Romania

Business Environment

Business practices

Closed hours and days

Public holidays

Compensation day

Periods when companies usually close

Standards

National standards organizations
Integration in the international standards network: The Romanian Institute for the Ratification ( Standarizare's Romanic Institute) is the national organism of standardisation and certification.
Their aim is to harmonise the Romanian standards with the European Union ones.
Classification of standards
Online consultation of standards
Certification organizations

Legal framework

Independence of justice: Judiciary is not completely independent in Romania. It is highly influenced by the executive institutions.
Equal treatment of nationals and foreigners: Foreign nationals cannot expect an impartial trial from the country’s judicial system.
The language of justice: The judicial language used in the country is Romanian.
Having recourse to an interpreter: Having an interpreter is possible.
Sources of the law and legal similarities: Romania is a social Republic state based on parliamentary democracy. Romania is the largest of the Balkan countries and is going to join the European Union (EU) in January 2007.
The President is the head of the state and is elected by a popular vote for a five-year term. President is the commander- in-chief of the armed forces and is responsible for safeguarding the constitution. According to the constitution of Romania, President acts as mediator among the various power centers within the state. Prime Minister is appointed by the President with the consent of the parliament (generally the leader of the majority party) to serve a four-year term. Prime Minister is the head of the government and enjoys the executive powers which include implementation of the law in the country and running the day-to-day affairs. The Council of Ministers (cabinet) is appointed by the Prime Minister.
The legislature in Romania is bicameral. The Parliament consists of: Senate (the upper house) having 137 seats and the Chamber of Deputies (the lower house) having 332 seats. The members of both the houses are elected by direct, popular vote on a proportional representation basis to serve four-year terms. The executive branch of government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. Prime Minister does not have the power to dissolve the Parliament directly, but President can do so after consultation with the political parties represented in the Parliamnet.The people of Romania have considerable political rights.
Judiciary is not completely independent in Romania. It is highly influenced by the executive institutions. The main source of the law in Romania is the constitution of 1991(revised in 2003). The legal system is based on the French civil code (Napoleonic Code). The judicial language used in the country is Romanian, having an interpreter is possible.
Romania is weakly ruled by law. Foreign nationals cannot expect an impartial trial from the country’s judicial system. Corruption remains a serious problem in the country, especially in the government and the corporate sector. Though anti-corruption laws have been passed by the government, but no genuine progress has been made.
Consulting national laws online

Intellectual Property

National organizations: The State Office for Inventions and for Trademarks (OSIM) is the government organisation in charge of the recording and the protection of patents, trademarks and industrial design.
Romania signed the agreement of Paris concerning the protection of industrial property and the agreement which establishes the World Intellectual property Organisation (WIPO). In terms of patents, they ratified the Patent Law Treaty (PLT), as well as the Patent Co-operation Treaty (PCT). They signed the Madrid Agreement concerning the International Register of marks.

National regulation and international agreements

Type of property	Law	Validity	International agreements signed
Patent	Patent Law 1991	Period of validity of 20 years
Trademark			Trademark law treaty Nice agreement concerning the International classification of goods and Services for the Purposes of the registration of Marks Protocol relating to the Madrid Agreement concerning the International Registration of Marks
Design
Copyright
Industrial Models

Tax rates

Consumption taxes

Tax rate: 19%
Reduced tax rate: 9%
Some activities (exports, health, sciences, education, charitable works, finance, insurances) are exempted from VAT.

Corporate taxes

Tax rate

Capital gains taxation

No separate capital gains tax is payable by resident entities. Capital gains from sale of immovable property located in Romania or from sale/transfer of shares held in a Romanian legal entity are taxed at the standard corporate tax rate of 16%.

Other corporate taxes

Individual taxes

Tax rate

Allowable deductions and tax credit

A monthly general deduction is granted for each Romanian citizen living in Romania. Also, additional supplementary deductions are granted for the family members, dependants of the taxpayer.

Sources of fiscal information

Tax Authorities: KMPG tax issues; Ernst & Young
Other domestic resources

Accounting rules

Tax year: The fiscal year begins on January 1st and ends on December 31st of the same year.
Accounting regulation bodies
Accounting reports: The balance sheet is presented into accounts with liabilities composed of constant capital and debts, because there is a distinction between long and short-term debts.
The profit and loss account gives priority to the repository of the global production and lets the choice of the cost - classification by nature.
Publication: Companies have to publish a balance sheet, a profit and loss account and annexes.
Professional accountancy bodies
Certification and auditing: The external control of accounts must be given to a body of auditors chosen by the company.
Accounting news