As the international business context becomes increasingly complex, so do the HR processes necessary to accommodate the global workforce. Among them, the hiring process is one of particular importance, since the best way to ensure optimal strategy implementation for any company is to hire the right people.
Beyond the substantive aspects – the intrinsic part of hiring – a multinational company needs also to remain aware of the institutional ones. In this sense, given our expertise in Romanian payroll, we will further on explain the procedures to be followed by a non-resident company when employing a Romanian citizen.
ACKNOWLEDGING TWO DIFFERENT SITUATIONS
Within the framework of European Union legislation, we distinguish two different situations when it comes to non-resident companies (from an EU country) wanting to employ a Romanian:
- The employee will work in a different country that the one where he/she is domiciled (resident) – in our case Romania. In this situation, as EU legislation stipulates, the person in question will be subject to taxation in the country where his/her employer’s headquarters or main interests are located.
- The employee will work in Romania for an employer who has business interests in Romania, but whose headquarters are located elsewhere. In this case, the employee will be subject of Romanian labour taxation.
STEP-BY-STEP HIRING PROCEDURE
Here are the steps to be followed by the employer when wanting to hire a Romanian citizen:
I. First of all, the foreign company should get a fiscal registration number in Romania.
In order to do this, a file containing a specific set of documents must be submitted to the fiscal authorities. Here is what this file should contain:
– notarized power of attorney for the person in charge of all the formalities (translated in Romanian by a legally authorized translator);
– proof of the company’s registration at the local trade registry OR proof of its registration as a VAT subject (original or notarized copy, translated in Romanian) from the local fiscal authorities; although the registration is not for VAT, experience showed us that such a certificate will also suffice for this purpose;
– Form 090, which can be found on the website of the Ministry of Finance;
– copy of the labour contract.
The labour contract cannot be registered at the Labour Authority prior to the fiscal registration code being issued for the company. Therefore, it is recommended to sign the labour contract with at least 2 weeks before the employee begins his new job. This period should provide enough time for submitting the above file and obtaining the fiscal registration number. From our experience, for extra caution, setting aside a one month period for all these formalities might not be such a bad idea.
II. The second step is to declare the new contract at the Territorial Labor Authority
For the first employee, a specific form and an electronic registration in the REVISAL system must be submitted (saved on an external support like a CD, memory stick etc.). For your information, REVISAL is the software dedicated to the evidence of labor contracts. Once this file submitted, a password to the online platform will be delivered to the company, so that the following labour contracts or any subsequent changes they might suffer can be reported electronically.