Overview

National Focus: Government Digital Economy/Growth/Transformation Plans or Strategies

Romania’s digital economy has been steadily growing over the past decade and has played a significant role in the country’s economic development. Romania actively participates in various EU digital initiatives and funding programs to further integrate into the broader European digital market. The National Recovery and Resilience Plan (PNRR) also includes significant investments in digitalization, particularly in public administration, healthcare, and education sectors.  Moreover, under the National Recovery and Resilience Plan (PNRR), Romania allocated $4.1 billion for digitalization efforts, which was a significant increase. 

The Romanian Ministry of Research, Innovation and Digitalization has initiated 36 investments and launched 72 public procurements, marking a 450% increase compared to July 2023. The Romanian government is heavily investing in the digitalization of public services. This initiative is intended to improve the efficiency and accessibility of governmental services for both citizens and businesses. Key projects include digitizing tax filing, public procurement processes, and creating unified digital identities for citizens, enabling easier access to services.

The Strategy for Artificial Intelligence and the development of 5G infrastructure are critical components of Romania’s digital growth agenda. The government emphasizes increasing internet penetration, improving digital literacy, and enhancing e-government services.

As a member of the European Union, Romania adheres to EU-mandated policies and procedures related to digital economy. Please click (HYPERLINK) for the EU Country Commercial Guide.

Projected Digital Economy Growth

Chart

Description automatically generated

Market Challenges

Regulatory environment

Romania has been actively shaping its digital tech policies to harness the potential of technology for economic growth and innovation.

Data Privacy:

As an EU member, Romania adheres to the GDPR, which imposes strict data privacy and protection requirements. While this regulation provides robust protection for personal data, compliance can be complex and costly for businesses, particularly small and medium-sized enterprises (SMEs). Ensuring compliance with GDPR in Romania requires significant investment in data management systems, legal expertise, and ongoing monitoring.

AI Regulation:

Romania’s government approved in July 2024 the national artificial intelligence strategy for 2024-2027, falling in line with EU ambitions for the bloc to become a global leader in the field. The European funding aims to introduce state-of-the-art technologies and hopes that state institutions will use artificial intelligence extensively. The Romanian Prime Minister emphasized the need for Romania to align with EU ambitions and create a regulatory framework for adopting AI and other relevant technologies. Collaboration between academia, business, research, innovation, and public administration is key in this endeavor.

To modernize the country on the digital front, the transformation will focus on digital public administration, economy, education, cybersecurity, digital communications, and future technologies including AI. The government aims for AI to transform Romania’s economic landscape and sees it as crucial for economic growth and social prosperity. The national AI strategy will be implemented by the intelligence services SRI and SIE as part of an inter-ministerial commission.

Cross-Border Data Flows

Romania follows the EU’s strict regulations on cross-border data flows, particularly those involving transfers to non-EU countries. While these rules protect data privacy, they can complicate international business operations, especially for multinational companies that rely on seamless data exchange across borders. Businesses must ensure data transfers comply with EU regulations, which may involve implementing standard contractual clauses or obtaining appropriate certifications.

Cybersecurity

Romania has a comprehensive cybersecurity regulatory environment that aligns with EU directives and addresses national security concerns. The country focuses on protecting critical infrastructure, ensuring compliance with international standards, and fostering public-private collaboration, putting it in a strong position to tackle cybersecurity challenges. However, businesses operating in Romania still face ongoing challenges due to the evolving threat landscape and the associated costs of compliance.

Romania’s National Cyber Security Strategy outlines the country’s approach to cybersecurity, focusing on protecting critical information infrastructures and enhancing national cyber defense capabilities. The National Cyber Security Directorate (DNSC) oversees cybersecurity, ensuring compliance with national and EU regulations. Romania complies with the EU’s NIS Directive and Cybersecurity Act. The country requires critical infrastructure operators to implement stringent cybersecurity measures and align its regulations with the GDPR. Public institutions must adopt specific cybersecurity measures and collaboration between public and private sectors in cybersecurity is encouraged.

