In recent surveys, Romania has been evaluated as a friendly, safe and economical environment for digital nomads, alongside Portugal and Spain. The unpleasand pandemic has actually stimulated both the offer and the request for setting up an unsophisticated office abroad. While, in a recently published paper, we looked into the taxation of digital nomads (see C.F. Costaș, C. Dohotar, Impozitarea nomazilor digitali, Cluj Tax Forum Journal no. 2/2021), it is beginning of 2022 that brings the interesting news: Romania acknowledged the need to start providing a legal framework for such digital nomads.
The first step in legally regulating this aspect was made at the beginning of this year, by the entry into force on 17 January 2022 of Law no. 22/2022 for the amendment and completion of the Government Emergency Ordinance no. 194/2002 on the regime of foreigners in Romania, which comes to define the notion of digital nomad and provide the possibility of obtaining long-stay visas in Romania by persons who fall into the category of digital nomads, and meet a number of additional conditions.
We note, therefore, that globalization, and in particular the COVID-19 coronavirus pandemic, has brought changes also in the way work is effectively performed. The legislation must be adapted in such a way that people counted as digital nomads benefit from the rights of foreigners in Romania.
Until the entry into force of the new law, foreigners in Romania could obtain the right of long stay on this reason (work) only if they were employed by a company operating in Romania or (for commercial purposes) if they held the status of administrator and / or associate at a company registered in Romania. In the case of foreigners working remotely, they could not be granted a long-term visa for this purpose, being forced to apply for a visa under another criterion, and if they did not fall into any other legal category, they could not obtain this right, bearing all the consequences arising from this (the impossibility of establishing a legal residence, the obligation to leave the country at the expiration of the short-stay visa of 90 days etc.).
The Romanian authorities have responded to this need that increased during this last year, and in their attempt to adapt, they have defined the conditions under which foreigners working remotely, while residing in Romania, can apply for and obtain a long-term visa.
According to this new law, the digital nomad is the foreigner who is employed by an employment contract with a company registered outside Romania and who provides services through the use of information and communication technology or who owns a company registered outside Romania, in which he provides services through the use of information and communications technology, and may be employed remotely as employees or within the company, using information and communications technology.
The first shortcomings of the law lay in the omission to include in the category of digital nomads foreigners who provide long distance services based on other types of contracts, such as a collaboration contract, a service contract, etc. Thus, from the point of view of the purpose of regulation, the goal of the Legislature has not been fully achieved, as this category of persons are at a disadvantage, strictly on the basis of the type of contract under which they perform their activity, without such discrimination being justified or (probably) pursued. The impossibility of obtaining the legal right of long-term residence remains a reality for this category of persons.
At the time being, foreigners who fall into the category of digital nomads, can apply to the diplomatic missions and consular offices of Romania in the country where they have their domicile or residence, granting a long-stay visa, if they have means of subsistence obtained from the activity carried out, in the amount of at least three times the average gross monthly earnings in Romania for each of the last 6 months prior to the date of submission of the visa application, as well as for the entire period entered in the visa.
In addition, they must present the following documents:
a) an employment contract concluded with a company registered outside Romania, by which to prove the provision of remote services, by using information and communication technology, or proof of remote administration and by using information and communication technology of a company registered by the at least three years from the date of the visa application outside Romania – in original, together with a certified translation into Romanian;
b) a document issued by the company registered outside Romania with which it has concluded an employment contract or by the company registered outside Romania that the foreigner owns, through which to be presented all the identification and contact data of the company, as well as the field of its activity, the foreigner’s participation in the company and information on the company’s legal representatives – in original, along with an authenticated translation into Romanian;
c) a letter of intent by which the foreigner details the purpose of the trip to Romania and the activities he intends to carry out on the Romanian territory – in original, together with an authenticated translation into Romanian;
d) a document issued by the specialized institution of the competent central or local public administration, from the place of fiscal residence, attesting the fact that, at the date of applying for the visa, the employed foreigner or, as the case may be, the company he owns has paid up to date with taxes, fees and other obligatory contributions, as well as that it is not registered with acts and deeds that have or have had the effect of tax evasion and tax fraud – in original, apostille or superlegalized, as the case may be, together with a certified translation into Romanian;
e) a reservation of a travel ticket valid until the destination, or the driving license, the green card, the registration documents of the means of transport and the proof of the itinerary, in the case of drivers;
f) the proof of medical insurance for the entire period of validity of the visa, valid on the territory of Romania and with a coverage in the amount of at least 30,000 euros;
g) the proof of the means of subsistence obtained from the activity carried out, in the amount of at least three times the average gross monthly salary in Romania for each of the last 6 months prior to the date of submission of the visa application, as well as for the entire visa period;
h) the proof of insurance of accommodation conditions;
i) criminal record certificate or other document with the same legal value, apostille or superlegalized, as the case may be, translated into Romanian and authenticated, issued by the authorities of the country of origin and, if applicable, of the state where the alien is legally resident and in which he obtains income from the performance of the employment contract with a company registered outside Romania or from activities carried out by a company registered by him outside Romania, by which to prove that there are no records of criminal acts ;
j) any other documents required by the Romanian authorities, in addition to those mentioned at a) -i).
Nonetheless, the Romanian legal context still needs appropriate changes and measures, more comprehensive, to adapt to this unprecedented reality, in which the movement of people has increased significantly, and population migration continues to be an important constant from various perspectives of labor, taxation, economy, etc. This first step in the legal regulation of the long-term right of residence of digital nomads, materialized through Law no. 22/2022, confirms that the new category of workers (i.e. digital nomads) has become a reality that can no longer be ignored, and it is necessary to regulate their legal situation, both in terms of residence and in the future, hopefully, in terms of taxation of their income and compulsory social contributions.
Costaș, Negru & Asociații provides assistance and legal representation for digital nomads before the competent Romanian authorities, including the assessment of their (possible) tax regime.
This short presentation was prepared for our Blog by Ms. Clara Dohotar, a lawyer working in our Bucharest office.