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Romania Company Formation

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Romania is known for its rich history and tourism, but many people don’t know its trading achievements. Romania is one of the fastest-growing industries in the European Union, and its growth has been tremendous in the past few years.

One of the contributing factors to that is opening of new businesses in Romania. Especially considering that Romania company formation is an easy process due to its seamless regulations in company registration. Whether you're a resident of Romania or a foreign investor, rest assured that the country’s laws are applied equally to all.

Let’s delve into the process of registering a company in Romania, its advantages, and more.

Advantages of Company Registration in Romania

There are many benefits to establishing a business in Romania. The highlight, on the contrary, is the lowest corporate tax rate in Europe, a positive image of jurisdiction, company ownership, and many more.

Let's have a look at the advantages of company registration and setting up a business in Romania in detail.

Low Taxation In Europe

Romania offers the most favorable corporate tax among the countries in the European Union. Romanian Fiscal Code provides lots of tax incentives for companies involved in technology enhancement activities. You can find numerous double-taxation treaties to reduce the tax burden and offer of a turnover tax of 1% for micro-enterprises.

Flexibility In Company Owning

Romania company formation offers to register sole proprietorship over the company. As per the corporate law reform in 2020, you can manage more than one company while being a sole shareholder. There is no need to have local citizens as your business partners, which encourages flexibility for the business owner.

Friendly European Jurisdiction

As a member of the EU, Romania offers the opportunity to sell products or services to almost 500 million consumers. It is also a promising location, and it has a friendly trade relationship with other countries. This geographical advantage makes it ideal for foreign investors to open a company in Romania.

Skilled Workforce

Almost 80% of Romanian schools incorporate foreign languages like English in their curriculum. This initiative helps to provide a highly skilled workforce and graduates experts. You can find professional employees with better communication skills to run your business.

Strategic Business Location

Romania shares a border with friendly EU and non-EU countries like Ukraine, Serbia. Since it has agreed to be part of the European Union in 2007, it has the power of free movement of goods and services within these countries. This makes it one of the best Romania company formation locations.

Solid Banking Sector

Romania has a robust banking sector, which provides favorable financial support for businesses. It offers one of the lowest non-performing loans (NPL) rates in Europe. You can easily get a business loan in the name of your company and have exponential growth.

Good Urban Infrastructure

Due to its rich history and the popularity of the tourism sector, people around the world love to migrate here. It also has good urban infrastructure with reliable accommodation, fast internet speed, and many more. All these advantages offer a great place for company formation and attract ideal customers.

Strong Growth Potential

Romania has been one of the leading countries in Europe in terms of GDP growth since 2014. It has a strong industrial and automotive sector with a flexible urbanism culture. With such potential growth, company formation in Romania is an ideal choice for you.

Essential Considerations Before Company Formation in Romania

Though Romania is one of the ideal places to set up your business in Europe. Still, you need to understand various regulatory aspects that come into play. Additionally, it is crucial to get familiar with local labor laws.

These steps are mandatory to follow when you want to establish your company in Romania. You can consult a professional Romania company formation firm to deal with liability and legal issues. These companies help to opt for the right licensing from the official government authorities.

Company Type in Romania

Romania offers similar rules for local and foreign investors, where you don’t need to follow specific criteria. Romania company registration offers 6 types of companies, the most common of which are Limited Liability Companies (SLR) and Joint Stock Companies (SA).

Let’s understand the type of company in Romania and how to open a company in Romania in detail.

Limited Liability Company (SRL)

Limited Liability Company (SRL) is the most common type suitable for small and medium enterprises. This Romania company formation structure contains two or more shareholders in a single entity. Shareholders can enjoy limited liability protection which helps safeguard their business assets.

Joint Stock Company (SA)

Joint stock companies or public limited companies are mostly registered by big businesses. Companies under SA can raise capital by selling their shares where shareholders can hold the minimum liability. Companies need to pay corporate tax on their profits, and stakeholders need to pay their income tax.

General Partnership (SNC)

General Partnership (SNC) splits equal shares of the company among partners. It is registered under the Romanian Trade Register, and the procedure may vary depending on local regulations. Under Romania company formation of the partnership, tax is applied at a partner level.

Limited Partnership (SCA)

The Romanian company, which is registered under Limited Partnership, has multiple partners. Among them, some hold limited liability, and others may have entire liabilities. They are also registered under the Romanian Trade Register following the local regulation.

Branches and Subsidiaries of a Foreign Company

Romanian law welcomes foreign companies to open branches or subsidiaries in the country. InteliumLaw cooperates with a team of experts to establish branches in Romania.

