exchange.
Legal base to register a company - There are no specific investment approvals required for setting up a business in Romania. The procedure requires fulfilling certain legal formalities such as registering with the Romanian Trade Registry and the Fiscal Administration. The general legal framework for registering a company initiated by a foreign entity refers to both the company itself, as well as to the registration process.
LEGAL FRAMEWORK FOR DOING BUSSINESS
Institutions to be approached: Several institutions may be relevant for starting a business in Romania, finding a partner and registering the company.
Searching and finding a business partner can be facilitated by the system of the Romanian Chamber of Commerce and Industry, by bilateral chambers of commerce and industry, Romanian Trade Promotion Center and Foreign Investment, the European network of Enterprise Europe Network in Romania, or diplomatic representatives of in Romania. Business associations are also capable of recommending and facilitating business contacts.
Preparation of documents, along with legal assistance and counselling, is provided by private consultancies and public institutions, such as the local Trade Register Offices and chambers of commerce and industry.
Registration is ensured solely by the Trade Register offices, located in each county, in the main town (capital of the county). Depending on the type of activity, on its degree of regulation, various additional permits and proofs may be required by the Trade Register.
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Forms of business cooperation and ventures
The establishment, functioning, dissolution, merge, division and liquidation of the commercial companies are regulated by Company Law No. 31/1990, republished. In order to develop trading activities, legal and natural persons may associate and establish commercial companies. Commercial companies with the head office in Romania are legal Romanian persons. The commercial companies regulated by the Romania legislation may be established in one of the following forms : • general partnership; • limited partnership; • joint stock company; • limited partnership by shares; • limited liability company (all are described in Atlas – Romania).
LEGAL FRAMEWORK FOR DOING BUSSINESS
The most common commercial companies are:
Limited Liability Companies (Societate cu raspundere limitata, S.R.L.)
A limited liability company is a company formed by a limited number of partners (no more than 50). It is based on the constitutive documents. The registered capital of a limited liability company cannot be less than 200 RON (Romanian currency). The registered share capital of a limited liability company is normally divided into social parts/shares with a registered value of not less than 10 RON. Shares cannot be freely traded, making limited liability companies similar to what are known as private companies in other legal systems. Shares of these companies cannot be pledged as collateral for loans. Decisions are made by majority vote in the General Meeting of the Shareholders (1 share = 1 vote). Decisions involving changes in the constitutive documents must be agreed by all shareholders if these documents do not state otherwise. One or more Directors/Managers are appointed in the constitutive documents or by the General Meeting and are put in charge of the management of the company. Limited liability companies may also be formed by a sole associate.
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Joint Stock Companies (Societate pe Actiuni, S.A.)
A joint stock company is a limited liability corporation with registered capital of a minimum of 25.000 euro, equivalent RON and with at least five shareholders. When an SA is established, at least 30% of the share capital, or 100% in respect of contributions in kind, must be immediately contributed upon formation of the company and all registered share capital must be fully paid up within twelve months of formation. Shares could be nominative shares or bearer shares and can be freely traded or pledged. A joint stock company may be set up privately or by public subscription. When a joint stock company is established by public subscription, a notarized prospectus must be drawn-up and filled with the Trade Register in the district where the head office of the company will be located. Decisions are made by a majority vote in the General Meeting of the Shareholders (each share represents one vote). General Meetings can be ordinary meeting, called at least once a year or extraordinary, called when needed to make decisions involving changes in the Memorandum of Association. Meetings require a quorum of ¾ of the shareholders and a simple majority vote of the quorum is required to approve changes in the Memorandum of Association. The management of a joint-stock company is assumed by a Council of Administration (Board of Directors), although it is possible to have only one Administrator.
LEGAL FRAMEWORK FOR DOING BUSSINESS
Branches, Subsidiaries and Agencies of Foreign Companies
A foreign company can do business in Romania through a subsidiary, agency or a branch. While a subsidiary has a legal personality and is considered a Romanian entity, the branch is just an extension of the parent company and therefore has no legal personality and no independence. Agencies are established and operate authorized by Ministry of Foreign Affairs and undertakes on behalf of the parent companies only transactions and activities which are consistent to its authorized object.
Requirements for registering a company
General partnerships and limited liability partnerships are set up through a contract of company. Joint-stock company, limited partnerships with shares or limited liability company are set through a contract of company and a statute , which might be concluded as a sole document called Articles of Incorporation. The Articles of Incorporation shall be signed by all associates or in case of public subscription, by the founders and will be concluded in authentic form. The signatories of the articles of incorporation are considered founders.
