Debt collection in Romania
Romania presents itself as an interesting market but with high risks of Insolvency and an inefficient judicial system.
The International image of Romania is that of a Country with a fast-growing economy and an increasing GDP. If the government’s forecasts on the economy will become true, in 2018 the growth will be equal to 5.5%.
Also Investments have increased considerably in recent years, most of them coming from abroad. Taking into consideration the commercial partners in the first place we have Germany. In fact Germany’s exports to Romania amounted to $ 17 billion or 19.9% if its overall imports.
After Germany, they follow according to the import quota and with the following percentages these countries:
Italy ($8.5 billion or 9.9%)
Hungary ($6.4 billion or 7.5%)
Poland ($4.7 billion or 5.4%)
France ($4.5 billion or 5.3%)
China ($4.3 billion or 5%)
Netherland ($3.4 billion or 4%) and in the end
Turkey ($3.4 billion or 3.9% ).
There are many growing strategic sectors that in the next few years could be the driving force for further consolidation of the foreign presence on Romanian territory. From the agro-industrial Industry to the transport, from industry to energy.
As regards Debt collection due to the business conditions in Romania, in the last period, the credit recovery procedure represents an important and complex chapter of our daily activity.
Therefore, before taking any legal action in Romania, it is important to analyze the culture and the laws of the Country. This is why it is important to make use of professionals and collaborators on site to overcome all the barriers inherent to language and culture.
Moreover, is it is essential to analyze also the so called Country Risk/Opportunity Risk.
According to the Romanian law 3 are the options to be followed in order to collect a debt:
- The order for payment
- The common law procedure
- The insolvency procedure
An enforcement decision can be obtained from 3 months (for the payment order procedure) up to 3 years (for insolvency procedure).Therefore, we as Invenium suggest an extra-judicial approach that lasts an average of 28 days instead of 90 days (the minium waiting time for the payment order procedure).
Invenium has many partners – not only in Romania but in 105 countries – to better assist creditors who need to assert their rights.
As for Romania we also have a Case History which we will explain in brief:
CASE HISTORY ROMANIA.
Just as an example we report this case: awell-known Italian company, a reality specialized in the production of chemical products, which boasts of an export presence in 70 countries, has requested extrajudicial intervention for the recovery of two credits: € 30,000 and € 9,000 respectively for two several Romanian companies. The Romanian companies were set up as Joint Ventures with two well-known Italian companies in the infrastructure sector. However, they are independent entities compared to Italian companies and, once the structural operation is in place, are put into liquidation.
The extra-judicial approach has been put in place both on the Romanian side -through the help of our Legal Partner who has been in contact with the local legal entities – and through the support of our Italian lawyer who managed the relationships with the Controlling Companies.
Thanks to the joint approach and the collaboration of the two lawyers towards both the parent companies and the subsidiaries, a fast and effective solution has been reached, which has remained within the pre-litigation area.
So, only the perseverance of an Invenium legal partner located in Bucharest allowed the collection of both credits in less than 45 days.