Doing Business in Romania: New Quota for Migrant Workers
By Karina Reizner, Hategan Attorneys
Romania has undergone one of the most promising economic growths among the EU states in the last few years. The height of the economic boom saw a 7% GDP growth in 2017, slowing down to a forecasted 3.8% GDP growth in 2019: still one of the highest growths in the European Union. This economic success is due partially to the flow of foreign direct investment (FDI) into Romania which might break the EUR 5 billion milestone in 2019, a height which has not been experienced in more than a decade.
However, not all is favourable in the market. With one of the lowest unemployment rates of around 4%, due to high emigration rates, there is not a lot of workforce available for new companies who want to open subsidiaries in Romania. The current situation triggered the need for many investors to open their vacant jobs to foreigners from outside the EU.
Consequently, at the beginning of 2019, the Government increased the quota of non-EU workers allowed in the Romanian labour market to 20,000. Strategically located at the outskirts of the EU, this was a good answer to the workforce crisis for many companies which are considering employing personnel from non-EU countries including the neighbouring Serbia, Moldavia and Turkey, but also from as far as the Philippines.
In order to better understand the Government’s decision, it should be mentioned that last year’s quota for non-EU workers was comparably lower, initially set at 7,000. By the middle of the year, after pressure from the investors, the Government supplemented the quota with another 8,000.
This measure is meant to have the following objectives:
- To prevent possible cases of illegal labour when foreigners move to Romania and start working without any legal documents.
- To limit the number of foreign workers for which certain social security contributions are already paid in the state of origin.
- To ensure the required labour force required in some industry sectors, which can no longer be covered exclusively by Romanian workers.
Last, but not least, it should be mentioned that the shortage of workforce should also be addressed by making the most of the EU fundamental right of citizens’ freedom of movement enshrined in Article 45 of the Treaty on the Functioning of the European Union. The flow of population within the EU should also be encouraged so that Romania’s shortage of workforce is met.
Karina ReiznerHategan Attorneys, Timisoara, Romania
T: +40 256 430 454
Hategan Attorneys is an independent, full-service business-law firm located in Timisoara, Romania, providing a tailored and integrated range of legal services to meet the needs of a wide variety of businesses, individuals and organisations. More than three quarters of their clients are international companies which plan to invest or are already doing business in Romania.
Karina Reizner specialises in commercial litigation, representing the interests of national and foreign companies in the Romanian courts. She is a quick-thinker, able to identify problems and establish legal strategy to resolve them swiftly and successfully.
Published: Labour Law, No. 06, Spring 2019 l Photo: George Serban - stock.adobe.com