Doing Business with Romania
PaulSourcing: Ten Commandments for Doing Business with Romania
The PaulSourcing agency has prepared ten recommendations for doing business with Romania for Czech entrepreneurs interested in business relations with Romania. In 2020, it was supplemented with 4 current tips.
4 recommendations for entering the Romanian market during the coronavirus pandemic situation:
- Market research and search for business partners With the impact of the covid-19 pandemic, the Romanian market switched to “stand-by” mode, mainly as a result of preventive regulations of the Romanian government and authorities with the aim of protecting the lives and health of citizens in the territory of Romania. Although the gradual easing of the state of emergency by the Romanian government has already begun, the local economy is still far from returning to normal. From July to the first half of September, traditional Romanian holidays will also take place.Therefore, the PaulSourcing Foreign Office in Bucharest (ZK Bucharest) recommends marketing preparation in the first half of the year for those interested in entering the Romanian market in the form of mapping potential suitable business contacts, which you will then be able to address independently or again in cooperation with the CT Bucharest office. Ideally after the current condition has subsided.
- Reaching out to companies Even in the period before the onset of the covid-19 pandemic, this part of entering the local market was one of the most challenging for Czech exporters. Most entrepreneurs and managers from the Czech Republic are used to a relatively timely response from Western European markets to their approach. In other markets, for example, a personal meeting is the first step in communication with local companies in the given territory. But it is different in Romania. Since the 1990s, the Romanian economy has been built on investment and the import of products. In many fields and market segments, the market is already saturated. Local trade and service companies, importers/distributors have gone through their development and today they can afford to choose their new suppliers and new business partners from abroad. Or even refuse. The reality is that approaching local companies directly from the Czech Republic does not practically work.And even reaching out directly on the territory of Romania presupposes not only knowledge of the local environment, but it is necessary to first verify and obtain a competent person within the local company. At the moment when it is possible to get in touch with the local manager, it is possible to familiarize him electronically with the offer of products, services and the idea of business cooperation. Only in the third phase is it possible to count on the response of the Romanian company. This can be negative, neutral (e.g. due to a business trip, holidays, etc.), or positive, which in practice means that the Romanian manager is willing to start e-mail/telephone communication with the Czech company as a result of being approached.
- Finding a local representative ZK Bucharest recommends Czech companies to use the services of a local representative, the PaulSourcing office or other entities with knowledge of the local environment for the acquisition work described above. However, at the time of the coronavirus restrictions and the slowdown of the local market, he recommends considering this step only at the end of 2020 and later.
- Participation in trade fairs and exhibitions With regard to the current development and practice of ZK Bucharest, Czech exporters are recommended to consider participating in local exhibitions that will be held only in 2021. In this regard, ZK Bucharest is considering participation in the international construction fair Construct-Ambient Expo, which should take place in March 2021 at the Romexpo exhibition center in Bucharest.
- Be aware of the different cultural development First of all, you need to be aware of the different cultural development and mentality of the Romanian business partner. Also different specifics in personal and business communication, which are due to different historical development, orientation of the economy and the presence of many nationalities living in the territory of Romania. These differences then gave rise to sometimes common and sometimes locally specific requirements for the preparation and implementation of the Czech company’s entry into the Romanian market, which even today offers interesting opportunities in many fields that in other parts of Europe or the world have long been saturated and without much potential.
- Supplement your knowledge of history and economics Luck favors the prepared, which is why one of the basic steps that can be recommended to Czech companies before entering the Romanian market is to study at least basic historical events and economic realities on the Internet. For example, logistics – getting through Hungary by highway is easy. But movement in the hinterland of Romania is another story, and calculating the cost of transporting goods can make export price lists more expensive.
- Compile the export price list The next step is to compile the export price lists. One of the innovations of recent years is the necessity of including a sufficient margin (commission) in the export price, which covers not only own production, transport and the costs of printed promotional materials to support the business partner, but it is necessary to take into account the costs of campaigns (or the costs of active sales activity by the local importer/distributor). Alternatively, it also happens that the importer asks about the implementation of campaigns directly by a foreign supplier.
- Prepare for a fixed management structure A Czech company must prepare for a fixed management structure, regardless of the size of the company. Finding the right contact person is a mistake made by many Czech managers, stemming from experience in other markets. Getting a Romanian business partner is a matter of repeated emails, phone calls and chance. Only a specific person makes decisions in the company, and the smaller the company, the narrower the possibility of communication with the given manager. If you arm yourself with patience, getting a counterpart for negotiations is not an unrealistic matter. Personal contact or fluency in Romanian is the key to success, even though English is widely spoken in Romania.
- Be more concise in communication We recommend that Czech companies avoid demanding presentations, lengthy texts or large file attachments (max. 3-4 MB of data) in e-mail communication. The ideal structure of an e-mail address is a brief e-mail address, in the attachment a Letter of Interest (letter on 1x A4) and a clear product leaflet or catalog with a selection of products offered only for Romania.
- Respond quickly After obtaining a contact person and a positive response from a Romanian company, respond as quickly as possible and communicate according to the requirements of the Romanian interested party for more detailed information (price lists, logistics, participation in campaigns, etc.). Communication can first take place by e-mail, and in case of interest, the Romanian manager will decide on a personal meeting with the Czech counterpart. Such an offer for negotiations is not rejected.
- Be polite The business negotiation itself may pleasantly surprise the Czech manager with the European character of the process, however there are small “buts…” that can spoil all the preparation and export goals. It is necessary to be polite and not to show superiority or advantage, given the different development and possibilities of both countries. After all, acting from a position of strength can be a reason for rejection.
