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Learn more about doing successful business in Romania. This page has information about Romania’s economy, history and even some useful Romanian phrases. Expand your international business expertise with Lingo24’s International Business Knowledge Base.

General information

Population (million inhabitants) 21.7
Land area (‘000 sq. km.) 238
Water area (‘000 sq. km) 7,160
Official language Romanian
Main minority languages Hungarian, Romani, German
GDP (2005) EUR 74.5 bn
GDP per capita in 2005 (PPP) EUR 3,440
Local currency RON (New Romanian Lei)
Border with Bulgaria 608 km
Border with Hungary 443 km
Border with Moldova 450 km
Border with Serbia and Montenegro 476 km
Border with Ukraine 531 km
Coastline on the Black Sea 225 km
Accession to the EU January 1, 2007

Climate and topography

Due to its location in the south-eastern part of Europe, Romania’s climate varies between temperate and continental from cold winters with frequent snow to sunny summers with frequent rainfall and thunderstorms. This is mainly due to a varied landscape: 31% mountains, 33% hills and 36% plains. This surprisingly even distribution can be attributed to the Carpathian Mountains, an arch of over 1000 km which goes through the heart of the country: from elevations of more than 2,400 metres, the natural landscape rolls down towards the Danube Delta, just a few metres above sea level – Romania’s lowest patch of land.

Population, religion & language

The country’s nearly 22 million inhabitants are spread over 41 counties and Bucharest, the capital city. Existing ethnic groups are living evidence of the historical influences in the region. Circa 89% of the population is made up of Romanians, with 20 separate minorities accounting for the remaining 11%. Among these, 6.6% are Hungarians (the largest national minority in Europe; they also look upon themselves as being of Hungarian nationality), 2.5% Gypsies/Romany, 0.3% Ukrainians, 0.3% Germans, 0.2% Russians and 0.2% Turks all live in the country. An accurate estimate for the Gypsy/Romany population is, however, difficult to pinpoint: although nearly half a million are officially registered, their number is suspected to be much higher.

Accordingly, religious diversity is also a feature of today’s Romanian society: 87% of the population is Christian Orthodox, 6.8% Protestant, 5.6% Catholic, 0.4% is divided between the Muslim and Jewish minorities, while 0.2% are unaffiliated.

Glossary

  • Hi – Ciao, Ceau (informal)
  • Hello – Buna (slightly informal)
  • Good morning – Buna dimineata
  • Good afternoon – Buna ziua
  • Good evening – Buna seara
  • Good bye / See you – Ciao, Ceau (informal), La revedere (formal)
  • Yes / No – Da / Nu
  • Thank you / Thanks – Multumesc / Mersi
  • Please – Va rog (plural and/or polite), Te rog (singular or informal)
  • Merry Christmas / Happy New Year / Happy Easter – Craciun fericit / Un An Nou fericit / Paste fericit
  • Happy Birthday – La multi ani
  • Congratulations – Felicitari
  • For a Romanian pronunciation guide, visit Wikitravel

Culture – collectivism versus individualism

  • One important feature of Romanian culture is its collectivism. Accordingly, the group is highly important and protection and loyalty towards the group are highly appreciated. It is extremely relevant to know who is part of the group and who is an outsider. This trait is mirrored in the business world: strong bonds between different members of a group will play an important role and, consequently, feelings will often go beyond rationality.Besides its collectivist character, the typical life of a Romanian person reflects the influences of a turbulent history. Important moments like birth and marriage are prepared thoroughly. Important occasions exist throughout the year, such as Easter, Christmas and New Year’s Eve, and they are coloured by symbols and beliefs that have remained almost intact throughout the centuries. If one wishes to become acquainted with Romanian culture, these would be the times to spend in Romania: the whole ritual – frenetically preparing traditional meals, cleaning the house, carol singers going from door to door dressed up in colourful costumes, painting eggs, the whole community welcoming a new beginning.Numerous festivals throughout the year are also proof of Romanian culture and tradition. The Festival of Contemporary Music, the Festival of Traditional Dance, Jazz & Blues Springtime International Festival, the “Horezu Coq” Folk Ceramics Fair, the Parade of Popular Traditions, the Festival of Wedding Traditions, the “Dragaica” Annual Fair of Popular Craftsmen, Putna’s Celebrations, the “Ana Lugojana” International Folk Festival are only a glimpse of the cultural and traditional events organised in the country throughout the year.

