Ease of Doing Business Rank: 55
Romania is a southeastern European country. Ukraine lies to the north, Hungary and Serbia to the west, Bulgaria to the south and Moldova and the Black Sea to the east.
The official language of Romania is Romanian, spoken by 91% of the population as a primary language.
The country also recognizes 14 living languages for minority groups with over 20% of a locality’s population. These include Hungarian, Romani, Ukrainian, German, Russian, Turkish, Tatar, Serbian, Slovak, Bulgarian and Croatian.
English is the most widely-spoke foreign language (31%), followed by French (17%), German (7%) and Italian (7%).
The 2019 population estimate is 19.32 million.
According to the 2011 census, Bucharest is the capital and largest city (1.88 million), followed by Iași (791,210), Cluj-Napoca (324,576) and Timișoara (319,279).
The top industries in Romania are telecommunications, high-tech, IT, aerospace, armaments, manufacturing, automotive, mining, oil refining and chemical derivatives.
The Times Higher Education World Rankings includes three Romanian universities in the top 1,000 in the world.
The Legatum Prosperity Index ranks Romania’s education system 39th out of 149.
The most common type of business entities in Romania are Limited Liability Company and Joint Stock Company.
The overwhelming majority of businesses are in the form of a Limited Liability Company.
Companies operating in a foreign region may apply for a foreign tax credit to offset taxes paid, providing the nation has a Double Tax Treaty with Romania.
Romania offers a tax exemption on profits invested in equipment and software. However, companies claiming this incentive cannot accelerate depreciation on assets.
The country also offers a 50 percent deduction on R&D expenses as well as accelerated depreciation on R&D devices and equipment to qualifying companies.
Romania exempts taxes on profits for the first ten years of activity, providing companies exclusively engage in R&D and innovation activities such as technological development and scientific research. They also allow expense deductions for professional and technical studies.
Many regions also provide building and land tax exemptions within industrial parks. These parks may also provide assistance for infrastructure development, equipment grants, foreign financial assistance, free administrative services or installment payments.
Bucharest is the financial center of the country. Iași is the largest city in eastern Romania and an important education and research center.
Unfortunately, Transylvania and Count Dracula are the first things that pop into most people’s minds when they think about Romania. Fortunately, the country offers much more.
Attractions include UNESCO World Heritage Sites, top-notch resorts on the Black Sea, the Danube Delta, Carpathian Mountains, thermal spas, medieval towns, castles, fortresses and even painted monasteries.
The Monastery of Horezu is a UNESCO site, due to its outstanding and unique Brancovenesti sculptural details, murals and icons dating back to 1690. The monastery housed a school that profoundly influenced religious art and architecture throughout the Balkan region.
Transylvania is home to almost two hundred villages with fortified churches built by the Saxons between the 13th and 15th centuries. Seven of these churches are also UNESCO World Heritage Sites. The historic center of Sighisoara provides a well-preserved German Saxon medieval town famous for trade and craftsmen.
Bran Castle sits atop a 200 foot rock and is irrevocably linked to Bram Stoker’s Dracula forever. However, any connection to Vlad Tepes, or Vlad the Impaler, is tenuous at best as Stoker never visited the castle or the region. Nonetheless, it is an impressive structure worthy of the author’s fertile imagination.
In northeastern Romania, the Painted Monasteries of Bucovina are lavishly decorated with 15th and 16th century frescoes of religious figures and scenes. They’re considered masterpieces of Byzantine art and are unique to Europe.
The Danube Delta is the second largest in Europe. It features 2,200 square miles of rivers, canals, marshes, lakes and islands and the ideal habitat for birds including Egyptian white pelicans, pygmy cormorants and Arctic geese.
The Carpathian Mountains are home to one of the largest undisturbed forests in Europe. Its parks include 400 unique species of mammals, including the Carpathian chamois. Over 60% of European brown bears live in the Carpathian Mountains too.
Romania’s Black Sea resorts span 45 miles on some of the finest sand on the planet. The area features mud baths said to treat arthritis, rheumatism and nervous disorders. You’ll also find many good restaurants, nightclubs and sports and entertainment facilities.
