The Foreign Investors Council (FIC), one of the biggest organizations representing multinationals active in Romania, sent a letter to the Government and Parliament asking them to adopt the law on the social contribution transfer from employers to employees.

The Government adopted the social contribution transfer at the end of last year, through an emergency ordinance that went into force on January 1, 2018. However, foreign investors say that, as long as the law for adopting this ordinance is not voted by the Parliament, investors face uncertainties, as the MPs may decide to come up with new amendments.

“In the three months in which the ordinance has been in force, reality has proven that the problems raised by employers were founded and new ones emerged. We are now again in a situation that doesn’t offer enough predictability and stability. Emergency ordinance 79/2017, which entered into force on January 1, 2018, has been discussed by the Senate and remained with the Chamber of Deputies, and it’s now uncertain if it will be adopted like this or changed,” reads the FIC letter.

The foreign investors say they still don’t understand the purpose of the social contribution transfer, which has changed the way employees in Romania are paid. Some companies haven’t yet raised their employees’ gross wages to compensate for the social contribution transfer as they fear the change would be reversed. Instead, they have been granting employees bonuses to compensate for the higher social contributions they have to pay.

Foreign investors lose confidence in Romanian business environment

editor@romania-insider.com