Online Harms Regulation

Romania does not have a comprehensive regulatory framework dedicated to online harms. However, various laws and regulations address related issues, such as cybercrime, data protection, and illegal content online.

Cybercrime and Illegal Content

Romania’s Criminal Code covers cybercrime and illegal content, with penalties for offenses. Law No. 365/2002 on Electronic Commerce requires ISPs to remove illegal content.

Data Protection and Privacy

Romania follows the GDPR for online data protection and privacy.

Hate Speech and Disinformation

Romania has legislation in place to combat hate speech and discrimination, including online. The National Council for Combating Discrimination (CNCD) is responsible for enforcing these laws, which can apply to online platforms where discriminatory content is shared.

Although not a specific Romanian regulation, Romania participates in the EU’s efforts to combat disinformation, including the voluntary Code of Practice on Disinformation. Romanian companies and platforms are encouraged to adhere to these guidelines to reduce the spread of false information online.

Lack of Unified Online Harms Regulation

The Romanian Minister of Research, Innovation, and Digitalization announced the launch of the ministry website of the of the #nofake platform for reporting through which Romanians can report inappropriate content they see on social networks.

The platform can be accessed on the website of the Ministry of Research, Innovation and Digitalization (MCID), at https://www.mcid.gov.ro/nofake/.  

Standards Development

Romania has embraced EU-wide digital and technological standards, which are generally well-developed. However, the main obstacle is implementing and customizing these standards at the national level. Businesses might encounter challenges in meeting both EU and Romanian-specific standards, especially in fast-changing sectors such as ICT and digital services.

Subnational Market Regulation

Regulatory enforcement and market conditions can vary significantly across different regions of Romania. Urban centers like Bucharest and Cluj-Napoca may offer more advanced regulatory support and infrastructure, while rural areas often lag behind. This creates a fragmented market, making it difficult for businesses to operate uniformly nationwide.  

Market Entry

Romania’s strategic location in Eastern Europe makes it an attractive destination for companies looking to expand into both Western and Eastern European markets. The country has streamlined processes for business operations, but bureaucratic challenges may pose obstacles. Companies must comply with national and EU data protection, cybersecurity, and intellectual property rights regulations.  

Public Sector Procurement

Romania’s public procurement laws are aligned with EU directives as a member of the European Union. The primary legal framework governing public procurement in Romania is Law No. 98/2016 on public procurement, which transposes EU Directive 2014/24/EU into national law. The National Agency for Public Procurement (ANAP) is the central body responsible for regulating and overseeing public procurement activities in Romania.

Romania follows standard EU procurement procedures, including open, restricted, negotiated procedures, and competitive dialogues.  

The Romanian government has implemented an electronic public procurement system, SEAP (Sistemul Electronic de Achiziții Publice), which is used for publishing tender notices and conducting procurement procedures online. SEAP enhances transparency and accessibility, allowing companies to participate in public tenders more easily.

Digital Trade Barriers

Data Localization

Romania adheres to the EU’s General Data Protection Regulation (GDPR), which facilitates the unrestricted transfer of personal data across member states. The GDPR does not impose data localization requirements, allowing data to be stored and processed in any EU country, including Romania. However, due to its rigorous data protection and privacy standards, complying with the GDPR can be challenging for companies, especially small and medium enterprises (SMEs).

Although Romania doesn’t have broad data localization mandates, certain sectors, such as banking and finance, may have specific data storage and processing requirements within the country. These requirements aim to bolster data security and ensure compliance with national regulations.

Technology Barriers

In certain public sector areas, the use of outdated technology and legacy systems can create obstacles for digital trade, especially for companies offering advanced digital solutions. Integrating modern digital technologies with existing infrastructure can be difficult and requires significant investment and adaptation.

While Romania has made substantial progress in digital infrastructure, including high-speed internet, there are still discrepancies in digital connectivity between urban and rural areas. This can restrict the availability of digital services and products, particularly in less developed regions.

