Company Formation in Romania
In recent years, Romania has been demonstrating a rapidly growing and competitive economy in trade and services, introducing new technologies, and a fairly developed real estate sector. The legislation supports enterprises. Many investors and entrepreneurs have chosen to start and run their own businesses here. Both individuals and legal entities can carry out company register in Romania. If a local company has bank accounts and a minimum authorized capital, it can create a management structure and own the property. Romania company formation services can help facilitate this process for new businesses.
Romania is not offshore. The economy is ranked 11th (in terms of GDP per capita among the EU countries). The government created good conditions for small businesses, R&D & IT firms, and legal entities involved in technological development. Entrepreneurial activity in such areas will be profitable if the company plans to enter the EU market with a relatively inexpensive labor force.
Why do you need to set up a company in Romania?
Company registration in Romania is beneficial for such reasons as free access to European markets (almost 700 million consumers), low taxes for small businesses, and good conditions for the IT sector. Many entrepreneurs choose to open a company in Romania to take advantage of these benefits.
You can register a company remotely by proxy for 5 days. Residents and non-residents, citizens, and legal entities can be directors and founders of a business in Romania. One founder can register an LLC, and the maximum number of participants is 50.
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There are many organizational and legal forms for company formation in Romania in the legislation (joint stock company – Societate pe acțiuni, the limited company – Societate în comandită simplă, limited liability company – Societate cu răspundere limitată, or SRL, the subsidiary company – Sucursală). Our experts will be happy to choose the best option for your business through our corporate services Romania. The Limited Liability Company (SRL) is the most common, and most foreign and Romanian entrepreneurs choose this particular form of business.
Fintecharbor.com lawyers will make the incorporation process as quick and convenient as possible with our corporate services Romania. We will verify the information provided, help you select the company’s title, collect all the required papers, open a temporary account in a local bank, and pay the authorized capital. After registering the company, it will be possible to open a permanent bank account in Romania.
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How much does it cost for company registration in Romania?
Types of Companies in Romania
In Romanian law, there are many legal forms for setting up and running a business:
- Joint-stock company – Societate pe acțiuni.
- Partnership, with limited shares – Societate în comandită simplă.
- Limited liability company – Societate cu răspundere limitată or SRL.
- Subsidiary company – Sucursală.
The most common is the Limited Liability Company (SRL). Most foreign entrepreneurs, as well as Romanian citizens, prefer this form of activity when they form a company in Romania.
Key features of registering a Limited Liability Company in Romania:
- The company is a separate legal entity.
- The liability of the founders is limited to the value of the share capital. The liability of each founder is limited to the value of their own share in the declared share capital.
- An SRL company in Romania can be founded by one shareholder, who is a natural person or a legal entity.
- The largest number of participants is 50.
- The director is appointed by the participants and can be a resident or non-resident of the country.
- A registered office in Romania is required to register an SRL. According to the country’s law, it is considered valid after the conclusion of the lease agreement.
- The registered company must submit quarterly reports on the results of its activities.
- The company’s bank account can be opened in a foreign bank.
Requirements for Romania company incorporation:
The following requirements must be fulfilled to establish a company formation (Romania):
- Register a unique company name.
- Register a registered office address.
- Prepare the necessary package of documents.
The Romania company formation of each type is similar. There may be differences only in the documentation that investors must prepare. In the case of a Romanian limited company, you will need the following documents:
- A completed application form.
- Information on the number and nominal value of each shareholder’s shares.
- Confirmation of the address registration of the office.
- Bank statement of account and payment of share capital.
- Certificate of company name and articles of association.
- Copies of the identity documents of the representatives of the company: shareholders, CEO.
Taxation in Romania
The standard corporate tax income rate in Romania is 16% and is one of the lowest in Europe, reflecting the general approach to taxation Romania has adopted. Resident companies are taxed on worldwide income unless a double taxation treaty provides otherwise. Non-resident companies that operate in Romania through a permanent establishment must pay corporate tax Romania on the taxable income attributable to the permanent establishment. Generally, corporate income tax is calculated on a quarterly basis.
Dividends are taxed at a rate of 5%. The standard VAT rate is 19%, and the reduced rate is 9% or 5%, depending on the company’s activity. Personal income in Romania is taxed at a flat rate of 10%. This is one of the lowest individual tax rates in the EU; the EU average is 38%.
Share Capital
The share capital amount depends on the company’s legal form. The minimum share capital of a joint stock company is 90,000 lei (25,000 euros). Each shareholder pays the share capital on incorporation. It cannot be less than 30% of the subscribed share capital. JSC shares are transferable and can be traded on organised markets.
There is no minimum authorised share capital in Romania company formation SRL. This requirement was abolished in December 2020 and is no longer mandatory. Before this change, the minimum share capital for LLC registration purposes was 200 lei (approximately 45 euros).
Company Name
Romania company register process involves several steps, including the registration of a company name. It is worth mentioning the requirements for the company name. In Romania, they are somewhat different from those generally accepted.
The company name must include at least one word in Romanian. At the same time, words such as: “țtiințific,” “academie,” “academie,” “universitate,” “universitar,” “alcoală,” “școlar” or their derivatives, as they are specific to local and state authorities.
It is only possible to include them in the name of an organisation if the Secretariat of the Government or the Prefecture’s Office does so.
Steps to register a company in Romania
At the beginning of registration, you must choose a name for the company and state the legal form at the end. It also checks for uniqueness. Further, the company’s structure (administrator and participants), the registration address, the activities of the company and regions, the authorized capital’s size, and the distribution of shares between its participants are indicated.
The National Trade Register Office of Romania approves the name. As a result of the check, a company name reservation certificate is issued; it is valid for 3 months. Tax registration also takes place there, and the Ministry of Public Finance gives a code. These enterprises are published in state newspapers as legal advertisements. Then, you submit documents to any branch of the bank (including a certificate of name reservation, confirmation of registration of the office address, company charter, application of a representative of the company or founder). And pay the full amount of the authorized capital.
It is necessary to get a unique registry for verification by all legal entities registered in the National Trade Register of Romania. The receipt of the register takes place at the regional office of the National Tax Administration Agency. This is necessary during inspections by regulatory authorities, such as financial, fire services, and consumer protection organizations. The registry must be located in the main and other offices of the company that have received permission to conduct activities.
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FAQ
What is the annual cost of company maintenance?
How do I check if a company is incorporated in Romania?
Register company in Romania can be checked on the Ministry of Justice of the Trade Register Office website (www.onrc.ro) or by sending a request for this to our lawyers.
