Expanding your Romanian business to the United States offers access to the world's largest consumer market. While Romania and the U.S. share economic relationships, the transition requires navigating substantial differences in legal frameworks, employment practices, and business culture.
Understanding Market Scale and Structure
Romania operates as a unified market under a centralized regulatory framework, while the U.S. functions as 50 distinct markets under federal oversight. This fundamental difference impacts regulatory compliance, market strategy, and operational planning.
Market Size Comparison: Romania's economy (GDP approximately $301 billion) is developing, while the U.S. economy exceeds $25 trillion—over 80 times larger. The U.S. consumer market includes 330+ million consumers with significantly higher purchasing power compared to Romania's 19 million consumers.
Legal Structure and Entity Formation
Romanian businesses are familiar with structures like SRL (limited liability company) and SA (public corporation). U.S. business structures differ:
C-Corporation: Most Romanian companies choose Delaware C-Corporations for U.S. expansion. This structure offers well-established corporate law and is ideal for companies seeking U.S. investment or planning significant growth.
LLC: Similar to SRL in some respects, LLCs offer flexibility and pass-through taxation, suitable for smaller operations.
Key Differences: Unlike Romania's capital requirements (minimum RON 200, approximately €40 for SRL, RON 90,000 for SA), U.S. entities typically have no minimum capital requirements. U.S. corporate governance differs substantially from Romanian corporate law.
Employment Law and Labor Relations
Romanian employment law provides worker protections including social security contributions and various labor regulations. U.S. employment law operates under different principles:
At-Will Employment: Unlike Romania's requirement for notice periods and formal termination processes, U.S. at-will employment allows termination without notice or cause, though with complexities around discrimination laws.
Benefits and Social Costs: Romanian employers contribute to social security systems (approximately 2.25% of salary in employer contributions, plus health insurance contributions). U.S. employers face different obligations: private health insurance (averaging $15,000+ per employee), Social Security (6.2%), Medicare (1.45%), and state unemployment insurance. Total employment costs typically range 25-40% above base salary, significantly higher than Romania.
Work Hours and Leave: Romania mandates 20+ days vacation. U.S. has no federal vacation mandate and typically offers 10-15 days vacation.
Compensation and Salary Practices
Romanian salary structures are lower than Western European levels. U.S. compensation practices show much greater variation and higher absolute levels:
Regional Variations: U.S. salaries can vary 35-50% between regions. Tech hubs command premiums of 35-50% above national medians. U.S. salaries are typically 4-6 times higher than equivalent Romanian salaries.
Total Compensation: U.S. employees expect comprehensive packages including health insurance, 401k retirement plans, equity options, and performance bonuses. Romanian companies expanding to the U.S. must budget for significantly higher compensation costs.
Banking and Financial Operations
Romanian businesses benefit from European banking systems. U.S. banking operates differently:
Account Opening: U.S. banking regulations require extensive documentation and often in-person meetings. Romanian businesses should plan for longer setup times.
Payment Systems: The U.S. ACH system operates differently than SEPA. International transfers involve higher fees and longer processing times, and currency conversion adds complexity.
Tax and Regulatory Compliance
Romania operates a unified VAT system (19% standard rate). The U.S. tax system is more complex:
Sales Tax: Unlike Romania's unified VAT, the U.S. operates state and local sales taxes. Since the 2018 Wayfair decision, businesses must collect sales tax based on economic nexus (typically $100,000 revenue or 200 transactions per state).
Corporate Taxation: U.S. corporate tax (21% federal) differs from Romania's rates (16% corporate tax). State taxes add additional layers. The U.S. taxes worldwide income for U.S. entities, requiring careful planning to avoid double taxation.
Immigration and Visa Requirements
Romanian citizens face standard U.S. visa requirements:
L-1 Visa: For intracompany transfers, requiring one year of employment with Romanian entity and qualifying relationship.
E-2 Treaty Investor Visa: Romania does NOT have an E-2 treaty with the U.S., making investment-based visas more difficult.
H-1B Visa: For specialized workers, but subject to annual caps and lottery. Competition is intense.
EB-5 Immigrant Investor Program: For permanent residency through investment ($800,000-$1.05 million minimum), though this is a lengthy process.
Cultural and Business Practice Differences
While both countries value business relationships, practices differ:
Communication Style: Romanian business communication can be more formal and hierarchical. U.S. business communication is more casual and relationship-focused.
Decision-Making: Romanian companies may involve more hierarchical decision-making. U.S. decisions can be faster but may require different relationship approaches.
Work Culture: Romanian work culture often emphasizes hierarchy and formality. U.S. work culture is generally more casual and individual-focused.
Key Challenges and Opportunities
Challenges:
- Navigating 50-state regulatory environment vs. Romania's centralized system
- Significantly higher employment costs (4-6x Romanian costs)
- Complex sales tax compliance across multiple jurisdictions
- Visa challenges for Romanian employees
- Cultural adaptation in business communication
- Currency and remittance considerations
Opportunities:
- Access to world's largest consumer market
- Growing Romanian reputation in IT and technology services
- Romanian-American community providing business networks
- Access to U.S. capital markets
- Technology and services market opportunities
- Higher revenue potential despite higher costs
Conclusion
Expanding from Romania to the U.S. offers significant opportunities but requires understanding substantial differences in legal, employment, and business environments. The higher costs are significant, but the market opportunity is substantial.
Romanian companies bring strengths including technology expertise, cost-effective operations, and growing international experience. These attributes, combined with proper U.S. market understanding, strategic planning for higher costs, and navigation of visa challenges, can lead to successful expansion and sustainable growth in America.