Regulative uncertainties can hinder the implementation of emerging technologies such as AI, blockchain, and IoT. Although Romania is generally open to technological innovation, the absence of specific regulations or clear guidelines for these technologies can impede companies from introducing new digital products or services.

Barriers to Internet Services

Romania adheres to EU regulations regarding online content, including the EU Copyright Directive and the Digital Services Act (DSA). These regulations impose certain obligations on internet service providers (ISPs) and online platforms, such as the requirement to remove illegal content or manage digital rights. Compliance with these rules can be complex and costly for digital service providers.

Internet Service Providers (ISPs) in Romania are subject to licensing and regulation by the National Authority for Management and Regulation in Communications (ANCOM). While Romania generally has a liberalized telecom market, regulatory compliance and the costs of obtaining necessary licenses can be barriers for new entrants.

Third Country Bias/Influence

As an EU member, the EU largely determines Romania’s trade policies, including those related to digital trade. This can create barriers for companies from non-EU countries, favoring EU-based companies in public procurement and compliance with EU-specific standards. Romania is also concerned about cybersecurity risks associated with technology from certain third countries, leading to increased scrutiny of foreign technology providers.

Most laws are set at the EU level. The Digital Economy Chapter of our Country Commercial Guide for the European Union provides a more comprehensive overview.

Digital Trade Opportunities

Cross-Sector Enabling Technologies

a.  Communications and Networking Technologies:

Romania is quickly expanding its 5G infrastructure. This presents investment opportunities in equipment, software, and services that facilitate high-speed internet and advanced connectivity. Romania’s strategic location as a gateway between Europe and Asia makes it a significant player in deploying subsea cables, which will improve global data transmission networks.

Advanced Computing:

The growing demand for cloud services and data processing drives investment in data centers. Romania offers competitive energy prices and a skilled workforce, making it an attractive location for data center expansion. There are currently 58 data centers in Romania, from 13 markets.  

Advanced and Networked Sensing and Signature Management:

Opportunities exist in developing and managing IoT networks for various applications, including smart cities, agriculture, and industry. Romania’s push towards digital transformation fuels demand for these technologies.

Human-Machine Interfaces:

With an increasing focus on immersive technologies in sectors like education, healthcare, and entertainment, AR/VR interfaces development has room for growth.

Artificial Intelligence:

Romania is fostering a growing AI ecosystem with applications across the healthcare, finance, and manufacturing sectors. There are opportunities to develop AI solutions and integrate them into existing systems.

The Minister of Research, Innovation, and Digitalization has announced that, in collaboration with the Romanian Tax Administration, they have pinpointed AI-driven tools that can enhance VAT collection. These tools were identified during discussions about the new e-invoicing requirements and could be implemented rapidly. This development provides valuable insight into tax authorities’ strategy to utilize the substantial data generated by e-invoicing requirements in tandem with AI tools.

Romania has achieved significant achievements in AI by introducing ION, the world’s first AI counselor, which was designed to act as a bridge between citizens and the executive branch of the government. Developed by Humans.ai in collaboration with AI researchers and computer science professors from Romania, ION stands as a groundbreaking endeavor to utilize advanced AI technologies to enhance communication and decision-making processes within the government.

Other Technologies:

Quantum Computing: Academic Institutions: Romanian universities and research institutions are making strides in quantum computing, collaborating internationally and partaking in EU-funded projects.

The Romanian Government adopted the National Strategy on Quantum Technologies, which is valid for the next five years. The strategy for Quantum Computing was, therefore, the necessary next step following the National Strategy for Artificial Intelligence, adopted in July 2024.

Open Radio Access Network (ORAN): The push towards open, interoperable networks creates opportunities for companies specializing in ORAN technologies, enabling more flexible and scalable telecom infrastructure. As of February 2024, Vodafone is installing Open Radio Access Network (ORAN) sites in 20 cities across Romania. The goal of the deployment is to provide high-quality network services to Vodafone customers, while also allowing operators to reduce costs and take advantage of 5G Standalone.