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Registration of Commercial Companies Checking the availability and booking the company’s name is the first step to registering a company. Within 15 days from the date of authentication of the Articles of Incorporation, the founders or the administrators of the company or an attorney-in-fact of theirs will request the incorporation of the company in the Commercial Register in the area where the head office of the company will be located.
The registration taxes depend on document’s complexity and volume. Additionally, extra costs will be charged if the Trade Register provides the legal assistance for preparing the documents. A minimum of 800-1000 euro may be taken into account for a limited liability company.
The registration period provided by the law for registering companies is 3 days from the day the request has been submitted. In the same period the trade register office issues the registration certificate containing the unique registration code. In general terms, the preparation and registration of a company takes 14 days in average .
LEGAL FRAMEWORK FOR DOING BUSSINESS
Operation of a company requires permits and approvals , depending on its declared activity: • General permits for all types of activities include an operational authorisation and daily schedule approval issued by the local municipalities. • Specialised permits are imposed by regulatory frameworks specific for such domains as environment, public health, sanitary – veterinary and food safety, fire fight, transportation, use of certain equipments and installations, quality in tourism services. The more complex the activity is, more regulations apply and, thus, more complex starting the operation of a company is. Most of the mentioned specialised regulations are to be taken in consideration when building a new construction or modernising/extending an existing one, and equipping it, as they refer to technical solutions and/or requirements. In order to fulfil all these regulations, it is strongly recommended to search for qualified counselling and assistance, legal, technical and architectural services should be enough.
When building any construction in Romania, a legal building permit is required, proving that the new building or the extension/modernisation of an existing one meet the legal framework for construction activity, meet the legislation in such domains as the environment, do not disturb underground networks, or have included solutions for them, include solutions for power feeding, water and sewage, etc.
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General consideration and framework
Romania actively seeks direct foreign investment, while its marketplace offers 21.5 million consumers, a well-educated workforce, a strategic geographical location, and abundant natural resources. To date, favoured areas for foreign investment include IT and telecommunications, energy, services, manufacturing, and consumer products.
Relevant institutions for facilitating foreign investment initiatives include: Romanian Centre for Trade and Foreign Investment, National Trade Register Office, National Association of Romanian Exporters and Importers (ANEIR), Foreign Investors Council.
Incentives
The National Agency for Fiscal Administration (NAFA) is the specialized institution of the Ministry of Public Finance which is designed to provide the resources for public expenditure and administration of the state. NAFA also coordinates the Financial Guard, the National Customs Authority, county and Bucharest public finance directorates. Taxation in Romania is governed by the Tax Code, its last review being conducted in August 2011. Fiscal policy in Romania is marked by government commitments to the implementation of the Stand-By Agreement with the IMF. In this context, tax incentives remain low in number and scope.
INVESTING IN ROMANIA
Incentives - the Tax Code provides some facilities in 2011, such as: • non-taxation of dividends received by a Romanian legal person, parent company from its subsidiary located in a Member State; • exemption from income tax under certain conditions; • deductions for research and development expenses; • tax-exempt dividends received by permanent establishments in Romania of foreign legal persons from other Member States parent companies; • tax credit; • special scheme for VAT exemption for small enterprises; • VAT exemptions for some operations inside the country; • exemptions of VAT for exports or other similar operations for intra-Community supplies and intra-and international transport; • special VAT scheme for travel agencies; • special VAT scheme for second-hand goods, works of art, collectors' items and antiques; • measures to simplify the application of reverse charge.
Additionally, tax and customs privileges are available in six free zones in Romania, located in Constanta South - Basarabi, Braila, Galati, Sulina, Giurgiu and the Court - Arad.
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Competition policy
In line with the Constitution, the Romanian economy is a market economy, based on free initiative and competition. According to these provisions all development policies should promote competition in the context of a sustainable development.
Legislative Framework and Provisions
Romania’s competition regulations are well harmonized with similar EU rules. As a result, granted state aid shall be notified to and authorized by the relevant department of the European Commission (EC), and the Romanian Competition Council acts only as a liaising authority between state aid providers, beneficiaries, and EC.
The Romanian Competition Council remains responsible for monitoring the competitive behaviour of businesses on the Romanian market, collusions between competitors in the Romanian market, and the growth of market structures (mergers and acquisitions). Collusive arrangements and anti- competitive agreements between competitors are strictly forbidden, but mergers and acquisitions are permitted provided these do not hinder free competition in the market.
