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The economically active population of Romania is 51.1% (11.4 million) of the total. The number of employed in 2001 has been about 10.7 million. The unemployment rate in December 2001 has been 8.6% in relation to the total civil active population, which represents a decrease of 1.9%, compared to 2000.

Agriculture, hunting, forestry and fishing	4,527
Mining and quarrying	150
Manufacturing	2,025
Electricity, gas and water supply	199
Construction	430
Trade and repair	952
Hotels and restaurants	131
Transport, storage and communication	519
Financial activities	76
Real estate renting and business activities	124
Other activities	1,564
Total	10,697

Year	‘000
1999	790
2000	821
2001	750

The legal framework establishing the regime of foreign nationals in Romania consists of the following regulations:

According to Government Decision No. 4/2001 (amended by the Government Decision No. 1317/ 27 December 2001) the Office for Foreign Investors has been reorganised in the Directorate for Co-ordination of EU’s Non-reimbursable Financial Assistance. As a result, new prerogatives have been assigned in the field of non-reimbursable financial assistance granted by the European Union in the social policy and employment field, but maintaining the attributions for providing free information, counselling and documentation services to foreign and national investors in the labour and social solidarity field.

According to Law No. 123/2001, foreign citizens may carry out economic, social, cultural, sport and commercial activities, on their own or in association, and they may be employed by Romanian or foreign legal entities or individuals, in compliance with the labour market agreements concluded between Romania and other states. Foreigners can be employed on the basis of work permits issued by the Ministry of Labour and Social Solidarity.

According to Law No. 203/1999, work permits may be issued to foreign citizens who comply with the conditions provided by the Romanian Law on Employment and who have an employment visa. The work permits are issued for a six-month period with the possibility for other six-month extension upon the request of the person concerned. On the basis of conventions or agreements concluded by Romania, the work permit may also be issued, respectively extended, for periods longer than six months. The work permits may also be issued in other situations and conditions, agreed upon by international conventions and agreements to which Romania is a party or under special laws.

According to the relevant Romanian legislation on individual income tax, income is considered from Romania if the source of income is situated in Romania or if the place where the individual obtains his/her income is situated in Romania, irrespective of whether this income is paid from Romania or from abroad. Income tax is levied on the gross salary as well as on other salary-related rights such as bonuses, premiums, in-kind benefits. It is normally withheld and paid by the Romanian employer at the same time as monthly salaries.

Global income tax is applicable for Romanians domiciled in Romania. Foreign individuals are considered as taxpayers if they are physically present in Romania for a period exceeding 183 days in any 12-month period starting or ending in the respective year or if they derived income from a fixed base of business on the Romanian territory. If an individual is a resident of a country with which Romania has concluded a DTA, the DTA prevails over the national law in respect of the tax status of the individual. Individuals may be exempt from salary taxation under international conventions for the avoidance of double taxation signed between Romania and their country of residence.

The global individual income tax rate is 40%, for salaries in excess of around ROL 10.2 mil per month (that is, approximately USD 260). The tax is normally withheld and paid monthly by the Romanian employer when making the final payment of salary. Salaries are paid periodically and the regularization is made at the year-end.

Foreign citizens working on foreign employment agreements are required to calculate and pay income tax and register monthly income tax declarations with the Romanian Tax Authorities either personally or by means of a fiscal representative. The local company which is the "beneficiary of the services" provided by foreign citizens has the obligation to inform the authorities about the starting and ending date of their assignment in Romania, by filing a standard notification letter.

Based on very recent clarifications on the social security contributions, employers have to pay various social contributions calculated on the gross salary, varying between 41- 48% (depending on the work categories for the employees). These are:

· Social security contribution - between 23.33-30% of the gross salary; however, there is a ceiling and the amount should never exceed an average of USD 125 per employee at present (see below);

The employees pay contributions of 19.67%, which are deductible for global income tax purposes. These are:

· Social security contribution - of 11.67% on the gross salary; at present, this should never exceed about USD 48 for each employee;

The computation base for the social security contribution cannot exceed three times the monthly gross average national salary (at this stage such an average salary is approximately USD 140, at current rates).

Foreign citizens working in Romania on a work permit and a labour contract registered with the Labour Office are required to pay the Romanian social contributions (except 1% unemployment contribution).

A foreign citizen who is not employed or paid by an employer having a permanent establishment in Romania has no obligation to pay social security contributions and does not need to provide proof of payment of social security in another territory. As of November 2000, any foreign individual performing services in Romania, as well as Romanians not domiciled in Romania have the obligation to obtain a fiscal number from the Ministry of Finance.