5G: As of May 2024, Romania had 2.3 million 5G connections, which is a threefold increase from 2022. However, 4G still dominates, with 17 million active connections in the country, compared to 21.5 million in total.

Internet access: In December 2023, Romania’s internet access level reached a record high of 92%. This marks a 2.6 percentage point increase from the previous year and is a significant improvement from the record low of 42% in December 2010.

Romania’s internet infrastructure is highly developed and competitive, boasting some of the fastest connection speeds in the region. As of August 2022, the average fixed broadband speed in Romania was 123.31 Mbps, which is twice as fast as the global average of 69.14 Mbps. Household plans in Romania range from 10 Mbit/s to 1000 Mbit/s, and data traffic is unmetered.  

b. Specific Industry Sub-sectors

Financial Technologies (Fintech):

Fintech is rapidly growing in Romania, driven by digitalization and demand for digital financial services. Key players include startups and international companies offering digital banking, payment processing, financial software, and blockchain solutions. Neobanks and digital banking platforms are gaining popularity, with companies like Revolut and Monese making significant strides in the market. The National Bank of Romania regulates the fintech sector, and regulatory sandboxes are being considered to support innovation. Romania has a vibrant blockchain and cryptocurrency community, with favorable regulatory environment. Challenges include financial inclusion, talent acquisition, and cybersecurity, but there are opportunities for cross-border expansion and collaboration with traditional banks.  

Cybersecurity:

Romania is becoming a hub for cybersecurity services and products. With rising cloud adoption, there’s a demand for secure cloud infrastructure management. Companies can offer services that help businesses comply with GDPR and other regulations, leveraging Romania’s alignment with EU standards. Romania’s strong educational system provides opportunities to expand training programs globally through online courses and certifications. Opportunities also exist in IoT security, quantum-safe cryptography, and tailored solutions for SMEs.

Internet of Things (IoT) and Smart Cities:

Romania’s cities are gradually adopting smart city technologies, creating opportunities for IoT developers, infrastructure providers, and smart grid technologies. The demand for connected devices in homes, industries, and municipalities is rising, offering a market for IoT products and services. Key initiatives include intelligent traffic management, smart lighting, and digital public services. Challenges include securing funding and coordinating efforts, but opportunities lie in public-private partnerships, EU funding, and leveraging Romania’s strong IT sector for innovation in smart city solutions.

Software and Digital Services:

Software and digital services are among the most well-established sectors in Romania’s digital economy. The country is known for its software development outsourcing services, and many global companies have set up development centers in Romania.  Opportunities abound in custom software development, cloud computing, AI, machine learning, and digital transformation services. Romania’s reputation as a tech hub makes it an attractive location for startups and established companies alike.

Telecommunications:

The development of telecommunications in Romania is roughly equivalent to the United States. Under the country code +40, there were a total of 25.44 million connections in 2022. Among them were 23.22 million mobile phones, corresponding to an average of 1.2 per person.

c. Digital Economy-related trade events

• GoTech World is a major technology and digital economy event. It covers a broad spectrum of tech industries, including IT&C, digital marketing, and business solutions.
• Bucharest Tech Week is an annual event that celebrates technology and innovation through a series of conferences, workshops, and exhibitions.  
• Digital Innovation Summit focuses on digital innovation across various sectors, including tech and telecommunications.
• Cluj Innovation Days is an annual event organized by the Cluj IT Cluster, focusing on innovation and digital transformation.  
• DevTalks Romania is a leading IT conference focusing on software development, emerging technologies, and digital innovation.
• Cybersecurity Conference Romania is dedicated to cybersecurity issues.
• Smart Cities of Romania Expo and Conference focuses on developing smart cities in Romania, exploring the integration of digital technologies in urban planning and management.
• AI Expo Europe is the gateway to the latest advancements, insights, and opportunities in the world of artificial intelligence.