INVESTING IN ROMANIA
State Aid The established priorities are to be supported through state aid measures compatible with the Romanian and EC legislation, respectively measure which can be framed under the following state aid definitions: • Regional aid : creation of a new enterprise, extension of an existing one, diversification of production, introduction of new products/services, fundamentally changing the overall production process within an existing enterprise, etc. • Aid for SMEs : partial coverage of the operating costs during the first years of existence, specialised consultancy services for business development offered at preferential tariffs, risk capital, etc. • Aid for research and development : investments in instruments, equipments, land, buildings, employment of specialised personnel, covering costs related to consultancy services in the field of R&D, etc. • Aid for environmental protection : investments in improving the environmental protection standards; preventing and restoring the damages caused to the environment or to the natural resources; energy saving; producing energy from renewable sources; sustaining the production of energy in combined heat and power installations etc. • Employment aid : investments required for adapting the employer’s premises in order to make possible the recruitment of disabled persons, partial coverage of costs related to the employment of new persons; partial or total exemption from the payment of certain taxes and social contributions related to the disabled persons, newly employed.
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• Training aid: general training providing qualifications which are largely transferable to other firms or activities. • Aid for rescue and restructuring firms in difficulty : when justified by arguments of social or regional policy or by the need to take into consideration the positive role of SMEs or, exceptionally, when there is an interest to maintain certain undertakings on a given market structure so to avoid a monopoly or a narrow oligopoly. • Aid in the form of risk capital : this type of aid aims at correcting some failures of the financial markets as concerns their capacity to provide the required capital, especially for start-ups and undertakings operating in the field of high technologies. • Aid for compensating net losses generated by the provision of services of general economic interest: ensures the provision of quality essential services, in sufficient quantities and at reasonable prices, for all citizens, irrespective of their geographic positioning. • Aid under the “de minimis” threshold : the amounts granted cannot exceed the EUR 200,000 ceiling over a 3-year period, or 100,000 for transport field, and cannot be used for subsidising the export. • Sectorial aid : in sectors considered to be sensitive, such as: coal industry, steel sector, synthetic fibres industry, motor vehicles and shipbuilding industries, agriculture and fishery, air and maritime transport sectors. Currently, The National Network for State Aid created and animated by the National Competition Council, offers support and additional information on state aid schemes and ad-hoc state aid .
INVESTING IN ROMANIA
Human ressources
Romania has traditionally offered a large, skilled labour force at comparatively low wage rates in most sectors, although the labour pool has tightened in highly skilled professions, despite growing unemployment overall. The university system is generally regarded as good, particularly in technical fields. The quality of work of Romanian craftsmen, engineers, and software designers is well regarded by foreign managers. With appropriate on-the-job training, local labour performs well with new technologies and more exacting quality requirements. However, labour shortages have appeared in certain sectors, resulting in strong upward pressure on wages in recent years. Outward labour migration and the number of students graduating without the practical skills needed for the modern workplace are considered the main causes for this trend.
Labour Code has been revised in the beginning of 2011 (Law 40/2011), balancing employees’ right with employers’, and allowing employers to dismiss as well as hiring easier.
Unemployment officially stood at 4.93% in the end of October 2011, representing 444,000 persons, in a slow increase after a steady drop between January – July 2011 and even compared to 2010 .
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Land and building property rights
The Romanian Constitution, adopted in December 1991 and revised in 2003, guarantees the right to ownership of private property. Mineral and airspace rights, and similar rights, are excluded from private ownership. Under the revised Constitution, foreign citizens can gain land ownership through inheritance. Citizens of EU member states can own land in Romania, subject to reciprocity in their home country.
Companies owning foreign capital may acquire land or property needed to fulfil or develop company goals. If the company is dissolved or liquidated, the land must be sold within one year of closure, and may only be sold to a buyer(s) with the legal right to purchase such assets. For a period of seven years after Romania's accession to the EU, foreign investors may not purchase agricultural land, forests, or forestry land (except for farmers acting as commercial entities). Investors can purchase shares in agricultural companies that lease land in the public domain from the State Land Agency.
