international employment law firm alliance L&E Global

Starting a business in Romania

1. Introduction

The social and economic context of recent years and the development in technologies that allow more flexible business models, with employees working from everywhere, has resulted in a greater number of companies wanting to be present in the Romanian market. Foreign companies can access specialised workforce in a range of industries by establishing local entities. As more international companies are interested in opening up shop in Romania, we understand the need to ensure quick access to doing business in Romania and an efficient guideline to the entire process. Companies established in Romania are subject to general EU regulations as well as to national law and having a simple checklist of legal requirements will allow companies to begin doing business in Romania in a more efficient way.

Magda Volonciu & Associates is a Bucharest-based Romanian labour and employment boutique law firm offering premium specialised labour and employment consultancy, assistance and representation. Our law firm has an excellent reputation in the national and international markets, having been acknowledged as the best law firm specialised in labour law and industrial relations (relation with the unions) in Romania, due to its professionalism, seriousness, devotion and team spirit that characterises the activity of the law firm. We have extensive expertise in drafting organisational documents necessary for setting up a company in Romania and can provide the necessary tools for operating efficiently in a new market.

2. Labour and Employment Law Requirements

a) Employer Policy Requirements

In order to be legally compliant, employers are required by legal provisions to draft an Internal Regulation with a minimum mandatory content. Also, a number of employment policies and procedures might be necessary or required by authorities depending on the type of activity conducted by the company. The internal regulations, employment policies and documents will help an organisation manage employee relations and mitigate the risk of legal liability in the future.

It is mandatory for all employers to draft an Internal Regulation that will include the company’s internal rules on:

  • the protection of health and safety at the workplace;
  • the manner in which the employer understands to implement the principle of non-discrimination;
  • the rights and obligations of both the employer and the employees,
  • the procedure to be followed in order to resolve amicably individual disputes, requests or claims made by the employees;
  • the work discipline;
  • the disciplinary offences and sanctions;
  • the disciplinary inquiry procedure;
  • the manner in which other legal or contractual provisions are applied within the company;
  • the criteria and the procedure to be followed for the general evaluation of the employees;
  • notice periods;
  • the general policy on professional training, if such policy exists.

In order to conduct specific activities the employer might need to obtain authorisations from national or local authorities. Internal procedures or policies regarding health and safety or data protection might also be required.

The companies are advised to create additional policies, internal procedures and working instructions on the company’s rules on things like the protection of women at the workplace, use of company cars, use of company computers and information, access to restricted areas, use protection equipment etc. These policies will help an organisation manage employee relations and mitigate the risk of legal liability in the future.

b) Employee Training Requirements

All employees must receive health and safety training at the beginning of the activity and at specific times and occasions. The training is done internally, usually by supervisors for their subordinates. Supervisors have to be trained in order to train the other employees. Depending on the type of activity and the number of employees a safety officer for the entire organisation has to be employed. The safety officer has to be properly trained for this position. It is possible to outsource the health and safety training activity to specialised individuals or service providers.

Employers are required to ensure that all the employees attend training programs once every 2 years if the total number of employees is under 21 and once every 3 years if the total number of employees is above 21. The employers have to bear all costs of the mandatory training programs. Training can be done internally or by contracting service providers.

All employers that have more than 20 employees are required to have in place an annual training plan that will be drafted with union or employees’ representatives’ consultation. If a collective employment agreement is in place, the training plan will become its Appendix.

If the employer has the initiative of a training program bearing the costs for this program, the employee cannot have the initiative to terminate the employment for a period to be established by addendum to the employment agreement of the employee.

Professional training at the beginning of the employment provided by the employer is not mandatory.

For certain positions employees might be required by law to undergo specific training in order to obtain or extend an authorisation.

c) Employment Agreements

Employment agreements have to be signed and registered at least one day prior to the actual commencement of the activity. The employment agreements need to be drafted in writing at least also in Romanian. The employment agreements can be drafted, signed and stored by electronic means if both parties agree to this. The employment agreement has a mandatory minimum content established by the Labour Code. It needs to include references to:

  • the identity of the parties;
  • the place of work or, in the absence of a fixed workplace, the possibility for the employee to work in different places and information on if the employer will provide transport between the workplaces or will bear the costs of the transport;
  • the employers headquarter or domicile;
  • the position/occupation according to the specification of the Classification of Occupations in Romania or other normative acts, as well as the job description, specifying the duties of the position;
  • the criteria for evaluating the professional activity of the employee;
  • job-specific risks;
  • the date the agreement is to come into effect;
  • in the case of a fixed-term employment contract or a temporary employment contract, their duration;
  • the number of vacation days the employee is entitled to;
  • the notice duration and conditions for both parties;
  • the salary, other components of the remuneration detailed separately, the periodicity of salary payments and the method of payment;
  • normal working hours in hours/day and/or hours/week, the conditions under which overtime will be performed and compensated and, if the case, the manner in which shift work is implemented;
  • the collective employment agreement applicable at the time of the employment
  • the duration of the probation period and the manner in which this period will function;
  • the procedure for the use of electronic signatures;
  • the right and the manner in which the professional training is organised by the employer;
  • if the employer will bear the costs of private medical insurances, contributions to private pension funds or will grant other financial benefits to the employees.

The negotiation of collective employment agreements is mandatory for employers with more than 10 employees however the signing of the collective employment agreement following these negotiations is not mandatory. We have extensive expertise in drafting both individual and collective agreements.

3. Corporate Law Requirements

a) Compliance for Incorporation

In order to incorporate a company in Romania, the following steps and requirements need to be observed:

  • drafting the articles of incorporation and the statute of the company;
  • defining the organisation’s capital structure;
  • establishing a headquarter and a representative;
  • registering to the Commercial Registry. The Commercial Registry will check the articles of incorporation the statute and the availability of the name chosen and can reject the request for registration;
  • obtaining the fiscal code and the registration number in the Commercial Registry;
  • opening a representative bank account;
  • registering the intellectual property the company has and intends to use, when it is necessary in order to conduct the activity.

Our firm can put you in contact with specialised professionals in order to ensure the timely and correct incorporation.

b) Post Incorporation Registrations

Post incorporation registration includes filings for tax purposes that can be done either by an employee or by an outside service provider.

Individual employment agreements and the relevant changes in their content need to be registered in the electronic registry for the evidence of employees (ReGes). This registration can be made by an employee or by an outside service provider.

If a collective employment agreement is in place, it needs to be registered with the local labour inspectorate. As stated, for certain activities additional authorisations and registrations might be needed.

4. Payroll and Benefits Providers

The payroll and benefit responsibilities can be outsourced to third party companies or can be managed internally. The registration of individual employment agreements and its addendums in the general registry can be made by an employee or by outside service providers.

Any questions

Ask our member firm Magda Volonciu and Associates in Romania