How to Verify a Romanian Business Partner: A Due Diligence Guide
Before signing a contract with a Romanian company, it is wise to check its legal status, financial health and reputation. This guide explains the key steps.
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Doing business in a new market always carries risks, and Romania is no exception. While most Romanian companies are reliable, it is essential to perform basic due diligence before entering into any agreement. A few hours of research can save you from costly mistakes and legal disputes. This guide outlines the key steps to verify a Romanian business partner using publicly available information and simple checks.
Check the Trade Register
The first step is to confirm that the company legally exists and is in good standing. In Romania, all businesses must register with the National Trade Register Office (ONRC). You can request an official extract (called a *certificat constatator*) online or through a local representative. This document shows the company's registration number, legal form, registered address, shareholders, administrators, and any branches. It also indicates whether the company is active, suspended, dissolved, or in insolvency proceedings. Always ask for a recent extract and verify the data matches what the partner has told you.
Review Financial Statements
Romanian companies are required to file annual financial statements with the Ministry of Finance. These are publicly available and can be obtained through the ministry's online portal or commercial data providers. Look for consistent revenue, profitability, and a healthy balance sheet. Be wary of companies that show no income or have a history of losses, especially if they are asking for advance payments or credit. For larger deals, consider hiring a local accountant to analyse the statements in detail.
Check Tax Compliance
Outstanding tax debts can be a red flag and may even transfer to you in certain transactions (e.g., mergers or asset purchases). You can check a company's tax status with the National Agency for Fiscal Administration (ANAF). A certificate of fiscal attestation (*certificat de atestare fiscală*) shows whether the company has any unpaid taxes or social contributions. This document is usually requested by banks and public institutions, and a partner should be willing to provide it if they have nothing to hide.
Search for Litigation and Insolvency
Court records in Romania are public. The Ministry of Justice's portal (*portal.just.ro*) allows you to search for civil and commercial cases involving a company. Look for lawsuits where the company is a defendant, especially for unpaid debts or breach of contract. Also check the National Insolvency Bulletin (*Buletinul Procedurilor de Insolvență*) to see if the company has ever been subject to insolvency proceedings. A pattern of litigation or repeated insolvency filings is a strong warning sign.
Assess Reputation and References
Finally, do not rely solely on official records. Ask for references from other business partners, especially foreign companies that have worked with the Romanian firm. Check industry associations and chambers of commerce for membership and reputation. A quick internet search can reveal news articles or complaints. If possible, visit the company's premises to confirm they have a real operation and not just a virtual office. Trust your instincts: if something feels off, it probably is.
When in Doubt, Seek Professional Help
For high-value deals or complex transactions, it is wise to hire a local lawyer or due diligence specialist. They can access additional databases, conduct on-site checks, and provide a legal opinion. The cost of professional due diligence is small compared to the potential losses from a bad deal. Remember that prevention is always better than cure.
