Romania is a country that has shown rapid growth rates in recent years. A dynamic and competitive economy with advances in trade and services, the active introduction of new technologies, a loyal tax system, a developed real estate sector with office and residential premises, as well as legal support for enterprises create favorable conditions for the development of the private sector and business immigration. Romania has become a strategic choice for many investors and entrepreneurs to start and run their own business.
Benefits of doing business in Romania
- Entering the European market for trade and services.
- Small authorized capital for creating a new company (from 50 USD).
- Favorable tax rates on income of individuals and legal entities.
- There are no restrictions on the participation of foreign citizens in the work of a Romanian company.
- The presence of a large number of qualified workers in the labor market.
- The possible remote option of company registration in Romania.
Features of company opening in Romania
A business in Romania can be registered by both individuals and legal entities. Romanian companies with their bank accounts and minimum authorized capital can own property and create their management structure. At the same time, any business requires a registered address in Romania.
In Romanian legislation, there are many organizational and legal forms for starting and running a business:
- limited liability company;
- joint-stock company;
- subsidiary company;
- limited society.
The most common is a limited liability company. Most Romanian and foreign entrepreneurs choose this option.
Stages of the company opening in Romania
Business opening in Romania takes place in several stages.
1) Registration, company name
The names of the companies are approved by the National Trade Register. The staff of the institution checks the availability of your submitted version in the national register. As a result of the verification, a company name reservation certificate is issued, valid for 3 months.
2) Opening a bank account
The company administrator or other authorized person submits documents to any bank, including a certificate of name reservation, company charter, confirmation of registration of office address, statement of a company representative, or founder/founders. Additional documents may be required depending on the policy of the selected bank. After verification, you pay the full amount of the authorized capital required to create a company. The bank employee will give you a confirmation of opening an account and depositing funds.
3) Registration of the company in the national commercial register
You will need to prepare documents and, within 15 days after the signing by all founders of the memorandum of association, register the company in the National Trade Register. Within 3 days from the date of filing, the National Trade Register carries out free official registration and issue a certificate of company opening. Tax registration is also carried out and a code is issued from the Ministry of Public Finance. These companies are published in the official state newspaper as legal advertising. The final decision on the registration of the company is made by the director of the National Trade Register in the selected territorial district.
4) Obtaining a unique registry for checks
Registration of the register is carried out at the regional office of the National Agency of Tax Administration. All legal entities registered in the National Trade Register must complete this procedure. The resulting register is used for inspections by regulatory authorities: financial, fire fighting services, consumer protection organizations, and urban planning. The register must be kept both in the main and in other offices of the company that have received permission to conduct business, licenses, and agreements.
Basic documents for company opening in Romania
The registration procedure for each type of company in Romania is similar. Differences can only arise in the types of documents that investors have to prepare. In the case of establishing a Romanian limited liability company, the entrepreneur will need the following documents:
- completed application form;
- confirmation of address registration of the office;
- company name certificate and articles of association;
- information on the number and value of shares of each shareholder;
- an extract from the bank on the availability of an account and payment of the authorized capital;
- copies of identity documents of company representatives.
Taxes in Romania
The standard corporate income tax rate in Romania is 16% and is one of the lowest in Europe. Resident companies are subject to income tax worldwide unless otherwise provided for in the double taxation treaty.
Non-resident companies that operate in Romania through a permanent establishment are required to pay corporate income tax on taxable profits attributable to the permanent establishment. Typically, the corporate income tax is calculated quarterly.
Dividend tax is charged at the rate of 5%. The standard VAT rate is 19%, reduced – 9% or 5%, depending on the type of business of the company.
Personal income in Romania is taxed at a flat rate of 10%, which is one of the lowest individual tax rates in the EU, with an average of 38% in the EU.