Romania - Market ChallengesRomania - Market Challenges
Romania overthrew its communist regime almost thrity years ago, yet the Romanian government still plays an oversized role in the economy in terms of employment, ownership of assets, and influence on the business environment. State-owned enterprises shape many industries, acting as dominant customers, suppliers, or, in some cases, competitors. Despite pleas from the international finance and business community, state-owned enterprises in the country do not regularly utilize private management.
While some progress has been made since joining the EU in 2007, companies in Romania still report challenges regarding the independence and efficiency of the judicial system, corruption, bureaucracy, and political instability. Romania’s poor infrastructure continues to negatively impact business costs, productivity, public safety, and the country’s ability to attract foreign investment. The country’s connections to the rest of the EU’s transportation infrastructure are still underdeveloped, which holds back the country’s ability to realize its full potential for new investment, trade, and tourism.
Romania is not a member of the “Euro Zone”, so all payments are made in local currency – the New Romanian Lei (RON). However, many companies and consumers have debt denominated in euros, and most big-ticket consumer items (i.e., real estate, cars, and major appliances) are priced in euros. This creates trade inefficiencies due to higher transaction costs and exchange rate fluctuations.
Many U.S. firms opperating in Romania face ongoing challenging with recruiting and retaining employees. A fast growing economy, increasing investments and the ability for Romanians to work for higher wages elsewhere in the EU had led to a labor shortage. This shortage is more pronounced in north and western parts of the country where employers often bus in workers from villages. While unemployment rates are higher in the Moldova region, companies report that skilled works are harder to find in the lesser-developed eastern portions of the country.
All companies opperating in Romania report complaints with frequent legistative changes without prior private sector consultantions. Regulatory Impact Assements (RIAs) are very rare and laws can change with little notice. Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
While some progress has been made since joining the EU in 2007, companies in Romania still report challenges regarding the independence and efficiency of the judicial system, corruption, bureaucracy, and political instability. Romania’s poor infrastructure continues to negatively impact business costs, productivity, public safety, and the country’s ability to attract foreign investment. The country’s connections to the rest of the EU’s transportation infrastructure are still underdeveloped, which holds back the country’s ability to realize its full potential for new investment, trade, and tourism.
Romania is not a member of the “Euro Zone”, so all payments are made in local currency – the New Romanian Lei (RON). However, many companies and consumers have debt denominated in euros, and most big-ticket consumer items (i.e., real estate, cars, and major appliances) are priced in euros. This creates trade inefficiencies due to higher transaction costs and exchange rate fluctuations.
Many U.S. firms opperating in Romania face ongoing challenging with recruiting and retaining employees. A fast growing economy, increasing investments and the ability for Romanians to work for higher wages elsewhere in the EU had led to a labor shortage. This shortage is more pronounced in north and western parts of the country where employers often bus in workers from villages. While unemployment rates are higher in the Moldova region, companies report that skilled works are harder to find in the lesser-developed eastern portions of the country.
All companies opperating in Romania report complaints with frequent legistative changes without prior private sector consultantions. Regulatory Impact Assements (RIAs) are very rare and laws can change with little notice. Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.