- Look for compromises and negotiate. Dictating business conditions to a Romanian partner in the style of “we want it this way because we have it set up this way in other countries” is the beginning of the end. The Romanian manager will be happy to accept a joint compromise, he will be happy to participate in an interesting project and, in the end, also in the marketing costs of supporting the entry of a new product into the market. On the contrary, you should be prepared that some conditions proposed by the Romanian side are not speculative, but simply given, and you can leave time to think about whether to accept them or try to negotiate a concession. The stronger (bigger) the Romanian company (distributor), the greater the participation or the greater costs of mutual trade. The Romanian market is not for unprepared exporters.
- Listen and ask questions Complimenting a business partner about his company, fleet or occasionally lightening the conversation with informal topics (sports, weather, family…) is perfectly fine. Avoid politics or national minorities. Minimize your own presentation. Present a printed color catalog and briefly present who you are, why you are interested in doing business with the company and what you can offer your Romanian counterpart (quality, speed, after-sales care, participation in foreign projects, etc.). On the contrary, allow space for the presentation of the Romanian company. Listen and ask questions. Don’t forget to suggest the next course of action at the end of the meeting.
- Don’t forget the gifts Regarding gifts/attentions, it is optimal to bring the Romanian manager a small book about the Czech Republic, the spa or a music CD with Czech classical music to the first meeting. Inviting a Romanian manager to your own company after a meeting in the Czech Republic is a suitable tool to thank for the time that your counterpart devoted to you. Czech tourism and its offer is very positively received by Romanians and, for example, Prague is one of the most visited short-term destinations.
Practical telephone numbers (emergency services, police, firemen, information lines, etc.)
Ambulance, police, fire department: +40 112
Information line: +40 1931
Important web links and contacts
- President of the Republic: https://www.presidency.ro/
- Government: www.gov.ro
- Ministry of Foreign Affairs – Ministerul Afacerilor Externe Web address: https://www.mae.ro
- Ministry of the Interior – Ministerul Afacerilor Interne Web address: https://www.mai.gov.ro/
- Ministry of Agriculture and Rural Development – Ministerul Agriculturii Şi Dezvoltării Rurale Web address: https://www.madr.ro
- Ministry of National Defense – Ministerul Apărării Naţionale Website address: https://www.mapn.ro
- Ministry of Culture – Ministerul Culturii Web address: https://www.cultura.ro/
- Ministry of Regional Development, Public Works, and Administration – Ministerul Dezvoltării, Lucrarilor Publice şi Administraţiei Web address: https://www.mdlpa.ro
- Ministry of Economy – Ministerul Economiei, Web address: https://www.economie.gov.ro
- Ministry of Energy – Ministerul Energiei Web address: https://www.energie.gov.ro
- Ministry of National Education – Ministerul Educaţiei Web address: https://www.edu.ro/
- Ministry of Finance – Ministerul Finanţelor Web address: https://www.mfinante.gov.ro/ Ministry for Investments and European Projects – Ministerul Investitiilor si Proiectelor Europene Web address: https://www.mfe.gov.ro
- Ministry of Justice – Ministerul Justiţiei Web address: https://www.just.ro
- Ministry of the Environment, Water and Forestry – Ministerul Mediului, Apelor si Padurilor Web address: https://www.mmediu.ro/
- Ministry of Labor and Social Protection – Ministerul Muncii si Protecţei Sociale Web address: https://www.mmuncii.ro
- Ministry of Health – Ministerul Sănătăţii Web address: https://www.ms.ro/
- Ministry of Sport – Ministerul Sportului Web address: https://www.mts.ro/
- Ministry of Transport, Infrastructure – Ministerul Transporturilor si Infrastructurii Web address: https://www.mt.gov.ro/
- Ministry of Research, Innovation and Digitalization – Ministerul Cercetarii, Inovarii si Digitalizarii Web address: https://www.research.gov.ro
- Ministry of Business and Tourism – Ministerul Antrepreneuriatului si Turismului Web address: https://www.imm.gov.ro
- Ministry of Family, Youth and Equal Opportunities – Ministerul Familiei, Tineretului si Egalitatii de sanse Web address: https://www.mfamilie.gov.ro
- Romanian Chamber of Commerce and Industry: www.ccir.ro
- AAAS Privatization Agency (AVAS) – www.aaas.gov.ro
- Agency for Payments and Interventions in Agriculture – www.apia.org.ro/
- Forest administration – www.rosilva.ro
- Housing fund – www.anl.ro/
- Cosmic Agency – www.rosa.ro
- Agency for Consumer Protection – www.anpc.ro
- National Institute of Meteorology – www.meteoromania.ro/
- National Institute of Hydrology and Water Management – www.inhga.ro
- Prison Administration – https://anp.gov.ro
- European Romanian Institute – www.ier.gov.ro
- National Institute of Research and Development in Informatics – www.ici.ro
- Competition Office – www.consiliulconcurentei.ro/ro/despre-noi.html Patent Office – www.osim.ro
- Commission for Nuclear Safety (Nuclear Supervision) – www.cncan.ro
- Customs Administration: www.customs.ro Doing Business – catalog of Romanian companies (also in English) – https://doingbusiness.ro
- Catalog of Romanian companies: www.totalfirme.ro
- National Commercial Register (also in English) – https://www.onrc.ro
- Economic information: Association of Importers and Exporters of Romania (also in English) – www.aneir.ro
- Investment opportunities in Romania (English) – www.investromania.gov.ro, www.profitromania.ro
- Financial and stock exchange: Stock Exchange (also in English) – www.bvb.ro Financial investments (also in English) – www.investment.clubromania.ro
- Central bank – Banca Nationala Romana (BNR) – www.bnr.ro
- Tax Administration – Agentia Nationala de Administratie Fiscala (ANAF) – www.anaf.ro
- The largest organizer of ROMEXPO trade fairs – www.romexpo.ro