Conversely, Romania also retains much of its traditional charm. Many traditional Romanian villages still exist, the oldest dating back to 1204 AD. Residents still practice age-old traditions passed down from their ancestors.
Early inhabitants of the region began to trade with the Greeks around 600 BC. In 101 AD, Romans invaded the area and finally secured it during a second incursion in 105 AD. The area known as Dacia became a Roman province. However, barbarian invasions eventually led to a Roman withdrawal in 271 AD.
Over the next centuries, many peoples migrated to the area. Huns arrived in the 5th century, followed by the Avars in the 6th century, and the Slavs in the 7th century. A feudal order eventually emerged.
Order was disrupted in the 10th century when the Magyars (Hungarians) arrived in Transylvania. By the 13th century, they ruled Transylvania and enticed German aristocracy to the area to manage Romanian peasantry. In the 14th century, Romanians united to form two Romanian principalities: Wallachia and Moldavia. However, they were still ruled by foreign aristocracy.
In the 15th century, Ottoman Turks occupied Transylvania. The Turks were finally defeated in 1683 and the victorious Austrian ruling family of Habsburgs occupied Transylvania in 1687.
However, the Turkish Empire still dominated Wallachia and Moldavia until the early 19th century, but their power was waning. In 1859, the two principalities united under a single leader. By 1862, the united principalities became the new state of Romania.
Romania broke away from Turkey in 1877 and declared independence. By 1881, the region became a constitutional monarchy known as the Kingdom of Romania.
During World War I, Romania sided with the Allies and reabsorbed Bessarabia and its population which were previously under Russian rule. During the following decades, Romania underwent great political instability. In 1938, the king declared a royal dictatorship.
In 1940, Russia pressured the Romanian king to surrender Bessarabia. He also gave Northern Transylvania to Hungary and other territories to Bulgaria to appease Germany. Eventually, the king abdicated the throne in favor of his son, but he had little power.
In 1941, Romania fell under a fascist dictatorship and joined forces with Germany to defeat Russia and regain Bessarabia. During this period, gypsies and Jews faced genocide or deportation.
By 1943, it was clear Germany was losing the war. In 1944, a coup removed the fascist dictator, Romania declared war on Germany and Transylvania became part of Romania again.
Post World War II, Russian troops were stationed in Romania and they retook Bessarabia. During the 1946 elections, Communists won key posts. In 1947, Communists forced the king to abdicate the throne. By 1948, the Communist Party had merged with other left-wing parties to form a totalitarian regime.
Russian troops finally withdrew from Romania in 1958. However, Communism remained and by 1965, Romania had a new tyrannical ruler set on industrialiation at all costs. This led to rationing, austerity measures, hardships and great unrest.
An anti-communist riot in 1987 and protests in 1989 eventually led to revolution, the death of the ruler and the fall of communism in Romania. The country began the transition to democracy.
Today, Romania operates under a democratic parliamentary republic. They have a developing, mixed economy and are a member of the European Union.
According to the 2011 census, most inhabitants identify as Romanian (83.4%), followed by Hungarian (6.1%), Romani (3.1%), Ukrainian (0.3%), German (0.2%) and other ethnicities (0.7%).
According to the 2011 census, the overwhelming majority of Romanians practice Orthodox Christianity (81%), followed by Protestantism (6.2%), Catholicism (5.1%) and other religions (1.5%).
According to Forbes’ 2019 Best Countries for Business, Romania is the 41st best country in the world for conducting business.
The 2019 Index of Economic Freedom rates Romania 42nd globally and states, “Efforts to privatize state-owned enterprises have stalled, and progress on improving the business environment has been uneven. Significant tax evasion further jeopardizes the fiscal deficit and public debt burden. Foreign investors find the unpredictable regulatory system discouraging. Corruption is endemic at all levels of government and undermines the rule of law.”
World Bank’s “Doing Business” rankings rate Romania 55th for ease of doing business in the world.