Doing business in Romania: examples of successful Bulgarian companies

It appears that the river still divides rather than connects the two banks of business opportunities

Doing business in Romania: examples of successful Bulgarian companies

Which are the Bulgarian companies that reap the benefits of the closeness to one of the fastest growing European markets

It appears that the river still divides rather than connects the two banks of business opportunities

© Димитър Марков


If you missed part I: How Romania overtook Bulgaria

The Romanian market is huge and is recovering fast from the recent downturn caused by the pandemic. It is good news for Bulgarian companies to have a much bigger and growing market just across the Danube that is somewhat similar to their domestic market and at the same time free of most of its main problems. And some businesses already benefit - there are Bulgarian companies with over 90% market share in some sectors of the Romanian economy.

Bulgarian leaders on the Romanian market

Romania was Bulgaria's second largest trading partner in the last 5 years after Germany. According to preliminary data, bilateral trade turnover exceeded 8 billion еuro in 2022, with Bulgaria posting a surplus. The leading Bulgarian exports to Romania include iron, medicines, tractors and biodiesel.

The main groups of food imports into Romania are meat, dairy products, vegetables and fruits, fish and seafood, grains, and Bulgaria is among the six largest suppliers of those goods. "They have 9% VAT on food. At the same time, they have a similar food culture. That's why we are the largest importer of red lentils into the country, with a share of 40 to 50%. We are also leaders in beans (15%) and chickpeas (40%)", explains Nikolay Dimitrov, owner of Natura Fine Food, a leader in the food imports on the Romanian market.

Romania is second in Europe in terms of growth and growth potential in food and beverages (F&B) consumption. Nedelya, a Bulgarian confectionery business with 15 stores in Bucharest, is among the top three in its sector in the Romanian capital. The combination of three factors - the large metropolitan area of Bucharest (incomparable to any in Bulgaria), the higher purchasing power of the population and the higher level of hedonism) are the main reasons why Nedelya has been growing in Romania for so many years, says Peter Sturm Konstantinov, CEO of Nedelya Romania.

According to Velin Ganev, owner of Danubius, which is the exclusive commercial representative of Bulgaria's Dateks that holds over 50% of the cash register market in Romania, Danubius and two more Bulgarian companies hold among themselves a market share of over 90% in this segment in the country. Manufacturing of high-tech Bulgarian products and businesses well regulated by the state can easily enter the Romanian market.

Bulgarian companies also have a significant share in the services sector. "Bulgarian investments in Romania are several times more than Romanian investments in our country, and the number of Bulgarian companies doing business in our northern neighbor is about 3,200. The difficulties and challenges of the Romanian market have motivated Bulgarian companies to change their way of presenting and working. This has led Bulgarian companies to leading roles in various sectors including insurance, micro lending, agriculture, food, gambling, infrastructure construction and many others," commented Bulgaria's commercial attaché in Bucharest, Ivaylo Marinov.

The main differences in the business environment

According to a study conducted by international HR company Remote last year, Romania is the 7th best country for business development in the world. This is due to the fairly short time for launching a business (about 20 days) and the extremely low starting capital required.

According to the survey, nearly half of the financial directors at Romanian companies say they are currently in the process of expanding their business and the tax policies of the state are certainly one of the main incentives.

Digitization of services and e-administration are also not just empty words in strategic documents published somewhere on the websites of the ministries. "In Romania, the high level of digitization has limited the possibility of employing unregulated practices. The online platforms that they work on both state and local level do not allow direct contact with employees. Everything that is related to business is made to happen online - submission of documents, reports, certificates, cash," says Petko Dimitrov, chairman of the Bulgarian-Romanian chamber of commerce and industry.

There are Bulgarian companies with more than 90% market share in some Romanian sectors, and more and more Bulgarian experts in top positions in international companies in our northern neighbor
Photographer: Димитър Марков

For this reason, some innovations and non-standard solutions also find good soil in Romania. "In the last 10 years, investments in Romania have evolved in many areas - starting with investments in car factories and ending with food processing. In Romania we have Glovo, Bringo, which works with Carrefour, there is also Bolt. These food couriers are present in every medium and large city, unlike Bulgaria, where they are concentrated in the big cities," Petko Dimitrov says. This is the place to note that taxi and food delivery services provider Uber also operates in Romania.

Velin Ganev who has lived in Romania for many years, says that Bulgarian businesses work very well in places where the activity is regulated by the state. And of course, the big difference is that corruption at the level of institutions has decreased significantly. "We haven't given bribes in Romania, not even a single leu," says Stanko Stankov, owner of the first private railway carrier in Bulgaria - Bulmarket, which has entered the railway market and several other sectors in Romania.

How do you do business in Romania?

In Romania there is the first Bulgarian organized patronage. "The goal is for Bulgarian businesses to have the best lobby before Romanian authorities and a more direct contact with them," explains Marinov, the commercial attaché. "And this is necessary, because even with an excellent business idea there is no guarantee that the road to the Romanian market will be easy."

To work with Romanians, you have to understand their mentality, work culture, language," Marinov points out. "The problem I notice is the lack of sufficient information about Romania. The second obstacle is the lack of knowledge of the language and the specifics of the country. Romania is so close to Bulgaria, and at the same time it is still unknown," says Marinov.

One of the reasons for failure, for example, is the unawareness of the volumes of the Romanian market, says Ivaylo Marinov. Petko Dimitrov says that Bulgarian companies hardly agree to work at zero profits for a certain period of time. They want to start earning right away and dismiss the idea of delayed payments, which is typical in Romania.

Dimitrov also says that hiring Bulgarian management for newly established companies is recommended. In order for a Bulgarian small or medium-sized company to enter the Romanian market, it needs to work under a foreign brand, at the beginning at least, he adds.

Wide field for Bulgarian entrepreneurs

The Romanian market is becoming more attractive, as more and more Bulgarian companies are looking at new niches, including in construction and green energy. "A Bulgarian company is the market leader in Romania in the supply of photovoltaic panels and the entire energy harvesting system," says Marinov. A consortium comprising Romania's Coni SRL and Bulgaria's Trace Group won the largest public procurement contract in 2022, for the construction of the second lot of the highway connecting Ploiești and Buză worth 1.25 billion lei (252 million euro).

"Electronic commerce has 10 times higher potential in Romania", says Nikola Ilchev, owner of eCommerce Academy, a company active in online commerce and a partner of one of the leaders in the region - Romania-based eMAG.

At the same time, there are still many undiscovered market niches to invest in. "In my opinion, the fashion sector is totally underdeveloped in Romania. There is huge potential for catering to the interests and the needs of the various classes existing in Romania," Velin Ganev opines.

It should be noted that the Danube still divides rather than connects businesses from its two banks. During most of the year, the waiting time for goods to cross the border exceeds 24 hours. Stanko Stankov believes that infrastructure is significantly better developed in Romania, and the connections to Bulgaria are rather an obstacle to Bulgarian investments in Romania. This would largely change with the two countries' potential entry into the EU's free-travel Schengen area and a focus on cross-border connections.

If you missed part I: How Romania overtook Bulgaria

The Romanian market is huge and is recovering fast from the recent downturn caused by the pandemic. It is good news for Bulgarian companies to have a much bigger and growing market just across the Danube that is somewhat similar to their domestic market and at the same time free of most of its main problems. And some businesses already benefit - there are Bulgarian companies with over 90% market share in some sectors of the Romanian economy.

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