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March - 2005


How can foreigners work in Romania?

Recent changes to employment legislation means that foreigners may find it easier to work in Romania, but that does not mean the process is any less complicated

When coming to work in Romania, foreigners encounter three issues to overcome relating to their employment. These include, most frequently, obtaining a work permit, a residency visa and the extension of their residency visa.

The only nationals who are required to obtain a temporary residency visa, are those from countries where Romania still enforces its visa regime, such as Australia, Kuwait, Mexico and Russia. The European Union, the USA and Chinese nationals are currently exempt from obtaining a temporary residency visa. Foreigners (for example business travelers and tourists) are exempt from the temporary residency visa and must simply present their passport to customs when entering Romania, where they have an initial residency right of up to 90 days in a period of six months, but can apply for an extension of the stay.

The initial stay period that Romania allows varies based on the agreements the host nation concluded with each country, and ranges from 30 days (for example, in the case of Czech Republic nationals) to 90 days (as is the case of EU and US nationals).

For reasons relating to social pension contributions and the rigours of Romania's Labour Law, foreigners prefer “assignment agreements” as a legal basis for their activity with Romanian companies. Foreigners who work in Romania based on assignment agreements are not required to obtain a work permit.

According to these provisions of the Romanian laws, there are two types of assignment agreement, depending on the nature of the Romanian entity the foreigner will work for. The distinction between the two types of assignment contracts is important when dealing with the extension of the residency right of the assignee in Romania, as different rules apply to each category.

When the foreigner is working for a firm that is an affiliate of the foreign mother company?

The first category refers to a foreigner who is employed at a representative office or branch of the mother company in Romania, or when the mother company is a shareholder in a Romanian entity. In these three cases, the Romanian entity is considered an affiliate of the foreign mother company.

For this category, the employee's residency right can be extended only once, for a period of a maximum of one year. After this period has expired, the employee must either conclude a formal work agreement with the Romanian affiliate, or obtain a permanent residency right by establishing their domicile in Romania.

For a permanent residency right, the employee must submit to the Romanian Authority for Foreigners documents relating to the Romanian affiliate, proof of the employee's medical insurance and proof of legal living space, such as a lease contract or sale-purchase contract.

When the foreigner is working on a contract

The second category refers to a foreigner working in Romania on a services contract, concluded between the foreign and the Romanian entities (for example, this category applies to consultants, lawyers and any other freelancers).

Based on a services contract, the employee will be able to obtain the extension of the residency right indefinitely, as the “one year, one time only” legal restriction refers only to assignments to affiliates. In order to extend the temporary residency right, the employee must submit to the Romanian Authority for Foreigners a declaration detailing the necessity of remaining in Romania as an assignee, as long as the foreigner wishes, provided that the initial conditions are kept. The Romanian authorities then issue the residency permit, which serves as an identification document for the foreigner.

However, for both these categories of assignment (but only applicable to EU nationals), the assignee's family also receives a temporary or permanent residency right in Romania. The Romanian Authority for Foreigners may issue upon request a residency permit for the spouse and children.

Because there are many choices and this is a very complicated process, it is recommended that foreigners working or intending to work in Romania and who may fall under either category seek the advice of a legal professional.

Anamaria Corbescu
Attorney, SALANS