(Last updated: 25 Mar 2011)

Business etiquette

Business tips

There is a high level of acceptance of Western business practices, indicating that even though Romanians do not have the skills yet, they are willing to learn from their experienced partners for the mutual benefit of both parties.

Exchange of gifts with potential partners or visitors is customary.

Given names usually come first in Romania but visitors should always address people by their surname preceded by Mr or Mrs (Domnul or Doamna) until invited to use a first name.

Age and professional or academic titles are important and should be used before the surname, ie. Professor or Doctor.

Introductions tend to be formal, business cards are always exchanged.

For business meetings dress code is casual/smart casual. If you are invited to a function, Romanians expect to see you more formally dressed.

Handshakes are the usual greeting, however, the custom of a man kissing a woman's hand on meeting is still widely used.

Romanians are generous hosts and visitors should consider that lengthy mealtimes and drinking will be part of doing business.

Please also note: Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

Tariff

Foreign trade regulations have been gradually liberalised since 1990 in Romania and now broadly follow the guidelines set up by EU.

Community Customs Code (CCC) have become directly applicable in Romania as from the EU accession date (ie. 1 January 2007). There is an online EU customs tariff database (TARIC).

Duties are ad valorem, assessed on the CIF value (Incoterms 2000). Other taxes, duties and levies may be required to be paid upon import in addition to customs duties, such as excise duty, etc. Customs duties average between 11 per cent and 60 per cent. The average import tariff is estimated at 18 per cent.

Customs authority contact details:

Direction General des Douanes
13, Matei Millo Street
Bucharest 70704
Tel: +40 21 315 5858
Fax: +40 21 313 8251
Website: www.customs.ro

Non-tariff barriers

The monopoly of state organisations in foreign trading has been abolished and private companies are now legally authorised to transact foreign trade.

Romanian customs regulations comply with those of the European Union. Romania uses the EU's TARIC systems which maintains a global quota on imports of consumer goods.

A specific licence is generally not required for the import and export of commodities into and out of Romania. Exceptions are those commodities subject to quota as stipulated by EU, and those considered as potentially dangerous for human health or environment.

Other non-tariff barriers also apply upon the import and export of certain goods.

The inter-bank foreign exchange market was established in 1994. Foreign currency can be bought or sold at spot or forward rates.

As of 1 September 2006, National Bank of Romania liberalised the foreign currency transactions.

Product certification, labelling and packaging

Since January 1, 2007, Romania joined the EU and adopted the CE-Marking requirements.

Labelling

Instructions for use, description of a product and warranty must be written in Romanian. This involves placing a sticker printed in Romanian over existing packaging.

Labelling for foodstuff must include:

• quantity
• name of product
• list of ingredients
• durability
• manufacturer/importer
• organic or not
• GMO’s
• origin
• nutritional information
• nutritional and health claims

Labelling for cosmetics must include:

• net quantity
• function of the cosmetic product
• manufacturer/importer
• producer address
• country of origin
• durability, consumption expiry date
• list of ingredients and aditives
• special precautions in using (ex: recommended storage temperature)

Cosmetics for human use produced in Romania or imported from a third country, at first time placement in EU, have to be notified at Ministry of Public Health, Authority of Public Health section.

Human use medicines have to be authorised by the National Medicine Agency.

Packaging

No general requirements. Any specific requirements will be stipulated in the contract.

Goods should be securely packed, having due regard to the nature of the goods, means of transport and likely climatic conditions during transit and delivery. If hay or straw is used as a packing material a phytosanitary certificate, issued by the appropriate authority in the country of origin, must accompany the shipment papers.

Special certificates

Plants, plant parts and plant products require phytosanitary certificates issued by the approved authority in the country of origin; in Australia this is usually the Australian Quarantine and Inspection Service, Agriculture, Fisheries and Forestry-Australia or the relevant state department of agriculture. Quality control certification, when applicable, is required.

Methods of quoting and payment

Quotes in US dollars or Pound Sterling FOB Australian ports and CIF (Incoterms 2000) European and payment ports (or Constanta).

