Embarking on business ventures in Romania presents a myriad of opportunities and challenges. As a law firm – shifting its primary focus from white-collar crime to its adjacent, preventive component on commercial law in Romania – we had the privilege of guiding clients through the intricate landscape of Romanian business regulations, enriching revenues, and ensuring clear communication and solution-oriented approaches with the authorities. Here, we aim to highlight key legal considerations that entrepreneurs and corporations must bear in mind when engaging in commercial activities in this dynamic Eastern European country and its ever-growing economy.
Romania boasts a legal framework that is conducive to business development, offering a range of corporate structures and well-defined legal procedures for establishment. The legal system is based on civil law principles, and its regulatory framework aligns with European Union standards, providing a level of familiarity for international investors. Additionally, Romania is part of numerous bilateral and multilateral agreements, which serve to facilitate trade and investment with other countries (especially facilitating VAT treatment on cross-border commerce).
Commercial law in Romania encompasses a wide range of legal aspects, including contracts, corporate governance, mergers and acquisitions, competition law, and consumer protection. It is crucial for businesses to understand and comply with these regulations to ensure smooth operations. For instance, contracts should be drafted with precision and consideration for local norms, while mergers and acquisitions must undergo rigorous scrutiny by the Romanian Competition Council, one of the most feared and commanding authorities in our country.
From an investment point of view, Romania holds significant potential in the energy sector, particularly in renewable energy sources and the oil and gas industry. The country has made notable strides in aligning its energy policies with EU directives, creating a favourable environment for investors. However, navigating the complex web of licenses, permits, and compliance requirements remains critical, and choosing the right counsel can determine the entire deal’s course of action – to success or to failure. To optimise their investments, businesses must also stay abreast of evolving renewable energy incentives and feed-in tariffs.
Although our markets are still mostly populated with energy manufactured from crude oil and gas, we do believe the current environment made an even stronger push toward more investments in renewable energy. Companies are now focusing on creating sustainable workplaces, using better types of equipment to ensure less pollution, as well as investing in the optimisation of factories and final products.
With the current energy crisis, the business environment currently has a precarious state, in regards to the uncertainty of evolution within the energy prices, and the supply-demand equilibrium. In the current crisis and on legal grounds of the newly imposed emergency and solidarity measures at the EU level, a lawyer’s contribution has proven to be absolutely vital towards creating a bulletproof evolution for companies that carry out activities in energy sectors.
Maintaining compliance with Romanian laws and regulations is paramount for businesses operating in the country. This includes adhering to tax laws, labour regulations, and industry-specific licensing requirements. The tax system in Romania is relatively straightforward, without fearing double imposition, but vigilance is required to ensure full compliance, especially with corporations that deal on a regular basis with transfer pricing. Additionally, labour laws governing contracts, working hours, and employee rights must be carefully observed to avoid legal complications, seeing as our courts are people-oriented, to say the least.
Should disputes arise, businesses in Romania can rely on a well-established legal system to resolve conflicts. The judiciary is independent, and alternative dispute resolution methods, such as mediation and arbitration, are also available. Engaging in thorough due diligence and incorporating dispute resolution clauses in contracts can provide an added layer of protection for businesses. Such prevention is determined by a rigorous approach to contractual clauses, in full respect to our civil law and international provisions, shielding clients from any potential risk or additional liability in connection with their contractual rights and obligations.
Moving on to our favourite area of the law – white-collar crime, an area of legal concern that cannot be overlooked when engaging in business activities in Romania. While the country has made significant progress in combatting economic offenses, such as fraud, embezzlement, and corruption, vigilance remains essential. Businesses should implement robust compliance programmes, conduct thorough due diligence on partners and employees, and adopt transparent financial practices to mitigate the risk of falling victim to or inadvertently participating in white-collar criminal activities. Engaging legal counsel with expertise in white-collar crime can provide valuable guidance in navigating this aspect of the business environment in Romania, ensuring that businesses operate ethically and within the bounds of the law.
Our newest project and main focus for the previous year was centered around promoting a preventive approach to business criminal law, creating a series of legal training sessions for both top and middle management of our clients, teaching both theory and practice when it comes to the main problems their day-to-day activities and employees may encounter. In our experience, such training sessions will hold strong evidential power to the company’s good faith in its endeavours, in raising awareness of the dangers of misconduct and non-compliance, further shielding the company from potential liability and risk.
Concluding our plea for doing business in Romania, our country offers a wealth of opportunities for entrepreneurs and corporations alike. With a sound understanding of the legal landscape, businesses can navigate the complexities of commercial and energy law to thrive in this dynamic, emergent market. By prioritising regulatory compliance and engaging in strategic dispute resolution, businesses can position themselves for success in Romania’s vibrant business environment. As business lawyers with wide expertise in our business market, we stand ready to guide clients through every step of their business endeavours.