Sole Proprietorship (PFA)

A sole proprietorship (PFA) in Romania is a business structure that is owned by a single person. It is one of the cost effective and straightforward ways to company registration in Romania. The biggest problem is, the owner holds the maximum liability of the company’s debts, which is at high risk.

Our Assistance in Establishing a Romanian Company

The main focus of any enterprise in Romania is to develop a business structure. InteliumLaw offers successful solutions for clients looking for Romania company formation. We also provide team of experts who help businesses to understand how to open a company in Romania.

Romania welcomes foreign enterprises to open their company with special breakage. We can help you with a hassle-free registration process by following the notes below.

You have to agree that implementing these tasks on your own can be difficult. So, our team can provide expert assistance at each step of registering your company. Hiring us can make this process quick and easy and you will be able to enjoy a remote online company registration in Romania.

Timeline for Establishing a Business in Romania

Setting up a company in Romania can take several weeks. This is because Romania company formation regulations differ for each type of activities. You need to go through various legal procedures, registration paperwork, and obtaining necessary permits.

In such cases, you can engage InteliumLaw who can help to tackle such regulators. We have a team of specialists and contractors who help to collect all the documents needed for company registration. With us, you can get your business registered in Romania in a short span of time.

Procedure for Registering a Romanian Company

Registering a company in Romania can be complex and time-consuming. With the right guidance, you can solve this problem simply with InteliumLaw. Let’s examine the steps required for Romania company formation and registration.

Step 1: Deciding Business Structure

The initial step is to choose the business structure for the Romanian jurisdiction. For example, local enterprises can choose limited liability companies and foreign companies can choose branches and subsidiaries.

Step 2: Registration Of Company Name

The next step is to decide on a distinctive company name with a local trade registry. Make sure to choose a name that doesn’t belong to any venture as you can face any legal trail.

Step 3: Submission Of Required Documents

The third step is to collect and compile the required documents for Romania company formation. This documentation may include the Articles of Association and affidavits of the specimen with the signature of stakeholders. In addition, the signature of the director is also required.

Step 4: Formal Registration Of The Company

After registering the name and final submission of documents, you have to go through formal registration of the company. Here, you have to note that the process can take 10 working days to get the final approval.

Step 5: Engagement Of the Company's Accountant

Now, we have to come to the last stage, where you have a company ready and your company’s accountant manages your financial records. Therefore, it is essential to choose a reputable accountant to ensure compliance with fiscal regulations. Following these steps to open a company in Romania can help to lay a solid foundation for your business.

New Regulations Concerning the Romanian Micro-Company

The fiscal code went through a series of reforms for micro-companies in Romania in the 2023 and 2024. These reforms comprise various changes in Law 296/2023 and Emergency Ordinance 115/2023.

Under the new regulation, you have a limitation for shareholdings in micro-companies. To get classified in this category, you could have only one micro-company owned by you as a shareholder with more than 25%. Previously, such ownership was allowed in at least three companies with micro status. Now, in case you have more than one company that is enjoying this regime till 31 March you need to choose only one that will remain with this benefit.

Two taxation rates have been imposed on micro-businesses. Micro-companies with an annual turnover below EUR 60,000 will be allowed to apply 1% tax on their turnover. The requirement to have a minimum nu,ber of employees for such companies was abolished. These Romanian micro-companies should not belong to HoReCa, medical, IT, and dental fields.

3% tax of the total income is mandatory for a firm that has an annual turnover between EUR 60,000 to EUR 500,000 or operates within the spheres excluded for companies that can apply 1% tax.

The regulation for micro-companies changes often in Romania. Thus, it is important to monitor the legislation and keep yourself updated. In such cases, you can engage InteliumLaw, we will provide you with overview of the recent changes that will help you to structure your business properly.

FAQs

What are the fees for company incorporation in Romania?

Company formation in Romania may start from EUR 1800 for the initial formation.  These expenses may increase depending what services you require for establishing of your business.

Who is the regulatory body for company registration in Romania?

All the companies are registered at ONRC (Oficiul Național al Registrului Comerțului/ National Trade Register Office) in Romania. It is a public institute that keeps a statistical record of economic activities in the country.

Can non-citizens establish businesses in Romania?

The government of Romania always welcomes foreigners to invest and start a business. They can use their passport and other required documents to start the process.

What are the yearly obligations for Romanian companies?

The Romanian companies need to organize and prepare annual financial statements, as well as audit (except several exemptions). 

Are there supplementary services offered aside from registration?

Among the additional services, you can choose assistance with the bank accounts opening, obtaining of licenses/ permits, drafting of special terms and conditions,  etc.

How long does it take to register a company in Romania?

The company registration in Romania could take around 2 weeks and more depending on the type of your business.

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