History

Throughout its history, the land has consistently been ravaged by various wars, it has seen numerous empires come and go (Roman, Ottoman, Austro-Hungarian), leaving behind their mark. In the last century, Romanians were oppressed for fifty years by the communist dictatorship of Nicolae Ceausescu. Nevertheless, they emerged the 1990s as survivors and are constantly undergoing profound changes.

Living throughout the Middle Ages until modern times in three neighbouring, autonomous principalities – Walachia, Moldavia and Transylvania, the locals assimilated and adapted the different contributions that were brought in. This has led to a rich historical, cultural and spiritual heritage. A look at the historical timeline below reveals, in a nutshell, the tumultuous roadmap of Romania’s history over last three centuries alone:

  1. In 1775 and 1812, the regions of Bukovina and Bessarabia were annexed to the Austrian and Russian empires, respectively.
  2. In 1856, the principalities of Walachia and Moldavia (for centuries under the domination of the Turkish Ottoman Empire) gained their autonomy. They united three years later and within a few years adopted a new name – Romania.
  3. In 1878, the country gained full autonomy making it the first independent national state in Eastern Europe.
  4. In 1881, the kingdom of Romania was proclaimed.
  5. The end of the First World War was followed by the disintegration of the Austro-Hungarian and Russian empires and the creation of Greater Romania, a union of Transylvania, Bessarabia and Bukovina with the Old Kingdom of Romania. Until 1938, Romania was a liberal constitutional monarchy.
  6. Between 1938 and 1944 Romania turned into a dictatorship, with King Carol II (the first in a line of 20th-century dictators) abolishing the existing parliamentary regime.
  7. In 1940, Romania lost Bessarabia and Northern Bukovina to Russia and in the same year Northern Transylvania was awarded by Germany and Italy to Hungary, while Southern Dobrudja went to Bulgaria.
  8. In 1941, in order to recover the territory lost to Russia, Romania, under general Antonescu’s military dictatorship, takes part in Germany’s invasion of Russia. As a result, Germany awarded the country with the administration of what became known as Transnistria. The invasion was followed three years later by an armistice.
  9. At the end of the Second World War, the Second Vienna Arbitration was rendered void. Of its lost territories, only Northern Transylvania returned to Romania, with Bessarabia, Bukovina and southern Dobrudja remaining under Russian and Bulgarian authority. The greater part of Bessarabia is nowadays part of the Republic of Moldova and Bukovina is part of the Ukraine.
  10. In 1947, the abdication of King Michael marked the beginning of socialism and the People’s Republic.
  11. In 1967, Nicolae Ceausescu becomes the head of state.
  12. The 1989 December Revolution marks the downfall of an utterly oppressive regime and the start of the transition from dictatorship and a closed economy towards a parliamentary republic with a market economy. After a quick trial, Nicolae Ceausescu and his wife Elena were executed on Christmas Day 1989 – Romania is the only Eastern Bloc country to have brutally executed its head of state.

Progress of Romania’s structural reform

Romania’s reform and liberalisation process has been underpinned by the prospect of accession to the EU and by increasing integration with European markets. Consequently, large foreign-exchange inflows, encouraged by capital account liberalisation and a generally positive view of Romania’s prospects, have strengthened the national currency’s nominal growth. In 2006, a slight nominal depreciation against both the US dollar and the euro had been forecast, and a more modest real appreciation of 2.8%. A further nominal depreciation against the euro in 2007 is expected, along with a nominal appreciation against the US dollar, which is forecast to depreciate sharply against the euro this year. This will result in another modest real appreciation of around 2%

Liberalisation Stabilisation
Current account convertibility – full
Interest rates liberalisation – full
Controls on inward direct investment – no
Wage regulation – yes
Tradability of land – limited
Share of general govt. tax revenue in GDP – 28%
Exchange rate regime – managed float
Infrastructure Financial sector
Independent telecoms regulator – full
Separation of railways accounts – full
Independent electricity regulator – full
Quality of concession laws – medium
Capital adequacy ratio – 12%
Deposit insurance system – yes
Secured transaction law – yes
Securities commission – yes
Social sector Enterprise and markets
Share of population living in poverty – 20.5%
Private pension funds – yes
Competition office – yes
Quality of insolvency law – high
Secured transaction law – advanced
Quality of corporate governance law – low

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Growth in real GDP

The real economy grew by 5.8% in 2004 following a 4.9% increase in real GDP in 2003. Domestic consumption and investment have been the major drivers of growth on the demand side and the construction industry and services sector have been the major contributors on the supply side. A further slowdown in growth in 2006 had been forecast, to 4.5%, as private consumption growth slowed sharply, held back by tightening fiscal and monetary policies (in order to reduce the current account deficit). Real GDP growth is expected to pick up to 5.2% in 2007, driven by strong investment and export growth. All the main economic indicators suggest that the present import-led consumption boom cannot be sustained. Investment activity is expected to remain strong, as new and modernised production facilities start to come online, large public investment projects get under way, and inflows of foreign direct investment (FDI) continue to rise.