Usual terms of payment are by letter of credit opened with a Romanian commercial bank or by sight draft.

For large sums, credit facilities are usually sought, the terms depending upon circumstances.

Documentary requirements

Fax signatures are not permitted.

Pro-forma invoice

May be a requirement of the contract. If requested, details should agree with those on the other shipping documents.

Commercial invoice

No prescribed form. A minimum of one original and four copies is required. The invoice must give a full and complete description of the goods. The use of English is acceptable.

Certificate of origin

When requested, a signed original certificate and five to 10 copies should be supplied. Must be legalised and certified by an approved authority (see ‘Guidelines’, section 2.3).

Must be written in the language of the contract.

Bill of lading

No special requirements. A signed original and four copies are required.

Packing list

Not compulsory but facilitates clearance.

Public health requirements

Although not a member of the International Chamber of Commerce, Romania observes quarantine and health requirements, food, drug and pharmaceutical regulations.

Insurance

Insurance is usually arranged in Romania. Advice of the importer or insurance company should be sought.

Weights and measures

The metric system. For tubes and piping, inches (Romanian tol) are also used.

Setting up in Romania

Austrade Bucharest is ready to assist you with any query.

Romanian legislation allows for the establishment of a wide range of business entities, including wholly foreign owned subsidiaries and branches. Limited liability and joint stock companies are registered with the Trade Register by issuance of a Registration certificate.

The foundation of a branch mainly requires:

• Records of the existence of the parent company
• Decision of the board of directors to establish a branch in Romania, listing of activities

Representative offices are often established as first step in committing to Romania and cannot commit to any contractual engagements in its own name, but can perform activities for the parent company.

Taxation

In 2000, Romania revised its tax system to bring it closer to European Union models and more in line with the recommendations of the World Bank and International Monetary Fund. This resulted in significant changes to the business and investment environment.

Currently, the standard corporate income tax is 16 per cent (down from 25 per cent) and the Value Added Tax (VAT) is 19 per cent  (down from 22 per cent).

The main taxes in Romania are:

• Profits tax
• Withholding tax
• Tax on goods and services (VAT)
• Customs duty
• Excise tax
• Stamp duty
• Local taxes
• Petroleum related tax
• Personal taxation
• Others such as road, tourism, show, energy, technological/risk taxes

Banking and finance

Romania has a two-tier banking system. The National Bank of Romania (NBR) is Romania’s central bank and is under the Parliament’s control. Credit institutions, Romanian entities and branches of non-EU credit institutions operate under the authorisation and strict supervision of the NBR. In addition, as of 2006, non-banking financial institutions are regulated in Romania, being subject to registration with and supervision by the NBR.

The banking market has witnessed significant changes in recent years following the development of domestic banks and the influx of foreign banks into Romania. All domestic banks in Romania are now private (except for the Savings Bank) and foreign banks are investing at a fast pace, most of them by acquiring existing banks; however, recently foreign banks are interested in starting green field projects in Romania. Currently there are 35 commercial banks with majority private capital authorised to operate in Romania. Several new banks are expected to be established, as NBR seems willing to grant new licences.

The major banks operating in Romania are:

• Romanian Commercial Bank - Erste
• ING
• Citibank
• BRD-Groupe Societe Generale
• ABN Amro
• Alpha Bank
• HVB Tiriac
• Transilvania
• Bancpost
• Raiffeisen

As of 1 September 2006, the NBR liberalised the foreign currency transactions, so that NBR authorisation is no longer necessary for current and capital foreign currency operations. However payments related to trading in goods and services between residents must be made in RON. Investment in government securities is no longer restricted for non-residents, which can invest in such instruments under the issuance prospectus.

Romania is predominantly a cash economy, although the use of credit/debit cards is increasing. Credit card and ATM fraud is prevalent.

There are an increasing number of ATM machines throughout the major cities. They are located in shopping malls, near banks, in hotels, within shops. Most of the credit cards are accepted. ATMs are easy to use, in both Romanian and English language.

It is illegal to change money on the streets. Money should be changed in recognised exchange shops, banks and hotels.