INVESTING IN ROMANIA
Intellectual and industrial property rights - Romania is signatory to international conventions in the intellectual property field, mainly the Paris Convention, the Berne Convention and TRIPS Agreement. Legislation for all intellectual property objects is fully harmonized with the Community regulations and the international treaties and conventions. Industrial property - The State Office for Inventions and Trademarks OSIM is the national administration in charge of granting protection for inventions, trademarks, geographical indications, industrial designs and others, in the territory of Romania, under the law and the provisions of international conventions and treaties to which the Romanian State is party. An invention may be protected in Romania according to the national legislation, or by the grant of a European patent with effect in Romania, according to the European Patent Convention. Copyright – Romanian legislation on copyright and related rights law is compatible with all the Conventions and all the Treaties to which Romania had accessed and to the first five European Directives which were into force at the moment of the promulgation of the Romanian law. The Copyright Office of Romania (COR) is the unique specialized national authority for settlement, administration of national registers, supervising, authorizing, arbitration and technical and scientifically expertise in the domain of copyright and related rights. Counterfeit - While problems persist in protecting IPR from counterfeit products, OSIM, law enforcement, and private groups have increased their efforts to combat counterfeiting while informing the business community of how best to protect and enforce IPR protections. Protection of Intellectual Property Rights during Customs Procedures - Intellectual property rights holders may apply to the Customs Authority requesting action against goods infringing their rights. Goods infringing an intellectual property right may not be imported, exported, or re- exported and may be placed under a suspension.
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Public procurement - The regulatory framework of public procurement in Romania, harmonized with the European legislation is marked by frequent and extensive changes. The legislation applies equally to all contracting authorities, and other categories of beneficiaries, which are imposed in the context of the use of public funds.
Currently, public procurement procedures are as follows: • Open tender is a procedure in which any company has the right to submit an offer; • Restricted tender is a procedure in which any company can apply as a candidate, but only those selected will be invited to submit tenders; • Competitive dialogue is a procedure in which any company is entitled to apply as a candidate, the contracting authority will organize a dialogue with the candidates selected to identify the most appropriate solutions. Solutions based on the selected candidates will submit offers; • Negotiation is a procedure in which the contracting authority is launching consultations with selected candidates and negotiate contract terms with one or more candidates; • Request for offers is a procedure whereby the contracting authority request bids from several operators; • Competition solution is a special procedure used to purchase a plan or project, and selection is assigned to a panel of judges.
The ceiling the public procurement legislation does not apply in Romania is EUR 15,000.
EXPORT AND IMPORT ACTIVITIES
Movement of goods and services, regulatory frame
Beginning with July 1, 2009 customs or other authorities designated by the member states have provided businesses with a unique registration and identification number (the EORI number) to be used for all customs activities they undertake within the European Union.
The Customs Authority is the Romanian authority in charge of regulating and supervising this domain.
The Customs Office requires standard documents for release for free circulation. The import SAD (Single Administrative Document) which also applies to exports must be submitted for acceptance and registration to the Customs Authority supported by the following documents accompanying the customs declaration for release for free circulation: - the invoice on the basis of which the customs value of the goods is declared; - where it is require, the declaration of particulars for the assessment of the customs value of the goods declared; - the documents required for the application of preferential tariff arrangements or other measures derogating from the legal rules applicable to the goods declared; - all other documents required for the application of the provisions governing the release for free circulation of the goods declared.
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Tariff and non-tariff barriers
Since January 1, 2007, Romania has applied the common EU tariff system. Tariffs are particularly high for certain items, such as cigarettes and alcohol. The Romanian Customs Code presents certain conditions to undertake import activities.
Standards of products and services to be introduced on the market
The Romanian Standards Association (ASRO) is the only National Standards Body in Romania, a specialized private body of public interest in the standardization area, a non-profit association authorized by the Government. The Romanian Standards Body is a full Member of the European standards organizations, CEN and CENELEC.
The National Standardization Program is issued annually and is available on internet at: http://www.asro.ro/ – the Standardization section, together with free access for the standards users to all the standardization products and services. All Romanian standards are voluntary. All products tested and certified in the non-member state are likely to have to be retested and re- certified to European Union requirements as a result of the EU’s particular approach to the protection of health and safety of consumers and the environment. Where products are not regulated by specific EU technical legislation, they are always subject to the EU’s General Product Safety Directive as well as to possible additional national requirements.
EXPORT AND IMPORT ACTIVITIES
Conformity Assessment
Conformity assessment is a mandatory step for a manufacturer to comply with specific Romanian legislation. The purpose of conformity assessment is to ensure consistent compliance during all stages of the production process. Romanian and EU product legislation gives manufacturers some choice in conformity assessment, depending on the level of risk involved in the use of their product. These choices range from self-certification, type examination and production quality control system, to a full quality assurance system. Conformity assessment bodies in Romania are companies, RTD institutes, universities and other entities, a total of 35 entities.
