Romania

Let’s say that you live in Romania today and want to be a freelancer. You defined what you wanted to do, marketed yourself, and found some potential customers. Now it’s the time to start doing payed work. I wish you luck my friend, and I advise you to get out of Romania as soon as possible.

It’s not that Romania doesn’t need entrepreneurs. It needs them badly, it needs them to start building something in this country that has now an economy based on consumption and thus the difference between imports and exports has reached staggering levels, sustained only by the continuous and very professional efforts of the National Bank. We need entrepreneurs for the sanity that they will fight for in a society where the most prominent business people did their fortunes from public money and/or public property and thus most Romanians associate entrepreneurs with thieves. We need entrepreneurs for teaching employees how to be professionals in a country where the media promoted values are not the people who work but the wise-guys who find ways to trick the system a little bit. Yes, Romania is a deeply disturbed society at its core, and everyone I know loves it and hates it at the same time.

Still, while I personally would love to meet you and while I think you would do a lot of good by working here, I advise you for your own good and peace of mind, don’t do freelancing in Romania. Let me give you just a few reasons:

• The recent 5% VAT increase was announced 4 days before the due date
• You have to register some kind of juridical person, the simplest being a PFA (Authorized Physical Person) in order to do freelancing
• If you have a PFA, you need to go each month to three different institutions to declare your income for each contract that you have, and to pay the social taxes. In case your income changes, you need to go to the same three institution within 14 days. If your income for a contract stops, you need to go to the same three institutions within 3 days. If you don’t do that, you will pay a very large fee
• If you have a freelancing contract, the fiscal administration may decide (based on unclear criteria) that you are actually trying to avoid paying the due taxes as an employee, and make you pay the whole amount for the last 5 years. So, you were perfectly legal for 5 years but suddenly you find out that you tried to avoid taxation
• If you have a company and you want to sell products or services in EU, you need to submit your details to an intra-community register (which requires going to the financial administration, office of commerce etc.) and to get the approval which is valid starting next month after you register
• Despite the protests against all these measures, including a fiscal strike, the Government is committed to keeping them in place
• In theory, you can send this paper work through the post office, but it’s not certain things will turn out right
• There is currently no way to do this online (the Ministry of Work promised that it will be possible starting October 2010, but for now it’s just a promise)
• We don’t know what else will happen.

Still want to do freelancing in Romania? Think again.

Funny video (in Romanian):