Bucharest, November 29, 2025 – By Claudia Sofianu, Partner, People Advisory Services Leader, EY Romania – The Romanian labor market has long been considered one of our country’s greatest assets, but in 2025, it has become one of the biggest challenges for the coming period. According to the EY Attractiveness Survey 2025, although investors continue to value the availability of labor, attention has shifted from costs to quality, with an increased emphasis on competence and adaptability.
Over half of investors (55%) say that the Romanian labor market has improved in recent years, a better percentage than in many other areas. Romania remains an attractive choice for the service, production and manufacturing sectors, but companies are no longer looking just for a large workforce, but people with relevant skills for changing industries.
Demand is higher than ever for technical and digital profiles, from engineers and energy specialists to people with know-how in AI or automation. More and more companies are noticing an urgent need for practical training and measures to encourage young people to stay in the country after graduation.
Investments are shifting from manufacturing to innovation
In 2025, 41% of investors say they want to expand their research and development (R&D) operations in Romania. This is a sign that the country is starting to be seen among executives not just as a manufacturing hub, but as an emerging market for the development of new ideas, technologies and products. However, the optimism shown in the business environment is not backed by concrete results in the R&D sector. Romania currently ranks last in the EU in terms of gross R&D expenditure, at 0.52% of GDP, where the European average is 2.26%. These results come against the backdrop of a competitive set of tax incentives for research and development (R&D) activities, designed to boost innovation and technological investment. The main measure consists of an additional 50% deduction of eligible expenses for R&D projects, which is applied to the calculation of corporate income tax. This deduction is granted for direct costs, such as research personnel, equipment and materials used in the activity. Equipment used for research purposes can also benefit from accelerated depreciation, allowing a significant part of its value to be deducted from the first year.
Furthermore, employees directly involved in research activities can benefit from income tax exemption, and companies that exclusively carry out R&D activities have, in theory, the possibility of accessing the full corporate income tax exemption for the first 10 years of activity. From 2024, the additional 50% deduction will also apply to taxpayers who owe minimum turnover tax, thus expanding access to tax incentives.
To benefit from these advantages, companies must rigorously document R&D activities, define projects in line with international criteria and, in the case of large taxpayers, obtain certification of projects in the official register of experts. Despite the favorable fiscal framework, the level of use of these facilities remains relatively low, due to administrative complexity and strict documentation requirements.
Education and mobility
A sensitive point identified in the EY study on the attractiveness of foreign investments in Romania is the need for the current school curriculum to respond to new business needs. Almost a third of respondents (31%) say that the educational curriculum should be updated to reflect the current requirements of companies. In addition, 25% see increasing labor mobility (including through more flexible policies for international recruitment) as a priority.
Romania is making progress in adapting educational and vocational training courses to new labor market demands. Digital education and programming modules have been included in pre-university education since middle school, preparing students for an increasingly technological labor market.
However, to maintain its long-term attractiveness, Romania must ensure a closer connection between academia and business in order to respond quickly and flexibly to changes in vocational and educational programs according to industry and service demands.
Medium-term challenges
Overall, the labor market in Romania remains attractive for investors. However, this advantage based only on low labor costs is gradually fading. Future competitiveness will depend on how well Romania manages to adapt its workforce to the new realities: digitization, green transition, automation and innovation.
Another challenge, closely related to the level of competitiveness and increasingly visible on the labor market from 2025, remains our country’s ability to retain and attract qualified labor in fields with high added value. Against the backdrop of an exodus of qualified labor at the regional level, several of the Visegrad countries (Poland, Czech Republic) have begun to accelerate policies to attract foreign specialists by offering additional fiscal facilities for competence centers.
In the Czech Republic, the Key and Research Staff program simplifies visa and residency procedures for foreign experts in management or research roles, offering reduced processing times and easy access to family permits. Also there, the “Digital Nomad” initiative allows IT professionals and freelancers to work remotely from the Czech Republic, benefiting from a special visa valid for up to one year. In Poland, the “Poland.Business Harbor” program worked as a complex relocation mechanism for IT specialists, startups and technology companies, providing support for visas, integration and connection to the local business ecosystem. All these initiatives had the same strategic objective: to transform their countries into regional hubs for skilled talent and digital innovation.
The visa program for digital nomads in Romania, initiated by law no. 22/2022, which amends GEO no. 194/2002 regarding the regime of foreigners, officially introduces the “digital nomad” category into Romanian legislation and creates the legal framework for these professionals to live and work temporarily in Romania. According to the provisions, the digital nomad is a citizen from outside the EU/EEA who is either employed by a company registered abroad, or owns such a company and carries out his activity remotely using communication technologies. Also, according to the “Romania Digital Nomad Visa Guide (2025 Requirements)”, they can benefit from a type D long-stay visa for a duration of up to 12 months, with the possibility of extension for another 12 months, if the conditions are met. Among the eligibility criteria are: proof of a constant income of at least three times the average gross monthly salary in Romania in the last six months, medical insurance covering the entire period of stay in Romania and documents certifying remote professional activity for a company registered outside the country. Thus, Romania ranks among the European countries that encourage modern forms of work and digital mobility, following the example of neighboring states.
Although there is still no public data to clearly indicate the level of success of the program aimed at digital nomads, the premises remain strongly favorable and the context is worth looking at with optimism. Recently published analyzes highlight the competitive advantages that Romania can offer these professionals: affordable living costs, very well-developed digital infrastructure and administrative procedures that facilitate obtaining the right of residence for those who work remotely for companies outside the country. Even in the absence of official statistics, these concrete benefits show a real potential for Romania to become an increasingly attractive destination for mobile global talent, thus supporting an optimistic perspective on the evolution of the program.