Product Certification - In order to sell products on the Romanian market, as well as on the EU, Norway, Liechtenstein and Iceland, exporters are required to apply CE marking whenever their product is covered by specific product legislation.
Accreditation - Independent certification bodies, known as notified bodies, have been officially accredited by competent authorities to test and certify to EU requirements. Accreditation is handled at Romanian level, by Romanian Accreditation Association.
Labelling and Marking - Romania has adopted various EU mandatory and voluntary labelling schemes, all regulated and supervised by the National Authority for Consumer Protection which publish the legislation in force concerning labelling. Romania imposes that all labelling should include the Romanian version.
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Trade Agreements - Romania has signed a significant number of bilateral Double Tax Agreements (DTAs). The Double Tax Agreements prevail over domestic legislation, provided that a certificate confirming the foreign fiscal residency of the taxpayer is presented to the Romanian tax authorities. Companies based in countries with which Romania has signed DTAs benefit from a reduced level of withholding taxes. The Fiscal Code provides for a significant simplification of taxation procedures as well as for harmonization with European Union fiscal practices.
Taxation – clearing, VAT
The country is fully integrated with EU customs, excise tax, and VAT transfer systems. Tax flat rate is 16% (profits, capital, dividends, etc.)
Distribution and Sales Channels - Distribution of goods and services in Romania is similar to other European countries. Wholesale and retail tiers, and support services such as packaging, warehousing and merchandising, are fully developed in Romania. Retail outlets, franchisees, and value added resellers serve as channels for the provision of services ranging from mobile phone service, consulting or software and IT. Romania’s range of retail outlets includes specialty shops, supermarkets, hypermarkets, cash and carry, department stores, gas station convenience stores, and do-it yourself shops, kiosks, street vendors, open-air markets and wholesale centres.
EXPORT AND IMPORT ACTIVITIES
Pricing - Pricing structures in Romania are similar to those used in most other countries: prices are increased by wholesale and retail mark-ups as well as by taxes, especially the Value Added Tax (VAT) that climbed from 19% to 24% as of July 2010. Product pricing is influenced primarily by existing competition in the Romanian market, as well as by the liquidity of the market. Common consumer goods are price-sensitive, and competition can be fierce, as local producers compete with products from China, Southeast Asia and Turkey. In the case of higher quality goods, the reputation of a brand - as well as technical specifications or length of warranties – can command a price premium in the market. Romania had an inflation rate of 8% in 2010. Increases in food prices (+0.73%) and fuel prices (+2.82% for total fuels, and +4.0% for gasoline) were additional drivers of overall inflation. The NBR envisions inflation to 3.3% by the end of 2011, and 3% in 2012 .
Sales Service/Customer Support - The concepts of after-sales customer service and support are still developing among Romanian businesses, but large multinationals are providing leadership in this area. As a consequence, Romanian consumers are increasingly sensitive to the quality of aftersales services in making their buying decisions.
17 EXPORT AND IMPORT ACTIVITIES
Sources of Financing Business Activities - Public sources (EU, international, national)
Initial investments in business start-ups and developed The most of the state-aid schemes refer to “initial investment” that is a project for new production/service units, extending existing units in order to produce/offer new products or services or products/services in a new range..
Very few schemes finance “start-up companies”, as risks related to a new business are much higher and require additional measures: - The National Programme for Rural Development - agricultural, tourism and non-agricultural activities in rural areas - POSCCE programme - companies created to transpose into production a RTD result - Environmental Fund – environmental–related projects for renewable energy, environmental- friendly industrial approaches in industrial activities or for treating waste waters.
These schemes are not specially designed for start-ups, and they also finance existing companies.
EXPORT AND IMPORT ACTIVITIES
Existing companies , with a stable activity and, generally, with positive financial results at least in the last fiscal year, are financed by several European and national schemes: - Sectorial Operational Programme Increase of Economic Competitiveness– investments up and above 250.000 euro for SMEs, investments in large enterprises (additional support addresses training and consultancy needs, going international, and implementing international standards). - ROP – development of micro-enterprises. - The National Programme for Rural Development - agricultural, tourism and non-agricultural activities in rural areas - Environmental Fund - State-aid scheme for regional investments, sustainable development, environmental projects, and other schemes, all coordinated by relevant ministries. - De minimis scheme, financing a large range of enterprises, economic activities and types of projects.