The Romanian current account deficit is expected to remain at over 5% of GDP, owing to strong import growth (reflecting strong domestic demand) and higher interest payments. The flow of private remittances from Romanians working abroad (estimated to be between €1.5 billion and 2 billion a year) is increasing. This should help mitigate the impact of the higher trade deficit on the current account. Financing is unlikely to be a problem in the short term owing to large inflows of FDI, reflecting both privatisation deals and Greenfield investment, as well as increasing amounts of EU pre-accession funds. The growth of imports reflects structural weaknesses in the Romanian economy, as well as the rapid expansion of consumer credit and real wages.

Growth in real GDP
2000 2001 2002 2003 2004 2005 2006 Estimate 2007 Projection
1.8 5.3 5.1 5.2 8.3 3.7 4.5 5.2

Inflation

Inflationary expectations remain strong, given the demand pressures generated by rapid growth in real wages and credit, and upward adjustments to energy prices. Consumer price inflation dropped to 8.1% year on year in October, as a result of a monthly inflation rate of just 0.9%, and prices have now risen by 6.8% since the start of 2006. However, the fiscal loosening implied by government policies in the final quarter of 2005-including further public-sector wage increases-will add to inflationary pressures. It can be assumed that a policy tightening will have aided disinflation in 2006. However, as Romania will probably have to raise energy prices significantly to bring them into line with those in the EU, a year-end inflation could vary between 6.5% (The Economist Intelligence Unit) and 7.4% (IMF) in 2006. Further gradual disinflation to 4.8% by the end of 2007 is assumed to take place.

(changes in per cent)

Inflation
2000 2001 2002 2003 2004 2005 2006 Estimate 2007 Projection
45.7 34.5 22.5 15.4 11.9 8.9 7.4 5.8

Industrial output (real)

Industrial output grew considerably less in 2005. This stagnation is partly attributable to the heavy rainfall and flooding that affected much of the country as well as to the severe appreciation of the Romanian leu, the rise in energy tariffs, subsidy cuts and stronger competition.

change in annual average retail/consumer price level, in per cent)

Industrial production indices (2000 = 100)
2000 2001 2002 2003 2004 2005 2006 2007
Total 100.0 108.3 113.0 116.5 122.7 125.0 132.5 (est.) 139.2 (est.)

 

Change from previous year, in per cent
2000 2001 2002 2003 2004 2005 2006 2007
8.0 8.3 4 .3 3.1 5.3 1.8 6.0 (est.) 5.0 (est.)

Doing business in Romania

The Doing Business in 2006 report published by the World Bank ranks Romania as the 49th country among the 175 observed economies. The ranking goes from 1 to 175, with the first place being the best. Consequently, a high ranking on the ease of doing business index means the regulatory environment is conducive to the operation of business. As shown below, the main indicators taken into account in the report (with Romania’s scores between brackets) were:

  1. Starting a Business: No. of procedures (5), time (11 days), cost as share of per capita income (4.4%) and minimum capital required to open a new business as share of per capita income (0.0%)
  2. Dealing with licenses: No. of procedures (17), time (242 days) and cost of business inspections and licensing as share of per capita income (332.6%)
  3. Hiring and firing workers: Difficulty of hiring index (from 0-100: 33), rigidity of hours index (from 0-100: 80), difficulty of firing index (from 0-100: 40), rigidity of employment index (from 0-100: 51), hiring cost as share of the salary (33.3%) and firing cost in terms of weeks of wages (3.0)
  4. Registering property: No. of procedures (8), time (150 days) and cost to register commercial real estate as share of the value (1.9%)
  5. Getting credit: Strength of legal rights index (0-10: 4), depth of credit information index (0-6: 5), public registry coverage in terms of adults (2.6%) and private bureau coverage (5.5% of adults)
  6. Protecting investors: Indices on the extent of disclosure (0-10: 9), extent of director liability (0-10: 5) and ease of shareholder suits index (0-10: 4) and strength of investor protection index (0-10: 6.0)
  7. Paying taxes: number of taxes paid (89), hours per year spent preparing tax returns (198) and total tax payable as share of gross profit (48.9%)
  8. Trading across borders:
    Number of documents for export (4) and time necessary to export (14)
    Number of documents for import (4) and time necessary to import (14)
  9. Enforcing contracts: No. of procedures (43), time (335 days) and cost to enforce a debt contract as share of the debt (10.7%)
  10. Closing a business: Time (4.6 years), cost to close down a business as share of the estate (9.0%) and recovery rate (19.9%)
The table below shows Romania’s position with respect to other countries in Europe.
Economy Ease of Doing Business Starting a Business Dealing with Licenses Employing Workers Registering Property Getting Credit
UK 6 9 46 17 19 1
Belgium 20 37 48 23 158 48
Romania 49 7 116 101 114 48
Bulgaria 54 85 140 100 65 33
Hungary 66 87 143 90 103 21
Poland 75 114 146 49 86 65
Slovakia 36 63 47 72 5 13

Business code of conduct: a few tips

Romanians have a rather bureaucratic mindset: remember this when dealing with specific requests or transactions that might seem trivial in your own country.

The infrastructure is not yet fully modernized.

If holding meetings in old and neglected locations, keep in mind that this has nothing to do with the professionalism or the expertise of the Romanian partner.

  • Many Romanian entrepreneurs are young and most of them are often “short-term oriented”. For the eldest, “contacts” are often better than “contracts”.
  • A group feeling is highly important: personal relations build on trust, a good network and maintaining your contacts are essential; many times feelings trespass rationality.
  • In a business meeting, speaking first about general issues before the actual subject matter is common practice. Business gifts and personal attention are highly appreciated.
  • Everyone who lives or works in Romania will sooner or later come in touch with corruption: a “special” fee to the doctor, to the administrative staff for faster handling etc. Try to understand the context and develop a way of dealing with this, preferably in advance.
  • The historical influences among the regions should also be kept in mind while doing business in Romania: in Transylvania – the Austro-Hungarian influences, in the south – the Ottoman or Turkish influences, in the north – Russian influences.
  • Romanian employees appreciate holidays on religious days.
  • Romanians are proud of the culture and history of their country.

Transportation

Railways

  • Total: 11,385 km (3,888 km electrified):
  • standard gauge: 10,898 km 1.435-m gauge
  • broad gauge: 60 km 1.524-m gauge
  • narrow gauge: 427 km 0.760-m gauge (2003)

Waterways

The total length of navigable rivers, canals, and other inland bodies of water is 1,731 km.

Major ports and harbours

Braila, Constanta, Galati, Mangalia, Sulina, Tulcea, Drobeta Turnu Severin

Random facts - did you know…

That Romania...

  • has been one of the five fastest growing economies in Europe during the last five years?
  • is fourth among the top 10 countries with the highest growth rate in tourism?
  • is one of the largest wine producers in Europe (9th in the world) with a vineyard surface of 243,000 hectares and an annual production of 5 to 6 million hectolitres? And that archaeological findings and historical documents place the beginnings of wine culture some 4000 years ago on the present territory of Romania?
  • is world’s 11th largest agricultural producer, and the sixth-largest agricultural exporter?
  • has the largest oil and gas reserves in Eastern Europe, substantial coal deposits and that it has substantial hydroelectric power installed?
  • has world’s finest example of a mediaeval city (Sighisoara)?
  • has over one-third of all of Europe’s hot and mineral springs?
  • although most of the Central and Eastern European languages are Slavic, the origins of Romanian are Latin and it is a sister language of Italian, French, Spanish and Portuguese. Hence the country is sometimes referred to as a Neo-Latin island in a Slavic sea”

