BrexitToRemainia Newsletter #31

By CC / In Newsletters / 0 Comments

One of the reasons we decided for a fortnight frequency of this newsletter was that not much would happen anyway in Romania during one week alone. Wrong assumption, at least on what concerns the past few weeks. With the new Government now in place, “to be or not to be” questions abound. Will pillar 2 of the pension system change or not? Will companies be taxed on their turnover from now on? Will Codruta Covesi be able to keep her place as head of DNA? Does Liviu Dragnea own Tel Drum? Will this new crisis take a toll on his political influence? Disregarding politics, business and society move on with their lives. Healthcare consumers turn to online and mHealth technologies more and more. And young people like Tudor Popa are helping those visually impaired live a better and safer life in darkness. Shame for the former, kudos for the latter.

Be savvy: know what`s happening right now in Romania. News from politics, economy, business, various industries and social life.

A shaky Government (continued)

We left you last time with the news that we have a new Government (after PSD ruling party ousted their own people from power). In the few days since “coronation” of the new ministers, various things have (re)surfaced in the media:

  • Prime Minister Mihai Tudose is the same one who has been accused in the past of plagiarism in his doctoral thesis. Ever since he withdrew his PhD, just to be on the safe side
  • With or without pension? The new Finance Minister announced he will scrap pillar 2 of the national pension system, just to be contradicted by prime minister within a matter of hours. So it seems we still have almost 10 Bn EUR in the system … peanuts, right?
  • Companies should be taxed based on their total revenue, not on their profit. Whaaaat? So if i’m a new business and still don’t make a profit, my losses would be even higher. Or, if i’m a big company with lots of sales but low profit margin (e.g. retail) I might go from profit making to loss making and leave the country, right? Isn’t that illegal state aid which discriminates against large companies, as we have seen in EU vs Poland legal case? Debate is ongoing … stay tuned

… but these are all non-news (at least for the time being). The big question is: how long will Romanian’s (still largely independent) justice survive the attacks of corrupt politicians? DNA Head Prosecutor Codruta Covesi has always been pressured by politicians due to her departments’ high profile cases and incriminations. But recently there is an attempt to oust her from within the organisation: she fired two prosecutors on professional grounds and that created a big scandal with voices asking for her resignation. However President Iohannis is backing Covesi and sees no reason to ask for such dramatic moves :). Could all of these have something to do with the news below? …

RISE Project – “Their Secret Service”

Do you have 20 minutes to spare for a quality read? If so, take Google translate and enjoy this report which was just published by RISE Project (a non profit organisation funded by Open Sociey Foundations & USAID which specializes in investigation journalism). You will find multiple occasions to amuse yourself at the magnitude of corruption networks and deals in the Romanian system. This particular report targets the most powerful politician these days, Liviu Dragnea, head of Social Democratic Party (PSD). In short, the story is:

  1. PSD/ALDE coalition managed to pass a law taking one of Romania’s secret service agencies outside the power of President & Parliament (and in full control of Ministry of Interior). The head of this Ministry is Carmen Dan, a close ally of Liviu Dragnea, of course. The agency (nicknamed “two and a half”) is in possession of information pertinent to the business affairs of Liviu Dragnea with Tel Drum
  2. Tel Drum is a private company (previously public!) which owns 200 buildings and 800 hectares of land in Teleorman, the constituency of Liviu Dragnea. Nothing wrong until here … just that …
  3. This company is de facto (but of course indirectly) owned by Liviu Dragnea, we learn. The latter rejects any links and he’d better be right, otherwise another criminal charge will land on him and maybe end his career, too. As one can imagine, selling land from public domain and awarding millions of Euro from EU funds to one’s “own” company is not quite right.

This report was published on 6th of July 2017. One day later RISE Project received a spontaneous tax inspection from Romanian authorities. No correlation, of course.

PS: so what has this report to do with Codruta Covesi, as we alluded in the article above? Well, DNA has just confirmed that they, too, have an open case on the same topic. Ha! Ha …

Take action: grasp opportunities for advancing business in (and/or with) Romania. What others think & do. What business events to attend.

Healthcare … delivered online

It’s been a long time since we spoke about healthcare. Today’s article is about how Romanians use internet or health technologies to keep their health under control. From a survey conducted on 1.360 urban respondents who use internet on regular basis we learn that:

  • Seven out of ten Romanians use internet for healthcare related issues: 50% of them to get information on diseases / symptoms / treatments, 35% for administrative tasks (reminders, scheduling) and 23% for communicating online with their physicians or with fellow patients
  • Majority of those who use health-related technologies (wristbands, smart watches, app) do so on their own initiative – 67%. The rest were asked by a healthcare professional or a family member. If you are a business looking for empowered patients to take control of their diseases via technology … look no further 🙂
  • Romanian patients or health conscious citizens would love to be offered more services for online scheduling of hospital visits (78%), peer-reviewed medical information (65%), marketplaces to find doctors specialized in various conditions (61%), online medical records management (57%)
  • Slightly unrelated, but useful to know: there seems to be a trend to access private hospitals for lab tests (61%) and imaging services (37%), whereas public hospitals – everyone loath them – are mostly used for hospitalization (39%) and surgical procedures (25%)

If you prefer info-graphics, see this one (it’s in English, so no Google translate this time :)).

High schoolers win European competition

“We are team Oculus. Join us and together we will defeat darkness”. This is how the introduction video ends of the winners of Amcham European awards this year. The team is of course Romanian and Tudor Popa, its CEO, is only 17 years old. Together with his friends Tudor created Mitra Glasses, a device that provides essential aid and safety to visually impaired people during movement, using incorporated sensors and efficient algorithms. Last year, Oculus won the Global Final of the Social Innovation Relay, too. If you want to contact them, you’d better do so on Facebook directly … Millennials, eh?


Romanian Overview Report: In this comprehensive report you will find information about: macroeconomic landscape, industries and investments, infrastructure and technology, taxation system, human capital, governmental support and last but not least quality of life in Romania (if you decide to move over here ;)).

Investor Guide Romania: In this well-structured guide you will find information about: investment climate in Romania, economy in general and the business ecosystem in particular, availability of financing, employment and labour law, fiscal policies, as well as how it is for an expat to live in Romania (not too bad, we can assure).