Research and innovation - Research and innovation in industry are financed by both EU and national programmes, either as a direct aid – national programme, or through cooperating with RTD entities such as RTD institutes and universities. EU sources: SOP IEC – special axis addressing RTD project of enterprises, in cooperation with RTD structures, or in order to create poles of excellence. National sources: the National Programme for RTD – addressing RTD project of enterprises or developed in cooperation with RTD structures
18 EXPORT AND IMPORT ACTIVITIES
Human resources development - Three types of schemes operate in Romania to develop human resourses in companies: - two schemes addressing direct qualification and training (the difference is made by the result of the project: either qualification or specialisation/further training for qualified staff), and - the third scheme addressing health and safety issues. Indirectly, companies may benefit of human recourses development by participating into such project developed by public or private training providers, universities, chambers of commerce, etc.
Private sources, including bank loans Private sources for financing businesses are mainly represented by Investment Funds, large NGOs involved into supporting certain disadvantaged areas, and, most numerous, by loan schemes developed by banks. NGOs involved into supporting certain disadvantaged areas, e.g. World Vision Foundation financing small scale rural investment projects for local farmers. Banks: all banks operating in Romania have developed several types of financing instruments, for current activity, investment projects, and schemes to support companies accessing European funds.
ENTREPRENEURIAL CULTURE
Enhancing the competence through innovation, especially technological innovation and new business schemes - Entrepreneurial initiative is stimulated in Romania through several programmes financing the creation of new businesses. The funds financing such new businesses are currently aiming at stimulating the innovation-based start-ups and spin-offs, and population of rural area with non-agricultural enterprises that might diversify the skills and abilities.
Lifelong learning - In the recent years, great consideration was given to the reinforcement of the initial education and training contribution in providing employability competences to their future graduates. Entrepreneurial education is part of the compulsory curriculum in gymnasium education. In case of university education, entrepreneurial education is less coherent and systematic compared to pre-university education, as well as compared to the experiences and practices of other Member States. The public and private market is offering training courses for adults of management, marketing, basic competencies such as communication, team working, leadership, etc. ensures the needs for such skills and abilities: universities, chambers of commerce, training and consultancy companies, business associations and other relevant organisers.
Corporate responsibility - Corporate social responsibility (CSR), as a concept, is becoming increasingly common in Romanian business, driven primarily by multinational companies infusing their corporate culture into the local market. Virtually all foreign enterprises in Romania have some kind of CSR program, and most follow generally accepted CSR principles.
19 LOCAL RESOURCES FOR CROSS BORDER BUSSINESS COOPERATION
Main economic sectors of cross border interest
Romania is a market with great potential, a strategic location, and a business environment that offers good opportunities. After several years of strong growth, Romania slumped into a deep recession in 2009 with GDP contracting by more than 7%. The contraction moderated in 2010 to minus 2% of GDP, and most forecasts see a gradual return to growth of 0.5% to 1.5% in 2011, positive but still lagging behind most of the European Union. Forecasts for succeeding years are more encouraging, as most predict the rate of economic growth to accelerate further.
As a relatively new (2007) EU member, Romania offers a sizable domestic market and a comparatively low-cost foothold for accessing the EU market. Much of the foreign investment in retail and some manufacturing has been based on these two elements. In addition to this larger market, Romania’s membership makes it eligible for billions of euro in EU grant funding.
Based on market analyses, the national authorities and several important foreign economic missions in Romania recommend the following sectors as being an opportunity for foreign companies : agricultural machinery and equipment, automotive market, energy, environmental technologies, healthcare, information technology, packaging and packaging waste.
LOCAL RESOURCES FOR CROSS BORDER BUSSINESS COOPERATION
Local products and services of cross border interest
Constanta County economy seize its competitive and natural advantages that it already has or has developed over time: over 70 km of opening the Black Sea and Danube opening Danube - Black Sea that links the various tourist resources (beaches, spa background, cultural and historical heritage, protected areas), flat agricultural land, favourable conditions for viticulture, labour large, broad and diversified educational framework, dynamic business environment.
Main groups of products exported : fuels and mineral oils, ships, boats and floating structures, iron and steel.
As regards imports, the highest values recorded for Constanta County: fuels and mineral oils; boilers, turbines, engines, machinery and mechanical appliances; machinery, electrical equipment and parts.
Sectors with internationalization potential of Constanta: shipbuilding, metals and logistics; renewable energy investments; automotive, mining and transport; business services and information technology, shipping activities; seaside hotel business ; furniture production; construction sector.
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