That…

  • Vlad Tepes, Dracula, one of the most famous characters in the world, was born in Sighisoara, in the year 1431 in Transylvania (a Romanian province) and that his house still exists today? His hometown (a must see for any traveller) is also placed on the World Heritage List.
  • Casa Poporului (initially the People’s House, now called The Palace of Parliament) is the 2nd largest office building in the world after the Pentagon? It is said that 26 churches and over 7000 homes were destroyed to make room for this gigantic building that could accommodate all of Buckingham Palace in its underground parking lot.
  • “Voronet blue”, the blue mural paint of the Voronet monastery is, after 450 years since it was applied, still vividly blue?
  • Nadia Comaneci (1961-) was the first Olympic gymnast ever to score a perfect 10, at the Montreal Olympics in 1976?
  • Constantin Brancusi (1876-1957) – was one of the pioneers of the world’s abstract sculpture, whose famous works (including Mademoiselle Pogany II, Danaïde, The Kiss, Bird in space, Sleeping Muse, The Endless Column, The Prayer, The Torment, The Magic Bird, etc.) hold the world record for the highest amounts of money ever paid for a sculpture?
  • Ana Aslan (1897-1988) was the first physician credited with using modern anti-aging medicine (the famous Gerovital-H3) and founded the world’s first Gerontology Institute in Bucharest in 1956?
  • Sergiu Celibidache (1912-1996), famous maestro refused recordings? He claimed that epiphenomena could never be captured on record. He backed up this argument by saying that listening to his music on a record would be like sleeping with a photograph of Brigitte Bardot.
  • Henri Coanda (1886-1972) is the inventor of the world’s very first jet aircraft?
  • Elie Wiesel, the Nobel Prize winner for Peace in 1986 was born in Romania?
  • Octav Botnar (1913-1998), the founder of Datsun UK (now known as Nissan UK) was born in Cernauti (now part of Ukraine, back then part of Romania)?
  • George E. Palade, (1912-) is the first Romanian-born scientist to ever win the Nobel Prize in Physiology or Medicine 1974?
  • George Enescu (1881-1955) was one of the most gifted musicians of the twentieth century, had a phenomenal memory? He memorised a great deal of his compositions instead of writing them down.

For those who want to speak Romanian, beware of some false friends:

  • Fabric (Eng.) – cloth, material ? Fabrica (Rom.) – factory
  • Sympathetic (Eng.) – empathic ? Simpatic (Rom.) – likable
  • Abate (Eng.) – to become less strong ? Abate (Rom.) – monk, friar
  • Library (Eng.) – collection of books ? Librarie (Rom.) – bookshop
  • Abstract (Eng.) – general ideas ? Abstract (Rom.) – existing just as an idea
  • Actually (Eng.) – in fact ? Actual (Rom) – current
  • Sensible (Eng.) – understanding ? Sensibil (Rom.) – sensitive
  • Eventually (Eng.) – in the end ? Eventual (Rom.) – maybe, perhaps
  • Apology (Eng.) – an act of saying sorry ? Apologie (Rom.) – praise

Sensitive topics of the day

  • Interethnic Hungarian-Romanian relations have been complicated by the dispute over the history of Transylvania.
  • High level of pollution affecting the Danube Delta.
  • Accession to the European Union (many Romanians believe that accession poses a threat to their wellbeing).
  • Corruption issues & scandals.

Useful websites

Prepared in cooperation with European Business Intelligence Gap: “We fill the East/West gap in your business intelligence needs.”

Places to visit - properties listed in the World Heritage List

Churches of Moldavia (1993) – with their painted exterior walls, decorated with 15th- and 16th-century frescoes that are considered masterpieces of Byzantine art, these seven churches in northern Moldavia are unique in Europe.

Dacian Fortresses of the Orastie Mountains (1999) – built in 1st centuries B.C. and A. D, these fortresses show an unusual fusion of military and religious architectural techniques and concepts from the classical world and the late European Iron Age.

Historic Centre of Sighisoara (1999) – a small, fortified medieval town which played an important strategic and commercial role on the fringes of central Europe for several centuries.

Monastery of Horezu (1993) – founded in 1690 by Constantin Brancoveanu, the monastery is a masterpiece of the ‘Brancovean’ architectural style.

The Villages with Fortified Churches in Transylvania (1993) – these seven villages are characterised by a particular system of using land, a unique settlement pattern and organisation of the family farmstead that have been preserved since the late Middle Ages. They are dominated by their fortified churches, which illustrate building styles from the 13th to the 16th century.

Wooden Churches of Maramures (1999) – these eight churches are outstanding examples of a range of architectural solutions from different periods and areas.

Danube Delta (1991) – the largest and best preserved of Europe’s deltas hosting over 300 species of birds as well as 45 freshwater fish species in its numerous lakes and marshes.

This list is followed by numerous properties submitted on the Tentative List.

source & more: whc.unesco.org

Speak to us about localisation for Romania